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SERIES 1998-2 SUPPLEMENT
Dated as of June 26, 1998
to
AMENDED AND RESTATED
POOLING AND SERVICING AGREEMENT
Dated as of June 26, 1998
$750,000,000
among
PARTNERS FIRST RECEIVABLES FUNDING, LLC
Transferor
PARTNERS FIRST HOLDINGS, LLC
Servicer
and
THE BANK OF NEW YORK
Trustee
on behalf of the Series 1998-2 Securityholders
______________________________
PARTNERS FIRST CREDIT CARD MASTER TRUST
Series 1998-2
______________________________
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TABLE OF CONTENTS
ARTICLE I
Creation of the Series 1998-2 Securities
Section 1.1. Designation . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II
Definitions
Section 2.1. Definitions . . . . . . . . . . . . . . . . . . . . . . . 2
Section 2.2. Form of Delivery of Series 1998-2 Securities;
Depositary. . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE III
Servicing Fee and Interchange
Section 3.1. Servicing Compensation; Interchange . . . . . . . . . . . 20
ARTICLE IV
Rights of Series 1998-2 Securityholders and
Allocation and Application of Collections
Section 4.1. Collections and Allocations . . . . . . . . . . . . . . 22
Section 4.2. Determination of Monthly Interest . . . . . . . . . . . 24
Section 4.3. Principal Funding Account; Controlled
Accumulation Period . . . . . . . . . . . . . . . . . . 26
Section 4.4. Required Amount . . . . . . . . . . . . . . . . . . . . 28
Section 4.5. Application of Class A Available Funds,
Class B Available Funds, Collateral Available
Funds, Class D Available Funds and Available
Principal Collections . . . . . . . . . . . . . . . . . 29
Section 4.6. Defaulted Amounts; Charge-Offs . . . . . . . . . . . . . 32
Section 4.7. Excess Spread; Excess Finance Charge Collections . . . . 34
Section 4.8. Redirected Principal Collections . . . . . . . . . . . . 36
Section 4.9. Excess Finance Charge Collections . . . . . . . . . . . 37
Section 4.10. Redirected Investor Finance Charge Collections . . . . . 38
Section 4.11. Shared Principal Collections . . . . . . . . . . . . . . 39
Section 4.12. Reserve Account . . . . . . . . . . . . . . . . . . . . 39
Section 4.13. Determination of LIBOR . . . . . . . . . . . . . . . . . 41
Section 4.14. Investment Instructions . . . . . . . . . . . . . . . . 41
Section 4.15. Yield Supplement Account . . . . . . . . . . . . . . . . 41
ARTICLE V
Distributions and Reports to Series 1998-2 Securityholders
Section 5.1. Distributions . . . . . . . . . . . . . . . . . . . . . 43
Section 5.2. Reports and Statements to Series 1998-2
Securityholders. . . . . . . . . . . . . . . . . . . . . 44
ARTICLE VI
Pay Out Events
Section 6.1. Pay Out Events . . . . . . . . . . . . . . . . . . . . . 45
ARTICLE VII
Optional Repurchase; Series Termination
Section 7.1. Optional Repurchase . . . . . . . . . . . . . . . . . . 46
Section 7.2. Series Termination . . . . . . . . . . . . . . . . . . . 47
Section 7.3. [Reserved] . . . . . . . . . . . . . . . . . . . . . . . 47
Section 7.4. Constituent Class D Securities. . . . . . . . . . . . 47
Section 7.5 Legends; Transfer and Exchange; Restrictions on Transfer
of Series 1998-2 Securities; Tax Treatment. . . . . . . 48
Section 7.6 Defeasance . . . . . . . . . . . . . . . . . . .. . . . 48
ARTICLE VIII
Final Distributions
Section 8.1. Sale of Receivables or Securityholders' Interest
pursuant to Section 2.6 or 10.1 of the Agreement an
Section 7.1 or 7.2 of this Supplement . . . . . . . . . 49
Section 8.2. Distribution of Proceeds of Sale, Disposition or
Liquidation of the Receivables pursuant to Section 9.1
of the Agreement . . . . . . . . . . . . . . . . . . . . 51
ARTICLE IX
Miscellaneous Provisions
Section 9.1. Ratification of Agreement . . . . . . . . . . . . . . . 53
Section 9.2. Counterparts . . . . . . . . . . . . . . . . . . . . . . 53
Section 9.3. Governing Law . . . . . . . . . . . . . . . . . . . . . 53
EXHIBITS
Exhibit A-1 - Form of Class A Security
Exhibit A-2 - Form of Class B Security
Exhibit B - Form of Monthly Payment Instructions and Notification
to the Trustee
Exhibit C - Form of Monthly Series 1998-2 Securityholders' Statement
Exhibit D - Form of Servicer's Certificate
SERIES 1998-2 SUPPLEMENT, dated as of June 26, 1998 (the
"Supplement"), between PARTNERS FIRST RECEIVABLES FUNDING, LLC, a
Delaware limited liability company, as Transferor, PARTNERS FIRST
HOLDINGS, LLC, as Servicer, and THE BANK OF NEW YORK, a New York
banking corporation, not in its individual capacity, but solely
as Trustee.
Pursuant to the Amended and Restated Pooling and Servicing
Agreement dated as of June 26, 1998 (as amended and supplemented, the
"Agreement"), among the Transferor, the Servicer and the Trustee, the
Transferor has created the Partners First Credit Card Master Trust (the
"Trust"). Section 6.3 of the Agreement provides that the Transferor may
from time to time direct the Trustee to authenticate one or more new Series
of Investor Securities representing fractional undivided interests in the
Trust. The Principal Terms of any new Series are to be set forth in a
Supplement to the Agreement.
Pursuant to this Supplement, the Transferor and the Trustee shall
create a new Series of Investor Securities and specify the Principal Terms
thereof.
ARTICLE I
Creation of the Series 1998-2 Securities
Section 1.1. Designation.
(a) There is hereby created a Series of Investor Securities to
be issued pursuant to the Agreement and this Supplement to be known as
"Partners First Credit Card Master Trust, Series 1998-2." The Series 1998-
2 Securities shall be issued in three Classes, the first of which shall be
known as the "Class A Series 1998-2 Floating Rate Asset Backed Securities,"
the second of which shall be known as the "Class B Series 1998-2 Floating
Rate Asset Backed Securities" and the third of which shall be known as the
"Class D Series 0000-0 Xxxxx Backed Securities." In addition, there is
hereby created a fourth Class of uncertificated interests in the Trust
which, except as expressly provided herein, shall be deemed to be "Investor
Securities" for all purposes under the Agreement and this Supplement (other
than for purposes of the definition of the term "Tax Opinion" in Section
1.1 of the Agreement) and which shall be known as the "Collateral Interest,
Series 1998-2." The Collateral Interest shall be considered a Class of
Series 1998-2 for all purposes of the Agreement and this Supplement,
including for purposes of voting concerning the liquidation of the Trust
pursuant to Section 9.1 of the Agreement. The Collateral Interest Holder
shall be deemed to be the Series Enhancer for all purposes under the
Agreement and this Supplement.
(b) Series 1998-2 shall be included in Group I and shall be a
Principal Sharing Series. Series 1998-2 shall be an Excess Allocation
Series. Series 1998-2 shall not be subordinated to any other Series.
Notwithstanding any provision in the Agreement or in this Supplement to the
contrary, the first Distribution Date with respect to Series 1998-2 shall
be the August 17, 1998 Distribution Date and the first Monthly Period shall
begin on and include June 26, 1998 and end on and include July 31, 1998.
(c) Notwithstanding the foregoing, except as expressly provided
herein, (i) the provisions of Article VI and Article XII of the Agreement
relating to the registration, authentication, delivery, presentation,
cancellation and surrender of Registered Securities shall not be applicable
to the Collateral Interest, (ii) the Opinion of Counsel specified in clause
(d) of the definition of Tax Opinion shall not be required pursuant to
Section 6.3(b)(vi) of the Agreement with respect to the Collateral Interest
and the Class D Securities and (iii) the Tax Opinion required pursuant to
Section 6.3(b)(vi) of the Agreement shall address the effect of the
issuance of the Collateral Interest and the Class D Securities but parts
(a) and (c) of any such Tax Opinion shall not address, or be required to
address, any tax consequences that shall result to any Collateral Interest
Holder or Class D Securityholder.
ARTICLE II
Definitions
Section 2.1. Definitions.
(a) Whenever used in this Supplement, the following words and
phrases shall have the following meanings, and the definitions of such
terms are applicable to the singular as well as the plural forms of such
terms and the masculine as well as the feminine and neuter genders of such
terms.
"Additional Interest" means, with respect to any Distribution
Date, the Class A Additional Interest, the Class B Additional Interest and
Collateral Additional Interest for such Distribution Date.
"Adjusted Invested Amount" shall mean, with respect to any date
of determination, an amount equal to the Invested Amount less the Principal
Funding Account Balance on such date of determination.
"Applicable Class A Spread" shall mean 0.10% per annum.
"Applicable Class B Spread" shall mean 0.31% per annum.
"Available Principal Collections" shall mean, with respect to any
Monthly Period, an amount equal to the sum of (a) (i) an amount equal to
the Principal Allocation Percentage of Series 1998-2 Allocable Principal
Collections received during such Monthly Period minus (ii) the amount of
Redirected Principal Collections with respect to such Monthly Period which
pursuant to subsection 4.8(a) , (b) or (c) are required to fund the
Required Amount for the related Distribution Date, (b) any Shared Principal
Collections with respect to other Series that are allocated to Series 1998-
2 in accordance with Section 4.4 of the Agreement and Section 4.11 hereof,
and (c) any other amounts which pursuant to Section 4.5 or 4.7 hereof are
to be treated as Available Principal Collections with respect to the
related Distribution Date.
"Available Reserve Account Amount" shall mean, with respect to
any Distribution Date, the lesser of (a) the amount on deposit in the
Reserve Account on such date (before giving effect to any deposit to be
made to the Reserve Account on such date) and (b) the Required Reserve
Account Amount.
"Base Rate" shall mean, with respect to any Monthly Period, the
sum of the weighted average of the Class A Interest Rate, the Class B
Interest Rate, the Collateral Rate and the Class D Interest Rate as of the
last day of such Monthly Period (weighted based on the Class A Invested
Amount, the Class B Invested Amount, the Collateral Invested Amount and the
Class D Invested Amount, respectively, as of the last day of such Monthly
Period) plus the product of 2.00% and the percentage equivalent of a
fraction the numerator of which is the Adjusted Invested Amount and the
denominator of which is the Invested Amount each as of the last day of such
Monthly Period.
"Charge-Offs" shall mean Class A Charge-Offs, Class B Charge-
Offs, Collateral Charge-Offs and Class D Charge-Offs.
"Class A Additional Interest" shall have the meaning specified in
subsection 4.2(a).
"Class A Adjusted Invested Amount" shall mean, with respect to
any date of determination, an amount equal to the Class A Invested Amount
less the Principal Funding Account Balance (but not in excess of the Class
A Invested Amount) on such date.
"Class A Available Funds" shall mean, with respect to any Monthly
Period, an amount equal to the sum of (a) the amount of Principal Funding
Investment Proceeds, if any, with respect to such Distribution Date, (b)
the Class A Floating Percentage of the sum of the Redirected Investor
Finance Charge Collections and the Yield Supplement Draw Amount, if any,
for the Distribution Date related to such Monthly Period and (c) the amount
of funds, if any, to be withdrawn from the Reserve Account which, pursuant
to subsection 4.12(d), are required to be included in Class A Available
Funds with respect to such Distribution Date.
"Class A Charge-Offs" shall have the meaning specified in
subsection 4.6(a).
"Class A Default Amount" shall mean, with respect to each
Distribution Date, an amount equal to the product of (i) the Series Default
Amount for the related Monthly Period and (ii) the Class A Floating
Percentage for such Monthly Period.
"Class A Floating Percentage" shall mean, with respect to any
Monthly Period, the percentage equivalent (which percentage shall never
exceed 100%) of a fraction, the numerator of which is equal to the Class A
Adjusted Invested Amount as of the close of business on the last day of the
preceding Monthly Period and the denominator of which is equal to the
Adjusted Invested Amount as of such day; provided, however, that with
respect to the first Monthly Period, the Class A Floating Percentage shall
mean the percentage equivalent of a fraction, the numerator of which is the
Class A Initial Invested Amount and the denominator of which is the Initial
Invested Amount.
"Class A Initial Invested Amount" shall mean $528,000,000.
"Class A Interest Rate" shall mean, for any Interest Period with
respect to the Class A Securities, a per annum rate equal to LIBOR
determined on the related LIBOR Determination Date plus the Applicable
Class A Spread, calculated on the basis of actual days elapsed and a 360-
day year.
"Class A Interest Shortfall" shall have the meaning specified in
subsection 4.2(a).
"Class A Invested Amount" shall mean, on any date of
determination, an amount equal to (a) the Class A Initial Invested Amount,
minus (b) the aggregate amount of principal payments made to the Class A
Securityholders on or prior to such date, minus (c) the excess, if any, of
the aggregate amount of Class A Charge-Offs for all prior Distribution
Dates over Class A Charge-Offs reimbursed pursuant to subsection 4.7(b)
prior to such date; provided, however, that the Class A Invested Amount may
not be reduced below zero.
"Class A Monthly Interest" shall have the meaning specified in
subsection 4.2(a).
"Class A Principal Percentage" shall mean, with respect to any
Monthly Period (i) during the Revolving Period, the percentage equivalent
(which percentage shall never exceed 100%) of a fraction, the numerator of
which is the Class A Invested Amount as of the last day of the immediately
preceding Monthly Period and the denominator of which is the Invested
Amount as of such day and (ii) during the Controlled Accumulation Period or
the Early Amortization Period, the percentage equivalent (which percentage
shall never exceed 100%) of a fraction, the numerator of which is the Class
A Invested Amount as of the end of the Revolving Period, and the
denominator of which is the Invested Amount as of the end of the Revolving
Period; provided, however, that with respect to the first Monthly Period,
the Class A Principal Percentage shall mean the percentage equivalent of a
fraction, the numerator of which is the Class A Initial Invested Amount and
denominator of which is the Initial Invested Amount.
"Class A Required Amount" shall have the meaning specified in
subsection 4.4(a).
"Class A Scheduled Payment Date" shall mean the June 2001
Distribution Date.
"Class A Securities" shall mean any one of the Securities
executed by the Transferor and authenticated by or on behalf of the
Trustee, substantially in the form of Exhibit A-1.
"Class A Securityholder" shall mean the Person in whose name a
Class A Security is registered in the Security Register.
"Class A Servicing Fee" shall have the meaning specified in
Section 3.1.
"Class B Additional Interest" shall have the meaning specified in
subsection 4.2(b).
"Class B Adjusted Invested Amount" shall mean an amount equal to
the Class B Invested Amount less the positive difference, if any, between
the Principal Funding Account Balance and the Class A Invested Amount on
such date.
"Class B Available Funds" shall mean, with respect to any Monthly
Period, an amount equal to the sum of (a) following the payment in full of
the principal amount of the Class A Securities, the amount of Principal
Funding Investment Proceeds, if any, with respect to such Distribution
Date, (b) the Class B Floating Percentage of the sum of the Redirected
Investor Finance Charge Collections and the Yield Supplement Draw Amount,
if any, for the Distribution Date related to such Monthly Period and (c)
the amount of funds, if any, to be withdrawn from the Reserve Account
which, pursuant to subsection 4.12(d), are required to be included in Class
B Available Funds with respect to such Distribution Date.
"Class B Charge-Offs" shall have the meaning specified in
subsection 4.6(b).
"Class B Default Amount" shall mean, with respect to each
Distribution Date, an amount equal to the product of (i) the Series Default
Amount for the related Monthly Period and (ii) the Class B Floating
Percentage for such Monthly Period.
"Class B Floating Percentage" shall mean, with respect to any
Monthly Period, the percentage equivalent (which percentage shall never
exceed 100%) of a fraction, the numerator of which is equal to the Class B
Adjusted Invested Amount as of the close of business on the last day of the
preceding Monthly Period and the denominator of which is equal to the
Adjusted Invested Amount as of the close of business on such day; provided,
however, that with respect to the first Monthly Period, the Class B
Floating Percentage shall mean the percentage equivalent of a fraction, the
numerator of which is the Class B Initial Invested Amount and the
denominator of which is the Initial Invested Amount.
"Class B Initial Invested Amount" shall mean $113,000,000.
"Class B Interest Rate" shall mean, for any Interest Period with
respect to the Class B Securities, a per annum rate equal to LIBOR plus the
Applicable Class B Spread determined on the related LIBOR Determination
Date, calculated on the basis of actual days elapsed and a 360-day year.
"Class B Interest Shortfall" shall have the meaning specified in
subsection 4.2(b).
"Class B Invested Amount" shall mean, on any date of
determination, an amount equal to (a) the Class B Initial Invested Amount,
minus (b) the aggregate amount of principal payments made to the Class B
Securityholders on or prior to such date, minus (c) the aggregate amount of
Class B Charge-Offs for all prior Distribution Dates, minus (d) the
aggregate amount of Redirected Principal Collections allocated on all prior
Distribution Dates pursuant to subsection 4.8(a) (excluding any Redirected
Principal Collections that have resulted in a reduction in the Collateral
Invested Amount pursuant to Section 4.8), minus (e) an amount equal to the
amount by which the Class B Invested Amount has been reduced on all prior
Distribution Dates pursuant to subsection 4.6(a) and plus (f) the aggregate
amount of Excess Spread and Excess Finance Charge Collections allocated and
available on all prior Distribution Dates pursuant to subsection 4.7(m) for
the purpose of reimbursing amounts deducted pursuant to the foregoing
clauses (c), (d) and (e); provided, however, that the Class B Invested
Amount may not be reduced below zero.
"Class B Monthly Interest" shall have the meaning specified in
subsection 4.2(b).
"Class B Principal Percentage" shall mean, with respect to any
Monthly Period, (i) during the Revolving Period, the percentage equivalent
(which percentage shall never exceed 100%) of a fraction, the numerator of
which is the Class B Invested Amount as of the last day of the immediately
preceding Monthly Period and the denominator of which is the Invested
Amount as of such day and (ii) during the Controlled Accumulation Period or
the Early Amortization Period, the percentage equivalent (which percentage
shall never exceed 100%) of a fraction, the numerator of which is the Class
B Invested Amount as of the end of the Revolving Period, and the
denominator of which is the Invested Amount as of the end of the Revolving
Period; provided, however, that with respect to the first Monthly Period,
the Class B Principal Percentage shall mean the percentage equivalent of a
fraction, the numerator of which is the Class B Initial Invested Amount and
the denominator of which is the Initial Invested Amount.
"Class B Required Amount" shall have the meaning set forth in
subsection 4.4(b).
"Class B Scheduled Payment Date" shall mean the June 2001
Distribution Date.
"Class B Securities" shall mean any one of the Securities
executed by the Transferor and authenticated by or on behalf of the
Trustee, substantially in the form of Exhibit A-2.
"Class B Securityholder" shall mean the Person in whose name a
Class B Security is registered in the Security Register.
"Class B Servicing Fee" shall have the meaning specified in
Section 3.1.
"Class D Available Funds" shall mean, with respect to any Monthly
Period, an amount equal to the product of (i) the Class D Floating
Percentage and (ii) the sum of the Redirected Investor Finance Charge
Collections and the Yield Supplement Draw Amount, if any, for the
Distribution Date related to such Monthly Period.
"Class D Charge-Offs" shall have the meaning specified in
subsection 4.6(d).
"Class D Default Amount" shall mean, with respect to each
Distribution Date, an amount equal to the product of (i) the Series Default
Amount for the related Monthly Period and (ii) the Class D Floating
Percentage for such Monthly Period.
"Class D Floating Percentage" shall mean, with respect to any
Monthly Period, the percentage equivalent (which percentage shall never
exceed 100%) of a fraction, the numerator of which is equal to the Class D
Invested Amount as of the close of business on the last day of the
preceding Monthly Period and the denominator of which is equal to the
Adjusted Invested Amount as of the close of business on such day; provided,
however, that with respect to the first Monthly Period, the Class D
Floating Percentage shall mean the percentage equivalent of a fraction, the
numerator of which is the Class D Initial Invested Amount and the
denominator of which is the Initial Invested Amount.
"Class D Initial Invested Amount" shall mean $42,000,000.
"Class D Interest Rate" shall mean, for any Interest Period with
respect to the Class D Securities, 0% per annum or such greater rate as may
be designated from time to time by the Servicer upon satisfaction of the
Rating Agency Condition.
"Class D Interest Shortfall" shall have the meaning specified in
subsection 4.2(d).
"Class D Invested Amount" shall mean, on any date of
determination, an amount equal to (a) the Class D Initial Invested Amount,
minus (b) the aggregate amount of principal payments made to the Class D
Securityholders prior to such date, minus (c) the aggregate amount of Class
D Charge-Offs for all prior Distribution Dates, minus (d) the aggregate
amount of Redirected Principal Collections allocated on all prior
Distribution Dates pursuant to Section 4.8, minus (e) an amount equal to
the amount by which the Class D Invested Amount has been reduced on all
prior Distribution Dates pursuant to subsections 4.6(a), (b) and (c) and
plus (f) the amount of Excess Spread and Excess Finance Charge Collections
allocated and available on all prior Distribution Dates pursuant to
subsection 4.7(m) for the purpose of reimbursing amounts deducted pursuant
to the foregoing clauses (c), (d) and (e); provided, however, that the
Class D Invested Amount may not be reduced below zero.
"Class D Monthly Interest" shall have the meaning specified in
subsection 4.2(d).
"Class D Principal Percentage" shall mean, with respect to any
Monthly Period, (i) during the Revolving Period, the percentage equivalent
(which percentage shall never exceed 100%) of a fraction, the numerator of
which is the Class D Invested Amount as of the last day of the immediately
preceding Monthly Period and the denominator of which is the Invested
Amount as of such day and (ii) during the Controlled Accumulation Period or
the Early Amortization Period, the percentage equivalent (which percentage
shall never exceed 100%) of a fraction, the numerator of which is the Class
D Invested Amount as of the end of the Revolving Period, and the
denominator of which is the Invested Amount as of the end of the Revolving
Period; provided, however, that with respect to the first Monthly Period,
the Class D Principal Percentage shall mean the percentage equivalent of a
fraction, the numerator of which is the Class D Initial Invested Amount and
the denominator of which is the Initial Invested Amount.
"Class D Securities" shall mean any one of the Securities
executed by the Transferor and authenticated by or on behalf of the
Trustee, substantially in the form of Exhibit A-3.
"Class D Securityholder" shall mean the Person in whose name a
Class D Security is registered in the Security Register.
"Class D Servicing Fee" shall have the meaning specified in
Section 3.1.
"Clearing System Certificate" shall mean a certificate in
substantially the form of Exhibit E hereto or such other form of
certificate as shall be satisfactory to the Trustee, Euroclear and Cedel.
"Closing Date" shall mean June 26, 1998.
"Collateral Additional Interest" shall have the meaning specified
in subsection 4.2(c).
"Collateral Available Funds" shall mean with respect to any
Monthly Period, the product of (i) the Collateral Floating Percentage and
(ii) an amount equal to the sum of the Redirected Investor Finance Charge
Collections with respect to the preceding Monthly Period and the Yield
Supplement Draw Amount, if any, for such Distribution Date.
"Collateral Charge-Offs" shall have the meaning specified in
subsection 4.6(c).
"Collateral Default Amount" shall mean, with respect to any
Distribution Date, the product of (i) the Series Default Amount for the
related Monthly Period and (ii) the Collateral Floating Percentage.
"Collateral Floating Percentage" shall mean, with respect to any
Monthly Period, the percentage equivalent (which percentage shall never
exceed 100%) of a fraction, the numerator of which is equal to the
Collateral Invested Amount as of the close of business on the last day of
the preceding Monthly Period and the denominator of which is the Adjusted
Invested Amount as of the close of business on such last day; provided,
however, that with respect to the first Monthly Period, the Collateral
Floating Percentage shall mean the percentage equivalent of a fraction, the
numerator of which is the Collateral Initial Invested Amount and the
denominator of which is the Initial Invested Amount.
"Collateral Initial Invested Amount" shall mean $67,000,000.
"Collateral Interest" shall mean a fractional undivided interest
in the Trust which shall consist of the right to receive, to the extent
necessary to make the required payments to the Collateral Interest Holder
under this Supplement, the portion of Collections allocable thereto under
the Agreement and this Supplement and funds on deposit in the Collection
Account allocable thereto pursuant to the Agreement and this Supplement.
"Collateral Interest Holder" shall mean the entity so designated
in the Loan Agreement.
"Collateral Interest Shortfall" shall have the meaning specified
in subsection 4.2(c).
"Collateral Invested Amount" shall mean, when used with respect
to any date, an amount equal to (a) the Collateral Initial Invested Amount,
minus (b) the aggregate amount of principal payments made to the Collateral
Interest Holder prior to such date, minus (c) the aggregate amount of
Collateral Charge-Offs for all prior Distribution Dates pursuant to
subsection 4.6(c), minus (d) the aggregate amount of Redirected Principal
Collections allocated on all prior Distribution Dates pursuant to Section
4.8 allocable to the Collateral Invested Amount (excluding any Redirected
Principal Collections that have resulted in a reduction in the Class D
Invested Amount pursuant to Section 4.8), minus (e) an amount equal to the
amount by which the Collateral Invested Amount has been reduced on all
prior Distribution Dates pursuant to subsections 4.6(a) and (b), plus
(f) the aggregate amount of Excess Spread and Excess Finance Charge
Collections allocated and available on all prior Distribution Dates
pursuant to subsection 4.7(i), for the purpose of reimbursing amounts
deducted pursuant to the foregoing clauses (c), (d) and (e); provided,
however, that the Collateral Invested Amount may not be reduced below zero.
"Collateral Monthly Interest" shall have the meaning specified in
subsection 4.2(c).
"Collateral Monthly Principal" shall mean (a) with respect to any
Distribution Date relating to the Revolving Period following any reduction
of the Required Enhancement Amount pursuant to clause (z) of the proviso in
the definition thereof, an amount equal to the lesser of (i) the excess, if
any, of the sum of the Collateral Invested Amount (after giving effect to
reductions for any Collateral Charge-Offs and Redirected Principal
Collections for which the Class D Invested Amount was not reduced on such
Distribution Date and after giving effect to any adjustments thereto for
the benefit of the holders of the Series 1998-2 Securities on such
Distribution Date) and the Class D Invested Amount (after giving effect to
all distributions and deposits to be made on such Distribution Date) over
the Required Enhancement Amount on such Distribution Date, and (ii) the
Available Principal Collections on such Distribution Date or (b) with
respect to any Distribution Date relating to the Controlled Accumulation
Period an amount equal to the lesser of (i) the excess, if any, of the sum
of the Collateral Invested Amount (after giving effect to reductions for
any Collateral Charge-Offs and Redirected Principal Collections on such
Distribution Date and after giving effect to any adjustments thereto for
the benefit of the holders of the Series 1998-2 Securities on such
Distribution Date) and the Class D Invested Amount (after giving effect to
all distributions and deposits to be made on such Distribution Date) over
the Required Enhancement Amount on such Distribution Date, and (ii) the
excess, if any, of (A) the Available Principal Collections on such
Distribution Date over (B) the lesser of (x) the Controlled Deposit Amount
and (y) the sum of the Class A Adjusted Invested Amount and the Class B
Adjusted Invested Amount for such Distribution Date.
"Collateral Principal Percentage" shall mean, with respect to any
Monthly Period, (i) during the Revolving Period, the percentage equivalent
(which percentage shall never exceed 100%) of a fraction, the numerator of
which is the Collateral Invested Amount as of the last day of the
immediately preceding Monthly Period and the denominator of which is the
Invested Amount as of such day and (ii) during the Controlled Accumulation
Period or the Early Amortization Period, the percentage equivalent (which
percentage shall never exceed 100%) of a fraction, the numerator of which
is the Collateral Invested Amount as of the end of the Revolving Period,
and the denominator of which is the Invested Amount as of the end of the
Revolving Period; provided, however, that with respect to the first Monthly
Period, the Collateral Principal Percentage shall mean the percentage
equivalent of a fraction, the numerator of which is the Collateral Initial
Invested Amount and the denominator of which is the Initial Invested
Amount.
"Collateral Rate" shall mean, for any Interest Period, the rate
specified in the Loan Agreement.
"Collateral Required Amount" shall have the meaning specified in
subsection 4.4(c).
"Collateral Servicing Fee" shall have the meaning set forth in
Section 3.1.
"Controlled Accumulation Amount" shall mean, for any Distribution
Date with respect to the Controlled Accumulation Period, $53,416,667;
provided, however, that, if the Controlled Accumulation Period Length is
determined to be less than 12 months, the Controlled Accumulation Amount
for each Distribution Date with respect to the Controlled Accumulation
Period will be equal to (i) the product of (x) the sum of the Class A
Initial Invested Amount and the Class B Initial Invested Amount and (y) the
Controlled Accumulation Period Factor for the related Monthly Period
divided by (ii) the Required Accumulation Factor Number.
"Controlled Accumulation Period" shall mean, unless a Pay Out
Event shall have occurred prior thereto, the period commencing at the close
of business on May 31, 2000 or such later date as is determined in
accordance with subsection 4.3(c) and ending on the first to occur of (a)
the commencement of the Early Amortization Period, (b) the payment in full
of the Invested Amount and (c) the Series 1998-2 Termination Date.
"Controlled Accumulation Period Factor" shall mean, for each
Monthly Period, a fraction, the numerator of which is equal to the sum of
the series invested amounts as of the last day of the prior Monthly Period
of all outstanding Series, and the denominator of which is equal to the sum
(without duplication) of (a) the Series Invested Amount as of the last day
of the prior Monthly Period, (b) the series invested amounts as of the last
day of the prior Monthly Period of all outstanding Series (other than
Series 1998-2) that are not expected to be in their revolving periods, and
(c) the series invested amounts as of the last day of the prior Monthly
Period of all other outstanding Series that are not Principal Sharing
Series and are in their revolving periods.
"Controlled Accumulation Period Length" has the meaning specified
in subsection 4.3(c).
"Controlled Deposit Amount" shall mean, for any Distribution Date
with respect to the Controlled Accumulation Period, an amount equal to the
sum of the Controlled Accumulation Amount for such Distribution Date and
any Deficit Controlled Accumulation Amount for the immediately preceding
Distribution Date.
"Covered Amount" shall mean, for any Distribution Date with
respect to the Controlled Accumulation Period or the first Distribution
Date during the Early Amortization Period, if such Distribution Date occurs
prior to the date the Class A Invested Amount and the Class B Invested
Amount are paid in full, an amount equal to the product of (i) a fraction,
the numerator of which is equal to the actual number of days in the related
Interest Period and the denominator of which is 360, and (ii) the sum of
(a) the product of (x) a fraction, the numerator of which is an amount
equal to the excess, if any, of the outstanding principal amount of the
Class A Securities over the Class A Adjusted Invested Amount, and the
denominator of which is an amount equal to the excess of the sum of the
outstanding principal amount of the Class A Securities and the outstanding
principal amount of the Class B Securities, over the sum of the Class A
Adjusted Invested Amount and the Class B Adjusted Invested Amount, in each
such case as of the preceding Distribution Date and (y) the Class A
Interest Rate in effect during such Interest Period and (b) the product of
(x) a fraction, the numerator of which is equal to the excess, if any, of
the outstanding principal amount of the Class B Securities over the Class B
Adjusted Invested Amount, and the denominator of which is an amount equal
to the excess of the sum of the outstanding principal amount of the Class A
Securities and the outstanding principal amount of the Class B Securities,
over the sum of the Class A Adjusted Invested Amount and the Class B
Adjusted Invested Amount, in each case as of the preceding Distribution
Date and (y) the Class B Interest Rate in effect during such Interest
Period, and (iii) the Principal Funding Account Balance (but not in excess
of the sum of the Class A Adjusted Invested Amount and the Class B Adjusted
Invested Amount), if any, as of the preceding Distribution Date.
"Deficit Controlled Accumulation Amount" shall mean (a) on the
first Distribution Date with respect to the Controlled Accumulation Period,
the excess, if any, of the Controlled Accumulation Amount for such
Distribution Date over the amount deposited in the Principal Funding
Account on such Distribution Date and (b) on each subsequent Distribution
Date with respect to the Controlled Accumulation Period, the excess, if
any, of the Controlled Deposit Amount for such subsequent Distribution Date
over the amount deposited in the Principal Funding Account on such
subsequent Distribution Date.
"Distribution Date" shall mean August 17, 1998 and the 15th day
of each calendar month thereafter, or if such 15th day is not a Business
Day, the next succeeding Business Day.
"Early Amortization Period" shall mean the period commencing at
the close of business on the Business Day immediately preceding the day on
which a Pay Out Event with respect to Series 1998-2 is deemed to have
occurred, and ending on the first to occur of (i) the payment in full of
the Invested Amount and (ii) the Series 1998-2 Termination Date.
"Excess Finance Charge Collections" shall mean, with respect to
any Distribution Date, as the context requires, either (i) the amount set
forth in subsection 4.7(o) initially allocated to Series 1998-2 but which
is available to be allocated to other Excess Allocation Series and applied
in accordance with the terms of the related Supplement to cover amounts
payable with respect to such other Series from Collections of Finance
Charge Receivables or (ii) amounts allocated to other Excess Allocation
Series but which are available to cover Finance Charge Shortfalls with
respect to Series 1998-2 in accordance with subsection 4.9.
"Excess Spread" shall mean, with respect to any Distribution
Date, the sum of the amounts, if any, specified pursuant to subsections
4.5(a)(iv), 4.5(b)(iii), 4.5(c)(ii) and 4.5(d)(ii) with respect to such
Distribution Date.
"Finance Charge Shortfall" shall have the meaning specified in
Section 4.9.
"Floating Allocation Percentage" shall mean, with respect to any
Monthly Period, the percentage equivalent (which percentage shall never
exceed 100%) of a fraction, the numerator of which is the Adjusted Invested
Amount as of the last day of the preceding Monthly Period (or with respect
to the first Monthly Period, the Initial Invested Amount) and the
denominator of which is the product of (x) the Series 1998-2 Allocation
Percentage with respect to such Monthly Period and (y) the sum of (i) the
total amount of Principal Receivables in the Trust as of such day (or with
respect to the first Monthly Period, the total amount of Principal
Receivables in the Trust on the Closing Date) and (ii) the principal amount
on deposit in the Special Funding Account as of such last day (or with
respect to the first Monthly Period, as of the Closing Date); provided,
however, that with respect to any Monthly Period in which an Addition Date
for an Aggregate Addition or a Removal Date occurs, the amount in (y)(i)
above shall be (1) the aggregate amount of Principal Receivables in the
Trust at the end of the day on the last day of the prior Monthly Period for
the period from and including the first day of such Monthly Period to but
excluding the related Addition Date or Removal Date and (2) the aggregate
amount of Principal Receivables in the Trust at the end of the day on the
related Addition Date or Removal Date for the period from and including the
related Addition Date or Removal Date to and including the last day of such
Monthly Period.
"Group I" shall mean Series 1998-2 and each other Series
specified in the related Supplement to be included in Group I.
"Group I Additional Amounts" shall mean, with respect to any
Distribution Date, the sum of (a) Series 1998-2 Additional Amounts for such
Distribution Date and (b) for all other Series included in Group I, the sum
of (i) the aggregate net amount by which the Invested Amounts of such
Series have been reduced as a result of investor charge-offs, subordination
of principal collections and funding the series default amounts in respect
of any Class or Series Enhancement interests of such Series as of such
Distribution Date and (ii) if the applicable Supplements so provide, the
aggregate unpaid amount of interest at the applicable interest rates that
has accrued on the amounts described in the preceding clause (i) for such
Distribution Date.
"Group I Finance Charge Collections" shall mean, with respect to
any Distribution Date, the sum of (a) Investor Finance Charge Collections
for such Distribution Date and (b) the aggregate amount of the investor
finance charge collections for all other Series included in Group I for
such Distribution Date.
"Group I Monthly Fees" shall mean with respect to any
Distribution Date, the sum of (a) Series 1998-2 Monthly Fees for such
Distribution Date and (b) the aggregate amount of the servicing fees,
investor fees, fees payable to any Series Enhancer and any other similar
fees, which are payable out of redirected investor finance charge
collections pursuant to the related Supplements, for all other Series
included in Group I for such Distribution Date.
"Group I Monthly Interest" shall mean, with respect to any
Distribution Date, the sum of (a) Series 1998-2 Monthly Interest for such
Distribution Date and (b) the aggregate amount of monthly interest,
including overdue monthly interest and interest on such overdue monthly
interest, if such amounts are payable out of redirected investor finance
charge collections pursuant to the related Supplements, for all other
Series included in Group I for such Distribution Date.
"Group I Series Default Amount" shall mean, with respect to any
Distribution Date, the sum of (a) the Series Default Amount for such
Distribution Date and (b) the aggregate amount of the series default
amounts for all other Series included in Group I for such Distribution
Date.
"Xxxxxx" shall mean Xxxxxx Trust and Savings Bank, an Illinois
banking corporation.
"Initial Invested Amount" shall mean $750,000,000.
"Initial Yield Supplement Deposit" has the meaning specified in
subsection 4.15(b).
"Interest Period" shall mean, with respect to any Distribution
Date, the period from and including the immediately preceding Distribution
Date (or, in the case of the first Distribution Date, the Closing Date) to
but excluding such Distribution Date.
"Invested Amount" shall mean, as of any date of determination, an
amount equal to the sum of (a) the Class A Invested Amount as of such date,
(b) the Class B Invested Amount as of such date, (c) the Collateral
Invested Amount as of such date and (d) the Class D Invested Amount as of
such date.
"Investor Finance Charge Collections" shall mean with respect to
any Distribution Date, an amount equal to the product of (a) the Floating
Allocation Percentage for the related Monthly Period and (b) Series 1998-2
Allocable Finance Charge Collections deposited in the Collection Account
for the related Monthly Period.
"LIBOR" shall mean, for any Interest Period, an interest rate per
annum determined by the Trustee for such Interest Period in accordance with
the provisions of Section 4.13.
"LIBOR Determination Date" shall mean (i) for the period from the
Closing Date through July 14, 1998, June 24, 1998, (ii) for the period from
July 15, 1998 through August 16, 1998, July 13, 1998, and (iii) for each
subsequent Interest Period, the second London Business Day prior to the
commencement of such Interest Period.
"Loan Agreement" shall mean the agreement among the Transferor,
the Trustee and the Collateral Interest Holder, dated June 26, 1998.
"London Business Day" shall mean any day on which dealings in
deposits in United States dollars are transacted in the London interbank
market.
"Monthly Interest" means, with respect to any Distribution Date,
the Class A Monthly Interest, the Class B Monthly Interest and the
Collateral Monthly Interest for such Distribution Date.
"Monthly Period" shall mean each calendar month.
"Monthly Servicing Fee" shall have the meaning specified in
Section 3.1.
"Net Servicing Fee Rate" shall mean (a) so long as the
Transferor, an Affiliate thereof, Holdings or an Affiliate thereof is the
Servicer, 1.25% per annum and (b) if the Transferor, an Affiliate thereof,
Holdings or an Affiliate thereof is no longer the Servicer, 2% per annum.
"Pay Out Event" shall mean any Pay Out Event specified in Section
6.1.
"Percentage Allocation" shall have the meaning specified in
subsection 4.1(c)(ii)(y).
"Principal Allocation Percentage" shall mean, with respect to any
Monthly Period, the percentage equivalent (which percentage shall never
exceed 100%) of a fraction, the numerator of which is (a) during the
Revolving Period, the Series Adjusted Invested Amount for Series 1998-2 as
of the last day of the immediately preceding Monthly Period (or, in the
case of the first Monthly Period, the Closing Date) and (b) during the
Controlled Accumulation Period or the Early Amortization Period, the Series
Adjusted Invested Amount for Series 1998-2 as of the last day of the
Revolving Period and the denominator of which is the product of (x) the sum
of (i) the total amount of Principal Receivables in the Trust as of the
last day of the immediately preceding Monthly Period (or with respect to
the first Monthly Period, the total amount of Principal Receivables in the
Trust as of the Closing Date) and (ii) the principal amount on deposit in
the Special Funding Account as of such last day (or with respect to the
first Monthly Period, the Closing Date) and (y) the Series 1998-2
Allocation Percentage as of the last day of the immediately preceding
Monthly Period; provided, however, that with respect to any Monthly Period
in which an Addition Date for an Aggregate Addition or a Removal Date
occurs the amount in (x)(i) above shall be (1) the aggregate amount of
Principal Receivables in the Trust at the end of the day on the last day of
the prior Monthly Period for the period from and including the first day of
such Monthly Period to but excluding the related Addition Date or Removal
Date and (2) the aggregate amount of Principal Receivables in the Trust at
the end of the day on the related Addition Date or Removal Date for the
period from and including the related Addition Date or Removal Date to and
including the last day of such Monthly Period; and provided further, that
if after the commencement of the Controlled Accumulation Period a Pay Out
Event occurs with respect to another Series that was designated in the
Supplement therefor as a Series that is a "Paired Series" with respect to
Series 1998-2, the Transferor may, by written notice delivered to the
Trustee and the Servicer, designate a different numerator for the foregoing
fraction, provided that (x) such numerator is not less than the Adjusted
Invested Amount as of the last day of the revolving period for such Paired
Series, (y) the Transferor shall have received written notice from each
Rating Agency that the Rating Agency Condition has been satisfied with
respect to such designation and shall have delivered copies of each such
written notice to the Servicer and the Trustee and (z) the Transferor shall
have delivered to the Trustee an Officer's Certificate to the effect that,
based on the facts known to such officer at such time, in the reasonable
belief of the Transferor, such designation will not cause a Pay Out Event
or an event that, after the giving of notice or the lapse of time, would
constitute a Pay Out Event, to occur with respect to Series 1998-2.
"Principal Funding Account" shall have the meaning specified in
subsection 4.3(a)(i).
"Principal Funding Account Balance" shall mean, with respect to
any date of determination during the Controlled Accumulation Period, the
principal amount, if any, on deposit in the Principal Funding Account on
such date of determination.
"Principal Funding Investment Proceeds" shall have the meaning
specified in subsection 4.3(a)(ii).
"Principal Funding Investment Shortfall" shall mean, with respect
to each Interest Period during the Controlled Accumulation Period, the
amount, if any, by which the Principal Funding Investment Proceeds are less
than the Covered Amount.
"Rating Agency" shall mean, with respect to any date, each rating
agency which is then rating any of the Class A Securities, the Class B
Securities, the Collateral Interest or the Class D Securities at the
request of the Transferor.
"Reassignment Amount" shall mean, with respect to any
Distribution Date, after giving effect to any deposits and distributions
otherwise to be made on such Distribution Date, the sum of (i) the Adjusted
Invested Amount on such Distribution Date, plus (ii) Monthly Interest for
such Distribution Date and any Monthly Interest previously due but not
distributed to the Series 1998-2 Securityholders on a prior Distribution
Date, plus (iii) the amount of Additional Interest, if any, for such
Distribution Date and any Additional Interest previously due but not
distributed to the Series 1998-2 Securityholders on a prior Distribution
Date.
"Redirected Investor Finance Charge Collections" shall mean an
amount equal to that portion of Group I Finance Charge Collections
allocated to Series 1998-2 pursuant to Section 4.10.
"Redirected Principal Collections" shall mean, with respect to
any Monthly Period, the product of (a) the Series 1998-2 Allocable
Principal Collections deposited in the Collection Account for such Monthly
Period and (b) the sum of the Class B Principal Percentage, the Collateral
Principal Percentage and the Class D Principal Percentage.
"Reference Banks" shall mean three major banks in the London
interbank market selected by the Servicer.
"Required Accumulation Factor Number" shall be equal to a
fraction, rounded upwards to the nearest whole number, the numerator of
which is one and the denominator of which is equal to the lowest monthly
principal payment rate on the Accounts, expressed as a decimal, for the 12
months preceding the date of such calculation.
"Required Amount" shall mean, with respect to any Monthly Period,
the sum of the Class A Required Amount, the Class B Required Amount and the
Collateral Required Amount.
"Required Enhancement Amount" shall mean (a) on the initial
Distribution Date, $109,000,000 and (b) on any Distribution Date
thereafter, an amount equal to the greater of (i) 14.5% of the sum of the
Class A Adjusted Invested Amount and the Class B Adjusted Invested Amount
on such Distribution Date, after taking into account deposits into the
Principal Funding Account on such Distribution Date and payments to be made
on such Distribution Date, and the Collateral Invested Amount and the Class
D Invested Amount on such Distribution Date after any adjustments made on
such Distribution Date and (ii) 5.0% of the Initial Invested Amount;
provided, however, (x) that if either (i) there is a reduction in the
Collateral Invested Amount pursuant to clause (c), (d) or (e) of the
definition of such term or (ii) a Pay Out Event with respect to the Series
1998-2 Securities has occurred, the Required Enhancement Amount for any
Distribution Date shall equal the Required Enhancement Amount for the
Distribution Date immediately preceding such reduction or Pay Out Event,
(y) in no event shall the Required Enhancement Amount exceed the sum of the
outstanding principal amounts of (i) the Class A Securities and (ii) the
Class B Securities, each as of the last day of the Monthly Period preceding
such Distribution Date after taking into account the payments to be made on
such immediately preceding Distribution Date, minus all amounts on deposit
in the Principal Funding Account and (z) the Required Enhancement Amount
may be reduced at the Transferor's option at any time to a lesser amount if
the Transferor, the Servicer, the Collateral Interest Holder and the
Trustee have been provided evidence that the Rating Agency Condition shall
have been satisfied.
"Required Reserve Account Amount" shall mean, with respect to any
Distribution Date on or after the Reserve Account Funding Date, an amount
equal to (1) 0.5% of the sum of the Class A Invested Amount and the Class B
Invested Amount as of the preceding Distribution Date (after giving effect
to all changes therein on such date) or (2) any other amount designated by
the Transferor, provided that the Transferor shall have received written
notice from each Rating Agency that the Rating Agency Condition shall have
been satisfied with respect to such designation and shall have delivered
copies of each such written notice to the Servicer and the Trustee.
"Reserve Account" shall have the meaning specified in subsection
4.12(a).
"Reserve Account Funding Date" shall mean the Distribution Date
which occurs not later than the earliest of (a) the Distribution Date with
respect to the Monthly Period which commences 3 months prior to the
commencement of the Controlled Accumulation Period; (b) the first
Distribution Date for which the difference between (x) the Series Adjusted
Portfolio Yield and (y) the Base Rate is less than 2.00%, but in such event
the Reserve Account Funding Date shall not be required to occur earlier
than the Distribution Date which commences 12 months prior to the
commencement of the Controlled Accumulation Period; (c) the first
Distribution Date for which the difference between (x) the Series Adjusted
Portfolio Yield and (y) the Base Rate is less than 3.00%, but in such event
the Reserve Account Funding Date shall not be required to occur earlier
than the Distribution Date which commences 6 months prior to the
commencement of the Controlled Accumulation Period; or (d) the first
Distribution Date for which the difference between (x) the Series Adjusted
Portfolio Yield and (y) the Base Rate is less than 3.50%, but in such event
the Reserve Account Funding Date shall not be required to occur earlier
than the Distribution Date which commences 4 months prior to the
commencement of the Controlled Accumulation Period.
"Reserve Account Surplus" shall mean, as of any date of
determination, the amount, if any, by which the amount on deposit in the
Reserve Account exceeds the Required Reserve Account Amount.
"Reserve Draw Amount" shall have the meaning specified in
subsection 4.12(c).
"Revolving Period" shall mean the period from and including the
Closing Date to, but not including, the earlier of (a) the commencement of
the Controlled Accumulation Period and (b) the commencement of the Early
Amortization Period.
"Series Adjusted Portfolio Yield" shall mean, with respect to any
Monthly Period, the annualized percentage equivalent of a fraction, (A) the
numerator of which is equal to (a) Redirected Investor Finance Charge
Collections with respect to such Monthly Period, plus (b) the amount of any
Principal Funding Investment Proceeds for the related Distribution Date,
plus (c) provided that each Rating Agency has consented in writing to the
inclusion thereof in calculating the Series Adjusted Portfolio Yield, any
Excess Finance Charge Collections pursuant to clause (ii) of the definition
thereof that are allocated to Series 1998-2 with respect to such Monthly
Period, plus (d) the amount of funds, if any, withdrawn from the Reserve
Account which pursuant to Section 4.12(d) are required to be included as
Class A Available Funds or Class B Available Funds for the Distribution
Date with respect to such Monthly Period, plus (e) the Yield Supplement
Draw Amount for the Distribution Date with respect to such Monthly Period,
if any, and minus (f) the Series Default Amount for the Distribution Date
with respect to such Monthly Period, and (B) the denominator of which is
the Invested Amount as of the last day of the preceding Monthly Period.
"Series Default Amount" shall mean, with respect to any Monthly
Period, an amount equal to the product of (a) the Series 1998-2 Allocable
Defaulted Amount for such Monthly Period and (b) the Floating Allocation
Percentage for such Monthly Period.
"Series Enhancement" with respect to Series 1998-2 shall mean (a)
with respect to the Class A Securities, the subordination of the Class B
Securities, the Collateral Interest and the Class D Securities, (b) with
respect to the Class B Securities, the subordination of the Collateral
Interest and the Class D Securities, and (c) with respect to the Collateral
Interest, the subordination of the Class D Securities.
"Series Invested Amount" shall mean the Initial Invested Amount.
"Series Required Transferor Amount" shall mean an amount equal to
7% of the Invested Amount.
"Series 1998-2" shall mean the Series of Securities the terms of
which are specified in this Supplement.
"Series 1998-2 Additional Amounts" shall mean, with respect to
any Distribution Date, the sum of the amounts determined pursuant to
subsections 4.7(b), (e), (i) and (o) for such Distribution Date.
"Series 1998-2 Allocable Defaulted Amount" shall mean the Series
Allocable Defaulted Amount with respect to Series 1998-2.
"Series 1998-2 Allocable Finance Charge Collections" shall mean
the Series Allocable Finance Charge Collections with respect to Series
1998-2.
"Series 1998-2 Allocable Principal Collections" shall mean the
Series Allocable Principal Collections with respect to Series 1998-2.
"Series 1998-2 Allocation Percentage" shall mean the Series
Allocation Percentage with respect to Series 1998-2.
"Series 1998-2 Security" shall mean a Class A Security, a Class B
Security, the Collateral Interest or a Class D Security.
"Series 1998-2 Securityholder" shall mean a Class A
Securityholder, a Class B Securityholder, the Collateral Interest Holder or
a Class D Securityholder.
"Series 1998-2 Securityholders' Interest" shall mean the
Securityholders' Interest for Series 1998-2, including the Collateral
Interest.
"Series 1998-2 Monthly Fees" shall mean, with respect to any
Distribution Date, the amount determined pursuant to subsection 4.5(a)(ii),
4.5(b)(ii), 4.5(c)(i) and 4.5(d)(i).
"Series 1998-2 Monthly Interest" shall mean the amounts
determined pursuant to subsections 4.2(a), (b), (c) and (d).
"Series 1998-2 Principal Shortfall" shall have the meaning
specified in Section 4.11.
"Series 1998-2 Termination Date" shall mean the November 2004
Distribution Date.
"Servicer Interchange" shall mean, for any Monthly Period, the
portion of Collections of Finance Charge Receivables allocated to the
Invested Amount with respect to such Monthly Period that is attributable to
Interchange; provided, however, that Servicer Interchange for a Monthly
Period shall not exceed one-twelfth of the product of (i) the Adjusted
Invested Amount as of the last day of such Monthly Period and (ii) 0.75%.
"Servicing Base Amount" shall have the meaning specified in
Section 3.1.
"Servicing Fee Rate" shall mean 2.0% per annum.
"Telerate Page 3750" shall mean the display page currently so
designated on the Dow Xxxxx Telerate Service (or such other page as may
replace that page on that service for the purpose of displaying comparable
rates or prices).
"Transferor Percentage" shall mean 100% minus (a) the Floating
Allocation Percentage, when used at any time with respect to Finance Charge
Receivables and Defaulted Receivables, or (b) the Principal Allocation
Percentage, when used at any time with respect to Principal Receivables.
"Yield Supplement Account" shall have the meaning specified in
subsection 4.15(a).
"Yield Supplement Draw Amount" shall mean an amount equal to the
sum of (a) (i) for the six Distribution Dates from and including the August
1998 Distribution Date through and including the January 1999 Distribution
Date, 1/9th of the Initial Yield Supplement Deposit, (ii) for the six
Distribution Dates from and including the February 1999 Distribution Date
through and including the July 1999 Distribution Date, 1/18th of the
Initial Yield Supplement Deposit and (iii) thereafter, zero and (b) with
respect to any such Distribution Date, the investment earnings on the
amounts on deposit in the Yield Supplement Account during the preceding
Interest Period.
(b) Notwithstanding anything to the contrary in this Supplement
or the Agreement, the term "Rating Agency" shall mean, whenever used in
this Supplement or the Agreement with respect to Series 1998-2, Moody's,
Standard & Poor's and Fitch; provided, however, that references to "Rating
Agency" in the definition of "Eligible Investments" shall be deemed to not
include Fitch to the extent that an investment is rated by Moody's and
Standard & Poor's, but not by Fitch. As used in this Supplement and in
the Agreement with respect to Series 1998-2, "highest investment category"
shall mean (i) in the case of Standard & Poor's, AAA or A-1+, as
applicable, (ii) in the case of Moody's, Aaa or P-1, as applicable, and
(iii) in the case of Fitch, F-1+ or AAA, as applicable.
(c) Each capitalized term defined herein shall relate to the
Series 1998-2 Securities and no other Series of Securities issued by the
Trust, unless the context otherwise requires. All capitalized terms used
herein and not otherwise defined herein have the meanings ascribed to them
in the Agreement. In the event that any term or provision contained herein
shall conflict with or be inconsistent with any term or provision contained
in the Agreement, the terms and provisions of this Supplement shall govern.
(d) The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Supplement shall refer to this Supplement
as a whole and not to any particular provision of this Supplement;
references to any Article, subsection, Section or Exhibit are references to
Articles, subsections, Sections and Exhibits in or to this Supplement
unless otherwise specified; and the term "including" means "including
without limitation."
Section 2.2. Form of Delivery of Series 1998-2 Securities;
Depositary.
(a) The Class A Securities and the Class B Securities shall be
delivered as Book-Entry Securities as provided in subsections 6.1 and 6.10
of the Agreement. The Collateral Interest shall be delivered as Registered
Securities, in uncertificated form, as provided in subsection 6.1 of the
Agreement. The Class D Securities shall be delivered as Definitive Securities
as provided in subsection 6.12 of the Agreement. The Class A Securities and
the Class B Securities shall be issuable and transferable in the minimum
denominations of $1,000 of original certificate balance and integral
multiples of $1,000 in excess thereof.
(b) The Depositary for Series 1998-2 shall be The Depository
Trust Company, and the Class A Securities and the Class B Securities shall
be initially registered in the name of Cede & Co., its nominee. The Class
A Securities and the Class B Securities will initially be held by the
Trustee as custodian for The Depository Trust Company.
ARTICLE III
Servicing Fee and Interchange
Section 3.1. Servicing Compensation; Interchange.
(a) Servicing Fee. The share of the Servicing Fee allocable to
the Series 1998-2 Securityholders with respect to any Distribution Date
(the "Monthly Servicing Fee") shall be equal to one-twelfth of the product
of (a) the Servicing Fee Rate and (b) (i) the Adjusted Invested Amount as
of the last day of the Monthly Period preceding such Distribution Date,
minus (ii) the product of (A) the amount, if any, on deposit in the Special
Funding Account as of the last day of the Monthly Period preceding such
Distribution Date and (B) the Series 1998-2 Allocation Percentage with
respect to such Monthly Period (the amount calculated pursuant to this
clause (b) is referred to as the "Servicing Base Amount"); provided,
however, that with respect to the first Distribution Date, the Monthly
Servicing Fee shall be equal to $1,458,333. On each Distribution Date
related to a Monthly Period for which Holdings or an Affiliate of Holdings
is the Servicer, the Servicer Interchange with respect to the related
Monthly Period on deposit in the Collection Account shall be withdrawn from
the Collection Account and paid to the Servicer in payment of a portion of
the Monthly Servicing Fee with respect to such Monthly Period. Should the
Servicer Interchange on deposit in the Collection Account on any
Distribution Date with respect to the related Monthly Period be less than
one-twelfth of .75% of the Adjusted Investor Interest as of the last day of
such Monthly Period, the Monthly Servicing Fee with respect to such Monthly
Period will not be paid to the extent of such insufficiency of Servicer
Interchange on deposit in the Collection Account. The share of the Monthly
Servicing Fee allocable to the Class A Securityholders with respect to any
Distribution Date (the "Class A Servicing Fee") shall be equal to one-
twelfth of the product of (a) the Class A Floating Percentage, (b) the Net
Servicing Fee Rate and (c) the Servicing Base Amount; provided, however,
that with respect to the first Distribution Date, the Class A Servicing Fee
shall be equal to $641,667. The share of the Monthly Servicing Fee
allocable to the Class B Securityholders with respect to any Distribution
Date (the "Class B Servicing Fee") shall be equal to one-twelfth of the
product of (a) the Class B Floating Percentage, (b) the Net Servicing Fee
Rate and (c) the Servicing Base Amount; provided, however, that with
respect to the first Distribution Date, the Class B Servicing Fee shall be
equal to $137,326. The share of the Monthly Servicing Fee allocable to the
Collateral Interest with respect to any Distribution Date (the "Collateral
Servicing Fee") shall be equal to one-twelfth of the product of the (a)
Collateral Floating Percentage, (b) the Net Servicing Fee Rate and (c) the
Servicing Base Amount; provided, however, that with respect to the first
Distribution Date, the Collateral Servicing Fee shall be equal to $81,424.
The share of the Monthly Servicing Fee allocable to the Class D
Securityholders with respect to any Distribution Date (the "Class D
Servicing Fee") shall be equal to one-twelfth of the product of (a) the
Class D Floating Percentage, (b) the Net Servicing Fee Rate and (c) the
Servicing Base Amount; provided, however, that with respect to the first
Distribution Date, the Class D Servicing Fee shall be equal to $51,042.
The remainder of the Servicing Fee shall be paid by the Holder of the
Transferor Security or the investor securityholders of other Series (as
provided in the related Supplements) and in no event shall the Trust, the
Trustee or the Series 1998-2 Securityholders be liable for the share of the
Servicing Fee to be paid by the Holder of the Transferor Security or the
investor securityholders of any other Series.
(b) Interchange. On or before each Determination Date, the
Transferor shall notify the Servicer of the amount of Interchange to be
included as Series 1998-2 Allocable Finance Charge Collections with respect
to the preceding Monthly Period as determined pursuant to this subsection
3.1(b). Such amount of Interchange shall be equal to the product of (i)
the amount of Interchange attributable to the Accounts, as reasonably
estimated by the Transferor, and (ii) the Series 1998-2 Allocation
Percentage. On each Distribution Date, the Transferor shall pay to the
Servicer, and the Servicer shall deposit into the Collection Account, in
immediately available funds, the amount of Interchange to be so included as
Series 1998-2 Allocable Finance Charge Collections with respect to the
preceding Monthly Period and such Interchange shall be treated as a portion
of Series 1998-2 Allocable Finance Charge Collections for all purposes of
this Supplement and the Agreement. Notwithstanding the above, if the
Rating Agency Condition is satisfied with respect thereto, the Transferor
may, in lieu of transferring Interchange as set forth above, designate
Discount Option Receivables pursuant to Section 2.12 of the Agreement in an
amount approximately equal to the then current Interchange with respect to
the Accounts.
ARTICLE IV
Rights of Series 1998-2 Securityholders and
Allocation and Application of Collections
Section 4.1. Collections and Allocations.
(a) Allocations. Collections of Finance Charge Receivables and
Principal Receivables and Defaulted Receivables allocated to Series 1998-2
pursuant to Article IV of the Agreement (and, as described herein,
Collections of Finance Charge Receivables redirected from other Series in
Group I) shall be allocated and distributed or redirected as set forth in
this Article.
(b) Payments to the Transferor. The Servicer shall on Deposit
Dates pay to the Holder of the Transferor Security the following amounts:
(i) an amount equal to the Transferor Percentage for the related
Monthly Period of Series 1998-2 Allocable Finance Charge Collections;
and
(ii) an amount equal to the Transferor Percentage for the related
Monthly Period of Series 1998-2 Allocable Principal Collections, if
the Transferor Amount (determined after giving effect to any Principal
Receivables transferred to the Trust on such Deposit Date) exceeds the
Required Transferor Amount.
The withdrawals to be made from the Collection Account pursuant
to this subsection 4.1(b) do not apply to deposits into the Collection
Account that do not represent Collections, including payment of the
purchase price for the Securityholders' Interest pursuant to Section 2.6 or
10.1 of the Agreement, payment of the purchase price for the Series 1998-2
Securityholders' Interest pursuant to Section 7.1 of this Supplement and
proceeds from the sale, disposition or liquidation of Receivables pursuant
to Section 9.1 or 12.2 of the Agreement.
(c) Allocations to the Series 1998-2 Securityholders. The
Servicer shall, prior to the close of business on any Deposit Date,
allocate to the Series 1998-2 Securityholders the following amounts as set
forth below:
(i) Allocations of Finance Charge Collections. The Servicer shall
allocate to the Series 1998-2 Securityholders and retain in the
Collection Account for application as provided herein an amount equal
to the product of (A) the Floating Allocation Percentage and (B) the
Series 1998-2 Allocation Percentage and (C) the aggregate amount of
Collections of Finance Charge Receivables deposited in the Collection
Account on such Deposit Date.
(ii) Allocations of Principal Collections. The Servicer shall
allocate to the Series 1998-2 Securityholders the following amounts as
set forth below:
(x) Allocations During the Revolving Period. During the Revolving
Period (A) an amount equal to the product of (I) the sum of the Class
B Principal Percentage, the Collateral Principal Percentage and the
Class D Principal Percentage and (II) the Principal Allocation
Percentage and (III) the Series 1998-2 Allocation Percentage and (IV)
the aggregate amount of Collections of Principal Receivables deposited
in the Collection Account on such Deposit Date, shall be allocated to
the Series 1998-2 Securityholders and retained in the Collection
Account until applied as provided herein and (B) an amount equal to
the product of (I) the Class A Principal Percentage and (II) the
Principal Allocation Percentage and (III) the Series 1998-2 Allocation
Percentage and (IV) the aggregate amount of Collections of Principal
Receivables deposited in the Collection Account on such Deposit Date
shall be allocated to the Series 1998-2 Securityholders and, to the
extent needed to make any distribution pursuant to subsection
4.5(e)(i), deposited in the Collection Account, and otherwise shall be
first, if any other Principal Sharing Series is outstanding and in its
amortization period or accumulation period, retained in the Collection
Account for application, to the extent necessary, as Shared Principal
Collections on the related Distribution Date, and second paid to the
Holder of the Transferor Security; provided, however, that such amount
to be paid to the Holder of the Transferor Security on any Deposit
Date shall be paid to such Holders only if the Transferor Amount on
such Deposit Date is greater than the Required Transferor Amount
(after giving effect to all Principal Receivables transferred to the
Trust on such day) and otherwise shall be deposited in the Special
Funding Account.
(y) Allocations During the Controlled Accumulation Period.
During the Controlled Accumulation Period (A) an amount equal to the
product of (I) the sum of the Class B Principal Percentage, the
Collateral Principal Percentage and the Class D Principal Percentage
and (II) the Principal Allocation Percentage and (III) the Series
1998-2 Allocation Percentage and (IV) the aggregate amount of
Collections of Principal Receivables deposited in the Collection
Account on such Deposit Date, shall be allocated to the Series 1998-2
Securityholders and retained in the Collection Account until applied
as provided herein and (B) an amount equal to the product of (I) the
Class A Principal Percentage and (II) the Principal Allocation
Percentage and (III) the Series 1998-2 Allocation Percentage and (IV)
the aggregate amount of Collections of Principal Receivables deposited
in the Collection Account on such Deposit Date (such product for any
such date, a "Percentage Allocation") shall be allocated to the Series
1998-2 Securityholders and retained in the Collection Account until
applied as provided herein; provided, however, that if the sum of such
Percentage Allocation and all preceding Percentage Allocations with
respect to the same Monthly Period exceeds the Controlled Deposit
Amount for the related Distribution Date, then such excess shall not
be treated as a Percentage Allocation and shall be first, if any other
Principal Sharing Series is outstanding and in its amortization period
or accumulation period, retained in the Collection Account for
application, to the extent necessary, as Shared Principal Collections
on the related Distribution Date, and second paid to the Holder of the
Transferor Security only if the Transferor Amount on such Deposit Date
is greater than the Required Transferor Amount (after giving effect to
all Principal Receivables transferred to the Trust on such day) and
otherwise shall be deposited in the Special Funding Account.
(z) Allocations During the Early Amortization Period. During the
Early Amortization Period, an amount equal to the product of (A) the
Principal Allocation Percentage and (B) the Series 1998-2 Allocation
Percentage and (C) the aggregate amount of Collections of Principal
Receivables deposited in the Collection Account on such Deposit Date,
shall be allocated to the Series 1998-2 Securityholders and retained
in the Collection Account until applied as provided herein; provided,
however, that after the date on which an amount of such Collections
equal to the Adjusted Invested Amount has been deposited into the
Collection Account and allocated to the Series 1998-2 Securityholders,
such amount shall be first, if any other Principal Sharing Series is
outstanding and in its amortization period or accumulation period,
retained in the Collection Account for application, to the extent
necessary, as Shared Principal Collections on the related Distribution
Date, and second paid to the Holder of the Transferor Security only if
the Transferor Amount on such date is greater than the Required
Transferor Amount (after giving effect to all Principal Receivables
transferred to the Trust on such day) and otherwise shall be deposited
in the Special Funding Account.
Section 4.2. Determination of Monthly Interest.
(a) The amount of monthly interest (the "Class A Monthly
Interest") distributable from the Collection Account with respect to the
Class A Securities on any Distribution Date shall be an amount equal to the
product of (i) a fraction, the numerator of which is equal to the actual
number of days in the Interest Period preceding such Distribution Date and
the denominator of which is 360, (ii) the Class A Interest Rate and (iii)
the outstanding principal balance of the Class A Securities as of close of
business on the last day of the preceding Monthly Period (or with respect
to the initial Distribution Date, the Closing Date); provided, that in the
case of the first Distribution Date the Class A Monthly Interest shall be
an amount equal to $4,390,100.
On the Determination Date preceding each Distribution Date, the
Servicer shall determine the excess, if any (the "Class A Interest
Shortfall"), of (x) the Class A Monthly Interest for the preceding
Distribution Date over (y) the aggregate amount of funds allocated and
available to pay such Class A Monthly Interest on such preceding
Distribution Date. If the Class A Interest Shortfall with respect to any
Distribution Date is greater than zero, on each subsequent Distribution
Date until such Class A Interest Shortfall is fully paid, an additional
amount ("Class A Additional Interest") equal to the product of (i) a
fraction, the numerator of which is the actual number of days in the
preceding Interest Period and the denominator of which is 360, (ii) the
Class A Interest Rate plus 2.0% per annum and (iii) such Class A Interest
Shortfall (or the portion thereof which has not been paid to the Class A
Securityholders) shall be payable as provided herein with respect to the
Class A Securities. Notwithstanding anything to the contrary herein, Class
A Additional Interest shall be payable or distributed to the Class A
Securityholders only to the extent permitted by applicable law.
(b) The amount of monthly interest (the "Class B Monthly
Interest") distributable from the Collection Account with respect to the
Class B Securities on any Distribution Date shall be an amount equal to the
product of (i) a fraction, the numerator of which is equal to the actual
number of days in the preceding Interest Period and the denominator of
which is 360, (ii) the Class B Interest Rate and (iii) the Class B Invested
Amount as of the close of business on the last day of the preceding Monthly
Period (or with respect to the initial Distribution Date, the Closing
Date); provided, that in the case of the first Distribution Date, Class B
Monthly Interest shall be an amount equal to $973,824.58.
On the Determination Date preceding each Distribution Date, the
Servicer shall determine the excess, if any (the "Class B Interest
Shortfall"), of (x) the Class B Monthly Interest for the preceding
Distribution Date over (y) the aggregate amount of funds allocated and
available to pay such Class B Monthly Interest on such preceding
Distribution Date. If the Class B Interest Shortfall with respect to any
Distribution Date is greater than zero, on each subsequent Distribution
Date until such Class B Interest Shortfall is fully paid, an additional
amount ("Class B Additional Interest") equal to the product of (i) a
fraction, the numerator of which is the actual number of days in the
preceding Interest Period and the denominator of which is 360, (ii) the
Class B Interest Rate plus 2.0% per annum and (iii) such Class B Interest
Shortfall (or the portion thereof which has not been paid to the Class B
Securityholders) shall be payable as provided herein with respect to the
Class B Securities. Notwithstanding anything to the contrary herein, Class
B Additional Interest shall be payable or distributed to the Class B
Securityholders only to the extent permitted by applicable law.
(c) The amount of monthly interest ("Collateral Monthly
Interest") distributable from the Collection Account with respect to the
Collateral Invested Amount on any Distribution Date shall be an amount
equal to the product of (i) a fraction, the numerator of which is equal to
the actual number of days in the preceding Interest Period and the
denominator of which is 360, (ii) the Collateral Rate in effect with
respect to the applicable Interest Period, and (iii) the Collateral
Invested Amount as of the close of business on the preceding Distribution
Date (after giving effect to any increase or decrease in the Collateral
Invested Amount on such preceding Distribution Date); provided that with
respect to the first Distribution Date such Collateral Invested Amount
shall be determined as of the close of business on the Closing Date.
On the Determination Date preceding each Distribution Date, the
Servicer shall determine the excess, if any (the "Collateral Interest
Shortfall"), of (x) the aggregate Collateral Monthly Interest for the
preceding Distribution Date over (y) the aggregate amount of funds
allocated and available to pay such Collateral Monthly Interest on such
preceding Distribution Date. If the Collateral Interest Shortfall with
respect to any Distribution Date is greater than zero, on each subsequent
Distribution Date until such Collateral Interest Shortfall is fully paid,
an additional amount ("Collateral Additional Interest") shall be payable as
provided herein with respect to the Collateral Invested Amount equal to the
product of (i) a fraction, the numerator of which is the actual number of
days in the preceding Interest Period and the denominator of which is 360,
(ii) the Collateral Rate in effect with respect to the period from and
including the immediately preceding Distribution Date to but including such
Distribution Date, (iii) such Collateral Interest Shortfall (or the portion
thereof which has not been paid to the Collateral Interest Holder) and (iv)
the Collateral Rate in effect with respect to the applicable Interest
Period. Notwithstanding anything to the contrary herein, Collateral
Additional Interest shall be payable or distributed to the Collateral
Interest Holder only to the extent permitted by applicable law.
(d) The amount of monthly interest (the "Class D Monthly
Interest") distributable from the Collection Account with respect to the
Class D Securities on any Distribution Date shall be an amount equal to the
product of (i) a fraction, the numerator of which is the actual number of
days in the preceding Interest Period and the denominator of which is 360,
(ii) the Class D Interest Rate and (iii) the Class D Invested Amount as of
the close of business on the last day of the preceding Monthly Period;
provided, that in the case of the first Distribution Date, Class D Monthly
Interest shall be zero.
On the Determination Date preceding each Distribution Date, the
Servicer shall determine the excess, if any (the "Class D Interest
Shortfall"), of (x) the Class D Monthly Interest for the preceding
Distribution Date over (y) the aggregate amount of funds allocated and
available to pay such Class D Monthly Interest on such preceding
Distribution Date. If the Class D Interest Shortfall with respect to any
Distribution Date is greater than zero, on each subsequent Distribution
Date until such Class D Interest Shortfall is fully paid, an additional
amount ("Class D Additional Interest") equal to the product of (i) a
fraction, the numerator of which is the actual number of days in the
preceding Interest Period and the denominator of which is 360, (ii) the
Class D Interest Rate plus 2.0% per annum and (iii) such Class D Interest
Shortfall (or the portion thereof which has not been paid to the Class D
Securityholders) shall be payable as provided herein with respect to the
Class D Securities. Notwithstanding anything to the contrary herein, Class
D Additional Interest shall be payable or distributed to the Class D
Securityholders only to the extent permitted by applicable law.
Section 4.3. Principal Funding Account; Controlled Accumulation
Period.
(a)(i) The Servicer, for the benefit of the Series 1998-2
Securityholders, shall establish and maintain in the name of the
Trustee, on behalf of the Trust, an Eligible Deposit Account (the
"Principal Funding Account"), bearing a designation clearly indicating
that the funds deposited therein are held for the benefit of the
Series 1998-2 Securityholders. The Principal Funding Account shall
initially be established with Xxxxxx.
(ii) At the written direction of the Servicer, funds on deposit
in the Principal Funding Account shall be invested by the Trustee in
Eligible Investments selected by the Servicer. All such Eligible
Investments shall be held by the Trustee for the benefit of the Series
1998-2 Securityholders; provided, that on each Distribution Date all
interest and other investment income (net of investment expenses and
losses earned on such income) ("Principal Funding Investment
Proceeds") on funds on deposit therein shall be applied as set forth
in paragraph (iii) below. Funds on deposit in the Principal Funding
Account shall be invested in Eligible Investments that will mature so
that such funds will be available at the close of business on the
Transfer Date immediately preceding the following Distribution Date.
Unless the Servicer directs otherwise, funds deposited in the
Principal Funding Account on a Transfer Date (which immediately
precedes a Distribution Date) upon the maturity of any Eligible
Investments are not required to be invested overnight. No such
Eligible Investment shall be disposed of prior to its maturity.
(iii) On each Distribution Date with respect to the Controlled
Accumulation Period, the Servicer shall direct the Trustee in writing
to withdraw from the Principal Funding Account and deposit into the
Collection Account all Principal Funding Investment Proceeds then on
deposit in the Principal Funding Account and such Principal Funding
Investment Proceeds shall be treated as a portion of Class A Available
Funds.
(iv) Reinvested interest and other investment income on funds
deposited in the Principal Funding Account shall not be considered to
be principal amounts on deposit therein for purposes of this
Supplement.
(b)(i) The Trustee shall possess all right, title and interest in
all funds on deposit from time to time in the Principal Funding
Account and in all proceeds thereof. The Principal Funding Account
shall be under the sole dominion and control of the Trustee for the
benefit of the Series 1998-2 Securityholders. If, at any time, the
Principal Funding Account ceases to be an Eligible Deposit Account,
the Trustee (or the Servicer on its behalf) shall within 10 Business
Days (or such longer period, not to exceed 30 calendar days, as to
which each Rating Agency may consent) establish a new Principal
Funding Account meeting the conditions specified in paragraph (a)(i)
above as an Eligible Deposit Account and shall transfer any cash or
any investments to such new Principal Funding Account.
(ii) Pursuant to the authority granted to the Servicer in
subsection 3.1(b) of the Agreement, the Servicer shall have the power,
revocable by the Trustee, to make withdrawals and payments or to
instruct the Trustee to make withdrawals and payments from the
Principal Funding Account for the purposes of carrying out the
Servicer's or Trustee's duties hereunder. Pursuant to the authority
granted to the Paying Agent in Section 5.1 of this Supplement and
Section 6.7 of the Agreement, the Paying Agent shall have the power,
revocable by the Trustee, to withdraw funds from the Principal Funding
Account for the purpose of making distributions to the Series 1998-2
Securityholders.
(c) The Controlled Accumulation Period is scheduled to commence
at the close of business on May 31, 2000; provided, however, that if the
Controlled Accumulation Period Length (determined as described below) is
less than twelve months, the date on which the Controlled Accumulation
Period actually commences will be delayed to the close of business on the
last day of the month preceding the month that is the number of months
prior to the Class A Scheduled Payment Date at least equal to the
Controlled Accumulation Period Length and, as a result, the number of
Monthly Periods in the Controlled Accumulation Period will at least equal
the Controlled Accumulation Period Length. Beginning on the Determination
Date immediately preceding the February 2000 Distribution Date, and on each
Determination Date thereafter until the Controlled Accumulation Period
commences, the Servicer will determine the "Controlled Accumulation Period
Length" which will equal the number of months such that the sum of the
Controlled Accumulation Period Factors for each month during such period
will be equal to or greater than the Required Accumulation Factor Number;
provided, however, that the Controlled Accumulation Period Length shall not
be less than one month. Notwithstanding the foregoing, if the Controlled
Accumulation Period Length shall have been determined to be less than
twelve months and, after the date on which such determination is made, a
Pay Out Event or Reinvestment Event (as those terms are defined in the
Supplement for such Series) shall occur with respect to any outstanding
Principal Sharing Series other than Series 1998-2, the Controlled
Accumulation Period will commence on the earlier of (i) the date that such
Pay Out Event or Reinvestment Event shall have occurred with respect to
such Series and (ii) the date on which the Controlled Accumulation Period
is then scheduled to commence.
Section 4.4. Required Amount.
(a) With respect to each Distribution Date, on the related
Determination Date, the Servicer shall determine the amount (the "Class A
Required Amount"), if any, by which (x) the sum of (i) Class A Monthly
Interest for such Distribution Date, (ii) any Class A Monthly Interest
previously due but not paid to the Class A Securityholders on a prior
Distribution Date, (iii) any Class A Additional Interest for such
Distribution Date, (iv) any Class A Additional Interest previously due but
not paid to the Class A Securityholders on a prior Distribution Date, (v)
the Class A Servicing Fee for such Distribution Date, (vi) any Class A
Servicing Fee previously due but not paid to the Servicer, and (vii) the
Class A Default Amount, if any, for such Distribution Date exceeds (y) the
Class A Available Funds. In the event that the difference between (x) the
Class A Required Amount for such Distribution Date and (y) the amount of
Excess Spread and Excess Finance Charge Collections applied with respect
thereto pursuant to subsection 4.7(a) on such Distribution Date is greater
than zero, the Servicer shall give written notice to the Trustee of such
positive Class A Required Amount on the date of computation.
(b) With respect to each Distribution Date, on the related
Determination Date, the Servicer shall determine the amount (the "Class B
Required Amount"), if any, equal to the sum of (x) the amount, if any, by
which (A) the sum of (i) Class B Monthly Interest for such Distribution
Date, (ii) any Class B Monthly Interest previously due but not paid to the
Class B Securityholders on a prior Distribution Date, (iii) Class B
Additional Interest, if any, for such Distribution Date, (iv) any Class B
Additional Interest previously due but not paid to the Class B
Securityholders on a prior Distribution Date, (v) the Class B Servicing Fee
for such Distribution Date and (vi) any Class B Servicing Fee previously
due but not paid to the Servicer exceeds (B) the Class B Available Funds
and (y) the Class B Default Amount for such Distribution Date. In the
event that the difference between (x) the Class B Required Amount for such
Distribution Date and (y) the amount of Excess Spread and Excess Finance
Charge Collections applied with respect thereto pursuant to subsection
4.7(c) on such Distribution Date is greater than zero, the Servicer shall
give written notice to the Trustee of such excess Class B Required Amount
on the date of computation.
(c) With respect to each Distribution Date, on the related
Determination Date, the Servicer shall determine the amount (the
"Collateral Required Amount"), if any, equal to the sum of (x) the sum of
(i) the Collateral Monthly Interest for such Distribution Date, (ii) any
Collateral Monthly Interest previously due but not paid to the Collateral
Interest Holder on a prior Distribution Date, (iii) Collateral Additional
Interest, if any, for such Distribution Date, (iv) any Collateral
Additional Interest previously due but not paid to the Collateral Interest
Holder on a prior Distribution Date, and (v) the Collateral Default Amount
and (y) the amount, if any, by which (A) the Collateral Servicing Fee for
such Distribution Date and any Collateral Servicing Fee previously due but
not paid to the Servicer exceeds (B) the amount of Collateral Available
Funds. In the event that the difference between (x) the Collateral
Required Amount for such Distribution Date and (y) the amount of Excess
Spread and Excess Finance Charge Collections applied with respect thereto
pursuant to Section 4.7 on such Distribution Date is greater than zero, the
Servicer shall give written notice to the Trustee of such excess Collateral
Required Amount on the date of computation.
Section 4.5. Application of Class A Available Funds, Class B
Available Funds, Collateral Available Funds, Class D Available Funds and
Available Principal Collections. The Servicer shall apply, or shall cause
the Trustee to apply by written instruction to the Trustee, on each
Distribution Date, Class A Available Funds, Class B Available Funds,
Collateral Available Funds, Class D Available Funds and Available Principal
Collections on deposit in the Collection Account with respect to such
Distribution Date to make the following distributions:
(a) On each Distribution Date, an amount equal to the Class A
Available Funds with respect to such Distribution Date will be distributed
or deposited in the following priority:
(i) an amount equal to Class A Monthly Interest for such
Distribution Date, plus the amount of any Class A Monthly Interest
previously due but not distributed to Class A Securityholders on a
prior Distribution Date, plus the amount of any Class A Additional
Interest for such Distribution Date and any Class A Additional
Interest previously due but not distributed to Class A Securityholders
on a prior Distribution Date, shall be distributed to the Paying Agent
for payment to Class A Securityholders;
(ii) an amount equal to the Class A Servicing Fee for such
Distribution Date, plus the amount of any Class A Servicing Fee
previously due but not distributed to the Servicer on a prior
Distribution Date, shall be distributed to the Servicer (unless such
amount has been netted against deposits to the Collection Account in
accordance with Section 4.3 of the Agreement);
(iii) an amount equal to the Class A Default Amount for such
Distribution Date shall be treated as a portion of Available Principal
Collections for such Distribution Date; and
(iv) the balance, if any, shall constitute Excess Spread and
shall be allocated and distributed or deposited as set forth in
Section 4.7.
(b) On each Distribution Date, an amount equal to the Class B
Available Funds with respect to such Distribution Date will be distributed
or deposited in the following priority:
(i) an amount equal to Class B Monthly Interest for such
Distribution Date, plus the amount of any Class B Monthly Interest
previously due but not distributed to Class B Securityholders on a
prior Distribution Date, plus the amount of any Class B Additional
Interest for such Distribution Date and any Class B Additional
Interest previously due but not distributed to Class B Securityholders
on a prior Distribution Date, shall be distributed to the Paying Agent
for payment to Class B Securityholders;
(ii) an amount equal to the Class B Servicing Fee for such
Distribution Date, plus the amount of any Class B Servicing Fee
previously due but not distributed to the Servicer on a prior
Distribution Date, shall be distributed to the Servicer (unless such
amount has been netted against deposits to the Collection Account in
accordance with Section 4.3 of the Agreement); and
(iii) the balance, if any, shall constitute Excess Spread and
shall be allocated and distributed or deposited as set forth in
Section 4.7.
(c) On each Distribution Date, an amount equal to the Collateral
Available Funds with respect to such Distribution Date will be distributed
or deposited in the following priority:
(i) an amount equal to the Collateral Servicing Fee for such
Distribution Date, plus the amount of any Collateral Servicing Fee
previously due but not distributed to the Servicer on a prior
Distribution Date, shall be distributed to the Servicer (unless such
amount has been netted against deposits to the Collection Account in
accordance with Section 4.3 of the Agreement); and
(ii) the balance, if any, shall constitute Excess Spread and
shall be allocated and distributed or deposited as set forth in
Section 4.7.
(d) On each Distribution Date, an amount equal to the Class D
Available Funds with respect to such Distribution Date will be distributed
or deposited in the following priority:
(i) an amount equal to the Class D Servicing Fee for such
Distribution Date, plus the amount of any Class D Servicing Fee
previously due but not distributed to the Servicer on a prior
Distribution Date, shall be distributed to the Servicer (unless such
amount has been netted against deposits to the Collection Account in
accordance with Section 4.3 of the Agreement); and
(ii) the balance, if any, shall constitute Excess Spread and
shall be allocated and distributed or deposited as set forth in
Section 4.7.
(e) On each Distribution Date with respect to the Revolving
Period, an amount equal to the Available Principal Collections deposited in
the Collection Account for the related Monthly Period shall be distributed
in the following order of priority:
(i) an amount equal to the Collateral Monthly Principal shall be
paid to the Collateral Interest Holder for application in accordance
with the Loan Agreement; and
(ii) the balance of such Available Principal Collections shall
be treated as Shared Principal Collections and applied in accordance
with Section 4.4 of the Agreement.
(f) On each Distribution Date with respect to the Controlled
Accumulation Period, an amount equal to the Available Principal Collections
deposited in the Collection Account for the related Monthly Period shall be
distributed in the following order of priority:
(i) an amount equal to the lesser of (x) the Controlled Deposit
Amount and (y) the sum of the Class A Adjusted Invested Amount and the
Class B Adjusted Invested Amount shall be deposited in the Principal
Funding Account;
(ii) for each Distribution Date before the Class B Invested
Amount is paid in full, if a reduction in the Required Enhancement
Amount has occurred, an amount equal to the Collateral Monthly
Principal shall be paid to the Collateral Interest Holder to be
applied in accordance with the Loan Agreement;
(iii) for each Distribution Date beginning on the Distribution
Date on which the Class B Invested Amount shall have been paid in
full, an amount up to the Collateral Invested Amount shall be paid to
the Collateral Interest Holder to be applied in accordance with the
Loan Agreement;
(iv) for each Distribution Date beginning on the Distribution
Date on which the Collateral Invested Amount shall have been paid in
full, an amount up to the Class D Invested Amount shall be deposited
in the Principal Funding Account for distribution to the Class D
Securityholders; and
(v) for each Distribution Date, after giving effect to
paragraphs (i), (ii), (iii) and (iv) above, an amount equal to the
balance, if any, of such Available Principal Collections will be
treated as Shared Principal Collections and applied in accordance with
Section 4.4 of the Agreement.
(g) On each Distribution Date with respect to the Early
Amortization Period, an amount equal to Available Principal Collections
deposited in the Collection Account for the related Monthly Period shall be
distributed or deposited in the following order of priority:
(i) an amount up to the Class A Adjusted Invested Amount on such
Distribution Date shall be deposited in the Principal Funding Account
for distribution to the Class A Securityholders;
(ii) for each Distribution Date beginning on the Distribution
Date on which the Class A Invested Amount is paid in full, an amount
up to the Class B Adjusted Invested Amount on such Distribution Date
shall be deposited in the Principal Funding Account for distribution
to the Class B Securityholders;
(iii) for each Distribution Date beginning on the Distribution
Date on which the Class B Invested Amount is paid in full, an amount
up to the Collateral Invested Amount on such Distribution Date shall
be paid to the Collateral Interest Holder for application in
accordance with the Loan Agreement;
(iv) for each Distribution Date beginning on the Distribution
Date on which the Collateral Invested Amount is paid in full, an
amount up to the Class D Invested Amount on such Distribution Date
shall be deposited in the Principal Funding Account for distribution
to the Class D Securityholders; and
(v) for each Distribution Date, after giving effect to
paragraphs (i), (ii), (iii) and (iv) above, an amount equal to the
balance, if any, of such Available Principal Collections will be
treated as Shared Principal Collections and applied in accordance with
Section 4.4 of the Agreement.
Section 4.6. Defaulted Amounts; Charge-Offs.
(a) On each Determination Date, the Servicer shall calculate the
Class A Default Amount, if any, for the related Distribution Date. If, on
any Distribution Date, the Class A Required Amount for the related Monthly
Period exceeds the sum of (x) the amount of Redirected Principal
Collections allocated to Series 1998-2 with respect to such Monthly Period
and (y) the amount of Excess Spread and the Excess Finance Charge
Collections allocable to Series 1998-2 with respect to such Monthly Period,
then the Class D Invested Amount (after giving effect to any reductions for
any Redirected Principal Collections pursuant to Section 4.8 on such
Distribution Date) shall be reduced by the amount of such excess, but not
by more than the Class A Default Amount for such Distribution Date. In the
event that such reduction would cause the Class D Invested Amount to be a
negative number, the Class D Invested Amount will be reduced to zero and
the Collateral Invested Amount (after giving effect to reductions for any
Redirected Principal Collections pursuant to Section 4.8 for which the
Class D Invested Amount was not reduced on such Distribution Date) shall be
reduced by the amount by which the Class D Invested Amount would have been
reduced below zero, but not by more than the excess, if any, of the Class A
Default Amount for such Distribution Date over the amount of the reduction,
if any, of the Class D Invested Amount in respect of the Class A Default
Amount on such Distribution Date. In the event that such reduction would
cause the Collateral Invested Amount to be a negative number, the
Collateral Invested Amount will be reduced to zero and the Class B Invested
Amount (after giving effect to reductions for any Redirected Principal
Collections pursuant to Section 4.8 for which the Collateral Invested
Amount was not reduced on such Distribution Date) shall be reduced by the
amount by which the Collateral Invested Amount would have been reduced
below zero, but not by more than the excess, if any, of the Class A Default
Amount for such Distribution Date over the amount of the reductions, if
any, of the Collateral Invested Amount and the Class D Invested Amount in
respect of the Class A Default Amount on such Distribution Date). In the
event that such reduction would cause the Class B Invested Amount to be a
negative number, the Class B Invested Amount shall be reduced to zero, and
the Class A Invested Amount shall be reduced by the amount by which the
Class B Invested Amount would have been reduced below zero, but not by more
than the excess, if any, of the Class A Default Amount for such
Distribution Date over the aggregate amount of the reductions, if any, of
the Class D Invested Amount, the Collateral Invested Amount and the Class B
Invested Amount in respect of the Class A Default Amount for such
Distribution Date (a "Class A Charge-Off"). Class A Charge-Offs shall
thereafter be reimbursed and the Class A Invested Amount increased (but not
by an amount in excess of the aggregate unreimbursed Class A Charge-Offs)
on any Distribution Date by the amount of Excess Spread and Excess Finance
Charge Collections allocated and available for that purpose pursuant to
subsection 4.7(b).
(b) On each Determination Date, the Servicer shall calculate the
Class B Default Amount, if any, for the related Distribution Date. If, on
any Distribution Date, the Class B Required Amount for such Distribution
Date exceeds the sum of (x) the amount of Excess Spread and Excess Finance
Charge Collections allocated to Series 1998-2 with respect to the related
Monthly Period which are allocated and available to pay such amount
pursuant to subsection 4.7(c) and (y) the Redirected Principal Collections
not allocated to pay the Class A Required Amount pursuant to subsection
4.8(a) with respect to such Distribution Date, then the Class D Invested
Amount (after giving effect to any reductions for Redirected Principal
Collections pursuant to Section 4.8 and any reductions pursuant to
subsection 4.6(a) on such Distribution Date) shall be reduced by the amount
of such excess. In the event that such reduction would cause the Class D
Invested Amount (after giving effect to any reductions for Redirected
Principal Collections pursuant to Section 4.8 and any reductions pursuant
to subsection 4.6(a) on such Distribution Date) to be a negative number,
the Class D Invested Amount shall be reduced to zero, and the Collateral
Invested Amount (after giving effect to any reductions for Redirected
Collateral Principal Collections pursuant to Section 4.8 for which the
Class D Invested Amount was not reduced on such Distribution Date and for
any reductions pursuant to subsection 4.6(a)) shall be reduced by the
amount by which the Class D Invested Amount would have been reduced below
zero, but not by more than the excess, if any, of the Class B Default
Amount for such Distribution Date over the amount of the reductions, if
any, of the Class D Invested Amount in respect of the Class A Default
Amount and the Class B Default Amount on such Distribution Date. In the
event that such reduction would cause the Collateral Invested Amount (after
giving effect to any reductions for Redirected Collateral Principal
Collections pursuant to Section 4.8 and any reductions pursuant to
subsection 4.6(a) on such Distribution Date) to be a negative number, the
Collateral Invested Amount shall be reduced to zero, and the Class B
Invested Amount (after giving effect to any reductions for any Redirected
Class B Principal Collections pursuant to Section 4.8 for which the
Collateral Invested Amount was not reduced on such Distribution Date and
for any reductions pursuant to subsection 4.6(a)) shall be reduced by the
amount by which the Collateral Invested Amount would have been reduced
below zero, but not by more than the excess, if any, of the Class B Default
Amount for such Distribution Date over the amount of such reduction, if
any, of the Collateral Invested Amount and the Class D Invested Amount in
respect of the Class B Default Amount on such Distribution Date (a "Class B
Charge-Off"). Class B Charge-Offs shall thereafter be reimbursed and the
Class B Invested Amount increased (but not by an amount in excess of the
aggregate unreimbursed Class B Charge-Offs) on any Distribution Date by the
amount of Excess Spread and Excess Finance Charge Collections allocated and
available for that purpose pursuant to subsection 4.7(e).
(c) On each Determination Date, the Servicer shall calculate the
Collateral Default Amount, if any, for the related Distribution Date. If,
on any Distribution Date, the Collateral Default Amount for such
Distribution Date exceeds the sum of (x) the amount of Excess Spread and
Excess Finance Charge Collections allocated to Series 1998-2 with respect
to the related Monthly Period which are allocated and available to pay such
amount pursuant to subsection 4.7(h) and (y) the Redirected Principal
Collections not allocated to pay the Class A Required Amount pursuant to
subsection 4.8(a) or the Class B Required Amount pursuant to subsection
4.8(b) with respect to such Distribution Date, then the Class D Invested
Amount (after giving effect to any reductions for Redirected Principal
Collections pursuant to Section 4.8 and any reductions pursuant to
subsections 4.6(a) and 4.6(b) on such Distribution Date) shall be reduced
by the amount of such excess. In the event that such reduction would cause
the Class D Invested Amount to be a negative number, the Class D Invested
Amount will be reduced to zero and the Collateral Invested Amount (after
giving effect to reductions for any Redirected Collateral Principal
Collections pursuant to Section 4.8 for which the Class D Invested Amount
was not reduced on such Distribution Date and for any reductions pursuant
to subsections 4.6(a) and 4.6(b)) shall be reduced by the amount by which
the Class D Invested Amount would have been reduced below zero, but not by
more than the excess, if any, of the Collateral Default Amount for such
Distribution Date over the amount of the reduction, if any, of the Class D
Invested Amount in respect of the Collateral Default Amount on such
Distribution Date (a "Collateral Charge-Off"). Collateral Charge-Offs
shall thereafter be reimbursed and the Collateral Invested Amount increased
(but not by an amount in excess of the aggregate unreimbursed Collateral
Charge-Offs) on any Distribution Date by the amount of Excess Spread and
Excess Finance Charge Collections allocated and available for that purpose
pursuant to subsection 4.7(i).
(d) On each Determination Date, the Servicer shall calculate the
Class D Default Amount. If, on any Distribution Date the Class D Default
Amount for the previous Monthly Period exceeds the amount of Excess Spread
and Excess Finance Charge Collections allocated to Series 1998-2 with
respect to the related Monthly Period which are allocated and available to
pay such amount pursuant to subsection 4.7(l), the Class D Invested Amount
(after giving effect to any reductions for Redirected Principal Collections
pursuant to Section 4.8 on such Distribution Date and any reductions
pursuant to subsections 4.6(a), 4.6(b) and 4.6(c)) will be reduced by the
amount of such excess, but not by more than the lesser of the Class D
Default Amount and the Class D Invested Amount for such Distribution Date
(a "Class D Charge-Off"). The Class D Invested Amount will be reimbursed
after any reduction pursuant to this Section 4.6 on any Distribution Date
by the amount of Excess Spread and Excess Finance Charge Collections
allocated and available on such Distribution date for that purpose as
described under subsection 4.7(m).
Section 4.7. Excess Spread; Excess Finance Charge Collections.
The Servicer shall apply, or shall cause the Trustee to apply by written
instruction to the Trustee, on each Distribution Date, Excess Spread and
Excess Finance Charge Collections allocated to Series 1998-2 with respect
to the related Monthly Period, to make the following distributions or
deposits in the following order of priority:
(a) an amount equal to the Class A Required Amount, if any, with
respect to such Monthly Period shall be distributed by the Trustee to fund
any deficiencies in the Class A Required Amount in accordance with, and in
the priority set forth in, subsections 4.5(a)(i), (ii) and (iii);
(b) an amount equal to the aggregate amount of Class A Charge-
Offs which have not been previously reimbursed shall be treated as a
portion of Available Principal Collections for such Distribution Date;
(c) an amount equal to the Class B Required Amount, if any, with
respect to such Distribution Date shall be (I) used to fund any
deficiencies in the Class B Required Amount in accordance with, and in the
priority set forth in, subsections 4.5(b)(i) and (ii) and then (II)
treated, up to the Class B Default Amount, as a portion of Available
Principal Collections for such Distribution Date;
(d) an amount equal to the difference, if any, between (x) the
sum of (A) the product of (i) a fraction, the numerator of which is equal
to the actual number of days in the Interest Period preceding such
Distribution Date (or in the case of the first Distribution Date, the
Closing Date) and the denominator of which is 360, (ii) the Class B
Interest Rate and (iii) the outstanding principal balance of the Class B
Securities as of the close of business on the last day of the preceding
Monthly Period, and (B) any amount in respect of the foregoing clause (A)
previously due but not distributed to the Class B Securityholders on a
prior Distribution Date, and (y) the amount distributed to the Paying Agent
for payment to the Class B Securityholders pursuant to subsection
4.5(b)(i);
(e) an amount equal to the aggregate amount by which the Class B
Invested Amount has been reduced pursuant to clauses (c), (d) and (e) of
the definition of "Class B Invested Amount" in Section 2.1 of this
Supplement (but not in excess of the aggregate amount of such reductions
which have not been previously reimbursed) shall be treated as a portion of
Available Principal Collections for such Distribution Date;
(f) an amount equal to the excess, if any, of the sum of the
Monthly Servicing Fee for such Distribution Date and the amount of any
Monthly Servicing Fee previously due but not distributed to the Servicer on
a prior Distribution Date, over the sum of the amounts distributed to the
Servicer on such Distribution Date pursuant to subsections 4.5(a)(ii),
(b)(ii), (c)(i) and (d)(i) shall be distributed to the Servicer;
(g) an amount equal to Collateral Monthly Interest for such
Distribution Date, plus the amount of any Collateral Monthly Interest
previously due but not distributed to the Collateral Interest Holder on a
prior Distribution Date, plus the amount of any Collateral Additional
Interest for such Distribution Date and any Collateral Additional Interest
previously due but not distributed to the Collateral Interest Holder on a
prior Distribution Date, shall be distributed to the Collateral Interest
Holder for application in accordance with the Loan Agreement;
(h) an amount equal to the Collateral Default Amount, if any,
for such Distribution Date shall be treated as a portion of Available
Principal Collections for such Distribution Date;
(i) an amount equal to the aggregate amount by which the
Collateral Invested Amount has been reduced pursuant to clauses (c), (d)
and (e) of the definition of "Collateral Invested Amount" (but not in
excess of the aggregate amount of such reductions which have not been
previously reimbursed) shall be treated as a portion of Available Principal
Collections for such Distribution Date;
(j) on each Distribution Date from and after the Reserve Account
Funding Date, but prior to the date on which the Reserve Account terminates
pursuant to subsection 4.12(f), an amount up to the excess, if any, of the
Required Reserve Account Amount over the Available Reserve Account Amount
shall be deposited into the Reserve Account;
(k) an amount equal to Class D Monthly Interest for such
Distribution Date, plus the amount of any Class D Monthly Interest
previously due but not distributed to the Class D Securityholders on a
prior Distribution Date, plus the amount of any Class D Additional Interest
for such Distribution Date and any Class D Additional Interest previously
due but not distributed to the Class D Securityholders on a prior
Distribution Date, shall be distributed to the Paying Agent for
distribution to the Class D Securityholders;
(l) an amount equal to the Class D Default Amount, if any, for
such Distribution Date shall be treated as a portion of Available Principal
Collections for such Distribution Date;
(m) an amount equal to the aggregate amount by which the Class D
Invested Amount has been reduced pursuant to clauses (c), (d) and (e) of
the definition of "Class D Invested Amount" (but not in excess of the
aggregate amount of such reductions which have not been previously
reimbursed) shall be treated as a portion of Available Principal
Collections for such Distribution Date;
(n) an amount equal to the aggregate of any other amounts then
required to be applied pursuant to the Loan Agreement (to the extent such
amounts are required to be applied pursuant to the Loan Agreement out of
Excess Spread and Excess Finance Charge Collections) shall be distributed
to the Collateral Interest Holder for application in accordance with the
Loan Agreement; and
(o) the balance, if any, will be applied first to any other
amounts that the Trust may be liable for from time to time and not
otherwise provided for above and then will constitute a portion of Excess
Finance Charge Collections for such Distribution Date and will be available
for allocation to other Excess Allocation Series or to the Holder of the
Transferor Security as described in Section 4.5 of the Agreement.
Section 4.8. Redirected Principal Collections. On each
Distribution Date, the Servicer shall apply, or shall cause the Trustee to
apply, Redirected Principal Collections with respect to such Distribution
Date, to make the following distributions or deposits in the following
order of priority:
(a) an amount equal to the excess, if any, of (i) the Class A
Required Amount, if any, with respect to such Distribution Date over
(ii) the amount of Excess Spread and Excess Finance Charge Collections
allocated to Series 1998-2 with respect to the related Monthly Period
shall be distributed by the Trustee to fund any deficiency pursuant to
and in the priority set forth in subsections 4.5(a)(i), (ii) and
(iii);
(b) an amount equal to the excess, if any, of (i) the Class B
Required Amount, if any, with respect to such Distribution Date over
(ii) the amount of Excess Spread and Excess Finance Charge Collections
allocated and available to the Class B Securities pursuant to
subsection 4.7(c) on such Distribution Date shall be applied first to
fund any deficiency pursuant to subsections 4.5(b)(i) and (ii) and
then to fund any deficiency pursuant to and in the priority set forth
in subsection 4.7(c); and
(c) an amount equal to the excess, if any, of (i) the Collateral
Required Amount, if any, with respect to such Distribution Date over
(ii) the amount of Excess Spread and Excess Finance Charge Collections
allocated and available to the Collateral Interest pursuant to
subsections 4.7(g), 4.7(h) and 4.7(i) on such Distribution Date shall
be applied to fund such deficiency pursuant to and in the priority set
forth in Section 4.7.
On each Distribution Date, the Class D Invested Amount shall be
reduced by the amount of Redirected Principal Collections for such
Distribution Date. In the event that such reduction would cause the Class
D Invested Amount to be a negative number, the Class D Invested Amount
(after giving effect to any Class D Charge-Offs for such Distribution Date)
shall be reduced to zero and the Collateral Invested Amount (after giving
effect to any Collateral Charge-Offs for such Distribution Date) shall be
reduced by the amount by which the Class D Invested Amount would have been
reduced below zero. In the event that such reduction would cause the
Collateral Invested Amount (after giving effect to any Collateral Charge-
Offs for such Distribution Date) to be a negative number, the Collateral
Invested Amount shall be reduced to zero and the Class B Invested Amount
shall be reduced by the amount by which the Collateral Invested Amount
would have been reduced below zero. In the event that the reallocation of
Redirected Principal Collections would cause the Class B Invested Amount
(after giving effect to any Class B Charge-Offs for such Distribution Date)
to be a negative number on any Distribution Date, Redirected Principal
Collections shall be redirected on such Distribution Date in an aggregate
amount not to exceed the amount which would cause the Class B Invested
Amount (after giving effect to any Class B Charge-Offs for such
Distribution Date) to be reduced to zero. References to "negative numbers"
above shall be determined without regard to the requirement that the
Invested Amount of a Class not be reduced below zero.
Section 4.9. Excess Finance Charge Collections. Series 1998-2
shall be an Excess Allocation Series. Subject to Section 4.5 of the
Agreement, Excess Finance Charge Collections with respect to the Excess
Allocation Series for any Distribution Date will be allocated to Series
1998-2 in an amount equal to the product of (x) the aggregate amount of
Excess Finance Charge Collections with respect to all the Excess Allocation
Series for such Distribution Date and (y) a fraction, the numerator of
which is equal to the Finance Charge Shortfall for Series 1998-2 for such
Distribution Date and the denominator of which is equal to the aggregate
amount of Finance Charge Shortfalls for all the Excess Allocation Series
for such Distribution Date. The "Finance Charge Shortfall" for Series
1998-2 for any Distribution Date will be equal to the excess, if any, of
(a) the full amount required to be paid, without duplication, pursuant to
subsections 4.5(a), 4.5(b), 4.5(c) and 4.5(d), subsections 4.7(a) through
(o) on such Distribution Date over (b) the sum of (i) the Redirected
Investor Finance Charge Collections, (ii) if such Monthly Period relates to
a Distribution Date with respect to the Controlled Accumulation Period or
Early Amortization Period, the amount of Principal Funding Investment
Proceeds, if any, with respect to such Distribution Date and (iii) the
amount of funds, if any, to be withdrawn from the Reserve Account which,
pursuant to subsection 4.12(d), are required to be included in Class A
Available Funds and the Class B Available Funds with respect to such
Distribution Date.
Section 4.10. Redirected Investor Finance Charge Collections.
(a) That portion of Group I Finance Charge Collections for any
Distribution Date equal to the amount of Redirected Investor Finance Charge
Collections for such Distribution Date will be allocated to Series 1998-2
and will be distributed as set forth in this Supplement.
(b) Redirected Investor Finance Charge Collections with respect
to any Distribution Date shall equal the sum of (i) the aggregate amount of
Series 1998-2 Monthly Interest, Series Default Amount, Series 1998-2
Monthly Fees and Series 1998-2 Additional Amounts for such Distribution
Date and (ii) that portion of excess Group I Finance Charge Collections to
be included in Redirected Investor Finance Charge Collections pursuant to
subsection (c) hereof; provided, however, that if the amount of Group I
Finance Charge Collections for such Distribution Date is less than the sum
of (w) Group I Monthly Interest, (x) Group I Series Default Amount, (y)
Group I Monthly Fees and (z) Group I Additional Amounts, then Redirected
Investor Finance Charge Collections shall equal the sum of the following
amounts for such Distribution Date:
(A) The product of (I) Group I Finance Charge Collections (up to
the amount of Group I Monthly Interest) and (II) a fraction, the
numerator of which is Series 1998-2 Monthly Interest and the
denominator of which is Group I Monthly Interest;
(B) the product of (I) Group I Finance Charge Collections less
the amount of Group I Monthly Interest (up to the Group I Series
Default Amount) and (II) a fraction, the numerator of which is the
Series Default Amount and the denominator of which is the Group I
Series Default Amount;
(C) the product of (I) Group I Finance Charge Collections less
the amount of Group I Monthly Interest and the Group I Series Default
Amount (up to Group I Monthly Fees) and (II) a fraction, the numerator
of which is Series 1998-2 Monthly Fees and the denominator of which is
Group I Monthly Fees; and
(D) the product of (I) Group I Finance Charge Collections less
the sum of (i) Group I Monthly Interest, (ii) the Group I Series
Default Amount and (iii) Group I Monthly Fees and (II) a fraction, the
numerator of which is Series 1998-2 Additional Amounts and the
denominator of which is Group I Additional Amounts.
(c) If the amount of Group I Finance Charge Collections for such
Distribution Date exceeds the sum of (i) Group I Monthly Interest, (ii)
Group I Series Default Amount, (iii) Group I Monthly Fees and (iv) Group I
Additional Amounts, then Redirected Investor Finance Charge Collections for
such Distribution Date shall include an amount equal to the product of (x)
the amount of such excess and (y) a fraction, the numerator of which is
equal to the Invested Amount as of the last day of the second preceding
Monthly Period and the denominator of which is equal to the sum of such
Invested Amount and the aggregate invested amounts for all other Series
included in Group I as of such last day.
Section 4.11. Shared Principal Collections. Subject to Section
4.4 of the Agreement, Shared Principal Collections for any Distribution
Date will be allocated to Series 1998-2 in an amount equal to the product
of (x) the aggregate amount of Shared Principal Collections with respect to
all Principal Sharing Series for such Distribution Date and (y) a fraction,
the numerator of which is the Series 1998-2 Principal Shortfall for such
Distribution Date and the denominator of which is the aggregate amount of
Principal Shortfalls for all the Series which are Principal Sharing Series
for such Distribution Date. The "Series 1998-2 Principal Shortfall" will
be equal to (a) for any Distribution Date with respect to the Revolving
Period, zero, (b) for any Distribution Date with respect to the Controlled
Accumulation Period, the excess, if any, of the Controlled Deposit Amount
with respect to such Distribution Date over the amount of Available
Principal Collections for such Distribution Date (excluding any portion
thereof attributable to Shared Principal Collections) and (c) for any
Distribution Date with respect to the Early Amortization Period, the
excess, if any, of the Invested Amount over the amount of Available
Principal Collections for such Distribution Date (excluding any portion
thereof attributable to Shared Principal Collections).
Section 4.12. Reserve Account.
(a) The Servicer shall establish and maintain, in the name of
the Trustee, on behalf of the Trust, for the benefit of the Securityholders
an Eligible Deposit Account (the "Reserve Account") bearing a designation
clearly indicating that the funds deposited therein are held for the
benefit of the Series 1998-2 Securityholders. The Reserve Account shall
initially be established with Xxxxxx. The Trustee shall possess all right,
title and interest in all funds on deposit from time to time in the Reserve
Account and in all proceeds thereof. The Reserve Account shall be under
the sole dominion and control of the Trustee for the benefit of the Series
1998-2 Securityholders. If at any time the Reserve Account ceases to be an
Eligible Deposit Account, the Trustee (or the Servicer on its behalf) shall
within 10 Business Days (or such longer period, not to exceed 30 calendar
days, as to which each Rating Agency shall consent) establish a new Reserve
Account meeting the conditions specified above as an Eligible Deposit
Account, and shall transfer any cash or any investments to such new Reserve
Account. The Trustee, at the direction of the Servicer, shall (i) make
withdrawals from the Reserve Account from time to time in an amount up to
the Available Reserve Account Amount at such time, for the purposes set
forth in this Supplement, and (ii) on each Distribution Date (from and
after the Reserve Account Funding Date) prior to the termination of the
Reserve Account make a deposit into the Reserve Account in the amount
specified in, and otherwise in accordance with, subsection 4.7(j).
(b) Funds on deposit in the Reserve Account shall be invested at
the written direction of the Servicer by the Trustee in Eligible
Investments. Funds on deposit in the Reserve Account on any Transfer Date,
after giving effect to any withdrawals from the Reserve Account on such
Transfer Date, shall be invested in such investments that will mature so
that such funds will be available for withdrawal on or prior to the
following Transfer Date. The Trustee shall maintain for the benefit of the
Series 1998-2 Securityholders possession of the negotiable instruments or
securities, if any, evidencing such Eligible Investments. No such Eligible
Investment shall be disposed of prior to its maturity. On each
Distribution Date, all interest and earnings (net of losses and investment
expenses) accrued since the preceding Distribution Date on funds on deposit
in the Reserve Account shall be retained in the Reserve Account (to the
extent that the Available Reserve Account Amount is less than the Required
Reserve Account Amount) and the balance, if any, shall be deposited in the
Collection Account and treated as collections of Finance Charge Receivables
allocable to Series 1998-2. For purposes of determining the availability
of funds or the balance in the Reserve Account for any reason under this
Supplement, except as otherwise provided in the preceding sentence,
investment earnings on such funds shall be deemed not to be available or on
deposit.
(c) On the Determination Date preceding each Distribution Date
with respect to the Controlled Accumulation Period and the first
Distribution Date with respect to the Early Amortization Period, the
Servicer shall calculate the "Reserve Draw Amount" which shall be equal to
the excess, if any, of the Covered Amount with respect to such Distribution
Date over the Principal Funding Investment Proceeds with respect to such
Distribution Date; provided, that such amount shall be reduced to the
extent that funds otherwise would be available for deposit in the Reserve
Account under subsection 4.7(j) with respect to such Distribution Date.
(d) In the event that for any Distribution Date the Reserve Draw
Amount is greater than zero, the Reserve Draw Amount, up to the Available
Reserve Account Amount, shall be withdrawn from the Reserve Account on the
related Transfer Date by the Trustee (acting in accordance with the
instructions of the Servicer), deposited into the Collection Account and,
prior to payment in full of the Class A Invested Amount, included in Class
A Available Funds for such Distribution Date, and thereafter included in
Class B Available Funds for such Distribution Date.
(e) In the event that the Reserve Account Surplus on any
Distribution Date, after giving effect to all deposits to and withdrawals
from the Reserve Account with respect to such Distribution Date, is greater
than zero, the Trustee, acting in accordance with the written instructions
of the Servicer, shall withdraw from the Reserve Account, and apply an
amount equal to such Reserve Account Surplus in accordance with the
priorities set forth in subsections 4.7(k) through (o).
(f) Upon the earliest to occur of (i) the day on which the
Invested Amount is paid in full to the Series 1998-2 Securityholders, (ii)
if the Controlled Accumulation Period has not commenced, the occurrence of
a Pay Out Event with respect to Series 1998-2, (iii) if the Controlled
Accumulation Period has commenced, the earlier of the first Distribution
Date with respect to the Early Amortization Period and the Class A
Scheduled Payment Date and (iv) the termination of the Trust pursuant to
the Agreement, the Trustee, acting in accordance with the instructions of
the Servicer, after the prior payment of all amounts owing to the Class A
Securityholders and the Class B Securityholders which are payable from the
Reserve Account as provided herein, shall withdraw from the Reserve Account
and apply all amounts, if any, on deposit in the Reserve Account in
accordance with the priorities set forth in subsections 4.7(k) through (o),
and the Reserve Account shall be deemed to have terminated for purposes of
this Supplement.
Section 4.13. Determination of LIBOR.
(a) On each LIBOR Determination Date, the Trustee shall
determine LIBOR on the basis of the rate for deposits in United States
dollars for a period equal to the relevant Interest Period (commencing on
the first day of such Interest Period) which appears on Telerate Page 3750
as of 11:00 a.m., London time, on such date. If such rate does not appear
on Telerate Page 3750, the rate for that LIBOR Determination Date shall be
determined on the basis of the rates at which deposits in United States
dollars are offered by the Reference Banks at approximately 11:00 a.m.,
London time, on that day to prime banks in the London interbank market for
a period equal to the relevant Interest Period (commencing on the first day
of such Interest Period). The Trustee shall request the principal London
office of each of the Reference Banks to provide a quotation of its rate.
If at least two such quotations are provided, the rate for that LIBOR
Determination Date shall be the arithmetic mean of the quotations. If
fewer than two quotations are provided as requested, the rate for that
LIBOR Determination Date will be the arithmetic mean of the rates quoted by
major banks in New York City, selected by the Servicer, at approximately
11:00 a.m., New York City time, on that day for loans in United States
dollars to leading European banks for a period equal to the relevant
Interest Period (commencing on the first day of such Interest Period).
Upon such determination, the Trustee shall notify the Servicer of
LIBOR for such LIBOR Determination Date.
(b) The Servicer shall determine, and promptly notify the
Trustee of, the Class A Interest Rate and the Class B Interest Rate for the
applicable Interest Period. The Class A Interest Rate and Class B Interest
Rate applicable to the then current and the immediately preceding Interest
Periods may be obtained by any Investor Securityholder by telephoning the
Trustee at its Corporate Trust Office at (000) 000-0000.
(c) On each LIBOR Determination Date prior to 3:00 p.m. New York
City time, the Trustee shall send to the Servicer by facsimile,
notification of LIBOR for the following Interest Period.
Section 4.14. Investment Instructions. Any investment
instructions required to be given to the Trustee pursuant to the terms
hereof must be given to the Trustee no later than 10:00 a.m. (New York
time) on the date such investment is to be made. In the event the Trustee
receives such investment instruction later than such time, the Trustee may,
but shall have no obligation to, make such investment. In the event the
Trustee is unable to make an investment required in an investment
instruction received by the Trustee after 10:00 a.m. on such day, such
investment shall be made by the Trustee on the next succeeding Business
Day. In no event shall the Trustee be liable for any investment not made
pursuant to investment instructions received after 10:00 a.m. on the day
such investment is requested to be made.
Section 4.15. Yield Supplement Account.
(a) The Servicer shall establish and maintain, in the name of
the Trustee, on behalf of the Trust, for the benefit of the Series 1998-2
Securityholders, an Eligible Deposit Account (the "Yield Supplement
Account"), bearing a designation clearly indicating that the funds
deposited therein are held for the benefit of the Series 1998-2
Securityholders. The Yield Supplement Account shall initially be
established with Xxxxxx. The Trustee shall possess all right, title
and interest in all funds on deposit from time to time in the Yield
Supplement Account and in all proceeds thereof. The Yield Supplement
Account shall be under the sole dominion and control of the Trustee for the
benefit of the Series 1998-2 Securityholders. If, at any time, the Yield
Supplement Account ceases to be an Eligible Deposit Account, the Servicer
shall direct the Trustee to establish within 10 Business Days (or such
longer period, not to exceed 30 calendar days, as to which each Rating
Agency shall consent) a new Yield Supplement Account meeting the conditions
specified above, transfer any cash and/or any investments from the old
Yield Supplement Account to such new Yield Supplement Account and from the
date such new Yield Supplement Account is established, it shall be the
"Yield Supplement Account." In addition, after five-days notice to the
Trustee, the Servicer may direct the Trustee to establish a new Yield
Supplement Account meeting the conditions specified above, transfer any
cash and/or investments from the old Yield Supplement Account to such new
Yield Supplement Account and from the date such new Yield Supplement
Account is established, it shall be the "Yield Supplement Account."
Pursuant to the authority granted to the Servicer in subsection 3.1(b) of
the Agreement, the Servicer shall have the power, revocable by the Trustee,
to make withdrawals and payments or to instruct the Trustee to make
withdrawals and payments from the Yield Supplement Account for the purposes
of carrying out the Servicer's or the Trustee's duties hereunder.
(b) On the Closing Date, $11,250,000, in immediately available
funds, from the proceeds of the issuance and sale of the Series 1998-2
Securities shall be deposited into the Yield Supplement Account (the
"Initial Yield Supplement Deposit"). On each Distribution Date, the
Trustee, acting in accordance with the written instructions of Servicer,
shall withdraw from the Yield Supplement Account and deposit to the
Collection Account an amount equal to the Yield Supplement Draw Amount.
The Yield Supplement Draw Amount so deposited on any such Distribution Date
shall be deemed to be Collections of Finance Charge Receivables allocated
to the Series 1998-2 Securities and not deemed to be a part of Group I
Finance Charge Collections.
(c) Funds on deposit in the Yield Supplement Account shall be
invested at the written direction of the Servicer by the Trustee in
Eligible Investments. Funds on deposit in the Yield Supplement Account on
the Closing Date and thereafter shall be invested in Eligible Investments
that will mature so that such funds will be available for withdrawal on
each of the Business Days preceding the Transfer Dates on which withdrawals
from the Yield Supplement Account are scheduled to be made pursuant to
Section 4.15(b). As long as the Trustee shall have complied and be in
compliance with the terms of the Agreement, the Trustee shall not be liable
for any insufficiency of amounts available in the Yield Supplement Account
resulting from losses in connection with Eligible Investments.
ARTICLE V
Distributions and Reports to
Series 1998-2 Securityholders
Section 5.1. Distributions.
(a) On each Distribution Date, the Paying Agent shall distribute
to each Class A Securityholder of record on the related Record Date (other
than as provided in Section 12.2 of the Agreement) such Class A
Securityholder's pro rata share of the amounts on deposit in the Collection
Account or otherwise held by the Paying Agent that are allocated and
available on such Distribution Date to pay Class A Monthly Interest and any
Class A Additional Interest pursuant to subsection 4.5(a)(i).
(b) On the Class A Scheduled Final Payment Date, or if a Pay Out
Event has occurred, on each Distribution Date commencing with the
Distribution Date in the Monthly Period following the Monthly Period in
which such Pay Out Event occurs, the Paying Agent shall distribute to each
Class A Securityholder of record on the related Record Date (other than as
provided in Section 12.2 of the Agreement) such Class A Securityholder's
pro rata share of the amounts on deposit in the Principal Funding Account
or otherwise held by the Paying Agent that are allocated and available on
such date to pay principal of the Class A Securities pursuant to
subsections 4.5(f)(i) or 4.5(g)(i) up to a maximum amount on any such date
equal to the Class A Invested Amount on such date (unless there has been an
optional repurchase of the Series 1998-2 Securityholders' Interest pursuant
to Section 10.1 of the Agreement, in which event the foregoing limitation
will not apply).
(c) On each Distribution Date, the Paying Agent shall distribute
to each Class B Securityholder of record on the related Record Date (other
than as provided in Section 12.2 of the Agreement) such Class B
Securityholder's pro rata share of the amounts on deposit in the Collection
Account or otherwise held by the Paying Agent that are allocated and
available on such Distribution Date to pay interest on the Class B
Securities pursuant to subsections 4.5(b)(i) and 4.7(d).
(d) On the Class B Scheduled Final Payment Date, or if a Pay Out
Event has occurred, on each Distribution Date commencing with the
Distribution Date in the Monthly Period following the Monthly Period in
which such Pay Out Event occurs, the Paying Agent shall distribute to each
Class B Securityholder of record on the related Record Date (other than as
provided in Section 12.2 of the Agreement) such Class B Securityholder's
pro rata share of the amounts on deposit in the Principal Funding Account
or otherwise held by the Paying Agent that are allocated and available on
such date to pay principal of the Class B Securities pursuant to
subsections 4.5(f)(i) or 4.5(g)(ii) up to a maximum amount on any such date
equal to the Class B Invested Amount on such date (unless there has been an
optional repurchase of the Series 1998-2 Securityholders' Interest pursuant
to Section 10.1 of the Agreement, in which event the foregoing limitation
will not apply).
(e) On each Distribution Date on and after the Distribution Date
on which the Collateral Invested Amount is paid in full, the Paying Agent
shall distribute to each Class D Securityholder of record on the related
Record Date (other than as provided in Section 12.2 of the Agreement) such
Class D Securityholder's pro rata share of the amounts on deposit in the
Collection Account or otherwise held by the Paying Agent that are allocated
and available on such Distribution Date to pay principal on the Class D
Securities pursuant to subsection 4.5(f)(iv) or 4.5(g)(iv).
(f) The distributions to be made pursuant to this Section 5.1
are subject to the provisions of Sections 2.6, 9.1, 10.1 and 12.2 of the
Agreement and Sections 8.1 and 8.2 of this Supplement.
(g) Except as provided in Section 12.2 of the Agreement with
respect to a final distribution, distributions to Series 1998-2
Securityholders hereunder shall be made by check mailed to each Series
1998-2 Securityholder at such Series 1998-2 Securityholder's address
appearing in the Security Register without presentation or surrender of any
Series 1998-2 Security or the making of any notation thereon; provided,
however, that with respect to Series 1998-2 Securities registered in the
name of a Clearing Agency, such distributions shall be made to such
Clearing Agency in immediately available funds.
(h) The Transferor has appointed, and the Trustee has consented
to the appointment of Xxxxxx Trust and Savings Bank, an Illinois state
banking association, as Paying Agent, Registrar and Transfer Agent of the
Series 1998-2 Securities; the Collection Account shall also be maintained
at Xxxxxx Trust and Savings Bank.
Section 5.2. Reports and Statements to Series 1998-2
Securityholders.
(a) On each Distribution Date, the Paying Agent, on behalf of
the Trustee, shall forward to each Series 1998-2 Securityholder a statement
substantially in the form of Exhibit C prepared by the Servicer.
(b) Not later than each Determination Date, the Servicer shall
deliver to the Trustee, the Paying Agent, each Rating Agency and the
Collateral Interest Holder (i) a statement substantially in the form of
Exhibit C prepared by the Servicer and (ii) a certificate of a Servicing
Officer substantially in the form of Exhibit D.
(c) A copy of each statement or certificate provided pursuant to
paragraph (a) or (b) may be obtained by any Series 1998-2 Securityholder or
any Security Owner thereof by a request in writing to the Servicer.
(d) On or before January 31 of each calendar year, beginning
with calendar year 1999, the Paying Agent, on behalf of the Trustee, shall
furnish or cause to be furnished to each Person who at any time during the
preceding calendar year was a Series 1998-2 Securityholder, a statement
prepared by the Servicer containing the information which is required to be
contained in the statement to Series 1998-2 Securityholders, as set forth
in paragraph (a) above aggregated for such calendar year or the applicable
portion thereof during which such Person was a Series 1998-2
Securityholder, together with other information as is required to be
provided by an issuer of indebtedness under the Code. Such obligation of
the Servicer shall be deemed to have been satisfied to the extent that
substantially comparable information shall be provided by the Paying Agent
pursuant to any requirements of the Code as from time to time in effect.
ARTICLE VI
Pay Out Events
Section 6.1. Pay Out Events. If any one of the following events
shall occur with respect to the Series 1998-2 Securities:
(a) the occurrence of an Insolvency Event relating to the
Transferor or, unless the Rating Agency Condition is satisfied with respect
to the deletion of Holdings or PFR from this subsection 6.1(a), the
occurrence of an Insolvency Event relating to Holdings or PFR;
(b) the Trust becomes an "investment company" within the meaning
of the Investment Company Act of 1940, as amended;
(c) a failure on the part of the Transferor (i) to make any
payment or deposit required by the terms of the Agreement or this
Supplement on or before the date occurring five Business Days after the
date such payment or deposit is required to be made therein or herein or
(ii) duly to observe or perform any other covenants or agreements of the
Transferor set forth in the Agreement or this Supplement, which failure has
a material adverse effect on the Series 1998-2 Securityholders and which
continues unremedied for a period of 60 days after the date on which
written notice of such failure, requiring the same to be remedied, shall
have been given to the Transferor by the Trustee (with a copy to the Rating
Agency), or to the Transferor and the Trustee (which shall deliver a copy
of such notice to the Rating Agency) by any Holder of the Series 1998-2
Securities;
(d) any representation or warranty made by the Transferor in the
Agreement or this Supplement, or any information contained in a computer
file or microfiche list required to be delivered by the Transferor pursuant
to Section 2.1 or subsection 2.9(f) of the Agreement shall prove to have
been incorrect in any material respect when made or when delivered, which
continues to be incorrect in any material respect for a period of 60 days
after the date on which written notice of such failure, requiring the same
to be remedied, shall have been given to the Transferor by the Trustee, or
to the Transferor and the Trustee by any Holder of the Series 1998-2
Securities and as a result of which the interests of the Series 1998-2
Securityholders are materially and adversely affected for such period;
provided, however, that a Pay Out Event pursuant to this subsection 6.1(d)
shall not be deemed to have occurred hereunder if the Transferor has
repurchased the related Receivable, or all of such Receivables, if
applicable, during such period in accordance with the provisions of the
Agreement;
(e) a failure by the Transferor to convey Receivables in
Additional Accounts or Participations to the Trust within five Business
Days after the day on which it is required to convey such Receivables or
Participations pursuant to subsection 2.9(a) of the Agreement;
(f) any Servicer Default shall occur;
(g) the average of the Series Adjusted Portfolio Yields for any
three consecutive Monthly Periods is reduced to a rate which is less than
the average of the Base Rates for such three consecutive Monthly Periods;
(h) a Transfer Restriction Event shall occur;
then, in the case of any event described in subparagraph (c), (d) or (f),
after the applicable grace period, if any, set forth in such subparagraphs,
either the Trustee or the Holders of Series 1998-2 Securities evidencing
more than 50% of the aggregate unpaid principal amount of Series 1998-2
Securities by notice then given in writing to the Transferor and the
Servicer (and to the Trustee if given by the Series 1998-2 Securityholders)
may declare that a Pay Out Event has occurred with respect to Series 1998-2
as of the date of such notice, and, in the case of any event described in
subparagraph (a), (b), (e), (g), or (h), a Pay Out Event shall occur with
respect to Series 1998-2 without any notice or other action on the part of
the Trustee or the Series 1998-2 Securityholders immediately upon the
occurrence of such event. The Transferor shall deliver to the Rating
Agency a copy of any notice given or received by it pursuant to this
subsection 6.1(h).
ARTICLE VII
Optional Repurchase; Series Termination
Section 7.1. Optional Repurchase.
(a) On any day occurring on or after the date on which the
Invested Amount is reduced to 10% or less of the Initial Invested Amount,
the Transferor shall have the option to purchase the Series 1998-2
Securityholders' Interest, at a purchase price equal to (i) if such day is
a Distribution Date, the Reassignment Amount for such Distribution Date or
(ii) if such day is not a Distribution Date, the Reassignment Amount for
the Distribution Date following such day. If, on the date on which the
Transferor exercise such option, the long-term unsecured debt obligations
of Holdings and PFR are not rated at least in the third highest rating
category by the Rating Agency, the Transferor shall deliver to the Trustee,
with a copy to the Rating Agency, an Officer's Certificate which shall have
attached to it the relevant fraudulent conveyance statute, if any, and set
forth the factual basis for a conclusion that the exercise of such optional
repurchase would not constitute a fraudulent conveyance of the Transferor.
(b) The Transferor shall give the Servicer and the Trustee at
least 30 days prior written notice (with a copy to the Rating Agency) of
the date on which the Transferor intends to exercise such purchase option.
Not later than 12:00 noon, New York City time, on such day the Transferor
shall deposit the Reassignment Amount into the Collection Account in
immediately available funds. Such purchase option is subject to payment in
full of the Reassignment Amount. Following the deposit of the Reassignment
Amount into the Collection Amount in accordance with the foregoing, the
Invested Amount for Series 1998-2 shall be reduced to zero and the Series
1998-2 Securityholders shall have no further interest in the Receivables.
The Reassignment Amount shall be distributed as set forth in subsection
8.1(b).
Section 7.2. Series Termination.
(a) If, on the September 2004 Distribution Date, the Invested
Amount (after giving effect to all changes therein on such date) would be
greater than zero, the Servicer, on behalf of the Trustee, shall, within
the 40-day period which begins on such Distribution Date, solicit bids for
the sale of Principal Receivables and the related Finance Charge
Receivables (or interests therein) in an amount equal to the Invested
Amount at the close of business on the last day of the Monthly Period
preceding the Series 1998-2 Termination Date (after giving effect to all
distributions required to be made on the Series 1998-2 Termination Date,
except pursuant to this Section 7.2). Such bids shall require that such
sale shall (subject to subsection 7.2(b)) occur on the Series 1998-2
Termination Date. The Transferor shall be entitled to participate in, and
to receive from the Trustee a copy of each other bid submitted in
connection with, such bidding process.
(b) The Servicer, on behalf of the Trustee, shall sell such
Receivables (or interests therein) on the Series 1998-2 Termination Date to
the bidder who made the highest cash purchase offer. The proceeds of any
such sale shall be treated as Collections on the Receivables allocated to
the Series 1998-2 Securityholders pursuant to the Agreement and this
Supplement; provided, however, that the Servicer shall determine
conclusively the amount of such proceeds which are allocable to Finance
Charge Receivables and the amount of such proceeds which are allocable to
Principal Receivables. During the period from the September 2004
Distribution Date to the Series 1998-2 Termination Date, the Servicer shall
continue to collect payments on the Receivables and allocate and deposit
such Collections in accordance with the provisions of the Agreement and the
Supplements.
Section 7.3. [Reserved]
Section 7.4. Constituent Class D Securities. (a) Subject to
the satisfaction of the conditions set forth in subsection 7.4(c), the
Class D Securityholders may at any time and from time to time (i) subdivide
the Class D Securities into two or more subsidiary securities, or (ii)
reallocate all or any portion of the amounts distributable to the Class D
Securityholders pursuant to Article IV and Section 5.1 to any other
Securityholder. In connection with such subdivision, the Transferor may
assign an interest rate to Class D Securities or a portion thereof. Upon
presentation to the Trustee and the Paying Agent of documentation
satisfactory to the Trustee, the Trustee shall pay amounts due hereunder to
the Class D Securityholders to the holders of such constituent securities
or such other Securityholder, as the case may be, pursuant to the terms of
such documentation.
(b) The documentation referred to in subsection 7.4(a) shall set
forth the rights of the holders of the securities or other interests issued
thereby with respect to the approval of amendments and waivers pursuant to
Section 13.1 of the Agreement.
(c) As a condition precedent to the subdivision of any Class D
Securities pursuant to this Section 7.4 or any transfer of the Class D
Securities, (i) the Trustee and the Transferor shall have received a Tax
Opinion (which shall not be required to include the opinion described in
clause (d) of the definition of "Tax Opinion" with respect to the
constituent securities, any outstanding Class A Securities, Class B
Securities, the Collateral Interest and any outstanding Class D
Securities), (ii) the Transferor shall deliver to the Trustee an Officers'
Certificate stating that in the reasonable belief of the Transferor such
subdivision would not cause a Pay Out Event with respect to Series 1998-2
to occur, or an event which, with notice or lapse of time or both, would
constitute a Pay Out Event with respect to Series 1998-2, and (iii) the
Rating Agency Condition shall have been satisfied.
Section 7.5 Legends; Transfer and Exchange; Restrictions on
Transfer of Series 1998-2 Securities; Tax Treatment.
(a) The Class A Securities and the Class B Securities will be
registered under the Securities Act.
(b) Each Class A Security will bear legends substantially in the
form set forth at Exhibit A-1.
(c) Each Class B Security will bear legends substantially in the
form set forth at Exhibit A-2.
(d) Each Class D Security will bear legends substantially in the
form set forth at Exhibit A-3.
(e) The Collateral Interest shall be subject to the restrictions
on transfer set forth in the Loan Agreement, including Section 8.09
thereof.
(f) It is the intention of the parties hereto that the
Collateral Interest be treated under applicable tax law as indebtedness.
In the event that the Collateral Interest is not so treated, it is the
intention of the parties that the Collateral Interest be treated under
applicable tax law as an interest in a partnership that owns the
Receivables. In the event that the Collateral Interest is treated under
applicable tax law as an interest in a partnership, it is the intention of
the parties that the Collateral Interest be treated as guaranteed payments
and, if for any reason it is not so treated, that the holder of the
Collateral Interest be specially allocated gross interest income equal to
the interest accrued during each Interest Period on the Collateral
Interest.
(g) It is the intention of the parties hereto that, until such
time as the Class D Securities are transferred or subdivided in accordance
with Section 7.4, the Class D Securities be treated under applicable tax
law as interests in a partnership that owns the Receivables.
Section 7.6 Defeasance. The Securities may be defeased in whole
or in part on the date that the following conditions shall have been
satisfied: (i) there shall have been deposited (x) in the Principal
Funding Account, an amount such that the amount on deposit in the Principal
Funding Account following such deposit is equal to the sum of the
outstanding principal amount of the Class A Securities, the outstanding
principal amount of the Class B Securities and the outstanding principal
amount of the Collateral Interest so defeased, and (y) in the Reserve
Account, an amount equal to or greater than the anticipated excess of the
Base Rate over the investment earnings on the amount deposited in the
Principal Funding Account pursuant to clause (x) of this Section 7.6, as
estimated by the Transferor, for the period from the date of such deposit
to the Principal Funding Account through the June 2001 Distribution Date;
(ii) the Transferor shall have delivered to the Trustee (a) an opinion of
counsel to the effect that such deposit will not result in the Trust being
required to register as an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, (b) an opinion of counsel to
the effect that following such deposit none of the Trust, the Reserve
Account or the Principal Funding Account will be deemed to be an
association (or publicly traded partnership) taxable as a corporation, (c)
a certificate of an officer of the Transferor stating that the Transferor
reasonably believes that such deposits will not cause a Pay Out Event or
any event that, with the giving of notice or the lapse of time, would
constitute a Pay Out Event, to occur; (iii) the Rating Agency Condition
shall have been satisfied in connection with such events; and (iv) the
amounts deposited into the Principal Funding Account and the Reserve
Account pursuant to clauses (x) and (y) of this Section 7.6 are proceeds
from the issuance of a Series of Investor Securities. If the Securities
have been defeased in whole, the Series 1998-2 Securities will no longer be
entitled to the security interest of the Trust in the Receivables and,
except those set forth in clause (i) above, other Trust assets and the
percentages applicable to the allocation to the Series 1998-2
Securityholders of Collections of Principal Receivables, Collections of
Finance Charge Receivables and Collections of Defaulted Receivables will be
reduced to zero. Upon the satisfaction of the foregoing conditions, the
Class D Invested Amount will be reduced to zero.
ARTICLE VIII
Final Distributions
Section 8.1. Sale of Receivables or Securityholders' Interest
pursuant to Section 2.6 or 10.1 of the Agreement and Section 7.1 or 7.2 of
this Supplement.
(1)(i) The amount to be paid by the Transferor with respect to
Series 1998-2 in connection with a reassignment of Receivables to the
Transferor pursuant to Section 2.6 of the Agreement shall equal the
Reassignment Amount for the first Distribution Date following the
Monthly Period in which the reassignment obligation arises under the
Agreement.
(ii) The amount to be paid by the Transferor with respect to
Series 1998-2 in connection with a repurchase of the Securityholders'
Interest pursuant to Section 10.1 of the Agreement shall equal the sum
of (x) the Reassignment Amount for the Distribution Date of such
repurchase and (y) the sum of (A) the excess, if any, of (I) a price
equivalent to the average of bids quoted on the Record Date preceding
the date of repurchase or, if not a Business Day, on the next
succeeding Business Day by at least two recognized dealers selected by
the Trustee for the purchase by such dealers of a security which is
similar to the Class A Securities with a remaining maturity
approximately equal to the remaining maturity of the Class A
Securities and rated by each Rating Agency in the rating category
originally assigned to the Class A Securities over (II) the portion of
the Reassignment Amount attributable to the Class A Securities and (B)
the excess, if any, of (I) a price equivalent to the average of bids
quoted on such Record Date, or if not a Business Day, on the next
succeeding Business Day by at least two recognized dealers selected by
the Trustee for the purchase by such dealers of a security which is
similar to the Class B Securities with a remaining maturity
approximately equal to the remaining maturity of the Class B
Securities and rated by each Rating Agency in the rating category
originally assigned to the Class B Securities over (II) the portion of
the Reassignment Amount attributable to the Class B Securities.
(2) With respect to the Reassignment Amount deposited into the
Collection Account pursuant to Section 7.1 or any amounts allocable to the
Series 1998-2 Securityholders' Interest deposited into the Collection
Account pursuant to Section 7.2, the Trustee shall, in accordance with the
written direction of the Servicer, not later than 12:00 noon, New York City
time, on the related Distribution Date, make deposits or distributions of
the following amounts (in the priority set forth below and, in each case
after giving effect to any deposits and distributions otherwise be made on
such date) in immediately available funds: (i) (x) the Class A Invested
Amount on such Distribution Date will be distributed to the Paying Agent
for payment to the Class A Securityholders and (y) an amount equal to the
sum of (A) Class A Monthly Interest for such Distribution Date, (B) any
Class A Monthly Interest previously due but not distributed to the Class A
Securityholders on a prior Distribution Date and (C) the amount of Class A
Additional Interest, if any, for such Distribution Date and any Class A
Additional Interest previously due but not distributed to the Class A
Securityholders on any prior Distribution Date, will be distributed to the
Paying Agent for payment to the Class A Securityholders, (ii) (x) the Class
B Invested Amount on such Distribution Date will be distributed to the
Paying Agent for payment to the Class B Securityholders and (y) an amount
equal to the sum of (A) Class B Monthly Interest for such Distribution
Date, (B) any Class B Monthly Interest previously due but not distributed
to the Class B Securityholders on a prior Distribution Date and (C) the
amount of Class B Additional Interest, if any, for such Distribution Date
and any Class B Additional Interest previously due but not distributed to
the Class B Securityholders on any prior Distribution Date, will be
distributed to the Paying Agent for payment to the Class B Securityholders
and (iii) the balance, if any, will be distributed to the Collateral
Interest Holder for application in accordance with the Loan Agreement.
(3) Notwithstanding anything to the contrary in this Supplement
or the Agreement, all amounts distributed to the Paying Agent pursuant to
subsection 8.1(b) for payment to the Series 1998-2 Securityholders shall be
deemed distributed in full to the Series 1998-2 Securityholders on the date
on which such funds are distributed to the Paying Agent pursuant to this
Section and shall be deemed to be a final distribution pursuant to Section
12.2 of the Agreement.
Section 8.2. Distribution of Proceeds of Sale, Disposition or
Liquidation of the Receivables pursuant to Section 9.1 of the Agreement.
(1) Not later than 12:00 noon, New York City time, on the
Distribution Date following the date on which the Insolvency Proceeds are
deposited into the Collection Account pursuant to subsection 9.1(b) of the
Agreement, the Trustee shall in accordance with the written direction of
the Servicer (in the following priority and, in each case, after giving
effect to any deposits and distributions otherwise to be made on such
Distribution Date) (i) deduct an amount equal to the Class A Invested
Amount on such Distribution Date from the portion of the Insolvency
Proceeds allocated to Series 1998-2 Allocable Principal Collections and
distribute such amount to the Paying Agent for payment to the Class A
Securityholders, provided that the amount of such distribution shall not
exceed the product of (x) the portion of the Insolvency Proceeds allocated
to Series 1998-2 Allocable Principal Collections and (y) the Principal
Allocation Percentage with respect to the related Monthly Period, (ii)
deduct an amount equal to the Class B Invested Amount on such Distribution
Date from the portion of the Insolvency Proceeds allocated to Series 1998-2
Allocable Principal Collections and distribute such amount to the Paying
Agent for payment to the Class B Securityholders, provided that the amount
of such distribution shall not exceed (x) the product of (A) the portion of
such Insolvency Proceeds allocated to Series 1998-2 Allocable Principal
Collections and (B) the Principal Allocation Percentage with respect to the
related Monthly Period minus (y) the amount distributed to the Paying Agent
pursuant to clause (i) of this sentence and (iii) deduct an amount equal to
the Collateral Invested Amount, if any, on such Distribution Date from the
portion of the Insolvency Proceeds allocated to Series 1998-2 Allocable
Principal Collections and distribute such amount to the Collateral Interest
Holder for application in accordance with the Loan Agreement, provided that
the amount of such distribution shall not exceed (x) the product of (1) the
portion of the Insolvency Proceeds allocated to Series 1998-2 Allocable
Principal Collections and (2) the Principal Allocation Percentage with
respect to such Monthly Period minus (y) the amounts distributed to the
Paying Agent pursuant to clauses (i) and (ii) of this sentence. To the
extent that the product of (A) the portion of the Insolvency Proceeds
allocated to Series 1998-2 Allocable Principal Collections and (B) the
Principal Allocation Percentage with respect to the related Monthly Period
exceeds the aggregate amounts distributed to the Paying Agent pursuant to
the preceding sentence, the excess shall be allocated to the Transferor's
Interest and shall be released to the Holder of the Transferor Security on
such Distribution Date.
(2) Not later than 12:00 noon, New York City time, on such
Distribution Date, the Trustee shall in accordance with the written
direction of the Servicer (in the following priority and, in each case,
after giving effect to any deposits and distributions otherwise to be made
on such Distribution Date) (i) deduct an amount equal to the sum of (w)
Class A Monthly Interest for such Distribution Date, (x) any Class A
Monthly Interest previously due but not distributed to the Class A
Securityholders on a prior Distribution Date and (y) the amount of Class A
Additional Interest, if any, for such Distribution Date and any Class A
Additional Interest previously due but not distributed to the Class A
Securityholders on a prior Distribution Date from the portion of the
Insolvency Proceeds allocated to Collections of Finance Charge Receivables
and distribute such amount to the Paying Agent for payment to the Class A
Securityholders, provided that the amount of such distribution shall not
exceed the product of (x) the portion of the Insolvency Proceeds allocated
to Series 1998-2 Allocable Finance Charge Collections, (y) the Floating
Allocation Percentage with respect to the related Monthly Period and (z)
the Class A Floating Percentage with respect to such Monthly Period; (ii)
deduct an amount equal to the sum of (w) Class B Monthly Interest for such
Distribution Date, (x) any Class B Monthly Interest previously due but not
distributed to the Class B Securityholders on a prior Distribution Date and
(y) the amount of Class B Additional Interest, if any, for such
Distribution Date and any Class B Additional Interest previously due but
not distributed to the Class B Securityholders on a prior Distribution Date
from the portion of the Insolvency Proceeds allocated to Series 1998-2
Allocable Finance Charge Collections and distribute such amount to the
Paying Agent for payment to the Class B Securityholders, provided that the
amount of such distribution shall not exceed the product of (x) the portion
of the Insolvency Proceeds allocated to Series 1998-2 Allocable Finance
Charge Collections, (y) the Floating Allocation Percentage with respect to
the related Monthly Period and (z) the Class B Floating Percentage with
respect to such Monthly Period; (iii) deduct an amount equal to the sum of
(w) Collateral Monthly Interest for such Distribution Date, (x) any
Collateral Monthly Interest previously due but not distributed to the
Collateral Interest Holder on a prior Distribution Date and (y) the amount
of Collateral Additional Interest, if any, for such Distribution Date and
any Collateral Additional Interest previously due but not distributed to
the Collateral Interest Holder on a prior Distribution Date from the
portion of the Insolvency Proceeds allocated to Series 1998-2 Allocable
Finance Charge Collections and distribute such amount to the Collateral
Interest Holder in accordance with the Loan Agreement, provided that the
amount of such distribution shall not exceed the product of (x) the portion
of the Insolvency Proceeds allocated to Series 1998-2 Allocable Finance
Charge Collections, (y) the Floating Allocation Percentage with respect to
the related Monthly Period and (z) the Collateral Floating Percentage with
respect to such Monthly Period; (iv) deduct an amount equal to the sum of
(w) Class D Monthly Interest for such Distribution Date, (x) Class D
Monthly Interest previously due but not distributed to the Class D
Securityholders on a prior Distribution Date and (y) the amount of Class D
Additional Interest, if any, for such Distribution Date and any Class D
Additional Interest previously due but not distributed to the Class D
Securityholders on a prior Distribution Date from the portion of the
Insolvency Proceeds allocated to Series 1998-2 Allocable Finance Charge
Collections and distribute such amount to the Paying Agent for payment to
the Class D Securityholders, provided that the amount of such distribution
shall not exceed the product of (x) the portion of the Insolvency Proceeds
allocated to Series 1998-2 Allocable Finance Charge Collections, (y) the
Floating Allocation Percentage with respect to the related Monthly Period
and (z) the Class D Floating Percentage with respect to such Monthly
Period; and (v) distribute any remaining insolvency proceeds to the
Transferor.
(3) Notwithstanding anything to the contrary in this Supplement
or the Agreement, all amounts distributed to the Paying Agent pursuant to
this Section for payment to the Series 1998-2 Securityholders shall be
distributed in full to the Series 1998-2 Securityholders on the date on
which funds are distributed to the Paying Agent pursuant to this Section
and shall be deemed to be a final distribution pursuant to Section 12.2 of
the Agreement.
ARTICLE IX
Miscellaneous Provisions
Section 9.1. Ratification of Agreement. As supplemented by this
Supplement, the Agreement is in all respects ratified and confirmed and the
Agreement as so supplemented by this Supplement shall be read, taken and
construed as one and the same instrument.
Section 9.2. Counterparts. This Supplement may be executed in
two or more counterparts, and by different parties on separate
counterparts, each of which shall be an original, but all of which shall
constitute one and the same instrument.
SECTION 9.3. GOVERNING LAW. THIS SUPPLEMENT SHALL BE CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO
ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF
THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
IN WITNESS WHEREOF, the undersigned have caused this Supplement
to be duly executed and delivered by their respective duly authorized
officers on the day and year first above written.
PARTNERS FIRST RECEIVABLES FUNDING, LLC,
Transferor
By:/s/ Xxxx X. Xxxxxxx
___________________________________
Name: Xxxx X. Xxxxxxx
Title: Treasurer
PARTNERS FIRST HOLDINGS, LLC,
Servicer
By: /s/ Xxxxxxx X. Xxxxxx
____________________________________
Name: Xxxxxxx X. Xxxxxx
Title: Secretary
THE BANK OF NEW YORK,
not in its individual capacity, but solely as
Trustee,
By: /s/ Wuhan Xxxxxx
___________________________________
Name: Wuhan Xxxxxx
Title: Assistant Vice President
FORM OF CLASS A SECURITY EXHIBIT A-1
1/
REGISTERED $__________
No. R-_______ CUSIP No. _________
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND
ANY SECURITY 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.
PARTNERS FIRST CREDIT CARD MASTER TRUST
SERIES 1998-2
CLASS A FLOATING RATE ASSET BACKED SECURITY
Class A Scheduled Payment Date:
The June 2001 Distribution Date
Each $1,000 minimum denomination represents a
1/______ undivided interest
in Class A of the
PARTNERS FIRST CREDIT CARD MASTER TRUST, SERIES 1998-2
Evidencing an undivided interest in certain assets of a trust, the corpus
of which consists primarily of an interest in receivables generated from
time to time in the ordinary course of business in a portfolio of consumer
revolving credit card accounts serviced by Partners First Holdings, LLC,
and other assets and interests constituting the Trust under the Pooling and
Servicing Agreement referred to below.
(Not an interest in or obligation of Partners First National Bank, Partners
First Receivables Funding, LLC or any of their respective affiliates)
--------------------------
1/ Denominations of $1,000 and integral multiples of $1,000 in excess
thereof.
This certifies that ______________ (the "Class A Securityholder") is the
registered owner of a fractional undivided interest in certain assets of a
trust (the "Trust") created pursuant to the Amended and Restated Pooling
and Servicing Agreement, dated as of June 26, 1998 (as amended and
supplemented, the "Agreement"), as supplemented by the Series 1998-2
Supplement dated as of June 26, 1998 (as amended and supplemented, the
"Supplement"), among Partners First Receivables Funding, LLC, as
Transferor, Partners First Holdings, LLC, as Servicer, and The Bank of New
York, a New York banking corporation, as trustee (the "Trustee"). The
corpus of the Trust consists of (i) the Transferor's ownership interest in
a portfolio of receivables (the "Receivables") existing in the consumer
revolving credit card accounts identified under the Agreement from time to
time (the "Accounts"), (ii) all Receivables generated under the Accounts
from time to time thereafter, (iii) funds collected or to be collected from
cardmembers in respect of the Receivables, (iv) all funds which are from
time to time on deposit in the Collection Account, the Special Funding
Account, the Yield Supplement Account and any other Series Accounts and (v)
all other assets and interests constituting the Trust. The Holder of this
Security is entitled to the benefits of the subordination of the Class B
Securities, the Collateral Interest and the Class D Securities to the
extent provided in the Supplement. Although a summary of certain
provisions of the Agreement and the Supplement is set forth below and in
the Summary of Terms and Conditions attached hereto and made a part hereof,
this Class A Security does not purport to summarize the Agreement and the
Supplement and reference is made to the Agreement and the Supplement for
information with respect to the interests, rights, benefits, obligations,
proceeds and duties evidenced hereby and the rights, duties and obligations
of the Trustee. A copy of the Agreement and the Supplement (without
schedules) may be requested from the Trustee by writing to the Trustee at
the Corporate Trust Office. To the extent not defined herein, the
capitalized terms used herein have the meanings ascribed to them in the
Agreement or the Supplement, as applicable.
This Class A Security is issued under and is subject to the
terms, provisions and conditions of the Agreement and the Supplement, to
which Agreement and Supplement, each as amended and supplemented from time
to time, the Class A Securityholder by virtue of the acceptance hereof
assents and is bound.
It is the intent of the Transferor and the Class A
Securityholders that, for federal, state and local income and franchise tax
purposes only, the Class A Securities will qualify as indebtedness of the
Transferor secured by the Receivables. The Class A Securityholder, by the
acceptance of this Class A Security, agrees to treat this Class A Security
for federal, state and local income and franchise tax purposes as debt of
the Transferor.
In general, payments of principal with respect to the Class A
Securities are limited to the Class A Invested Amount, which may be less
than the unpaid principal balance of the Class A Securities. The Class A
Scheduled Payment Distribution Date is the June 2001 Distribution Date, but
principal with respect to the Class A Securities may be paid earlier or
later under certain circumstances described in the Agreement and the
Supplement. If for one or more months during the Controlled Accumulation
Period there are not sufficient funds to pay the Controlled Deposit Amount,
then to the extent that excess funds are not available on subsequent
Distribution Dates with respect to the Controlled Accumulation Period to
make up for such shortfalls, the final payment of principal of the Class A
Securities will occur later than the Class A Scheduled Payment Date.
Unless the certificate of authentication hereon has been executed
by or on behalf of the Trustee, by manual signature, this Class A Security
shall not be entitled to any benefit under the Agreement or the Supplement
or be valid for any purpose.
IN WITNESS WHEREOF, the Transferor has caused this Class A
Security to be duly executed.
PARTNERS FIRST RECEIVABLES FUNDING, LLC
By: ___________________________________
Name:
Title:
Dated: ______, 1998
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class A Securities described in the within-mentioned
Agreement and Supplement.
THE BANK OF NEW YORK,
as Trustee,
By: ________________________
Authorized Officer
PARTNERS FIRST CREDIT CARD MASTER TRUST
SERIES 1998-2
CLASS A FLOATING RATE ASSET BACKED SECURITY
Summary of Terms and Conditions
The Receivables consist of Principal Receivables which arise
generally from the purchase of goods and services and amounts advanced to
cardmembers as cash advances and Finance Charge Receivables. This Class A
Security is one of a Series of Securities entitled Partners First Credit
Card Master Trust, Series 1998-2 (the "Series 1998-2 Securities"), and one
of a class thereof entitled Class A Series 1998-2 Floating Rate Asset
Backed Securities, (the "Class A Securities"), each of which represents a
fractional, undivided interest in certain assets of the Trust. The assets
of the Trust are allocated in part to the investor securityholders of all
outstanding Series (the "Securityholders' Interest") with the remainder
allocated to the Holder of the Transferor Security. The aggregate interest
represented by the Class A Securities at any time in the Principal
Receivables in the Trust shall not exceed an amount equal to the Class A
Invested Amount at such time. The Class A Initial Invested Amount is
$528,000,000. The Class A Invested Amount on any date will be an amount
equal to (a) the Class A Initial Invested Amount, minus (b) the aggregate
amount of principal payments made to the Class A Securityholders on or
prior to such date, minus (c) the excess, if any, of the aggregate amount
of Class A Charge-Offs for all prior Distribution Dates over Class A
Charge-Offs reimbursed pursuant to subsection 4.7(b) of the Supplement
prior to such date; provided, however, that the Class A Invested Amount may
not be reduced below zero.
Subject to the terms and conditions of the Agreement, the
Transferor may, from time to time, direct the Trustee, on behalf of the
Trust, to issue one or more new Series of Investor Securities, which will
represent fractional, undivided interests in certain of the Trust Assets.
On each Distribution Date, the Paying Agent shall distribute to
each Class A Securityholder of record on the last day of the preceding
calendar month (each a "Record Date") such Class A Securityholder's pro
rata share of such amounts (including amounts on deposit in the Collection
Account) as are payable to the Class A Securityholders pursuant to the
Agreement and the Supplement. Distributions with respect to this Class A
Security will be made by the Paying Agent by check mailed to the address of
the Class A Securityholder of record appearing in the Security Register
without the presentation or surrender of this Class A Security or the
making of any notation thereon (except for the final distribution in
respect of this Class A Security) except that with respect to Class A
Securities registered in the name of Cede & Co., the nominee for The
Depository Trust Company, distributions will be made in the form of
immediately available funds. Final payment of this Class A Security will
be made only upon presentation and surrender of this Class A Security at
the office or agency specified in the notice of final distribution
delivered by the Trustee to the Series 1998-2 Securityholders in accordance
with the Agreement and the Supplement.
On any day occurring on or after the day on which the Invested
Amount is reduced to 10% or less of the Initial Invested Amount, the
Transferor has the option to repurchase the Series 1998-2 Securityholders'
Interest in the Trust. The repurchase price will be equal to (a) if such
day is a Distribution Date, the Reassignment Amount for such Distribution
Date or (b) if such day is not a Distribution Date, the Reassignment Amount
for the Distribution Date following such day. Following the deposit of the
Reassignment Amount in the Collection Account, Series 1998-2
Securityholders will not have any interest in the Receivables and the
Series 1998-2 Securities will represent only the right to receive such
Reassignment Amount.
THIS CLASS A SECURITY DOES NOT REPRESENT AN OBLIGATION OF, OR AN
INTEREST IN, THE TRANSFEROR OR THE SERVICER OR ANY AFFILIATE OF EITHER OF
THEM AND IS NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY OR INSTRUMENTALITY. THIS
CLASS A SECURITY IS LIMITED IN RIGHT OF PAYMENT TO CERTAIN COLLECTIONS WITH
RESPECT TO THE RECEIVABLES (AND CERTAIN OTHER AMOUNTS), ALL AS MORE
SPECIFICALLY SET FORTH HEREINABOVE AND IN THE AGREEMENT AND THE SUPPLEMENT.
The Class A Securities are issuable only in minimum denominations
of $1,000 and integral multiples of $1,000 in excess thereof. The transfer
of this Class A Security shall be registered in the Security Register upon
surrender of this Class A Security 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
or the Transfer Agent and Registrar, duly executed by the Class A
Securityholder or such Class A Securityholder's attorney, and duly
authorized in writing with such signature guaranteed, and thereupon one or
more new Class A Securities of authorized denominations and for the same
aggregate fractional undivided interest will be issued to the designated
transferee or transferees.
As provided in the Agreement and subject to certain limitations
therein set forth, Class A Securities are exchangeable for new Class A
Securities evidencing like aggregate fractional, undivided interests as
requested by the Class A Securityholder surrendering such Class A
Securities. No service charge may be imposed for any such exchange but the
Servicer or Transfer Agent and Registrar may require payment of a sum
sufficient to cover any tax or other governmental charge that may be
imposed in connection therewith.
The Servicer, the Trustee, the Paying Agent and the Transfer
Agent and Registrar and any agent of any of them, may treat the person in
whose name this Class A Security is registered as the owner hereof for all
purposes, and neither the Servicer nor the Trustee, the Paying Agent, the
Transfer Agent and Registrar, nor any agent of any of them, shall be
affected by notice to the contrary except in certain circumstances
described in the Agreement.
THIS CLASS A SECURITY SHALL BE CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
ASSIGNMENT
Social Security or other identifying number of assignee____________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto _____________________________________
(name and address of assignee)
the within security and all rights thereunder, and hereby irrevocably
constitutes and appoints ____________________, attorney, to transfer said
security on the books kept for registration thereof, with full power of
substitution in the premises.
2/
Dated: ____________ ______________________
Signature Guaranteed:
______________________
---------------------------
2/ NOTE: The signature to this assignment must correspond with
the name of the registered owner as it appears on the face
of the within Security in every particular, without
alteration, enlargement or any change whatsoever.
EXHIBIT A-2
FORM OF CLASS B SECURITY
3/
REGISTERED $__________
No. R-_______ CUSIP No. _________
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND
ANY SECURITY 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.
EACH PURCHASER REPRESENTS AND WARRANTS FOR THE BENEFIT OF THE
TRANSFEROR AND THE TRUSTEE THAT SUCH PURCHASER IS NOT (I) AN EMPLOYEE
BENEFIT PLAN (AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA")) THAT IS SUBJECT TO THE
PROVISIONS OF TITLE I OF ERISA, (II) A PLAN DESCRIBED IN SECTION 4975(E)(1)
OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), (III) A
GOVERNMENTAL PLAN, AS DEFINED IN SECTION 3(32) OF ERISA, SUBJECT TO ANY
FEDERAL, STATE OR LOCAL LAW WHICH IS, TO A MATERIAL EXTENT, SIMILAR TO THE
PROVISIONS OF SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE, (IV) AN
ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS (AS DEFINED IN 29 C.F.R.
SECTION 2510.3-101 OR OTHERWISE UNDER ERISA) BY REASON OF A PLAN'S
INVESTMENT IN THE ENTITY OR (V) A PERSON INVESTING PLAN ASSETS OF ANY SUCH
PLAN (INCLUDING WITHOUT LIMITATION, FOR PURPOSES OF CLAUSE (IV) AND THIS
CLAUSE (V), ANY INSURANCE COMPANY GENERAL ACCOUNT, BUT EXCLUDING ANY ENTITY
REGISTERED UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED).
----------------------
3/ Denominations of $1,000 and integral multiples of $1,000 in excess
thereof.
PARTNERS FIRST CREDIT CARD MASTER TRUST
SERIES 1998-2
CLASS B FLOATING RATE ASSET BACKED SECURITY
Class B Scheduled Payment Date
The June 2001 Distribution Date
Each $1,000 minimum denomination represents a
1/________ undivided interest
in Class B of the
PARTNERS FIRST CREDIT CARD MASTER TRUST, SERIES 1998-2
Evidencing an undivided interest in certain assets of a trust, the corpus
of which consists primarily of an interest in receivables generated from
time to time in the ordinary course of business in a portfolio of consumer
revolving credit card accounts serviced by Partners First Holdings, LLC,
and other assets and interests constituting the Trust under the Pooling and
Servicing Agreement referred to below.
(Not an interest in or obligation of Partners First Holdings, LLC, Partners
First Receivables Funding, LLC or any of their respective affiliates)
This certifies that ___________ (the "Class B Securityholder") is the
registered owner of a fractional, undivided interest in certain assets of a
trust (the "Trust") created pursuant to the Amended and Restated Pooling
and Servicing Agreement, dated as of June 26, 1998 (as amended and
supplemented, the "Agreement"), as supplemented by the Series 1998-2
Supplement dated as of June 26, 1998 (as amended and supplemented, the
"Supplement"), among Partners First Receivables Funding, LLC, as
Transferor, Partners First Holdings, LLC, as Servicer, and The Bank of New
York, a New York banking corporation, as trustee (the "Trustee"). The
corpus of the Trust consists of (i) the Transferor's ownership interest in
a portfolio of receivables (the "Receivables") existing in the consumer
revolving credit card accounts identified under the Agreement from time to
time (the "Accounts"), (ii) all Receivables generated under the Accounts
from time to time thereafter, (iii) funds collected or to be collected from
cardmembers in respect of the Receivables, (iv) all funds which are from
time to time on deposit in the Collection Account, the Special Funding
Account, the Yield Supplement Account and the other Series Accounts and (v)
all other assets and interests constituting the Trust. The Holder of this
Security is entitled to the benefits of the subordination of the Collateral
Interest and the Class D Securities to the extent provided in the
Supplement. Although a summary of certain provisions of the Agreement and
the Supplement is set forth below and in the Summary of Terms and
Conditions attached hereto and made a part hereof, this Class B Security
does not purport to summarize the Agreement and the Supplement and
reference is made to the Agreement and the Supplement for information with
respect to the interests, rights, benefits, obligations, proceeds and
duties evidenced hereby and the rights, duties and obligations of the
Trustee. A copy of the Agreement and the Supplement (without schedules)
may be requested from the Trustee by writing to the Trustee at the
Corporate Trust Office. To the extent not defined herein, the capitalized
terms used herein have the meanings ascribed to them in the Agreement or
the Supplement, as applicable.
This Class B Security is issued under and is subject to the
terms, provisions and conditions of the Agreement and the Supplement, to
which Agreement and Supplement, each as amended and supplemented from time
to time, the Class B Securityholder by virtue of the acceptance hereof
assents and is bound.
This Class B Security may not be acquired by or for the account
of any employee benefit plan, trust or account, including an individual
retirement account, that is subject to the Employee Retirement Income
Security Act of 1974, as amended, or that is described in Section
4975(e)(1) of the Internal Revenue Code of 1986, as amended, or an entity
whose underlying assets include plan assets by reason of a plan's
investment in such entity (a "Benefit Plan"). By accepting and holding
this Class B Security, the Holder hereof shall be deemed to have
represented and warranted that it is not a Benefit Plan. By acquiring any
interest in this Class B Security, the applicable Security Owner or Owners
shall be deemed to have represented and warranted that it or they are not
Benefit Plans.
THIS CLASS B SECURITY IS SUBORDINATED TO THE EXTENT NECESSARY TO
FUND PAYMENTS ON THE CLASS A SECURITIES TO THE EXTENT SPECIFIED IN THE
SUPPLEMENT.
It is the intent of the Transferor and the Class B
Securityholders that, for federal, state and local income and franchise tax
purposes only, the Class B Securities will qualify as indebtedness of the
Transferor secured by the Receivables. The Class B Securityholder, by the
acceptance of this Class B Security, agrees to treat this Class B Security
for federal, state and local income and franchise tax purposes as debt of
the Transferor.
In general, payments of principal with respect to the Class B
Securities are limited to the Class B Invested Amount, which may be less
then the unpaid principal balance of the Class B Securities. The Class B
Scheduled Payment Date is the June 2001 Distribution Date, but principal
with respect to the Class B Securities may be paid earlier or later under
certain circumstances described in the Agreement and the Supplement. If
for one or more months during the Controlled Accumulation Period there are
not sufficient funds to pay the Controlled Deposit Amount, then to the
extent that excess funds are not available on subsequent Distribution Dates
with respect to the Accumulation Period to make up for such shortfalls, the
final payment of principal of the Securities will occur later than the
Class B Scheduled Payment Date.
Unless the certificate of authentication hereon has been executed
by or on behalf of the Trustee, by manual signature, this Class B Security
shall not be entitled to any benefit under the Agreement or the Supplement
or be valid for any purpose.
IN WITNESS WHEREOF, the Transferor has caused this Class B
Security to be duly executed.
PARTNERS FIRST RECEIVABLES FUNDING, LLC
By: ___________________________________
Name:
Title:
Dated: __________, 1998
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class B Securities described in the within
mentioned Agreement and Supplement.
THE BANK OF NEW YORK,
as Trustee
By: __________________________
Authorized Signatory
PARTNERS FIRST CREDIT CARD MASTER TRUST
SERIES 1998-2
CLASS B FLOATING RATE ASSET BACKED SECURITY
Summary of Terms and Conditions
The Receivables consist of Principal Receivables which arise
generally from the purchase of goods and services and amounts advanced to
cardmembers as cash advances and Finance Charge Receivables. This Class B
Security is one of a Series of Securities entitled Partners First Credit
Card Master Trust, Series 1998-2 (the "Series 1998-2 Securities"), and one
of a class thereof entitled Class B Series 1998-2 Floating Rate Asset
Backed Securities, (the "Class B Securities"), each of which represents a
fractional, undivided interest in certain assets of the Trust. The assets
of the Trust are allocated in part to the investor securityholders of all
outstanding Series (the "Securityholders' Interest") with the remainder
allocated to the Holder of the Transferor Security. The aggregate interest
represented by the Class B Securities at any time in the Principal
Receivables in the Trust shall not exceed an amount equal to the Class B
Invested Amount at such time. The Class B Initial Invested Amount is
$113,000,000. The Class B Invested Amount on any date will be an amount
equal to (a) the Class B Initial Invested Amount, minus (b) the aggregate
amount of principal payments made to the Class B Securityholders prior to
such date, minus (c) the aggregate amount of Class B Charge-Offs for all
prior Distribution Dates , minus (d) the amount of Redirected Principal
Collections allocated on all prior Distribution Dates pursuant to
subsection 4.8(a) of the Supplement (excluding any Redirected Principal
Collections that have resulted in a reduction in the Collateral Invested
Amount pursuant to Section 4.8), minus (e) an amount equal to the amount by
which the Class B Invested Amount has been reduced to cover the Class A
Default Amount on all prior Distribution Dates, plus (f) the amount of
Excess Spread and Excess Finance Charge Collections allocated to Series
1998-2 and applied on all prior Distribution Dates for the purpose of
reimbursing amounts deducted pursuant to the foregoing clauses (c), (d) and
(e); provided, however, that the Class B Invested Amount may not be reduced
below zero.
Subject to the terms and conditions of the Agreement, the
Transferor may, from time to time, direct the Trustee, on behalf of the
Trust, to issue one or more new Series of Investor Securities, which will
represent fractional, undivided interests in certain of the Trust Assets.
On each Distribution Date, the Paying Agent shall distribute to
each Class B Securityholder of record on the last day of the preceding
calendar month (each a "Record Date") such Class B Securityholder's pro
rata share of such amounts (including amounts on deposit in the Collection
Account) as are payable to the Class B Securityholders pursuant to the
Agreement and the Supplement. Distributions with respect to this Class B
Security will be made by the Paying Agent by check mailed to the address of
the Class B Securityholder of record appearing in the Security Register
without the presentation or surrender of this Class B Security or the
making of any notation thereon (except for the final distribution in
respect of this Class B Security) except that with respect to Class B
Securities registered in the name of Cede & Co., the nominee for The
Depository Trust Company, distributions will be made in the form of
immediately available funds. Final payment of this Class B Security will
be made only upon presentation and surrender of this Class B Security at
the office or agency specified in the notice of final distribution
delivered by the Trustee to the Series 1998-2 Securityholders in accordance
with the Agreement and the Supplement.
On any day occurring on or after the day on which the Invested
Amount is reduced to 10% or less of the Initial Invested Amount, the
Transferor has the option to repurchase the Series 1998-2 Securityholders'
Interest in the Trust. The repurchase price will be equal to (a) if such
day is a Distribution Date, the Reassignment Amount for such Distribution
Date or (b) if such day is not a Distribution Date, the Reassignment Amount
for the Distribution Date next following such day. Following the deposit
of the Reassignment Amount in the Collection Account, Series 1998-2
Securityholders will not have any interest in the Receivables and the
Series 1998-2 Securities will represent only the right to receive such
Reassignment Amount.
THIS CLASS B SECURITY DOES NOT REPRESENT AN OBLIGATION OF, OR AN
INTEREST IN, THE TRANSFEROR OR THE SERVICER OR ANY AFFILIATE OF EITHER OF
THEM AND IS NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY OR INSTRUMENTALITY. THIS
CLASS B SECURITY IS LIMITED IN RIGHT OF PAYMENT TO CERTAIN COLLECTIONS WITH
RESPECT TO THE RECEIVABLES (AND CERTAIN OTHER AMOUNTS), ALL AS MORE
SPECIFICALLY SET FORTH HEREINABOVE AND IN THE AGREEMENT AND THE SUPPLEMENT.
The Class B Securities are issuable only in minimum denominations
of $1,000 and integral multiples of $1,000 in excess thereof. The transfer
of this Class B Security shall be registered in the Security Register upon
surrender of this Class B Security 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
or the Transfer Agent and Registrar, duly executed by the Class B
Securityholder or such Class B Securityholder's attorney, and duly
authorized in writing with such signature guaranteed, and thereupon one or
more new Class B Securities of authorized denominations and for the same
aggregate fractional undivided interest will be issued to the designated
transferee or transferees.
As provided in the Agreement and subject to certain limitations
therein set forth, Class B Securities are exchangeable for new Class B
Securities evidencing like aggregate fractional undivided interests as
requested by the Class B Securityholder surrendering such Class B
Securities. No service charge may be imposed for any such exchange but the
Servicer or Transfer Agent and Registrar may require payment of a sum
sufficient to cover any tax or other governmental charge that may be
imposed in connection therewith.
The Servicer, the Trustee, the Paying Agent and the Transfer
Agent and Registrar and any agent of any of them, may treat the person in
whose name this Class B Security is registered as the owner hereof for all
purposes, and neither the Servicer nor the Trustee, the Paying Agent, the
Transfer Agent and Registrar, nor any agent of any of them, shall be
affected by notice to the contrary except in certain circumstances
described in the Agreement.
THIS CLASS B SECURITY SHALL BE CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
ASSIGNMENT
Social Security or other identifying number of assignee___________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto____________________________________________________________
(name and address of assignee)
the within security and all rights thereunder, and hereby irrevocably
constitutes and appoints ____________________, attorney, to transfer said
security on the books kept for registration thereof, with full power of
substitution in the premises.
4/
Dated: ____________________
Signature Guaranteed:
____________________
____________________
-------------------------
the name of the registered owner as it appears on the face
of the within Security in every particular, without
alteration, enlargement or any change whatsoever.
EXHIBIT A-3
FORM OF CLASS D INVESTOR SECURITY
THIS SECURITY WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"). THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OR
ANY APPLICABLE STATE SECURITIES LAW OF ANY STATE AND MAY NOT BE OFFERED,
SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS REGISTERED PURSUANT TO OR
EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT AND ANY OTHER APPLICABLE
SECURITIES LAW.
EACH PURCHASER REPRESENTS AND WARRANTS FOR THE BENEFIT OF THE
TRANSFEROR AND THE TRUSTEE THAT SUCH PURCHASER IS NOT (I) AN EMPLOYEE
BENEFIT PLAN (AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA")) THAT IS SUBJECT TO THE
PROVISIONS OF TITLE I OF ERISA, (II) A PLAN DESCRIBED IN SECTION 4975(E)(1)
OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), (III) A
GOVERNMENTAL PLAN, AS DEFINED IN SECTION 3(32) OF ERISA, SUBJECT TO ANY
FEDERAL, STATE OR LOCAL LAW WHICH IS, TO A MATERIAL EXTENT, SIMILAR TO THE
PROVISIONS OF SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE, (IV) AN
ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS (AS DEFINED IN 29 C.F.R.
SECTION 2510.3-101 OR OTHERWISE UNDER ERISA) BY REASON OF A PLAN'S
INVESTMENT IN THE ENTITY OR (V) A PERSON INVESTING PLAN ASSETS OF ANY SUCH
PLAN (INCLUDING WITHOUT LIMITATION, FOR PURPOSES OF CLAUSE (IV) AND THIS
CLAUSE (V), ANY INSURANCE COMPANY GENERAL ACCOUNT, BUT EXCLUDING ANY ENTITY
REGISTERED UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED).
PARTNERS FIRST CREDIT CARD MASTER TRUST
SERIES 1998-2
CLASS D FLOATING RATE ASSET BACKED SECURITY
Each $1,000 minimum denomination represents a
1/_______ undivided interest
in Class D of the
PARTNERS FIRST CREDIT CARD MASTER TRUST, SERIES 1998-2
Evidencing an undivided interest in certain assets of a trust, the corpus
of which consists primarily of an interest in receivables generated from
time to time in the ordinary course of business in a portfolio of consumer
revolving credit card accounts serviced by Partners First Holdings, LLC,
and other assets and interests constituting the Trust under the Pooling and
Servicing Agreement referred to below.
(Not an interest in or obligation of Partners First Receivables Funding,
LLC, Partners First Receivables, LLC or any of their respective affiliates)
This certifies that PARTNERS FIRST RECEIVABLES FUNDING, LLC (the "Class D
Securityholder") is the registered owner of a fractional, undivided
interest in certain assets of a trust (the "Trust") created pursuant to the
Amended and Restated Pooling and Servicing Agreement, dated as of June 26,
1998 (as amended and supplemented, the "Agreement"), as supplemented by the
Series 1998-2 Supplement, dated as of June 26, 1998 (as amended and
supplemented, the "Supplement"), among Partners First Receivables Funding,
LLC, as Transferor, Partners First Holdings, LLC, as Servicer, and The Bank
of New York, a New York banking corporation, as trustee (the "Trustee").
The corpus of the Trust consists of (i) the Transferor's ownership interest
in a portfolio of receivables (the "Receivables") existing in the consumer
revolving credit card accounts identified under the Agreement from time to
time (the "Accounts"), (ii) all Receivables generated under the Accounts
from time to time thereafter, (iii) funds collected or to be collected from
cardmembers in respect of the Receivables, (iv) all funds which are from
time to time on deposit in the Collection Account, the Special Funding
Account, the Yield Supplement Account and the other Series Accounts and (v)
all other assets and interests constituting the Trust. Although a summary
of certain provisions of the Agreement and the Supplement is set forth
below and in the Summary of Terms and Conditions attached hereto and made a
part hereof, this Class D Security does not purport to summarize the
Agreement and the Supplement and reference is made to the Agreement and the
Supplement for information with respect to the interests, rights, benefits,
obligations, proceeds and duties evidenced hereby and the rights, duties
and obligations of the Trustee. A copy of the Agreement and the Supplement
(without schedules) may be requested from the Trustee by writing to the
Trustee at the Corporate Trust Office. To the extent not defined herein,
the capitalized terms used herein have the meanings ascribed to them in the
Agreement or the Supplement, as applicable.
This Class D Security is issued under and is subject to the
terms, provisions and conditions of the Agreement and the Supplement, to
which Agreement and Supplement, each as amended and supplemented from time
to time, the Class D Securityholder by virtue of the acceptance hereof
assents and is bound.
This Class D Security may not be acquired by or for the account
of any employee benefit plan, trust or account, including an individual
retirement account, that is subject to the Employee Retirement Income
Security Act of 1974, as amended, or that is described in Section
4975(e)(1) of the Internal Revenue Code of 1986, as amended, or an entity
whose underlying assets include plan assets by reason of a plan's
investment in such entity (a "Benefit Plan"). By accepting and holding
this Class D Security, the Holder hereof shall be deemed to have
represented and warranted that it is not a Benefit Plan. By acquiring any
interest in this Class D Security, the applicable Security Owner or Owners
shall be deemed to have represented and warranted that it or they are not
Benefit Plans.
THIS CLASS D SECURITY IS SUBORDINATED TO THE EXTENT NECESSARY TO
FUND PAYMENTS ON THE CLASS A SECURITIES, THE CLASS B SECURITIES AND THE
COLLATERAL INTEREST TO THE EXTENT SPECIFIED IN THE SUPPLEMENT.
Subject to the satisfaction of the conditions set forth in the
Supplement, the Class D Securityholders may at any time and from time to
time (i) subdivide their Class D Securities into two or more subsidiary
securities, or (ii) reallocate all or any portion of the amounts
distributable to the Class D Securityholders to any other Securityholder.
In connection with such subdivision, the Transferor may assign an interest
rate to Class D Securities or a portion thereof. Upon presentation to the
Trustee and the Paying Agent of documentation satisfactory to the Trustee,
the Trustee shall pay amounts due hereunder to the Class D Securityholders
to the holders of such constituent securities or such other Securityholder,
as the case may be, pursuant to the terms of such documentation.
No principal will be payable to the Class D Securityholders until
the Class A Invested Amount, the Class B Invested Amount and the Collateral
Invested Amount have been paid in full. In general, payments of principal
with respect to the Class D Securities are limited to the Class D Invested
Amount, which may be less then the unpaid principal balance of the Class D
Securities.
IN WITNESS WHEREOF, the Transferor has caused this Class D
Security to be duly executed.
PARTNERS FIRST RECEIVABLES FUNDING, LLC
By: ___________________________________
Name:
Title:
Dated: _________, 1998
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class D Securities described in the within
mentioned Agreement and Supplement.
THE BANK OF NEW YORK,
as Trustee
By:____________________________
Authorized Signatory
PARTNERS FIRST CREDIT CARD MASTER TRUST
SERIES 1998-2
CLASS D FLOATING RATE ASSET BACKED SECURITY
Summary of Terms and Conditions
The Receivables consist of Principal Receivables which arise
generally from the purchase of goods and services and amounts advanced to
cardmembers as cash advances and Finance Charge Receivables. This Class D
Security is one of a Series of Securities entitled Partners First Credit
Card Master Trust, Series 1998-2 (the "Series 1998-2 Securities"), and one
of a class thereof entitled Class D Series 1998-2 Floating Rate Asset
Backed Securities, (the "Class D Securities"), each of which represents a
fractional, undivided interest in certain assets of the Trust. The assets
of the Trust are allocated in part to the investor securityholders of all
outstanding Series (the "Securityholders' Interest") with the remainder
allocated to the Holder of the Transferor Security. The aggregate interest
represented by the Class D Securities at any time in the Principal
Receivables in the Trust shall not exceed an amount equal to the Class D
Invested Amount at such time. The Class D Initial Invested Amount is
$42,000,000. The Class D Invested Amount on any date will be an amount
equal to (a) the Class D Initial Invested Amount, minus (b) the aggregate
amount of principal payments made to the Class D Securityholders prior to
such date, minus (c) the aggregate amount of Class D Charge-Offs for all
prior Distribution Dates, minus (d) the amount of Redirected Principal
Collections allocated on all prior Distribution Dates pursuant to
subsection 4.8(a) of the Supplement, minus (e) an amount equal to the
amount by which the Class D Invested Amount has been reduced on all prior
Distribution Dates pursuant to subsections 4.6(a), (b) and (c) of the
Supplement and plus (f) the amount of Excess Spread and Excess Finance
Charge Collections allocated and available on all prior Distribution Dates
pursuant to subsection 4.7(m) of the Supplement for the purpose of
reimbursing amounts deducted pursuant to the foregoing clauses (c), (d) and
(e); provided, however, that the Class D Invested Amount may not be reduced
below zero.
Subject to the terms and conditions of the Agreement, the
Transferor may, from time to time, direct the Trustee, on behalf of the
Trust, to issue one or more new Series of Investor Securities, which will
represent fractional, undivided interests in certain of the Trust Assets.
On each Distribution Date, the Paying Agent shall distribute to
each Class D Securityholder of record on the last day of the preceding
calendar month (each a "Record Date") such Class D Securityholder's pro
rata share of such amounts (including amounts on deposit in the Collection
Account) as are payable to the Class D Securityholders pursuant to the
Agreement and the Supplement. Distributions with respect to this Class D
Security will be made by the Paying Agent by check mailed to the address of
the Class D Securityholder of record appearing in the Security Register
without the presentation or surrender of this Class D Security or the
making of any notation thereon (except for the final distribution in
respect of this Class D Security), distributions will be made in the form
of immediately available funds. Final payment of this Class D Security
will be made only upon presentation and surrender of this Class D Security
at the office or agency specified in the notice of final distribution
delivered by the Trustee to the Series 1998-2 Securityholders in accordance
with the Agreement and the Supplement.
On any day occurring on or after the day on which the Invested
Amount is reduced to 10% or less of the Initial Invested Amount, the
Transferor has the option to repurchase the Series 1998-2 Securityholders'
Interest in the Trust. The repurchase price will be equal to (a) if such
day is a Distribution Date, the Reassignment Amount for such Distribution
Date or (b) if such day is not a Distribution Date, the Reassignment Amount
for the Distribution Date next following such day. Following the deposit
of the Reassignment Amount in the Collection Account, Series 1998-2
Securityholders will not have any interest in the Receivables and the
Series 1998-2 Securities will represent only the right to receive such
Reassignment Amount.
THIS CLASS D SECURITY DOES NOT REPRESENT AN OBLIGATION OF, OR AN
INTEREST IN, THE TRANSFEROR OR THE SERVICER OR ANY AFFILIATE OF EITHER OF
THEM AND IS NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY OR INSTRUMENTALITY. THIS
CLASS D SECURITY IS LIMITED IN RIGHT OF PAYMENT TO CERTAIN COLLECTIONS WITH
RESPECT TO THE RECEIVABLES (AND CERTAIN OTHER AMOUNTS), ALL AS MORE
SPECIFICALLY SET FORTH HEREINABOVE AND IN THE AGREEMENT AND THE SUPPLEMENT.
The Class D Securities are issuable only in minimum denominations
of $1,000 and integral multiples of $1,000. The transfer of this Class D
Security shall be registered in the Security Register upon surrender of
this Class D Security 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 or the
Transfer Agent and Registrar, duly executed by the Class D Securityholder
or such Class D Securityholder's attorney, and duly authorized in writing
with such signature guaranteed, and thereupon one or more new Class D
Securities of authorized denominations and for the same aggregate
fractional undivided interest will be issued to the designated transferee
or transferees.
As provided in the Agreement and subject to certain limitations
therein set forth, Class D Securities are exchangeable for new Class D
Securities evidencing like aggregate fractional undivided interests as
requested by the Class D Securityholder surrendering such Class D
Securities. No service charge may be imposed for any such exchange but the
Servicer or Transfer Agent and Registrar may require payment of a sum
sufficient to cover any tax or other governmental charge that may be
imposed in connection therewith.
The Servicer, the Trustee, the Paying Agent and the Transfer
Agent and Registrar and any agent of any of them, may treat the person in
whose name this Class D Security is registered as the owner hereof for all
purposes, and neither the Servicer nor the Trustee, the Paying Agent, the
Transfer Agent and Registrar, nor any agent of any of them, shall be
affected by notice to the contrary except in certain circumstances
described in the Agreement.
THIS CLASS D SECURITY SHALL BE CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
ASSIGNMENT
Social Security or other identifying number of assignee ____________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto _____________________________________________________________
(name and address of assignee)
the within security and all rights thereunder, and hereby irrevocably
constitutes and appoints ____________________, attorney, to transfer said
security on the books kept for registration thereof, with full power of
substitution in the premises.
5/
Dated: ____________________
Signature Guaranteed:
____________________
____________________
-------------------------
5/ NOTE: The signature to this Assignment must correspond with
the name of the registered owner as it appears on the face
of the within Security in every particular, without
alteration, enlargement or any change whatsoever.
EXHIBIT B
FORM OF MONTHLY PAYMENT INSTRUCTIONS AND
NOTIFICATION TO THE TRUSTEE
______________________________
PARTNERS FIRST CREDIT CARD MASTER TRUST
SERIES 1998-2
______________________________
The undersigned, a duly authorized representative of Partners
First Holdings, LLC, as Servicer (the "Servicer") pursuant to the Amended
and Restated Pooling and Servicing Agreement dated as of June 26, 1998 (as
amended and supplemented, the "Pooling and Servicing Agreement"), among the
Servicer, Partners First Receivables Funding, LLC ("PFRF"), as Transferor
and The Bank of New York, as trustee (the "Trustee"), does hereby certify
as follows:
a. Capitalized terms used in this Certificate have their
respective meanings set forth in the Pooling and Servicing Agreement or the
Series 1998-2 Supplement dated as of June 26, 1998, among the Services,
PFRF and the Trustee (as amended and supplemented, the "Supplement"), as
applicable.
b. Partnership Holdings, LLC is the Servicer.
c. The undersigned is a Servicing Officer.
I. INSTRUCTION TO MAKE A WITHDRAWAL.
Pursuant to subsections 4.5(a), (b), (c) and (d), the Servicer
does hereby instruct the Trustee (i) to make withdrawals from the
Collection Account on ___________, ____, which date is a Distribution Date
under the Supplement, in the aggregate amounts (equal to the Class A
Available Funds, Class B Available Funds, Collateral Available Funds and
Class D Available Funds, respectively) as set forth below in respect of the
following amounts and (ii) to apply the proceeds of such withdrawals in
accordance with subsections 4.5(a), (b), (c) and (d):
With respect to the Class A Securities:
A) Pursuant to subsection 4.5(a)(i):
(1) Interest at the Class A Interest Rate for
the related Interest Period on the Class A
Invested Amount . . . . . . . . . . . . . . . .. . . . $_______
(2) Class A Monthly Interest previously due but
not paid . . . . . . . . . . . . . . . . . . . . . . . . $_______
(3) Class A Additional Interest and any Class A
Additional Interest due but not paid . . . . . . . . . . $_______
B) Pursuant to subsection 4.5(a)(ii):
(1) The Class A Servicing Fee for the preceding
Monthly Period . . . . . . . . . . . . . . . . . . . . . $_______
(2) Accrued and unpaid Class A Servicing Fees . . . . . $_______
C) Pursuant to subsection 4.5(a)(iii):
Class A Default Amount for the preceding Monthly
Period . . . . . . . . . . . . . . . . . . . . . . . . $_______
With respect to the Class B Securities:
A) Pursuant to subsection 4.5(b)(i):
(1) Interest at the Class B Interest Rate for
the preceding Monthly Period on the Class B
Invested Amount . . . . . . . . . . . . . . . .. . . . . $_______
(2) Class B Monthly Interest previously due but
not paid . . . . . . . . . . . . . . . . . . . . . . . . $_______
(3) Class B Additional Interest and any Class B
Additional Interest previously due but not paid . . . . . $_______
B) Pursuant to subsection 4.5(b)(ii):
(1) The Class B Servicing Fee for the preceding
Monthly Period . . . . . . . . . . . . . . . . . . . . . $_______
(2) Accrued and unpaid Class B Servicing Fees . . . . $_______
With respect to the Collateral Interest
A) Pursuant to subsection 4.5(c)(i):
(1) The Collateral Servicing Fee for the
preceding Monthly Period . . . .. . . . . . . . . . . . $_______
(2) Accrued and unpaid Collateral Servicing Fee . . . . $_______
With respect to the Class D Securities
A) Pursuant to subsection 4.5(d)(i):
(1) The Class D Servicing Fee for the preceding
Monthly Period . . . . . . . . . . . . . . . . . . . . . $_______
(2) Accrued and unpaid Class D Servicing Fee . . . . . $_______
Pursuant to subsections 4.5(e), (f) and (g), the
Servicer hereby instructs the Trustee (i) to make
withdrawals from the Collection Account on
____________, which date is a Distribution Date
under the Supplement, in the aggregate amounts
(equal to the Available Principal Collections) as
set forth below in respect of the following amounts
and (ii) to apply the proceeds of such withdrawals
in accordance with subsections 4.5(e), (f) and (g):
A) Pursuant to subsection 4.5(e):
(1) The Collateral Monthly Principal paid to the
Collateral Interest Holder for application in
accordance with the Loan Agreement . . . . . . . . . . . $_______
(2) Amount to be treated as Shared Principal
Collections . . . . . . . . . . . . . . . . .. . . . . $_______
B) Pursuant to subsection 4.5(f):
(1) The Lesser of the Controlled Deposit Amount
and the sum of the Class A Adjusted Invested
Amount and the Class B Adjusted Invested Amount
deposited in the Principal Funding Account . . .. . . . . $_______
(2) Prior to the date the Class B Invested
Amount is paid in full, in which a reduction of
the Required Enhancement Amount has occurred, an
amount equal to the Collateral Monthly Principal
shall be paid to the Collateral Interest Holder . . . . . $_______
(3) After the Class B Invested Amount is paid in
full, in which a reduction of the Required
Enhancement Amount has occurred an amount paid
to the Collateral Interest Holder (up to the
Collateral Invested Amount) pursuant to the Loan
Agreement . . . . . . . . . . . . . . . . . . . . . . . $_______
(4) Prior to the date the Collateral Invested
Amount is paid in full, the amount paid to the
Class D Securityholders for application in
accordance with the Loan Agreement . . . . . . . . . . . $_______
C) Pursuant to subsection 4.5(g):
(1) An amount up to the Class A Adjusted
Invested Amount deposited in the Principal
Funding Account . . . . . . . . . . . . . . . . . . . $_______
(2) On and after the Distribution Date on which
the Class A Invested Amount is paid in full, an
amount up to the Class B Invested Amount
deposited in the Principal Funding Account . . .. . . . $_______
(3) On and after the Distribution Date on which
the Class B Invested Amount is paid in full, an
amount up to the Collateral Invested Amount paid
to the Collateral Interest Holder pursuant to
the Loan Agreement . . . . . . . . . . . . . . . . . . . $_______
(4) On and after the Distribution Date on which
the Collateral Invested Amount is paid in full,
an amount up to Class D Invested Amount
deposited into the Principal Funding Account . . . . . $_______
Pursuant to Section 4.7, the Servicer does hereby
instruct the Trustee to apply on __________, which
is a Distribution Date under the Supplement, any
Excess Spread and Excess Finance Charge Collections
allocated to Series 1998-2 as follows:
A) Pursuant to subsection 4.7(a):
Class A Required Amount applied in the priority
set forth in subsections 4.5(a)(i), (ii) and
(iii) . . . . . . . . . . . . . . . . . . . . . . . . . $_______
B) Pursuant to subsection 4.7(b):
Aggregate amount of Class A Charge-Offs not
previously reimbursed allocated to Available
Principal Collections . . . . . . . . . . . . . . . . . $_______
C) Pursuant to subsection 4.7(c):
Class B Required Amount applied first in the
priority set forth in subsections 4.5(b)(i) and
(ii) and any remaining amount up to the Class B
Default Amount allocated to Available Principal
Collections . . . . . . . . . . . . . . . . . . . . . . $_______
D) Pursuant to subsection 4.7(d)
The amount equal to the difference between (x)
the product of (i)(A) a fraction, the numerator
of which is the actual number of days in the
period from (and including) the immediately
preceding Distribution Date (or in the case of
the first Distribution Date, the Closing Date)
to (but excluding) such Distribution Date and
the denominator of which is 360, times (B) the
Class B Interest Rate and (ii) the outstanding
principal balance of the Class B Invested
Securities as of the close of business on the
last day of the preceding Monthly Period and (y)
the amount distributed to the Paying Agent for
payment to the Class B Securityholders pursuant
to subsection 4.5(b)(i) . . . . . . . . . . . . . . . $_______
E) Pursuant to subsection 4.7(e):
The amount by which the "Class B Invested
Amount" has been reduced pursuant to clauses
(c), (d) and (e) of the definition thereof
allocated to Available Principal Collections . . . . $_______
F) Pursuant to subsection 4.7(f):
(1) The amount of the excess, if any, of the sum
of the Monthly Servicing Fee for such
Distribution and the amount of any Monthly
Serving Fee previously due but not distributed
on a prior Distribution Date, over the sum of
the amounts distributed to the pursuant Servicer
on such Distribution Date to subsections
4.5(a)(ii), (b)(ii), c(i) and d(i). . . . . . . . . . . $_______
G) Pursuant to subsection 4.7(g):
(1) Collateral Monthly Interest . . . . . . . . . . . $_______
(2) Collateral Monthly Interest previously due
but not paid . . . . . . . . . . . . . . . . . . . . . . $_______
(3) Collateral Additional Interest and any
Collateral Additional Interest previously due
and not paid . . . . . . . . . . . . . . . . . . . . . . $_______
H) Pursuant to subsection 4.7(h):
Collateral Default Amount allocated to Available
Principal Collections . . . . . . . . . . . . . . . . . $_______
I) Pursuant to subsection 4.7(i):
The amount by which the "Collateral Invested
Amount" has been reduced pursuant to clauses
(c), (d) and (e) of the definition thereof
allocated to Available Principal Collections . . . . . $_______
J) Pursuant to subsection 4.7(j):
The excess of the Required Reserve Account
Amount over the Available Reserve Amount
deposited into the Reserve Account . . . . . . . . . . $_______
K) Pursuant to subsection 4.7(k):
(1) Class D Monthly Interest . . . . . . . . . . . . $_______
(2) Class D Monthly Interest previously due but not
paid . . . . . . . . . . . . . . . . . . . . . . $_______
(3) Class D Additional Interest and any Class D
Additional Interest previously due but not
paid . . . . . . . . . . . . . . . . . . . . . . $_______
L) Pursuant to subsection 4.7(l): $_______
The amount equal to the Class D Default Amount
allocated to Available Principal Collections . . . . . $_______
M) Pursuant to subsection 4.7(m):
The amount by which the "Class D Invested
Amount" has been reduced pursuant to clauses
(c), (d) and (e) of the definition thereof
allocated to Available Principal Collections . . . . . $_______
N) Pursuant to subsection 4.7 (n)
Paid to the Collateral Interest Holder pursuant to
the Loan Agreement . . . . . . . . . . . . . . . . . . $_______
O) Pursuant to subsection 4.7 (o)
Treated as Excess Finance Charge Collections and
allocated to other Series or paid to the Holder
of the Transferor Security . . . . . . . . . . . . . . $_______
Pursuant to Section 4.8, the Servicer does hereby instruct the
Trustee to apply on __________, which is a Distribution Date under
the Pooling and Servicing Agreement, $__________ of Redirected
Principal Collections to fund any deficiencies in the Required
Amount after applying Class A Available Funds, Class B Available
Funds, Collateral Available Funds. Excess Spread and Excess
Finance Charge Collections thereto.
II. INSTRUCTION TO MAKE CERTAIN PAYMENTS
Pursuant to Section 5.1 of the Series Supplement, the Servicer
does hereby instruct the Trustee to pay in accordance with Section 5.1 from
the Collection Account or the Principal Funding Account, as applicable, on
__________, which date is a Distribution Date under the Supplement, the
following amounts as set forth below:
A) Pursuant to subsection 5.1(a):
Interest to be distributed to Class A
Securityholders . . . . . . . . . . . . . . . . . . . $_______
B) Pursuant to subsection 5.1(b):
On the Class A Scheduled Payment Date, principal
to be distributed to the Class A Securityholders . . $_______
C) Pursuant to subsection 5.1(c):
Interest to be distributed to Class B
Securityholders . . . . . . . . . . . . . . . . . . . $_______
D) Pursuant to subsection 5.1(d):
On the Class B Scheduled Final Payment Date, on
or after the date Class A Invested Amount is
paid in full, principal to be distributed to the
Class B Securityholders. . . . . . . . . . . . . . . $_______
E) Pursuant to subsection 5.1 (e):
On and after the Collateral Invested Amount is
paid in full, the amount to be paid to Class D
Securityholders . . . . . . . . . . . . . . . . . . $_______
III. ACCRUED AND UNPAID AMOUNTS
After giving effect to the withdrawals and transfers to be made in
accordance with this notice, the following amounts will be accrued and
unpaid with respect to all Monthly Periods preceding the current calendar
month.
1. Subsection 4.6(a): The aggregate amount of
all unreimbursed Class A Charge-Offs . . . . . . . $_______
2. Subsections 4.6(a), (b) and 4.8(a): The
aggregate amount by which the "Class B Invested
Amount" has been reduced pursuant to clauses
(c), (d) and (e) of the definition thereof . . . . $_______
3. Subsections 4.6(a), (b), (c) and 4.8(a) and
(b):
The aggregate amount by which the "Collateral
Invested Amount" has been reduced pursuant to
clauses (c), (d) and (e) of the definition
thereof . . . . . . . . . . . . . . . . . . . . . . $_______
4. Subsections 4.6(a), (b), (c) and (d) and 4.8(a),
(b) and (c):
The aggregate amount by which the "Class D
Invested Amount" has been reduced pursuant to
clauses (c), (d) and (e) of the definition
thereof . . . . . . . . . . . . . . . . . . . . . . $_______
IN WITNESS WHEREOF, the undersigned has duly executed this
Certificate this ____ day of __________, ____.
PARTNERS FIRST HOLDINGS, LLC
by ______________________________
Name:
Title:
EXHIBIT C
FORM OF MONTHLY STATEMENT
PARTNERS FIRST CREDIT CARD MASTER TRUST
SERIES 1998-2
Pursuant to the Amended and Restated Pooling and Servicing
Agreement dated as of June 26, 1998 (hereinafter as such agreement may have
been or may be from time to time, amended or otherwise modified, the
"Pooling and Servicing Agreement"), among Partners First Holdings, LLC (the
"Holdings"), as Servicer, Partners First Receivables Funding, LLC ("PFRF"),
as Transferor, and The Bank of New York, as trustee (the "Trustee"), as
supplemented by the Series 1998-2 Supplement dated as of June 26, 1998 (the
"Supplement") among the Holdings, PFRF and the Trustee, the Servicer is
required to prepare certain information each month regarding current
distributions to the Series 1998-2 Securityholders and the performance of
the Partners First Credit Card Master Trust (the "Trust") during the
previous month. The information which is required to be prepared with
respect to the Distribution Date of __________, and with respect to the
performance of the Trust during the month of __________ is set forth below.
Certain of the information is presented on the basis of an original
principal amount of $1,000 per Series 1998-2 Security (a "Security").
Certain other information is presented based on the aggregate amounts for
the Trust as a whole. Capitalized terms used in this Monthly Statement
have their respective meanings set forth in the Pooling and Servicing
Agreement and the Supplement.
A) Information regarding distributions in respect
of the Class A Securities per $1,000 original
security principal amount:
(1) The total amount of the distribution in
respect of Class A Securities, per $1,000
original security principal amount . . . . . . . . . $_______
(2) The amount of the distribution set forth in
paragraph 1 above in respect of interest on the
Class A Securities, per $1,000 original security
principal amount . . . . . . . . . . . . . . . . . . $_______
(3) The amount of the distribution set forth in
paragraph 1 above in respect of principal of the
Class A Securities, per $1,000 original security
principal amount . . . . . . . . . . . . . . . . . . $_______
B) Class A Investor Charge Offs and Reimbursement of Charge Offs:
(1) The amount of Class A Investor Charge Offs . . . . . $_______
(2) The amount of Class A Investor Charge Offs
set forth in paragraph 1 above, per $1,000
original security principal amount . . . . . . .. . . . $_______
(3) The total amount reimbursed in respect of
Class A Investor Charge Offs . . . . . . . . . . . . . $_______
(4) The amount set forth in paragraph 3 above,
per $1,000 original security principal amount . . . . . $_______
(5) The amount, if any, by which the outstanding
principal balance of the Class A Securities
exceeds the Class A Invested Amount after giving
effect to all transactions on such Distribution
Date . . . . . . . . . . . . . . . . . . . . . . . . . $________
C) Information regarding distributions in respect of the
Class B Securities, per $1,000 original security
principal amount:
(1) The total amount of the distribution in respect of
Class B Securities, per $1,000 original security
principal amount . . . . . . . . . . . . . . . . . . . . $________
(2) The amount of the distribution set forth in
paragraph 1 above in respect of interest on the
Class B Securities, per $1,000 original security
principal amount . . . . . . . . . . . . . . . . . . . . $________
(3) The amount of the distribution set forth in
paragraph 1 above in respect of principal of the
Class B Securities, per $1,000 original security
principal amount . . . . . . . . . . . . . . . . . . . . $________
D) Amount of reductions in Class B Invested Amount
pursuant to clauses (c), (d), and (e) of the definition
of Class B Invested Amount:
(1) The amount of reductions in Class B Invested
Amount pursuant to clauses (c), (d) and (e) of the
definition of Class B Invested Amount . . . . . . . . . $________
(2) The amount of the reductions in the Class B
Invested Amount set forth in paragraph 1 above,
per $1,000 original security principal amount . . . . . . $________
(3) The total amount reimbursed in respect of such
reductions in the Class B Invested Amount . . . . . . . . $________
(4) The amount set forth in paragraph 3 above, per
$1,000 original security principal amount . . . . . . . . $________
(5) The amount, if any, by which the outstanding
principal balance of the Class B Securities
exceeds the Class B Invested Amount after giving
effect to all transactions on such Distribution Date . . . $________
E) Information regarding certain distributions to the
Collateral Interest Holder:
(1) The amount distributed to the Collateral
Interest Holder in respect of interest on the
Collateral Invested Amount . . . . . . . . . . . . . . . . $_________
(2) The amount distributed to the Collateral
Interest Holder in respect of principal on the
Collateral Invested Amount . . . . . . . . . . . . . . . . $_________
F) Amount of reductions in Collateral Invested
Amount pursuant to clauses (c), (d), and (e) of the
definition of Collateral Invested Amount:
(1) The amount of reductions in the Collateral
Invested Amount pursuant to clauses (c), (d) and
(e) of the definition of Collateral Invested
Amount . . . . . . . . . . . . . . . . . . . . . . . . . $_________
(2) The total amount reimbursed in respect of such
reductions in the Collateral Invested Amount . . . . . . $_________
G) Information regarding certain distributions to
the Class D Securityholders:
(1) The amount distributed to the Class D
Securityholders in respect of interest on the
Class D Invested Amount . . . . . . . . . . . . . . . . . $__________
(2) The amount distributed to the Class D
Securityholders with respect to principal on the
Class D Invested Amount . . . . . . . . . . . . . . . . . $__________
H) Amount of reductions in Class D Invested Amount
pursuant to clauses (c), (d) and (e) of the definition
of Class D Invested Amount:
(1) The amount of reductions in the Class D
Invested Amount pursuant to clauses (c), (d) and
(e) of the definition of Class D Invested Amount . . . . . $___________
(2) The total amount reimbursed in respect of such
reduction in the Class D Invested Amount . . . . . . . . . $___________
RECEIVABLES --
Beginning of the Month Principal Receivables . . . . . . . . . $_________
Beginning of the Month Finance Charge Receivables . . . . . . . $_________
Beginning of the Month Discounted Receivables . . . . . . . . . $_________
Beginning of the Month Premium Receivables . . . . . . . . . . $_________
Beginning of the Month Total Receivables . . . . . . . . . . . $_________
Removed Principal Receivables . . . . . . . . . . . . . . . . . $_________
Removed Finance Charge Receivables . . . . . . . . . . . . . . $_________
Removed Total Receivables . . . . . . . . . . . . . . . . . . . $_________
Additional Principal Receivables . . . . . . . . . . . . . . . $_________
Additional Finance Charge Receivables . . . . . . . . . . . . . $_________
Additional Total Receivables . . . . . . . . . . . . . . . . . $_________
Discounted Receivables Generated this Period . . . . . . . . . $_________
Premium Receivables Generated this Period . . . . . . . . . . . $_________
End of the Month Principal Receivables . . . . . . . . . . . . $_________
End of the Month Finance Charge Receivables . . . . . . . . . . $_________
End of the Month Discounted Receivables . . . . . . . . . . . . $_________
End of the Month Premium Receivables . . . . . . . . . . . . . $_________
End of the Month Total Receivables . . . . . . . . . . . . . . $_________
Special Funding Account Balance . . . . . . . . . . . . . . . . $_________
Aggregate Invested Amount (all Master Trust Series) . . . . . . $_________
End of the Month Transferor Amount . . . . . . . . . . . . . . $_________
DELINQUENCIES AND LOSSES --RECEIVABLES
End of the Month Delinquencies
30-59 Days Delinquent . . . . . . . . $_________
60-89 Days Delinquent . . . . . . . . $_________
90+ Days Delinquent . . . . . . . . . $_________
Total 30+ Days Delinquent . . . . . . . . . . . . . . . . $_________
Defaulted Accounts During the Month . . . . . . . . . . . . . $_________
INVESTED AMOUNTS --
Class A Initial Invested Amount . . . $_________
Class B Initial Invested Amount . . . $_________
Collateral Initial Invested Amount . . $_________
Class D Initial Investment Amount . . $_________
INITIAL INVESTED AMOUNT . . . . . . . . . . . . . . . . . . . $_________
Class A Invested Amount . . . . . . . $_________
Class B Invested Amount . . . . . . . $_________
Collateral Invested Amount . . . . . . $_________
Class D Invested Amount . . . . . . . $_________
INVESTED AMOUNT . . . . . . . . . . . . . . . . . . . . . . . $_________
Class A Adjusted Invested Amount . . . . . . . . . . . . . $_________
Class B Adjusted Invested Amount . . . . . . . . . . . . . $_________
ADJUSTED INVESTED AMOUNT . . . . . . . . . . . . . . . . . . $_________
MONTHLY SERVICING FEE . . . . . . . . . . . . . . . . . . . . $_________
SERIES DEFAULT AMOUNT . . . . . . . . . . . . . . . . . . . . $_________
GROUP I INFORMATION
WEIGHTED AVERAGE INTEREST RATE FOR ALL
SERIES IN GROUP ONE . . . . . . . . . . . . . . . . . . . $_________
GROUP I FINANCE CHARGE COLLECTIONS . . . . . . . . . . . . $_________
GROUP I ADDITIONAL AMOUNTS . . . . . . . . . . . . . . . . $_________
GROUP I SERIES DEFAULT AMOUNT . . . . . . . . . . . . . . $_________
GROUP I MONTHLY FEES . . . . . . . . . . . . . . . . . . . $_________
GROUP I MONTHLY INTEREST . . . . . . . . . . . . . . . . $_________
SERIES 1998-2 INFORMATION
SERIES 1998-2 ALLOCATION PERCENTAGE . . . . . . . . . . . __________%
SERIES 1998-2 ALLOCABLE FINANCE CHARGE COLLECTIONS . . . . $_________
SERIES 1998-2 ADDITIONAL AMOUNTS . . . . . . . . . . . . . $_________
SERIES 1998-2 ALLOCABLE DEFAULTED AMOUNT . . . . . . . . . $_________
SERIES 1998-2 MONTHLY FEES . . . . . . . . . . . . . . . . $_________
SERIES 1998-2 ALLOCABLE PRINCIPAL COLLECTIONS . . . . . . $_________
SERIES 1998-2 REQUIRED TRANSFEROR AMOUNT . . . . . . . . . $_________
FLOATING ALLOCATION PERCENTAGE . . . . . . . . . . . . . . $_________
INVESTOR FINANCE CHARGE COLLECTIONS . . . . . . . . . . . __________%
SERIES DEFAULT AMOUNT . . . . . . . . . . . . . . . . . . $_________
REDIRECTED INVESTOR FINANCE CHARGE COLLECTIONS . . . . . . $_________
PRINCIPAL ALLOCATIONS PERCENTAGE . . . . . . . . . . . . . __________%
AVAILABLE PRINCIPAL COLLECTIONS . . . . . . . . . . . . . $_________
CLASS A AVAILABLE FUNDS --
CLASS A FLOATING PERCENTAGE . . . . . . . . . . . . . . . . . . _________%
Class A Floating Percentage of Redirected Investor Finance
Charge Collections . . . . . . . . . . $_________
Other Amounts . . . . . . . . . . . . $_________
TOTAL CLASS A AVAILABLE FUNDS . . . . . . . . . . . . . . . . $_________
Class A Monthly Interest . . . . . . . $_________
Class A Servicing Fee . . . . . . . . $_________
Class A Default Amount . . . . . . . . $_________
TOTAL CLASS A EXCESS SPREAD . . . . . . . . . . . . . . . . . $_________
CLASS A REQUIRED AMOUNT . . . . . . . . . . . . . . . . . . . $_________
CLASS B AVAILABLE FUNDS -- $
CLASS B FLOATING PERCENTAGE . . . . . . . . . . . . . . . . . . _________%
CLASS B AVAILABLE FUNDS . . . . . . . . . . . . . . . . . . . . $_________
Class B Monthly Interest . . . . . . . $_________
Class B Servicing Fee . . . . . . . . $_________
COLLATERAL AVAILABLE FUNDS COLLATERAL FLOATING
PERCENTAGE . . . . . . . . . . . . . . . . . . . . . . . . . . _________%
COLLATERAL AVAILABLE FUNDS . . . . . . . . . . . . . . . . . $_________
Collateral Interest Servicing Fee . . . . . . . . . . . . $_________
TOTAL COLLATERAL EXCESS SPREAD . . . . . . . . . . . . . . . . $_________
TOTAL CLASS B EXCESS SPREAD . . . . . . . . . . . . . . . . . . $_________
CLASS D FLOATING PERCENTAGE $_________
TOTAL CLASS A AVAILABLE FUNDS $_________
Class D Monthly Interest _________%
Class D Servicing Fee _________%
EXCESS SPREAD --
TOTAL EXCESS SPREAD . . . . . . . . . . . . . . . . . . . . . $_________
a) Excess Spread Applied to Class A Required Amount . . $__________
b) Excess Spread Applied to Class A Investor Charge
Offs . . . . . . . . . . . . . . . . . . . . . . . . $__________
c) Excess Spread Applied to Class B Required Amount . . $__________
d) Excess Spread Applied to Class B Interest . . . . . $__________
e) Excess Spread Applied to Reductions of Class B
Invested Amount pursuant to clauses (c), (d)
and (e) . . . . . . . . . . . . . . . . . . . . . . $__________
f) Excess Spread Applied to Monthly Servicing Fee $__________
g) Excess Spread Applied to Collateral Monthly Interest .$__________
h) Excess Spread Applied to Collateral Default Amount . .$__________
i) Excess Spread Applied to Reductions of Collateral
Invested Amount Pursuant to Clauses (c), (d) and (e) .$__________
j) Excess Spread Applied to Reserve Account . . . . . . .$__________
k) Excess Spread Applied to pay Class D Monthly
Interest . . . . . . . . . . . . . . . . . . . . . .$__________
l) Excess Spread Applied to Class D Default Amount . . .$__________
m) Excess Spread Applied to Reductions of Class D
Invested Amount pursuant to clauses (c), (d) and
(e) . . . . . . . . . . . . . . . . . . . . . . . . .$__________
n) Excess Spread Applied to Other Amounts Owed to
Collateral Interest Holder . . . . . . . . . . . . . $__________
TOTAL EXCESS FINANCE CHARGE COLLECTIONS ELIGIBLE FOR
OTHER EXCESS ALLOCATION SERIES . . . . . . . . . . . . . $__________
EXCESS FINANCE CHARGES COLLECTIONS
TOTAL EXCESS FINANCE CHARGE COLLECTIONS FOR ALL
ALLOCATION SERIES . . . . . . . . . . . . . . . . . . . $__________
SERIES 1998-2 EXCESS FINANCE CHARGE COLLECTIONS
EXCESS FINANCE CHARGE COLLECTIONS ALLOCATED TO
SERIES 1998-2 . . . . . . . . . . . . . . . . . . . . $__________
Excess Finance Charge Collections Applied to Class
A Required Amount . . . . . . . . . . . . . . . . . . $__________
Excess Finance Charge Collections Applied to Class
A Investor Charge Offs . . . . . . . . . . . . . . . $__________
Excess Finance Charge Collections Applied to Class
B Required Amount . . . . . . . . . . . . . . . . . . $__________
Excess Finance Charge Collections Applied to
Reductions of Class B Invested Amount Pursuant to
Clauses (c), (d) and (e) . . . . . . . . . . . . . . $__________
Excess Finance Charge Collections Applied to
Collateral Monthly Interest . . . . . . . . . . . . $__________
Excess Finance Charge Collections Applied to
Unpaid Monthly Servicing Fee . . . . . . . . . . . . $__________
Excess Finance Charge Collections Applied to
Collateral Default Amount . . . . . . . . . . . . . . $__________
Excess Finance Charge Collections Applied to
Reductions of Collateral Invested Amount Pursuant
to Clauses (c), (d) and (e) . . . . . . . . . . . . . $__________
Excess Finance Charge Collections Applied to
Reserve Account . . . . . . . . . . . . . . . . . . . $__________
Excess Finance Charge Collections Applied to pay
Class D Monthly Interest . . . . . . . . . . . . . . $__________
Excess Finance Charge Collections Applied to Class
D Default Amount . . . . . . . . . . . . . . . . . . $__________
Excess Finance Charge Collections Applied to
Reductions of Class D Invested Amount pursuant to
clauses (c), (d), and (e) . . . . . . . . . . . . . $__________
Excess Finance Charge Collections Applied to Other
Amounts Owed to Collateral Interest Holder . . . . . $__________
YIELD AND BASE RATE --
Base Rate (Current Month) . . . . . . . . . . . . . _________%
Base Rate (Prior Month) . . . . . . . . . . . . . . _________%
Base Rate (Two Months Ago) . . . . . . . . . . . . . _________%
THREE MONTH AVERAGE BASE RATE . . . . . . . . . . . . . . . . . _________%
Series Adjusted Portfolio Yield (Current Month) . . _________%
Series Adjusted Portfolio Yield (Prior Month) . . . _________%
Series Adjusted Portfolio Yield (Two Months Ago) . . _________%
THREE MONTH AVERAGE SERIES ADJUSTED PORTFOLIO YIELD . . . . . . _________%
PRINCIPAL COLLECTIONS --
CLASS A PRINCIPAL PERCENTAGE . . . . . . . . . . . . . . . . . _________%
Class A Principal Collections . . . . . . . . . . $_________
CLASS B PRINCIPAL PERCENTAGE . . . . . . . . . . . . . . . . . __________%
Class B Principal Collections . . . . . . . . . . $_________
COLLATERAL PRINCIPAL PERCENTAGE . . . . . . . . . . . . . . . __________%
Collateral Principal Collections . . . . . . . . . $_________
CLASS D PRINCIPAL PERCENTAGE . . . . . . . . . . . . . . . . . __________%
Class D Principal Collections . . . . . . . . . . $_________
AVAILABLE PRINCIPAL COLLECTIONS . . . . . . . . . . . . . . . . $_________
REDIRECTED PRINCIPAL COLLECTIONS . . . . . . . . . . . . . . . $_________
SERIES 1998-2 PRINCIPAL SHORTFALL . . . . . . . . . . . . . . . $_________
SHARED PRINCIPAL COLLECTIONS ALLOCABLE FROM OTHER
PRINCIPAL SHARING SERIES . . . . . . . . . . . . . . . . . . . $_________
ACCUMULATION --
Controlled Accumulation Amount . . . . . . . . . . $_________
Deficit Controlled Accumulation Amount . . . . . . $_________
CONTROLLED DEPOSIT AMOUNT . . . . . . . . . . . . . . . . . . . $_________
PRINCIPAL FUNDING ACCOUNT BALANCE . . . . . . . . . . . . . . . $_________
SHARED PRINCIPAL COLLECTIONS ELIGIBLE FOR OTHER
PRINCIPAL SHARING SERIES . . . . . . . . . . . . . . . . . . . $_________
INVESTOR CHARGE OFFS AND RECOVERIES--
CLASS A INVESTOR CHARGE OFFS . . . . . . . . . . . . . . . . . $_________
REDUCTIONS IN CLASS B INVESTED AMOUNT (OTHER THAN BY
PRINCIPAL PAYMENTS) . . . . . . . . . . . . . . . . . . . . . . $_________
REDUCTIONS IN COLLATERAL INVESTED AMOUNT (OTHER THAN
BY PRINCIPAL PAYMENTS) . . . . . . . . . . . . . . . .. . . . . $_________
REDUCTION IN CLASS D INVESTED AMOUNT (OTHER THAN BY
PRINCIPAL PAYMENTS) . . . . . . . . . . . . . . . . . . . . . $_________
PREVIOUS CLASS A CHARGE OFFS REIMBURSED . . . . . . . . . . . $_________
PREVIOUS CLASS B INVESTED AMOUNT REDUCTIONS REIMBURSED . . . $_________
PREVIOUS COLLATERAL INVESTED AMOUNT REDUCTIONS REIMBURSED . . . $_________
PREVIOUS CLASS D INVESTED AMOUNT REIMBURSED . . . . . . . . . . $_________
PARTNERS FIRST HOLDINGS, LLC,
as Servicer
By: ________________________
Name:
Title:
EXHIBIT D
FORM OF MONTHLY SERVICER'S CERTIFICATE
PARTNERS FIRST HOLDINGS, LLC
PARTNERS FIRST CREDIT CARD MASTER TRUST
SERIES 1998-2
The undersigned, a duly authorized representative of PARTNERS
FIRST HOLDINGS, LLC, as Servicer (the "Servicer"), pursuant to the Amended
and Restated Pooling and Servicing Agreement dated as of June 26, 1998 (as
amended and supplemented, the "Agreement"), as supplemented by the Series
1998-2 Supplement (as amended and supplemented, the "Series Supplement"),
among the Partners First Holdings, LLC, as Servicer, Partners First
Receivables, Funding, LLC, as Transferor, and The Bank of New York, as
Trustee, does hereby certify as follows:
1. Capitalized terms used in this Certificate have their respective
meanings as set forth in the Agreement or the Series Supplement, as
applicable.
2. Partners First Holdings, LLC is, as of the date hereof, the
Servicer under the Agreement.
3. The undersigned is a Servicing Officer.
4. This Certificate relates to the Distribution Date occurring on
__________ ____, _____.
5. As of the date hereof, to the best knowledge of the
undersigned, the Servicer has performed in all material respects all
its obligations under the Agreement through the Monthly Period
preceding such Distribution Date [or, if there has been a default in
the performance of any such obligation, set forth in detail the (i)
nature of such default, (ii) the action taken by the Servicer, if any,
to remedy such default and (iii) the current status of each such
default; if applicable, insert "None"].
6. As of the date hereof, to the best knowledge of the
undersigned, no Pay Out Event occurred on or prior to such
Distribution Date.
IN WITNESS WHEREOF, the undersigned has duly executed and
delivered this Certificate this ____ day of __________, ____.
PARTNERS FIRST HOLDINGS, LLC,
Servicer
By: _____________________________
Name:
Title:
