CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION,
Transferor on and after June 1, 1996,
THE CHASE MANHATTAN BANK,
Transferor prior to June 1, 1996 and Servicer
and
THE BANK OF NEW YORK,
Trustee
on behalf of the Series 1998-5 Certificateholders
-----------------------------
Series 1998-5 SUPPLEMENT
Dated as of September 24, 1998
to
SECOND AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT
Dated as of September 1, 1996
-----------------------------
CHASE CREDIT CARD MASTER TRUST
Series 1998-5
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Series 1998-5 SUPPLEMENT, dated as of September 24, 1998 (this "Series
Supplement"), by and among CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION
("Chase USA"), as Transferor on and after June 1, 1996, THE CHASE MANHATTAN
BANK, as Transferor prior to June 1, 1996 and as Servicer, and THE BANK OF NEW
YORK, as Trustee under the Second Amended Pooling and Servicing Agreement dated
as of September 1, 1996 between Chase USA, the Servicer and the Trustee (as may
be amended, modified or supplemented from time to time, the "Agreement").
Section 6.9 of the Agreement provides, among other things, that the
Transferor and the Trustee may at any time and from time to time enter into a
supplement to the Agreement for the purpose of authorizing the delivery by the
Trustee to the Transferor for the execution and redelivery to the Trustee for
authentication of one or more Series of Certificates.
Pursuant to this Series Supplement, the Transferor and the Trust shall
create a new Series of Investor Certificates and shall specify the Principal
Terms thereof.
SECTION I.1. Designation.
(a) There is hereby created a Series of Investor Certificates to be
issued in two classes pursuant to the Agreement and this Series Supplement and
to be known together as the "Series 1998-5 Certificates." The two classes shall
be designated the Class A Floating Rate Asset Backed Certificates, Series 1998-5
(the "Class A Certificates") and the Class B Floating Rate Asset Backed
Certificates, Series 1998-5 (the "Class B Certificates"). The Class A
Certificates and the Class B Certificates shall be substantially in the form of
Exhibits A-1 and A-2 hereto, respectively. In addition, there is hereby created
a third Class of an uncertificated interest in the Trust which shall be deemed
to be an "Investor Certificate" for all purposes under the Agreement and this
Series Supplement, except as expressly provided herein, and which shall be known
as the Collateral Interest, Series 1998-5 (the "Collateral Interest").
(b) Series 1998-5 shall be included in Group One (as defined below).
Series 1998-5 shall not be subordinated to any other Series.
(c) The Collateral Interest Holder, as holder of an "Investor
Certificate" under the Agreement, shall be entitled to the benefits of the
Agreement and this Series Supplement upon payment by the Collateral Interest
Holder of amounts owing on the Closing Date pursuant to the Loan Agreement.
Notwithstanding the foregoing, except as expressly provided herein, (i) the
provisions of Article VI and Article XII of the Agreement relating to the
registration, authentication, delivery, presentation, cancellation and surrender
of Registered Certificates shall not be applicable to the Collateral Interest,
(ii) the Opinion of Counsel specified in clause (d) of the sixth
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sentence of Section 6.9(b) of the Agreement shall not be required with respect
to the Collateral Interest and (iii) the Tax Opinion specified in clause (e) of
the sixth sentence of Section 6.9(b) of the Agreement shall address the effect
of the issuance of the Collateral Interest 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.
SECTION I.2. Definitions.
In the event that any term or provision contained herein shall conflict
with or be inconsistent with any provision contained in the Agreement, the terms
and provisions of this Series Supplement shall govern. All Article, Section or
subsection references herein shall mean Articles, Sections or subsections of the
Agreement, except as otherwise provided herein. All capitalized terms not
otherwise defined herein are defined in the Agreement. Each capitalized term
defined herein shall relate only to the Investor Certificates and no other
Series of Certificates issued by the Trust.
"Accumulation Period" shall mean, solely for the purposes of the
definition of Monthly Principal Payment as such term is defined in each
Supplement, the Controlled Accumulation Period.
"Accumulation Period Factor" shall mean, for each Monthly
Period, a fraction, the numerator of which is equal to the sum of the initial
investor interests (or other amounts specified in the applicable Supplement) of
all outstanding Series, and the denominator of which is equal to the sum of (a)
the Initial Investor Interest, (b) the initial investor interests (or other
amounts specified in the applicable Supplement) of all outstanding Series (other
than Series 1998-5) which are not expected to be in their revolving periods, and
(c) the initial investor interests (or other amounts specified in the applicable
Supplement) of all other outstanding Series which are not allocating Shared
Principal Collections to other Series and are in their revolving periods.
"Accumulation Period Length" shall have the meaning assigned such term
in subsection 4.9(i).
"Accumulation Shortfall" shall initially mean zero and shall thereafter
mean, with respect to any Monthly Period during the Controlled Accumulation
Period, the excess, if any, of the Controlled Deposit Amount for the previous
Monthly Period over the amount deposited into the Principal Funding Account
pursuant to subsection 4.9(e)(i) with respect to the Class A Certificates for
the previous Monthly Period.
"Additional Certificate Date" shall have the meaning assigned such term
in subsection 10(a).
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"Additional Certificates" shall have the meaning assigned such term in
subsection 10(a).
"Adjusted Investor Interest" shall mean, with respect to any date of
determination, an amount equal to the sum of (a) the Class A Adjusted Investor
Interest and (b) the Class B Investor Interest and (c) the Collateral Interest.
"Aggregate Investor Default Amount" shall mean, with respect to any
Monthly Period, the sum of the Investor Default Amounts in respect of such
Monthly Period.
"Available Investor Principal Collections" shall mean with respect to
any Monthly Period, an amount equal to (a) the Investor Principal Collections
for such Monthly Period, minus (b) the amount of Reallocated Collateral
Principal Collections and Reallocated Class B Principal Collections with respect
to such Monthly Period which pursuant to Section 4.12 are required to fund the
Class A Required Amount and the Class B Required Amount, plus (c) the amount of
Shared Principal Collections that are allocated to Series 1998-5 in accordance
with subsection 4.13(b).
"Available Reserve Account Amount" shall mean, with respect to any
Transfer Date, the lesser of (a) the amount on deposit in the Reserve Account on
such date (after taking into account any interest and earnings retained in the
Reserve Account pursuant to subsection 4.15(b) on such date, but before giving
effect to any deposit made or to be made pursuant to subsection 4.11(i) 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
annualized percentage equivalent of a fraction, the numerator of which is equal
to the sum of the Class A Monthly Interest, the Class B Monthly Interest (net of
any available investment earnings on deposit in the Spread Account (as defined
in the Loan Agreement) for each monthly period), the Collateral Monthly
Interest, each for the related Interest Period, and the Investor Servicing Fee
with respect to such Monthly Period and the denominator of which is the Investor
Interest as of the close of business on the last day of such Monthly Period.
"Class A Additional Interest" shall have the meaning specified in
Section 4.6(a).
"Class A Adjusted Investor Interest" shall mean, with respect to any
date of determination, an amount equal to the Class A Investor Interest minus
the Principal Funding Account Balance on such date of determination.
"Class A Available Funds" shall mean, with respect to any Monthly
Period, an amount equal to the sum of (a) the Class A Floating Allocation of the
Collections of Finance Charge Receivables allocated to the Investor Certificates
and deposited
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in the Finance Charge Account for such Monthly Period (or to be deposited in the
Finance Charge Account on the related Transfer Date with respect to the
preceding Monthly Period pursuant to the third paragraph of subsection 4.3(a)
and Section 2.8 of the Agreement and subsection 3(b) of this Series Supplement),
excluding the portion of Collections of Finance Charge Receivables attributable
to Servicer Interchange, (b) with respect to any Monthly Period during the
Controlled Accumulation Period prior to the payment in full of the Class A
Investor Interest, the Principal Funding Investment Proceeds arising pursuant to
subsection 4.14(b), if any, with respect to the related Transfer Date and (c)
the Reserve Draw Amount (up to the Available Reserve Draw Account Amount) plus
any amounts of interest and earnings described in subsections 4.15(b) and
4.15(d) which will be deposited into the Finance Charge Account on the related
Transfer Date.
"Class A Certificate Rate" shall mean from the Closing Date through
November 15, 1998 and with respect to each Interest Period thereafter, a per
annum rate equal to 0.16% per annum in excess of LIBOR, as determined on the
related LIBOR Determination Date.
"Class A Certificateholder" shall mean the Person in whose name a Class
A Certificate is registered in the Certificate Register.
"Class A Certificates" shall mean any of the certifi xxxxx executed by
the Transferor and authenticated by or on behalf of the Trustee, substantially
in the form of Exhibit A-1 hereto.
"Class A Deficiency Amount" shall have the meaning specified in
subsection 4.6(a).
"Class A Fixed Allocation" shall mean, with respect to any Monthly
Period following the Revolving Period, the percentage equivalent (which
percentage shall never exceed 100%) of a fraction, the numerator of which is the
Class A Investor Interest as of the close of business on the last day of the
Revolving Period and the denominator of which is equal to the Investor Interest
as of the close of business on the last day of the Revolving Period.
"Class A Floating Allocation" 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 Class A Adjusted Investor Interest as
of the close of business on the last day of the preceding Monthly Period and the
denominator of which is equal to the Adjusted Investor Interest as of the close
of business on such day; provided, however, that, with respect to the first
Monthly Period, the Class A Floating Allocation shall mean the percentage
equivalent of a fraction, the numerator of which is the Class A Initial
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Investor Interest and the denominator of which is the Initial Investor Interest.
"Class A Initial Investor Interest" shall mean the aggregate initial
principal amount of the Class A Certificates, which is $650,000,000.
"Class A Investor Allocation" shall mean, with respect to any Monthly
Period, (a) with respect to Default Amounts and Finance Charge Receivables at
any time and Principal Receivables during the Revolving Period, the Class A
Floating Allocation, and (b) with respect to Principal Receivables during the
Controlled Accumulation Period or Rapid Amortization Period, the Class A Fixed
Allocation.
"Class A Investor Charge-Offs" shall have the meaning specified in
subsection 4.10(a).
"Class A Investor Default Amount" shall mean, with respect to each
Transfer Date, an amount equal to the product of (a) the Aggregate Investor
Default Amount for the related Monthly Period and (b) the Class A Floating
Allocation applicable for the related Monthly Period.
"Class A Investor Interest" shall mean, on any date of determination,
an amount equal to (a) the Class A Initial Investor Interest, minus (b) the
aggregate amount of principal pay ments made to Class A Certificateholders prior
to such date and minus (c) the excess, if any, of the aggregate amount of Class
A Investor Charge-Offs pursuant to subsection 4.10(a) over Class A Investor
Charge-Offs reimbursed pursuant to subsection 4.11(b) prior to such date of
determination; provided, however, that the Class A Investor Interest may not be
reduced below zero.
"Class A Monthly Interest" shall have the meaning specified in
subsection 4.6(a).
"Class A Monthly Principal" shall mean the monthly principal
distributable in respect of the Class A Certificates as calculated in accordance
with subsection 4.7(a).
"Class A Required Amount" shall have the meaning specified in
subsection 4.8(a).
"Class A Scheduled Payment Date" shall mean the Septem ber 2003
Distribution Date.
"Class A Servicing Fee" shall have the meaning speci fied in subsection
3(a) of this Series Supplement.
"Class B Additional Interest" shall have the meaning specified in
subsection 4.6(b).
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"Class B Available Funds" shall mean, with respect to any Monthly
Period, an amount equal to the Class B Floating Allocation of the Collections of
Finance Charge Receivables and allocated to the Investor Certificates and
deposited in the Finance Charge Account for such Monthly Period (or to be
deposited in the Finance Charge Account on the related Transfer Date with
respect to the preceding Monthly Period pursuant to the third paragraph of
subsection 4.3(a) of the Agreement and subsection 3(b) of this Series
Supplement), excluding the portion of Collections of Finance Charge Receivables
attributable to Servicer Interchange.
"Class B Certificate Rate" shall mean from the Closing Date through
November 15, 1998, and for each Interest Period thereafter, a per annum rate
equal to 0.36% per annum in excess of LIBOR, as determined on the related LIBOR
Determination Date.
"Class B Certificateholder" shall mean the Person in whose name a Class
B Certificate is registered in the Certificate Register.
"Class B Certificates" shall mean any of the certifi xxxxx executed by
the Transferor and authenticated by or on behalf of the Trustee, substantially
in the form of Exhibit A-2 hereto.
"Class B Deficiency Amount" shall have the meaning specified in
subsection 4.6(b).
"Class B Fixed Allocation" shall mean, with respect to any Monthly
Period following the Revolving Period, the percentage equivalent (which
percentage shall never exceed 100%) of a fraction, the numerator of which is the
Class B Investor Interest as of the close of business on the last day of the
Revolving Period and the denominator of which is equal to the Investor Interest
as of the close of business on the last day of the Revolving Period.
"Class B Floating Allocation" 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 Class B Investor Interest as of the
close of business on the last day of the preceding Monthly Period and the
denominator of which is equal to the Adjusted Investor Interest as of the close
of business on such day; provided, however, that, with respect to the first
Monthly Period, the Class B Floating Allocation shall mean the percentage
equivalent of a fraction, the numerator of which is the Class B Initial Investor
Interest and the denominator of which is the Initial Investor Interest.
"Class B Initial Investor Interest" shall mean the aggregate initial
principal amount of the Class B Certificates, which is $54,166,000.
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"Class B Investor Allocation" shall mean, with respect to any Monthly
Period, (a) with respect to Default Amounts and Finance Charge Receivables at
any time or Principal Receivables during the Revolving Period, the Class B
Floating Allocation, and (b) with respect to Principal Receivables during the
Controlled Accumulation Period or Rapid Amortization Period, the Class B Fixed
Allocation.
"Class B Investor Charge-Offs" shall have the meaning specified in
subsection 4.10(b).
"Class B Investor Default Amount" shall mean, with respect to each
Transfer Date, an amount equal to the product of (a) the Aggregate Investor
Default Amount for the related Monthly Period and (b) the Class B Floating
Allocation applicable for the related Monthly Period.
"Class B Investor Interest" shall mean, on any date of determination,
an amount equal to (a) the Class B Initial Investor Interest, minus (b) the
aggregate amount of principal pay ments made to Class B Certificateholders prior
to such date, minus (c) the aggregate amount of Class B Investor Charge-Offs for
all prior Transfer Dates pursuant to subsection 4.10(b), minus (d) the amount of
the Reallocated Class B Principal Collec tions allocated pursuant to subsection
4.12(a) on all prior Transfer Dates for which the Collateral Interest has not
been reduced, minus (e) an amount equal to the amount by which the Class B
Investor Interest has been reduced on all prior Transfer Dates pursuant to
subsection 4.10(a) and plus (f) the aggregate amount of Excess Spread allocated
and available on all prior Transfer Dates pursuant to subsection 4.11(d), for
the purpose of reimbursing amounts deducted pursuant to the foregoing clauses
(c), (d) and (e); provided, however, that the Class B Investor Interest may not
be reduced below zero.
"Class B Monthly Interest" shall have the meaning specified in
subsection 4.6(b).
"Class B Monthly Principal" shall mean the monthly principal
distributable in respect of the Class B Certificates as calculated in accordance
with subsection 4.7(b).
"Class B Required Amount" shall have the meaning specified in
subsection 4.8(b).
"Class B Scheduled Payment Date" shall mean the October 2003
Distribution Date.
"Class B Servicing Fee" shall have the meaning speci fied in subsection
3(a) hereof.
"Closing Date" shall mean September 24, 1998.
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"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Collateral Allocation" shall mean, with respect to any Monthly Period,
(a) with respect to Default Amounts and Finance Charge Receivables at any time
or Principal Receivables during the Revolving Period, the Collateral Floating
Allocation, and (b) with respect to Principal Receivables during the Controlled
Accumulation Period or Rapid Amortization Period, the Collateral Fixed
Allocation.
"Collateral Available Funds" shall mean, with respect to any Monthly
Period, an amount equal to the Collateral Floating Allocation of the Collections
of Finance Charge Receivables allocated to the Investor Certificates and
deposited in the Finance Charge Account for such Monthly Period (or to be
deposited in the Finance Charge Account on the related Transfer Date with
respect to the preceding Monthly Period pursuant to the third paragraph of
subsection 4.3(a) of the Agreement and subsection 3(b) of this Series
Supplement), excluding the portion of Collections of Finance Charge Receivables
attributable to Servicer Interchange.
"Collateral Charge-Offs" shall have the meaning speci fied in
subsection 4.10(c).
"Collateral Default Amount" shall mean, with respect to any Transfer
Date, an amount equal to the product of (a) the Aggregate Investor Default
Amount for the related Monthly Period and (b) the Collateral Floating Allocation
applicable for the related Monthly Period.
"Collateral Fixed Allocation" shall mean, with respect to any Monthly
Period following the Revolving Period, the percentage equivalent (which
percentage shall never exceed 100%) of a fraction, the numerator of which is the
Collateral Interest as of the close of business on the last day of the Revolving
Period and the denominator of which is equal to the Investor Interest as of the
close of business on the last day of the Revolving Period.
"Collateral Floating Allocation" 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 Collateral Interest as of the
close of business on the last day of the preceding Monthly Period and the
denominator of which is equal to the Adjusted Investor Interest as of the close
of business on such day; provided, however, that, with respect to the first
Monthly Period, the Collateral Floating Allocation shall mean the percentage
equivalent of a fraction, the numerator of which is the Collateral Initial
Interest and the denominator of which is the Initial Investor Interest.
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"Collateral Initial Interest" shall mean the aggregate initial
principal amount of the Collateral Interest, which is $69,643,524.
"Collateral Interest" shall mean, on any date of determination, an
amount equal to (a) the Collateral Initial Interest, minus (b) the aggregate
amount of principal payments made to the Collateral Interest Holder prior to
such date, minus (c) the aggregate amount of Collateral Charge-offs for all
prior Transfer Dates pursuant to subsection 4.10(c), minus (d) the amount of
Reallocated Principal Collections allocated pursuant to subsections 4.12(a) and
(b) on all prior Transfer Dates, minus (e) an amount equal to the amount by
which the Collateral Interest has been reduced on all prior Transfer Dates
pursuant to subsections 4.10(a) and (b), and plus (f) the aggregate amount of
Excess Spread allocated and available on all prior Transfer Dates pursuant to
subsection 4.11(h), for the purpose of reimbursing amounts deducted pursuant to
the foregoing clauses (c), (d) and (e); provided further, however, that the
Collateral Interest may not be reduced below zero.
"Collateral Interest Holder" shall mean the entity so designated in the
Loan Agreement.
"Collateral Interest Servicing Fee" shall have the meaning specified in
subsection 3(a) hereof.
"Collateral Monthly Interest" shall mean the monthly interest
distributable in respect of the Collateral Interest as calculated in accordance
with subsection 4.6(c).
"Collateral Monthly Principal" shall mean the monthly principal
distributable in respect of the Collateral Interest as calculated in accordance
with subsection 4.7(c).
"Collateral Rate" shall mean, for any Interest Period, the rate
specified in the Loan Agreement.
"Controlled Accumulation Amount" shall mean (a) for any Transfer Date
with respect to the Controlled Accumulation Period prior to the payment in full
of the Class A Investor Interest, $54,166,667; provided, however, that if the
Accumulation Period Length is determined to be less than 12 months pursuant to
subsection 4.9(i), the Controlled Accumulation Amount for each Transfer Date
with respect to the Controlled Accumulation Period prior to the payment in full
of the Class A Investor Interest will be equal to (x) the Class A Initial
Investor Interest divided by (y) the number of Monthly Periods in the Controlled
Accumulation Period as determined pursuant to subsection 4.9(i), and (b) for any
Transfer Date with respect to the Controlled Accumulation Period after payment
in full of the Class A Investor Interest, an amount equal to the Class B
Investor Interest as of such Transfer Date.
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"Controlled Accumulation Period" shall mean, unless a Pay Out Event
shall have occurred prior thereto, the period commencing at the close of
business on August 31, 2002 or such later date as is determined in accordance
with subsection 4.9(i) and ending on the first to occur of (a) the commencement
of the Rapid Amortization Period and (b) the Series 1998-5 Termination Date.
"Controlled Deposit Amount" shall mean, with respect to any Transfer
Date, the sum of (a) the Controlled Accumulation Amount for such Transfer Date
and (b) any existing Accumulation Shortfall.
"Covered Amount" shall mean, as of the Transfer Date with respect to
any Interest Period, an amount equal to the product of (a) (i) a fraction, the
numerator of which is the actual number of days in such Interest Period and the
denominator of which is 360, times (ii) the Class A Certificate Rate in effect
with respect to such Interest Period, and (b) the Principal Funding Account
Balance as of the close of business on the Distribution Date preceding such
Transfer Date (after giving effect to all of the transactions occurring on such
date).
"Credit Enhancement" shall mean (a) with respect to the Class A
Certificates, the subordination of the Class B Certificates and the Collateral
Interest, and (b) with respect to the Class B Certificates, the subordination of
the Collateral Interest.
"Credit Enhancement Provider" shall mean the Collateral Interest
Holder.
"Cumulative Series Principal Shortfall" shall mean the sum of the
Series Principal Shortfalls (as such term is defined in each of the related
Series Supplements) for each Series.
"Daily Principal Shortfall" shall mean, on any date of determination,
the excess of the Monthly Principal Payment for the Monthly Period relating to
such date over the month to date amount of Collections processed in respect of
Principal Receivables for such Monthly Period allocable to investor certificates
of all outstanding Series, not subject to reallocation, which are on deposit or
to be deposited in the Principal Account on such date.
"Deficiency Amount" shall mean, at any time of determi nation, the sum
of the Class A Deficiency Amount and the Class B Deficiency Amount.
"Distribution Date" shall mean November 16, 1998 and the fifteenth day
of each calendar month thereafter, or if such fifteenth day is not a Business
Day, the next succeeding Business Day.
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"Excess Principal Funding Investment Proceeds" shall mean, with respect
to each Transfer Date relating to the Controlled Accumulation Period, the
amount, if any, by which the Principal Funding Investment Proceeds for such
Transfer Date exceed the Covered Amount determined on such Transfer Date.
"Excess Spread" shall mean, with respect to any Trans fer Date, the sum
of the amounts with respect to such Transfer Date, if any, specified pursuant to
subsections 4.9(a)(iv), 4.9(b)(iii) and 4.9(c)(ii).
"Finance Charge Shortfall" shall mean, with respect to any Transfer
Date, the excess, if any, of the amount distributable pursuant to the
subsections 4.11(a) through (i) over Excess Spread.
"Fitch" shall mean Fitch IBCA, Inc. or its successors.
"Fixed Investor Percentage" shall mean, with respect to any Monthly
Period, the percentage equivalent of a fraction, the numerator of which is the
Investor Interest as of the close of business on the last day of the Revolving
Period and the denominator of which is the greater of (a) the sum of (i) the
aggregate amount of Principal Receivables in the Trust determined as of the
close of business on the last day of the prior Monthly Period and (ii) the
Excess Funding Amount as of the close of business on such last day of the prior
Monthly Period and (b) the sum of the numerators used to calculate the Investor
Percentages (as such term is defined in the Agreement) for allocations with
respect to Principal Receivables for all outstanding Series on such date of
determination; provided, however, that with respect to any Monthly Period in
which an Addition Date occurs or in which a Removal Date occurs, the amount
determined pursuant to clause (a)(i) hereof shall be the sum of (A) the
aggregate amount of Principal Receivables in the Trust as of the close of
business 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 (B) the aggregate amount of Principal
Receivables in the Trust as of the beginning of the day on the related Addition
Date or Removal Date after adjusting for the aggregate amount of Principal
Receivables added to or removed from the Trust 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.
"Floating Investor Percentage" shall mean, with respect to any Monthly
Period, the percentage equivalent of a fraction, the numerator of which is the
Adjusted Investor Interest as of the close of business on the last day of the
prior Monthly Period (or with respect to the first Monthly Period, the Initial
Investor Interest) and the denominator of which is the greater of (a) the sum of
(i) the aggregate amount of Principal Receivables as of the close of business on
the last day of the prior Monthly
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Period (or with respect to the first calendar month in the first Monthly Period,
the aggregate amount of Principal Receivables in the Trust as of the close of
business on the day immediately preceding the Closing Date, and with respect to
the second calendar month in the first Monthly Period, the aggregate amount of
Principal Receivables as of the close of business on the last day of the first
calendar month in the first Monthly Period) and (ii) the Excess Funding Amount
as of the close of business on such last day of the prior Monthly Period and (b)
the sum of the numerators used to calculate the Investor Percentages (as such
term is defined in the Agreement) for allocations with respect to Finance Charge
Receivables, Default Amounts or Principal Receivables, as applicable, for all
outstanding Series on such date of determination; provided, however, that with
respect to any Monthly Period in which an Addition Date occurs or in which a
Removal Date occurs, the amount determined pursuant to clause (a)(i) hereof
shall be the sum of (A) the aggregate amount of Principal Receivables in the
Trust as of the close of business 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 (B) the aggregate amount
of Principal Receivables in the Trust as of the beginning of the day on the
related Addition Date or Removal Date after adjusting for the aggregate amount
of Principal Receivables added to or removed from the Trust 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 One" shall mean Series 1998-5 and each other Series specified in
the related Supplement to be included in Group One.
"Initial Investor Interest" shall mean $773,809,524; provided, however,
that following the issuance of any Additional Certificates pursuant to Section
10 hereof "Initial Investor Interest" shall mean the sum of $773,809,524 and the
initial investor interest of such Additional Certificates.
"Interest Period" shall mean, with respect to any Distribution Date,
the period from and including the previous Distribution Date through the day
preceding such Distribution Date, except that the initial Interest Period shall
be the period from and including the Closing Date through the day preceding the
initial Distribution Date.
"Investor Certificateholder" shall mean (a) with respect to the Class A
Certificates, the holder of record of a Class A Certificate, (b) with respect to
the Class B Certificates, the holder of record of a Class B Certificate and (c)
with respect to the Collateral Interest, the Collateral Interest Holder.
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"Investor Certificates" shall mean the Class A Certifi xxxxx, the Class
B Certificates and the Collateral Interest.
"Investor Default Amount" shall mean, with respect to any Receivable in
a Defaulted Account, an amount equal to the product of (a) the Default Amount
and (b) the Floating Investor Percentage on the day such Account became a
Defaulted Account.
"Investor Interest" shall mean, on any date of determi nation, an
amount equal to the sum of (a) the Class A Investor Interest, (b) the Class B
Investor Interest and (c) the Collateral Interest, each as of such date.
"Investor Percentage" shall mean for any Monthly Period, (a) with
respect to collections of Finance Charge Receivables and Default Amounts at any
time and collections of Principal Receivables during the Revolving Period, the
Floating Investor Percentage and (b) with respect to collections of Principal
Receivables during the Controlled Accumulation Period or the Rapid Amortization
Period, the Fixed Investor Percentage.
"Investor Principal Collections" shall mean, with respect to any
Monthly Period, the sum of (a) the aggregate amount deposited into the Principal
Account for such Monthly Period pursuant to subsections 4.5(a)(ii), (iii) and
(iv), 4.5(b)(ii), (iii) and (iv) or 4.5(c)(ii), in each case, as applicable to
such Monthly Period and (b) the aggregate amount to be treated as Investor
Principal Collections pursuant to subsections 4.9(a)(iii) and 4.11(a), (b), (c),
(d), (g) and (h) for such Monthly Period (other than such amount paid from
Reallocated Principal Collections).
"Investor Servicing Fee shall have the meaning speci fied in subsection
3(a) hereof.
"LIBOR" shall mean, for any Interest Period, the London interbank
offered rate for one-month United States dollar depos its determined by the
Trustee for each Interest Period in accordance with the provisions of Section
4.16.
"LIBOR Determination Date" shall mean September 22, 1998 for the period
from the Closing Date through November 15, 1998, and the second London Business
Day prior to the commencement of the second and each subsequent Interest Period.
"Loan Agreement" shall mean the agreement among the Transferor, the
Servicer, the Trustee, and the Collateral Interest Holder, dated as of the
Closing Date, as amended or modified from time to time.
"London Business Day" shall mean any Business Day on which dealings in
deposits in United States dollars are transacted in the London interbank market.
14
"Minimum Transferor Interest Percentage" shall mean 7%.
"Monthly Period" shall have the meaning specified in the Agreement,
except that the first Monthly Period with respect to the Investor Certificates
shall begin on and include the Closing Date and shall end on and include October
31, 1998.
"Monthly Principal Payment" shall mean with respect to any Monthly
Period, for all Series (including Series 1998-5) which are in an Amortization
Period or Accumulation Period (as such terms are defined in the related
Supplements for all Series), the sum of (a) the Controlled Distribution Amount
for the related Transfer Date for any Series in its Controlled Amortization
Period (as such terms are defined in the related Supplements for all Series),
(b) the Controlled Deposit Amount for the related Transfer Date for any Series
in its Accumulation Period, other than its Rapid Accumulation Period, if
applicable (as such terms are defined in the related Supplements for all
Series), (c) the Investor Interest as of the end of the prior Monthly Period
taking into effect any payments to be made on the following Distribution Date
for any Series in its Principal Amortization Period or Rapid Amortization Period
(as such terms are defined in the related Supplements for all Series), (d) the
Adjusted Investor Interest as of the end of the prior Monthly Period taking into
effect any payments or deposits to be made on the following Transfer Date and
Distribution Date for any Series in its Rapid Accumulation Period (as such terms
are defined in the related Supplements for all Series), (e) the excess of the
Collateral Interest as of the Transfer Date occurring in such Monthly Period
over the Required Collateral Interest for the related Transfer Date, assuming no
Accumulation Shortfall and (f) such other amounts as may be specified in the
related Supplements for all Series.
"Net Servicing Fee Rate" shall mean 1.0% per annum.
"Pay Out Commencement Date" shall mean the date on which a Trust Pay
Out Event is deemed to occur pursuant to Section 9.1 or a Series 1998-5 Pay Out
Event is deemed to occur pursuant to Section 9 hereof.
"Portfolio Adjusted Yield" shall mean, with respect to any Transfer
Date, the average of the percentages obtained for each of the three preceding
Monthly Periods by subtracting the Base Rate from the Portfolio Yield for such
Monthly Period and deducting 0.5% from the result for each Monthly Period.
"Portfolio Yield" shall mean, with respect to any Monthly Period, the
annualized percentage equivalent of a fraction, the numerator of which is an
amount equal to the sum of (a) the amount of Collections of Finance Charge
Receivables deposited into the Finance Charge Account and allocable to the
Investor Certificates for such Monthly Period,(b) the Principal Funding
Investment Proceeds deposited into the Finance Charge
15
Account on the Transfer Date related to such Monthly Period and (c) the amount
of the Reserve Draw Amount (up to the Available Reserve Account Amount) plus any
amounts of interest and earnings described in subsections 4.15(b) and (d), each
deposited into the Finance Charge Account on the Transfer Date relating to such
Monthly Period, such sum to be calculated on a cash basis after subtracting the
Aggregate Investor Default Amount for such Monthly Period, and the denominator
of which is the Investor Interest as of the close of business on the last day of
such Monthly Period.
"Principal Funding Account" shall have the meaning set forth in
subsection 4.14(a).
"Principal Funding Account Balance" shall mean, with respect to any
date of determination, the principal amount, if any, on deposit in the Principal
Funding Account on such date of determination.
"Principal Funding Investment Proceeds" shall mean, with respect to
each Transfer Date, the investment earnings on funds in the Principal Funding
Account (net of investment expenses and losses) for the period from and
including the immediately preceding Transfer Date to but excluding such Transfer
Date.
"Principal Funding Investment Shortfall" shall mean, with respect to
each Transfer Date relating to the Controlled Accumulation Period, the amount,
if any, by which the Principal Funding Investment Proceeds for such Transfer
Date are less than the Covered Amount determined as of such Transfer Date.
"Rapid Amortization Period" shall mean the Amortization Period
commencing on the Pay Out Commencement Date and ending on the earlier to occur
of (a) the Series 1998-5 Termination Date and (b) the termination of the Trust
pursuant to Section 12.1.
"Rating Agency" shall mean Xxxxx'x, Standard & Poor's and Fitch.
"Reallocated Class B Principal Collections" shall mean, with respect to
any Transfer Date, Collections of Principal Receivables applied in accordance
with subsection 4.12(a) in an amount not to exceed the product of (a) the Class
B Investor Allocation with respect to the Monthly Period relating to such
Transfer Date and (b) the Investor Percentage with respect to the Monthly Period
relating to such Transfer Date and (c) the amount of Collections of Principal
Receivables with respect to the Monthly Period relating to such Transfer Date;
provided however, that such amount shall not exceed the Class B Investor
Interest after giving effect to any Class B Investor Charge-Offs for such
Transfer Date.
16
"Reallocated Collateral Principal Collections" shall mean, with respect
to any Transfer Date, Collections of Principal Receivables applied in accordance
with subsections 4.12(a) and (b) in an amount not to exceed the product of (a)
the Collateral Allocation with respect to the Monthly Period relating to such
Transfer Date and (b) the Investor Percentage with respect to the Monthly Period
relating to such Transfer Date and (c) the amount of Collections of Principal
Receivables with respect to the Monthly Period relating to such Transfer Date;
provided however, that such amount shall not exceed the Collateral Interest
after giving effect to any Collateral Charge-Offs for such Transfer Date.
"Reallocated Principal Collections" shall mean the sum of (a)
Reallocated Class B Principal Collections and (b) Reallocated Collateral
Principal Collections.
"Reference Banks" shall mean four 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 Collateral Interest" shall mean (a) initial ly, $69,643,524
and (b) on any Transfer Date thereafter, 9.0% of the sum of the Class A Adjusted
Investor Interest, the Class B Investor Interest and the Collateral Interest on
such Transfer Date, after taking into account deposits into the Principal
Funding Account on such Transfer Date and payments to be made on the related
Distribution Date, and the Collateral Interest on the prior Transfer Date, after
any adjustments to be made on such date, but not less than $23,214,286;
provided, however, that (x) if either (i) there is a reduction in the Collateral
Interest pursuant to clause (c), (d) or (e) of the definition of such term or
(ii) a Pay Out Event with respect to the Investor Certificates has occurred, the
Required Collateral Interest for any Transfer Date shall equal the Required
Collateral Interest for the Transfer Date immediately preceding such reduction
or Pay Out Event, (y) in no event shall the Required Collateral Interest exceed
the sum of the outstanding principal amounts of (i) the Class A Certificates and
(ii) the Class B Certificates, each as of the last day of the Monthly Period
preceding such Transfer Date after taking into account the payments to be made
on the related Distribution Date and (z) the Required Collateral Interest may be
reduced at the Transferor's option at any time 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 with respect to such
reduction.
17
"Required Reserve Account Amount" shall mean, with respect to any
Transfer Date on or after the Reserve Account Funding Date, an amount equal to
(a) 0.50% of the outstanding principal balance of the Class A Certificates or
(b) any other amount designated by the Transferor; provided, however, that if
such designation is of a lesser amount, the Transferor shall (i) provide the
Servicer, the Collateral Interest Holder and the Trustee with evidence that the
Rating Agency Condition shall have been satisfied and (ii) deliver to the
Trustee a certificate of an authorized officer 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 cause a Pay Out Event to
occur with respect to Series 1998-5.
"Reserve Account" shall have the meaning specified in subsection
4.15(a).
"Reserve Account Funding Date" shall mean the Transfer Date which
occurs not later than the earliest of (a) the Transfer Date with respect to the
Monthly Period which commences three months prior to the commencement of the
Controlled Accumulation Period; (b) the first Transfer Date for which the
Portfolio Adjusted Yield is less than 2%, but in such event the Reserve Account
Funding Date shall not be required to occur earlier than the Transfer Date with
respect to the Monthly Period which commences 12 months prior to the
commencement of the Controlled Accumulation Period; (c) the first Transfer Date
for which the Portfolio Adjusted Yield is less than 3%, but in such event the
Reserve Account Funding Date shall not be required to occur earlier than the
Transfer Date with respect to the Monthly Period which commences six months
prior to the commencement of the Controlled Accumulation Period; and (d) the
first Transfer Date for which the Portfolio Adjusted Yield is less than 4%, but
in such event the Reserve Account Funding Date shall not be required to occur
earlier than the Transfer Date with respect to the Monthly Period which
commences four months prior to the commencement of the Controlled Accumulation
Period.
"Reserve Account Surplus" shall mean, as of any Trans fer Date
following the Reserve Account Funding Date, 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
4.15(c).
"Revolving Period" shall mean the period from and including the Closing
Date to, but not including, the earlier of (a) the day the Controlled
Accumulation Period commences and (b) the Pay Out Commencement Date.
18
"Series 1998-5" shall mean the Series of the Chase Credit Card Master
Trust represented by the Investor Certificates.
"Series 1998-5 Certificateholders" shall mean the holder of record of a
Series 1998-5 Certificate.
"Series 1998-5 Certificates" shall mean the Class A Certificates and
the Class B Certificates.
"Series 1998-5 Pay Out Event" shall have the meaning specified in
Section 9 hereof.
"Series 1998-5 Termination Date" shall mean the earli est to occur of
(a) the Distribution Date on which the Investor Interest is paid in full, (b)
the January 2006 Distribution Date and (c) the Trust Termination Date.
"Series Principal Shortfall" shall mean with respect to any Transfer
Date, the excess, if any, of (a) (i) with respect to any Transfer Date relating
to the Controlled Accumulation Period, the sum of (A) the Controlled Deposit
Amount for such Transfer Date, and (B) the excess, if any, of the Collateral
Interest for such Transfer Date over the Required Collateral Interest for such
Transfer Date and (ii) with respect to any Transfer Date during the Rapid
Amortization Period, the Adjusted Investor Interest over (b) the Investor
Principal Collections minus the Reallocated Principal Collections for such
Transfer Date.
"Series Servicing Fee Percentage" shall mean 2.0%.
"Servicer Interchange" shall mean, for any Monthly Period, the portion
of Collections of Finance Charge Receivables allocated to the Investor
Certificates and deposited in the Finance Charge Account 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 Investor Interest as of the last day of such Monthly
Period and (ii) 1.00%.
"Shared Excess Finance Charge Collections" shall mean, with respect to
any Distribution Date, as the context requires, either (x) the amount described
in subsection 4.11(k) allocated to the Series 1998-5 Certificates but available
to cover shortfalls in amounts paid from Collections of Finance Charge
Receivables for other Series, if any or (y) the aggregate amount of Collections
of Finance Charge Receivables allocable to other Series in excess of the amounts
necessary to make required payments with respect to such Series, if any, and
available to cover shortfalls with respect to the Series 1998-5 Certificates.
"Shared Principal Collections" shall mean either (a) the amount
allocated to the Investor Certificates which may be
19
applied to the Series Principal Shortfall with respect to other outstanding
Series or (b) the amounts allocated to the investor certificates of other Series
which the applicable Supplements for such Series specify are to be treated as
"Shared Principal Collections" and which may be applied to cover the Series
Principal Shortfall with respect to the Investor Certificates.
"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).
"Unallocated Principal Collections" shall have the meaning specified in
subsection 4.5(d).
SECTION I.3. Servicing Compensation and Assignment of Interchange. (a)
The share of the Servicing Fee allocable to Series 1998-5 with respect to any
Transfer Date (the "Investor Servicing Fee") shall be equal to one-twelfth of
the product of (i) the Series Servicing Fee Percentage and (ii) the Adjusted
Investor Interest as of the last day of the Monthly Period preceding such
Transfer Date; provided, however, that with respect to the first Transfer Date,
the Investor Servicing Fee shall be equal to the product of (i) a fraction, the
numerator of which is the number of days from and including the Closing Date to
and including the last day of the October 1998 Monthly Period and the
denominator of which is 360, (ii) 2.0% and (iii) the Investor Interest on the
Closing Date. On each Transfer Date a portion of Interchange with respect to the
related Monthly Period that is on deposit in the Finance Charge Account shall be
with drawn from the Finance Charge Account and paid to the Servicer in payment
of a portion of the Investor Servicing Fee with respect to such Monthly Period
("Servicer Interchange"). Should the Servicer Interchange on deposit in the
Finance Charge Account on any Transfer Date with respect to the related Monthly
Period be less than one-twelfth of 1.00% of the Adjusted Investor Interest as of
the last day of such Monthly Period, the Investor 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 Finance Charge Account. The share of the
Investor Servicing Fee allocable to the Class A Investor Interest with respect
to any Transfer Date (the "Class A Servicing Fee") shall be equal to one-twelfth
of the product of (i) the Class A Floating Allocation, (ii) the Net Servicing
Fee Rate and (iii) the Adjusted Investor Interest as of the last day of the
Monthly Period preceding such Transfer Date; provided, however, that with
respect to the first Transfer Date, the Class A Servicing Fee shall be equal to
the product of (i) the Class A Floating Allocation, (ii) a fraction, the
numerator of which is the number of days from and including the Closing Date to
and including the last day of the October 1998 Monthly Period and the
denominator of which is 360, (iii) the Net Servicing Fee Rate and (iv) the
Investor Interest on the Closing Date. The share of the Investor Servicing Fee
allocable to the Class B Investor Interest with
20
respect to any Transfer Date (the "Class B Servicing Fee") shall be equal to
one-twelfth of the product of (i) the Class B Floating Allocation, (ii) the Net
Servicing Fee Rate and (iii) the Adjusted Investor Interest as of the last day
of the Monthly Period preceding such Transfer Date; provided, however, that with
respect to the first Transfer Date, the Class B Servicing Fee shall be equal to
the product of (i) the Class B Floating Allocation, (ii) a fraction, the
numerator of which is the number of days from and including the Closing Date to
and including the last day of the October 1998 Monthly Period and the
denominator of which is 360, (iii) the Net Servicing Fee Rate and (iv) the
Investor Interest on the Closing Date. The share of the Investor Servicing Fee
allocable to the Collateral Interest with respect to any Transfer Date (the
"Collateral Interest Servicing Fee") shall be equal to one-twelfth of the
product of (i) the Collateral Floating Allocation, (ii) the Net Servicing Fee
Rate and (iii) the Adjusted Investor Interest as of the last day of the Monthly
Period preceding such Transfer Date; provided, however, that with respect to the
first Transfer Date, the Collateral Interest Servicing Fee shall be equal to the
product of (i) the Class C Floating Allocation, (ii) a fraction, the numerator
of which is the number of days from and including the Closing Date to and
including the last day of the October 1998 Monthly Period and the denominator of
which is 360, (iii) the Net Servicing Fee Rate and (iv) the Investor Interest on
the Closing Date. Except as specifically provided above, the Servicing Fee shall
be paid by the cash flows from the Trust allocated to the Transferor or the
certificateholders of other Series (as provided in the related Supplements) and
in no event shall the Trust, the Trustee or the Investor Certificateholders be
liable therefor. The Class A Servicing Fee shall be payable to the Servicer
solely to the extent amounts are available for distribution in respect thereof
pursuant to subsections 4.9(a)(ii) and 4.11(a). The Class B Servicing Fee shall
be payable solely to the extent amounts are available for distribution in
respect thereof pursuant to subsections 4.9(b)(ii) and 4.11(c). The Collateral
Interest Servicing Fee shall be payable solely to the extent amounts are
available for distribution in respect thereof pursuant to subsection 4.11(f) or,
if applicable, subsection 4.9(c)(i).
(b) On or before each Transfer Date, the Transferor shall notify the
Servicer of the amount of Interchange to be included as Collections of Finance
Charge Receivables and allocable to the Investor Certificateholders with respect
to the preceding Monthly Period as determined pursuant to this subsection 3(b).
Such amount of Interchange shall be equal to the product of (i) the aggregate
amount of Interchange with respect to such Monthly Period and (ii) the Investor
Percentage with respect to Finance Charge Receivables for such Monthly Period.
On each Transfer Date, the Transferor shall pay to the Servicer, and the
Servicer shall deposit into the Finance Charge Account, in immediately available
funds, the amount of Interchange to be so included as Collections of Finance
Charge
21
Receivables allocable to the Investor Certificates with respect to the preceding
Monthly Period.
SECTION I.4. Reassignment and Transfer Terms. The Investor Certificates
shall be subject to retransfer to the Transferor at its option, in accordance
with the terms specified in subsection 12.2(a), on any Distribution Date on or
after the Distribution Date on which the Investor Interest is reduced to an
amount less than or equal to 5% of the Initial Investor Interest. The deposit
required in connection with any such repurchase shall include the amount, if
any, on deposit in the Principal Funding Account and will be equal to the sum of
(a) the Investor Interest and (b) accrued and unpaid interest on the Investor
Certificates through the day preceding the Distribution Date on which the
repurchase occurs.
SECTION I.5. Delivery and Payment for the Investor Certificates. The
Transferor shall execute and deliver the Series 1998-5 Certificates to the
Trustee for authentication in accordance with Section 6.1. The Trustee shall
deliver such Certificates when authenticated in accordance with Section 6.2.
SECTION I.6. Depository; Form of Delivery of Investor Certificates.
(a) The Class A Certificates and the Class B Certificates shall be
delivered as Book-Entry Certificates as provided in Sections 6.1 and 6.10.
(b) The Depository for Series 1998-5 shall be The Depository Trust
Company, and the Class A Certificates and Class B Certificates shall be
initially registered in the name of Cede & Co., its nominee.
SECTION I.7. Article IV of Agreement. Sections 4.1, 4.2 and 4.3 shall
be read in their entirety as provided in the Agreement. Article IV (except for
Sections 4.1, 4.2 and 4.3 thereof) shall be read in its entirety as follows and
shall be applicable only to the Investor Certificates:
ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS AND
ALLOCATION AND APPLICATION OF COLLECTIONS
SECTION IV.1. Rights of Certificateholders and the Collateral Interest
Holder. The Investor Certificates shall represent undivided interests in the
Trust, consisting of the right to receive, to the extent necessary to make the
required payments with respect to such Investor Certificates at the times and in
the amounts specified in this Agreement, (a) the Floating Investor Percentage
and Fixed Investor Percentage (as applicable from time to time) of Collections
received with respect to the Receivables and (b) funds on deposit in the
Collection Account,
22
the Finance Charge Account, the Excess Funding Account, the Principal Account,
the Principal Funding Account, the Reserve Account and the Distribution Account.
The Collateral Interest shall be subordinate to the Class A Certificates and the
Class B Certificates. The Class B Certificates shall be subordinate to the Class
A Certificates. The Transferor Certificate shall not represent any interest in
the Collection Account, the Finance Charge Account, the Principal Account, the
Excess Funding Account, the Principal Funding Account, the Reserve Account or
the Distribution Account, except as specifically provided in this Article IV.
SECTION IV.2. Allocations.
(a) Allocations During the Revolving Period. During the Revolving
Period, the Servicer shall, prior to the close of business on the day any
Collections are deposited in the Collection Account, allocate to the Investor
Certificateholders or the Holder of the Transferor Certificate and pay or
deposit from the Collection Account the following amounts as set forth below:
(i) Deposit into the Finance Charge Account an amount equal to the
product of (A) the Investor Percentage on the Date of Processing of such
Collections and (B) the aggregate amount of Collections processed in respect
of Finance Charge Receivables on such Date of Processing to be applied in
accordance with Section 4.9.
(ii) Deposit into the Principal Account an amount equal to the product
of (A) the Collateral Allocation on the Date of Processing of such
Collections, (B) the Investor Percentage on the Date of Processing of such
Collections and (C) the aggregate amount of Collections processed in respect
of Principal Receivables on such Date of Processing to be applied first in
accordance with Section 4.12 and then in accordance with subsection 4.9(d).
(iii) Deposit into the Principal Account an amount equal to the product
of (A) the Class B Investor Allocation on the Date of Processing of such
Collections, (B) the Investor Percentage on the Date of Processing of such
Collections and (C) the aggregate amount of Collections processed in respect
of Principal Receivables on such Date of Processing to be applied first in
accordance with Section 4.12 and then in accordance with subsection 4.9(d).
(iv) (A) Deposit into the Principal Account an amount equal to the
product of (1) the Class A Investor Allocation on the Date of Processing of
such Collections, (2) the Investor Percentage on the Date of Processing of
such Collections and (3) the aggregate amount of Collections processed in
respect of Principal Receivables on such Date of Processing; provided,
however, that the amount deposited
23
into the Principal Account pursuant to this subsection 4.5(a)(iv)(A) shall
not exceed the Daily Principal Shortfall, and (B) pay to the Holder of the
Transferor Certificate an amount equal to the excess, if any, identified in
the proviso to clause (A) above; provided, however, that the amount to be
paid to the Holder of the Transferor Certificate pursuant to this subsection
4.5(a)(iv)(B) with respect to any Date of Processing shall be paid to the
Holder of the Transferor Certificate only if the Transferor Interest on such
Date of Processing is greater than the Minimum Transferor Interest (after
giving effect to the inclusion in the Trust of all Receivables created on or
prior to such Date of Processing and the application of payments referred to
in subsection 4.3(b)) and otherwise shall be deposited into the Excess
Funding Account.
(b) Allocations During the Controlled Accumulation Period. During the
Controlled Accumulation Period, the Servicer shall, prior to the close of
business on the day any Collections are deposited in the Collection Account,
allocate to the Investor Certificateholders or the Holder of the Transferor
Certificate and pay or deposit from the Collection Account the following amounts
as set forth below:
(i) Deposit into the Finance Charge Account an amount equal to the
product of (A) the Investor Percentage on the Date of Processing of such
Collections and (B) the aggregate amount of Collections processed in respect
of Finance Charge Receivables on such Date of Processing to be applied in
accordance with Section 4.9.
(ii) Deposit into the Principal Account an amount equal to the product
of (A) the Collateral Allocation on the Date of Processing of such
Collections, (B) the Investor Percentage on the Date of Processing of such
Collections and (C) the aggregate amount of Collections processed in respect
of Principal Receivables on such Date of Processing to be applied first in
accordance with Section 4.12 and then in accordance with subsection 4.9(e).
(iii) Deposit into the Principal Account an amount equal to the product
of (A) the Class B Investor Allocation on the Date of Processing of such
Collections, (B) the Investor Percentage on the Date of Processing of such
Collections and (C) the aggregate amount of Collections processed in respect
of Principal Receivables on such Date of Processing to be applied first in
accordance with Section 4.12 and then in accordance with subsection 4.9(e).
(iv) (A) Deposit into the Principal Account an amount equal to the
product of (1) the Class A Investor Allocation on the Date of Processing of
such Collections, (2) the Investor Percentage on the Date of Processing of
such
24
Collections and (3) the aggregate amount of Collections processed in respect
of Principal Receivables on such Date of Processing; provided, however, that
the amount deposited into the Principal Account pursuant to this subsection
4.5(b)(iv)(A) shall not exceed the Daily Principal Shortfall, and (B) pay to
the Holder of the Transferor Certificate an amount equal to the excess, if
any, identified in the proviso to clause (A) above; provided, however, that
the amount to be paid to the Holder of the Transferor Certificate pursuant
to this subsection 4.5(b)(iv)(B) with respect to any Date of Processing
shall be paid to the Holder of the Transferor Certificate only if the
Transferor Interest on such Date of Processing is greater than the Minimum
Transferor Interest (after giving effect to the inclusion in the Trust of
all Receivables created on or prior to such Date of Processing and the
application of payments referred to in subsection 4.3(b)) and otherwise
shall be deposited into the Excess Funding Account.
(c) Allocations During the Rapid Amortization Period. During the Rapid
Amortization Period, the Servicer shall, prior to the close of business on the
day any Collections are deposited in the Collection Account, allocate to the
Investor Certificateholders and pay or deposit from the Collection Account the
following amounts as set forth below:
(i) Deposit into the Finance Charge Account an amount equal to the
product of (A) the Investor Percentage on the Date of Processing of such
Collections and (E) the aggregate amount of Collections processed in respect
of Finance Charge Receivables on such Date of Processing to be applied in
accordance with Section 4.9.
(ii) (A) Deposit into the Principal Account an amount equal to the
product of (1) the Investor Percentage on the Date of Processing of such
Collections and (2) the aggregate amount of Collections processed in respect
of Principal Receivables on such Date of Processing; provided, however, that
the amount deposited into the Principal Account pursuant to this subsection
4.5(c)(ii)(A) shall not exceed the sum of the Investor Interest as of the
close of business on the last day of the prior Monthly Period (after taking
into account any payments to be made on the Distribution Date relating to
such prior Monthly Period and deposits and any adjustments to be made to the
Investor Interest to be made on the Transfer Date relating to such Monthly
Period) and any Reallocated Principal Collections relating to the Monthly
Period in which such deposit is made and (B) pay to the Holder of the
Transferor Certificate an amount equal to the excess, if any, identified in
the proviso to clause (A) above; provided, however, that the amount to be
paid to the Holder of the Transferor Certificate pursuant to this subsection
4.5(c)(ii)(B) with respect to any Date of
25
Processing shall be paid to the Holder of the Transferor Certificate only if
the Transferor Interest on such Date of Processing is greater than the
Minimum Transferor Interest (after giving effect to the inclusion in the
Trust of all Receivables created on or prior to such Date of Processing and
the application of payments referred to in subsection 4.3(b)) and otherwise
shall be deposited into the Excess Funding Account.
(d) Limitation on Required Deposits. With respect to the Investor
Certificates, and notwithstanding anything in the Agreement or this Series
Supplement to the contrary, whether or not the Servicer is required to make
monthly or daily deposits from the Collection Account into the Finance Charge
Account or the Principal Account pursuant to subsections 4.5(a), 4.5(b) and
4.5(c), with respect to any Monthly Period (i) the Servicer will only be
required to deposit Collections from the Collection Account into the Finance
Charge Account or the Principal Account in an amount equal to the lesser of (x)
the amount required to be deposited into any such deposit account pursuant to
subsection 4.5(a), 4.5(b) or 4.5(c) and (y) the amount required to be
distributed on or prior to the related Distribution Date to the Investor
Certificateholders and (ii) if at any time prior to such Distribution Date the
amount of Collections deposited in the Collection Account exceeds the amount
required to be deposited pursuant to clause (i) above, the Servicer will be
permitted to withdraw the excess from the Collection Account. To the extent
that, in accordance with this subsection 4.5(d), the Servicer has retained
amounts which would otherwise be required to be deposited in the Finance Charge
Account or the Principal Account with respect to any Monthly Period, the
Servicer shall be required to deposit such amounts in the Finance Charge Account
or the Principal Account on the related Transfer Date to the extent necessary to
make required distributions to the Investor Certificateholders on the related
Distribution Date, including any amounts which are required to be applied as
Reallocated Principal Collections.
For so long as the Servicer shall (i) satisfy the conditions specified
in the third paragraph of subsection 4.3(a) of the Agreement and (ii) be making
deposits to the Principal Account and Finance Charge Account on a monthly basis,
all requirements herein to deposit amounts on a daily basis shall be deemed to
be satisfied to the extent that the required monthly deposit is made and all
references to amounts on deposit in such accounts shall be deemed to include
amounts which would otherwise have been deposited therein on a daily basis.
SECTION IV.3. Determination of Monthly Interest.
(a) The amount of monthly interest distributable to the Class A
Certificates shall be an amount equal to the product of (i) (A) a fraction, the
numerator of which is the actual number of days in the related Interest Period
and the denominator of
26
which is 360, times (B) (i) the Class A Certificate Rate in effect with respect
to the related Interest Period, and (ii) the outstanding principal balance of
the Class A Certificates determined as of the close of business on the
Distribution Date preceding the related Transfer Date (after giving effect to
all of the transactions occurring on such date) (the "Class A Monthly
Interest"); provided, however, that with respect to the first Distribution Date,
Class A Monthly Interest will include, accrued interest at the Class A
Certificate Rate from the Closing Date through November 15, 1998; provided,
further, that in addition to Class A Monthly Interest an amount equal to the
amount of any unpaid Class A Deficiency Amounts, as defined below, plus an
amount equal to the product of (A) (1) a fraction, the numerator of which is the
actual number of days in the related Interest Period and the denominator of
which is 360, times (2) the sum of the Class A Certificate Rate in effect with
respect to the related Interest Period, plus 2% per annum, and (B) any Class A
Deficiency Amount from the prior Transfer Date, as defined below (or the portion
thereof which has not theretofore been paid to Class A Certificateholders) (the
"Class A Additional Interest") shall also be distributable to the Class A
Certificates, and on such Transfer Date the Trustee shall deposit such funds, to
the extent available, into the Distribution Account. The "Class A Deficiency
Amount" for any Transfer Date shall be equal to the excess, if any, of the
aggregate amount accrued pursuant to this subsection 4.6(a) as of the prior
Interest Period over the amount actually transferred to the Distribution Account
for payment of such amount.
(b) The amount of monthly interest distributable to the Class B
Certificates shall be an amount equal to the product of (i) (A) a fraction, the
numerator of which is the actual number of days in the related Interest Period
and the denominator of which is 360, times (B) the Class B Certificate Rate in
effect with respect to the related Interest Period and (ii) the outstanding
principal balance of the Class B Certificates determined as of the close of
business on the Distribution Date preceding the related Transfer Date (after
giving effect to all of the transactions occurring on such date) (the "Class B
Monthly Interest"); provided, however, that with respect to the first
Distribution Date, Class B Monthly Interest will include accrued interest at the
Class B Certificate Rate from the Closing Date through November 15, 1998;
provided, further, that in addition to the Class B Monthly Interest an amount
equal to the amount of any unpaid Class B Deficiency Amounts, as defined below,
plus an amount equal to the product of (A) (1) a fraction, the numerator of
which is the actual number of days in the related Interest Period and the
denominator of which is 360, times (2) the sum of the Class B Certificate Rate
in effect with respect to the related Interest Period, plus 2% per annum, and
(B) any Class B Deficiency Amount from the prior Transfer Date, as defined below
(or the portion thereof which has not theretofore been paid to Class B
Certificateholders) (the "Class B Additional Interest") shall also be
distributable to the Class B Certificates, and on
27
such Transfer Date the Trustee shall deposit such funds, to the extent
available, into the Distribution Account. The "Class B Deficiency Amount" for
any Transfer Date shall be equal to the excess, if any, of the aggregate amount
accrued pursuant to this subsection 4.6(b) as of the prior Interest Period over
the amount actually transferred to the Distribution Account for payment of such
amount.
(c) The amount of monthly interest distributable to the Collateral
Interest, which shall be an amount equal to the product of (i) (A) a fraction,
the numerator of which is the actual number of days in the related Interest
Period and the denominator of which is 360, times (B) the Collateral Rate in
effect with respect to the related Interest Period, and (ii) the Collateral
Interest determined as of the close of business on the Distribution Date
preceding the related Transfer Date (after giving effect to all of the
transactions occurring on such date) (the "Collateral Monthly Interest");
provided, however, that for the purposes of determining Collateral Monthly
Interest only, the Collateral Rate shall not exceed a per annum rate of 1% in
excess of LIBOR as determined on the related LIBOR Determination Date.
SECTION IV.4. Determination of Monthly Principal.
(a) The amount of monthly principal distributable from the Principal
Account with respect to the Class A Certificates on each Transfer Date ("Class A
Monthly Principal"), beginning with the Transfer Date in the month following the
month in which the Controlled Accumulation Period or, if earlier, the Rapid
Amortization Period, begins, shall be equal to the least of (i) the Available
Investor Principal Collections on deposit in the Principal Account with respect
to such Transfer Date, (ii) for each Transfer Date with respect to the
Controlled Accumulation Period prior to the Class A Scheduled Payment Date, the
Controlled Deposit Amount for such Transfer Date and (iii) the Class A Adjusted
Investor Interest on such Transfer Date prior to any deposit into the Principal
Funding Account to be made on such day.
(b) The amount of monthly principal distributable from the Principal
Account with respect to the Class B Certificates on each Transfer Date (the
"Class B Monthly Principal"), for the Controlled Accumulation Period, beginning
with the Transfer Date following the Monthly Period in which the Class A
Investor Interest has been paid in full, and during the Rapid Amortization
Period, beginning with the Transfer Date immediately preceding the Distribution
Date on which the Class A Investor Interest has been paid in full, shall be an
amount equal to the lesser of (i) the Available Investor Principal Collections
on deposit in the Principal Account with respect to such Transfer Date (minus
the portion of such Available Investor Principal Collections applied to Class A
Monthly Principal on such Transfer Date) and (ii) the Class B Investor Interest
(after taking into account any
28
adjustments to be made on such Transfer Date pursuant to Sections 4.10 and 4.12)
on such Transfer Date.
(c) The amount of monthly principal (the "Collateral Monthly
Principal") distributable from the Principal Account with respect to the
Collateral Interest on each Transfer Date shall be (A) during the Revolving
Period following any reduction of the Required Collateral Interest pursuant to
clause (z) of the proviso in the definition thereof an amount equal to the
lesser of (1) the excess, if any, of the Collateral Interest (after taking into
account any adjustments to be made on such Transfer Date pursuant to Sections
4.10 and 4.12) over the Required Collateral Interest on such Transfer Date and
(2) the Available Investor Principal Collections on such Transfer Date or (B)
during the Controlled Accumulation Period or Rapid Amortization Period, an
amount equal to the lesser of (1) the excess, if any, of the Collateral Interest
(after taking into account any adjustments to be made on such Transfer Date
pursuant to Sections 4.10 and 4.12) over the Required Collateral Interest on
such Transfer Date and (2) the excess, if any, of (i) the Available Investor
Principal Collections on such Transfer Date over (ii) the sum of the Class A
Monthly Principal and the Class B Monthly Principal for such Transfer Date.
SECTION IV.5. Coverage of Required Amount. (a) On or before each
Transfer Date, the Servicer shall determine the amount (the "Class A Required
Amount"), if any, by which the sum of (i) the Class A Monthly Interest for such
Transfer Date, plus (ii) the Class A Deficiency Amount, if any, for such
Transfer Date, plus (iii) the Class A Additional Interest, if any, for such
Transfer Date, plus (iv) the Class A Servicing Fee for the prior Monthly Period
plus (v) the Class A Servicing Fee, if any, due but not paid on any prior
Transfer Date, plus (vi) the Class A Investor Default Amount, if any, for the
prior Monthly Period, exceeds the Class A Available Funds for the related
Monthly Period.
(b) On or before each Transfer Date, the Servicer shall also determine
the amount (the "Class B Required Amount"), if any, equal to the sum of (i) the
amount, if any, by which the sum of (A) the Class B Monthly Interest for such
Transfer Date, plus (B) the Class B Deficiency Amount, if any, for such Transfer
Date plus (C) the Class B Additional Interest, if any, for such Transfer Date,
plus (D) the Class B Servicing Fee for the prior Monthly Period plus (E) the
Class B Servicing Fee, if any, due but not paid on any prior Transfer Date,
exceeds the Class B Available Funds for the related Monthly Period plus (ii) the
Class B Investor Default Amount, if any, for the prior Monthly Period.
(c) In the event that the sum of the Class A Required Amount and the
Class B Required Amount for such Transfer Date is greater than zero, the
Servicer shall give written notice to the Trustee of such positive Class A
Required Amount or Class B
29
Required Amount on or before such Transfer Date. In the event that the Class A
Required Amount for such Transfer Date is greater than zero, all or a portion of
the Excess Spread and Shared Excess Finance Charge Collections allocable to
Series 1998-5 with respect to such Transfer Date in an amount equal to the Class
A Required Amount, to the extent available, for such Transfer Date shall be
distributed from the Finance Charge Account on such Transfer Date pursuant to
subsection 4.11(a). In the event that the Class A Required Amount for such
Transfer Date exceeds the amount of Excess Spread and Shared Excess Finance
Charge Collections allocable to Series 1998-5 with respect to such Transfer
Date, the Collections of Principal Receivables allocable to the Collateral
Interest and the Collections of Principal Receivables allocable to the Class B
Certificates with respect to the prior Monthly Period shall be applied as
specified in Section 4.12. In the event that the Class B Required Amount for
such Transfer Date exceeds the amount of Excess Spread and Shared Excess Finance
Charge Collections allocable to Series 1998-5 available to fund the Class B
Required Amount pursuant to subsection 4.11(c), the Collections of Principal
Receivables allocable to the Collateral Interest (after application to the Class
A Required Amount) shall be applied as specified in Section 4.12; provided,
however, that the sum of any payments pursuant to this paragraph shall not
exceed the sum of the Class A Required Amount and Class B Required Amount.
SECTION IV.6. Monthly Payments. On or before each Transfer Date, the
Servicer shall instruct the Trustee in writing (which writing shall be
substantially in the form of Exhibit B hereto) to withdraw and the Trustee,
acting in accordance with such instructions, shall withdraw on such Transfer
Date or the related Distribution Date, as applicable, to the extent of available
funds, the amounts required to be withdrawn from the Finance Charge Account, the
Principal Account, the Principal Funding Account and the Distribution Account as
follows:
(a) An amount equal to the Class A Available Funds deposited into the
Finance Charge Account for the related Monthly Period shall be distributed on
each Transfer Date in the following priority:
(i) an amount equal to Class A Monthly Interest for such Transfer Date,
plus the amount of any Class A Deficien cy Amount for such Transfer Date,
plus the amount of any Class A Additional Interest for such Transfer Date,
shall be deposited by the Servicer or the Trustee into the Distribution
Account;
(ii) an amount equal to the Class A Servicing Fee for such Transfer
Date plus the amount of any Class A Servicing Fee due but not paid to the
Servicer on any prior Transfer Date shall be distributed to the Servicer;
30
(iii) an amount equal to the Class A Investor Default Amount, if any,
for the preceding Monthly Period shall be treated as a portion of Investor
Principal Collections and deposited into the Principal Account on such
Transfer Date; and
(iv) the balance, if any, shall constitute Excess Spread and shall be
allocated and distributed as set forth in Section 4.11.
(b) An amount equal to the Class B Available Funds deposited into the
Finance Charge Account for the related Monthly Period shall be distributed on
each Transfer Date in the following priority:
(i) an amount equal to the Class B Monthly Interest for such Transfer
Date, plus the amount of any Class B Deficiency Amount for such Transfer
Date, plus the amount of any Class B Additional Interest for such Transfer
Date, shall be deposited by the Servicer or the Trustee into the
Distribution Account;
(ii) an amount equal to the Class B Servicing Fee for such Transfer
Date, plus the amount of any Class B Servicing Fee due but not paid to the
Servicer on any prior Transfer Date for such Transfer Date shall be
distributed to the Servicer; and
(iii) the balance, if any, shall constitute Excess Spread and shall be
allocated and distributed as set forth in Section 4.11.
(c) An amount equal to the Collateral Available Funds deposited into
the Finance Charge Account for the related Monthly Period shall be distributed
on each Transfer Date in the following priority:
(i) if none of the Transferor, an Affiliate thereof or the Trustee is
the Servicer, an amount equal to the Collateral Interest Servicing Fee for
such Transfer Date plus the amount of any Collateral Interest Servicing Fee
due but not paid to the Servicer on any prior Transfer Date shall be
distributed to the Servicer; and
(ii) the balance, if any, shall constitute Excess Spread and shall be
allocated and distributed as set forth in Section 4.11.
(d) During the Revolving Period, an amount equal to the Available
Investor Principal Collections deposited into the Principal Account for the
related Monthly Period shall be distributed on each Transfer Date in the
following priority:
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(i) an amount equal to the Collateral Monthly Principal for such
Transfer Date shall be distributed to the Collateral Interest Holder in
accordance with the Loan Agreement;
(ii) an amount equal to the lesser of (A) the product of (1) a
fraction, the numerator of which is equal to the Available Investor
Principal Collections remaining after the application specified in
subsection 4.9(d)(i) above and the denominator of which is equal to the sum
of the Available Investor Principal Collections available for sharing as
specified in the related Supplement for each Series and (2) the Cumulative
Series Principal Shortfall and (B) Available Investor Principal Collections,
shall remain in the Principal Account to be treated as Shared Principal
Collections and applied to Series other than this Series 1998-5; and
(iii) an amount equal to the excess, if any, of (A) the Available
Investor Principal Collections for such Transfer Date over (B) the
applications specified in subsections 4.9(d)(i) and (ii) above shall be paid
to the Holder of the Transferor Certificate; provided, however, that the
amount to be paid to the Holder of the Transferor Certificate pursuant to
this subsection 4.9(d)(iii) with respect to such Transfer Date shall be paid
to the Holder of the Transferor Certificate only if the Transferor Interest
on such Date of Processing is greater than the Minimum Transferor Interest
(after giving effect to the inclusion in the Trust of all Receivables
created on or prior to such Transfer Date and the application of payments
referred to in subsection 4.3(b)) and otherwise deposited into the Excess
Funding Account.
(e) During the Controlled Accumulation Period or the Rapid Amortization
Period, an amount equal to the Available Investor Principal Collections
deposited into the Principal Account for the related Monthly Period shall be
distributed on each Transfer Date in the following priority:
(i) an amount equal to the Class A Monthly Principal for such Transfer
Date, shall be (A) during the Controlled Accumulation Period, deposited into
the Principal Funding Account, and (B) during the Rapid Amortization Period,
deposited into the Distribution Account;
(ii) after giving effect to the distribution referred to in clause (i)
above, an amount equal to the Class B Monthly Principal, shall be deposited
into the Distribution Account;
(iii) for each Transfer Date (other than the Transfer Date immediately
preceding the Series 1998-5 Termination Date, in which case on the Series
1998-5 Termination Date)
32
after giving effect to the distribution referred to in clauses (i) and (ii)
above, an amount equal to Collateral Monthly Principal shall be distributed
to the Collateral Interest Holder in accordance with the Loan Agreement;
(iv) an amount equal to the lesser of (A) the product of (1) a
fraction, the numerator of which is equal to the Available Investor
Principal Collections remaining after the application specified in
subsections 4.9(e)(i), (ii) and (iii) above and the denominator of which is
equal to the sum of the Available Investor Principal Collections available
for sharing as specified in the related Series Supplement for each Series
and (2) the Cumulative Series Principal Shortfall and (B) the Available
Investor Principal Collections, shall remain in the Principal Account to be
treated as Shared Principal Collections and applied to Series other than
this Series 1998-5; and
(v) an amount equal to the excess, if any, of (A) the Available
Investor Principal Collections over (B) the applications specified in
subsections 4.9(e)(i) through (iv) above shall be paid to the Holder of the
Transferor Certificate; provided, however, that the amount to be paid to the
Holder of the Transferor Certificate pursuant to this subsection 4.9(e)(v)
with respect to such Transfer Date shall be paid to the Holder of the
Transferor Certificate only if the Transferor Interest on such Date of
Processing is greater than the Minimum Transferor Interest (after giving
effect to the inclusion in the Trust of all Receivables created on or prior
to such Transfer Date and the application of payments referred to in
subsection 4.3(b)) and otherwise shall be deposited into the Excess Funding
Account.
(f) on the earlier to occur of (i) the first Transfer Date with respect
to the Rapid Amortization Period and (ii) the Transfer Date immediately
preceding the Class A Scheduled Payment Date, the Trustee, acting in accordance
with instructions from the Servicer, shall withdraw from the Principal Funding
Account and deposit in the Distribution Account the amount on deposit in the
Principal Funding Account.
(g) On each Distribution Date, the Trustee shall pay in accordance with
subsection 5.1(a) to the Class A Certificateholders from the Distribution
Account, the amount deposited into the Distribution Account pursuant to
subsection 4.9(a)(i) on the preceding Transfer Date and (b) to the Class B
Certificateholders from the Distribution Account, the amount deposited into the
Distribution Account pursuant to subsection 4.9(b)(i) on the preceding Transfer
Date.
(h) On the earlier to occur of (i) the first Distribution Date with
respect to the Rapid Amortization Period and (ii) the Class A Scheduled Payment
Date and on each
33
Distribution Date thereafter, the Trustee, acting in accordance with
instructions from the Servicer, shall pay in accordance with Section 5.1 from
the Distribution Account the amount so deposited into the Distribution Account
pursuant to subsections 4.9(e) and (f) on the related Transfer Date in the
following priority:
(i) an amount equal to the lesser of such amount on deposit in the
Distribution Account and the Class A Investor Interest shall be paid to the
Class A Certificateholders; and
(ii) for each Distribution Date with respect to the Rapid Amortization
Period and on the Class B Scheduled Payment Date, after giving effect to the
distributions referred to in clause (i) above, an amount equal to the lesser
of such amount on deposit in the Distribution Account and the Class B
Investor Interest shall be paid to the Class B Certificateholders.
(i) The Controlled Accumulation Period is scheduled to commence at the
close of business on August 31, 2002; provided, however, that, if the
Accumulation Period Length (determined as described below) is less than 12
months, the date on which the Controlled Accumulation Period actually commences
will be delayed to the first Business Day of the month that is the number of
whole months prior to the Class A Scheduled Payment Date at least equal to the
Accumulation Period Length and, as a result, the number of Monthly Periods in
the Controlled Accumulation Period will at least equal the Accumulation Period
Length. On the June 2002 Determination Date, and each Determination Date
thereafter until the Controlled Accumulation Period begins, the Servicer will
determine the "Accumulation Period Length" which will equal the number of whole
months such that the sum of the Accumulation Period Factors for each month
during such period will be equal to or greater than the Required Accumulation
Factor Number; provid ed, however, that the Accumulation Period Length will not
be determined to be less than one month.
SECTION IV.7. Investor Charge-Offs.
(a) On or before each Transfer Date, the Servicer shall calculate the
Class A Investor Default Amount. If on any Transfer Date, the Class A Investor
Default Amount for the prior Monthly Period exceeds the sum of the amount
allocated with respect thereto pursuant to subsection 4.9(a)(iii), subsection
4.11(a) and Section 4.12 with respect to such Monthly Period, the Collateral
Interest (after giving effect to reductions for any Collateral Charge-offs and
any Reallocated Principal Collections on such Transfer Date) will be reduced by
the amount of such excess, but not by more than the lesser of the Class A
Investor Default Amount and the Collateral Interest (after giving effect to
reductions for any Collateral Charge-Offs and any Reallocated Principal
Collections on such Transfer Date) for such Transfer
34
Date. In the event that such reduction would cause the Collateral Interest to be
a negative number, the Collateral Interest will be reduced to zero, and the
Class B Investor Interest (after giving effect to reductions for any Class B
Investor Charge-Offs and any Reallocated Class B Principal Collections on such
Trans fer Date) will be reduced by the amount by which the Collateral Interest
would have been reduced below zero. In the event that such reduction would cause
the Class B Investor Interest to be a negative number, the Class B Investor
Interest will be reduced to zero, and the Class A Investor Interest will be
reduced by the amount by which the Class B Investor Interest would have been
reduced below zero, but not by more than the Class A Investor Default Amount for
such Transfer Date (a "Class A Investor Charge-Off"). If the Class A Investor
Interest has been reduced by the amount of any Class A Investor Charge-Offs, it
will be reimbursed on any Transfer Date (but not by an amount in excess of the
aggregate Class A Investor Charge-Offs) by the amount of Excess Spread and
Shared Excess Finance Charge Collections allocable to Series 1998-5 allocated
and available for such purpose pursuant to subsection 4.11(b).
(b) On or before each Transfer Date, the Servicer shall calculate the
Class B Investor Default Amount. If on any Transfer Date, the Class B Investor
Default Amount for the prior Monthly Period exceeds the amount of Excess Spread
and Shared Excess Finance Charge Collections allocable to Series 1998-5 and
Reallocated Collateral Principal Collections which are allocated and available
to fund such amount pursuant to subsection 4.11(c) and Section 4.12, the
Collateral Interest (after giving effect to reductions for any Collateral
Charge-Offs and any Reallocated Principal Collections on such Transfer Date and
any adjustments with respect thereto as described in subsection 4.10(a) above)
will be reduced by the amount of such excess but not by more than the lesser of
the Class B Investor Default Amount and the Collateral Interest (after giving
effect to reductions for any Collateral Charge-Offs and any Reallocated
Principal Collections on such Transfer Date and any adjustments with respect
thereto as described in subsection 4.10(a) above) for such Transfer Date. In the
event that such reduction would cause the Collateral Interest to be a negative
number, the Collateral Interest shall be reduced to zero and the Class B
Investor Interest shall be reduced by the amount by which the Collateral
Interest would have been reduced below zero, but not by more than the Class B
Investor Default Amount for such Transfer Date (a "Class B Investor
Charge-Off"). The Class B Investor Interest will also be reduced by the amount
of Reallocated Class B Principal Collections in excess of the Collateral
Interest pursuant to Section 4.12 and the amount of any portion of the Class B
Investor Interest allocated to the Class A Certificates to avoid a reduction in
the Class A Investor Interest pursuant to subsection 4.10(a) above. The Class B
Investor Interest will thereafter be reimbursed (but not to an amount in excess
of the unpaid principal balance of the Class B Certificates) on any Transfer
Date by the amount of Excess Spread and Shared Excess
35
Finance Charge Collections allocable to Series 1998-5 allocated and available
for that purpose as described under subsection 4.11(d).
(c) On or before each Transfer Date, the Servicer shall calculate the
Collateral Default Amount. If on any Transfer Date, the Collateral Default
Amount for the prior Monthly Period exceeds the amount of Excess Spread and
Shared Excess Finance Charge Collections allocable to Series 1998-5 allocated
and available to fund such amount pursuant to subsection 4.11(g), the Collateral
Interest will be reduced by the amount of such excess but not by more than the
lesser of the Collateral Default Amount and the Collateral Interest for such
Transfer Date (a "Collateral Charge-Off"). The Collateral Interest will also be
reduced by the amount of Reallocated Principal Collections pursuant to Section
4.12 and the amount of any portion of the Collateral Interest allocated to the
Class A Certificates or the Class B Certificates to avoid a reduction in the
Class A Investor Interest, pursuant to subsection 4.10(a), or the Class B
Investor Interest, pursuant to subsection 4.10(b), respectively. The Collateral
Interest will thereafter be reimbursed on any Transfer Date by the amount of the
Excess Spread and Shared Excess Finance Charge Collections allocable to Series
1998-5 allocated and available for that purpose as described under subsection
4.11(h).
SECTION IV.8. Excess Spread. On or before each Trans fer Date, the
Servicer shall instruct the Trustee in writing (which writing shall be
substantially in the form of Exhibit B hereto) to apply Excess Spread with
respect to the related Monthly Period to make the following distributions on
each Transfer Date in the following priority:
(a) an amount equal to the Class A Required Amount, if any, with
respect to such Transfer Date shall be used to fund the Class A Required Amount
and be applied in accordance with, and in the priority set forth in, subsection
4.9(a);
(b) an amount equal to the aggregate amount of Class A Investor
Charge-Offs which have not been previously reimbursed shall be treated as a
portion of Investor Principal Collections and deposited into the Principal
Account on such Transfer Date;
(c) an amount equal to the Class B Required Amount, if any, with
respect to such Transfer Date shall be used to fund the Class B Required Amount
and be applied first in accordance with, and in the priority set forth in,
subsection 4.9(b) and then any remaining amount available to pay the Class B
Investor Default Amount shall be treated as a portion of Investor Principal
Collections and deposited into the Principal Account on such Transfer Date;
(d) an amount equal to the aggregate amount by which the Class B
Investor Interest has been reduced below the initial
36
Class B Investor Interest for reasons other than the payment of principal to the
Class B Certificateholders (but not in excess of the aggregate amount of such
reductions which have not been previously reimbursed) shall be treated as a
portion of Investor Principal Collections and deposited into the Principal
Account on such Transfer Date;
(e) an amount equal to the Collateral Monthly Interest plus the amount
of any past due Collateral Monthly Interest for such Transfer Date shall be paid
to the Collateral Interest Holder in accordance with the Loan Agreement;
(f) an amount equal to the aggregate amount of accrued but unpaid
Collateral Interest Servicing Fees shall be paid to the Servicer;
(g) an amount equal to the Collateral Default Amount, if any, for the
prior Monthly Period shall be treated as a portion of Investor Principal
Collections and deposited into the Principal Account on such Transfer Date;
(h) an amount equal to the aggregate amount by which the Collateral
Interest has been reduced below the Required Collateral Interest for reasons
other than the payment of principal to the Collateral Interest Holder (but not
in excess of the aggregate amount of such reductions which have not been
previously reimbursed) shall be treated as a portion of Investor Principal
Collections and deposited into the Principal Account on such Transfer Date;
(i) on each Transfer Date from and after the Reserve Account Funding
Date, but prior to the date on which the Reserve Account terminates as described
in Section 4.15(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;
(j) an amount equal to the amounts determined to be payable pursuant to
subsections 2.11(a)(ii) and (iii) of the Loan Agreement shall be paid to the
Collateral Interest Holder; and
(k) the balance, if any, after giving effect to the payments made
pursuant to subparagraphs (a) through (j) above shall constitute "Shared Excess
Finance Charge Collections" with respect to other Series in Group One.
To the extent of the Finance Charge Shortfall, if any, following the
application on each Transfer Date of Shared Excess Spread as described above,
the servicer shall instruct the Trustee in writing (which writing shall be
substantially in the form of Exhibit B hereto) to apply Shared Excess Finance
Charge Collections with respect to Group One allocable to Series 1998-5 in the
priority set forth above.
37
SECTION IV.9. Reallocated Principal Collections. On or before each
Transfer Date, the Servicer shall instruct the Trustee in writing (which writing
shall be substantially in the form of Exhibit B hereto) to withdraw from the
Principal Account and apply Reallocated Principal Collections (applying all
Reallocated Collateral Principal Collections in accordance with subsections
4.12(a) and (b) prior to applying any Reallocated Class B Principal Collections
in accordance with subsection 4.12(a) for any amounts still owing after the
application of Reallocated Collateral Principal Collections) with respect to
such Transfer Date, to make the following distributions on each Transfer Date in
the following priority:
(a) an amount equal to the excess, if any, of (i) the Class A Required
Amount, if any, with respect to such Transfer Date over (ii) the amount of
Excess Spread with respect to the related Monthly Period, shall be applied
pursuant to the priority set forth in subsection 4.9(a); and
(b) an amount equal to the excess, if any, of (i) the Class B Required
Amount, if any, with respect to such Transfer Date over (ii) the amount of
Excess Spread allocated and available to the Class B Certificates pursuant to
subsection 4.11(c) on such Transfer Date shall be applied first pursuant to the
priority set forth in subsection 4.9(b) and then pursuant to subsection 4.11(c).
(c) On each Transfer Date, the Collateral Interest shall be reduced by
the amount of Reallocated Collateral Principal Collections and by the amount of
Reallocated Class B Principal Collections for such Transfer Date. In the event
that such reduction would cause the Collateral Interest (after giving effect to
any Collateral Charge-Offs for such Transfer Date) to be a negative number, the
Collateral Interest (after giving effect to any Collateral Charge-Offs for such
Transfer Date) shall be reduced to zero and the Class B Investor Interest shall
be reduced by the amount by which the Collateral Interest would have been
reduced below zero. In the event that the reallocation of Reallocated Principal
Collections would cause the Class B Investor Interest (after giving effect to
any Class B Investor Charge-Offs for such Transfer Date) to be a negative number
on any Transfer Date, Reallocated Principal Collections shall be reallocated on
such Transfer Date in an aggregate amount not to exceed the amount which would
cause the Class B Investor Interest (after giving effect to any Class B Investor
Charge-Offs for such Transfer Date) to be reduced to zero.
SECTION IV.10. Shared Principal Collections.
(a) The portion of Shared Principal Collections on deposit in the
Principal Account equal to the amount of Shared Principal Collections allocable
to Series 1998-5 on any Transfer Date shall be applied as Available Investor
Principal Collections pursuant to Section 4.9 and pursuant to such Section 4.9
shall be
38
deposited in the Distribution Account or distributed in accordance with the
Loan Agreement.
(b) Shared Principal Collections allocable to Series 1998-5 with
respect to any Transfer Date shall mean an amount equal to the Series Principal
Shortfall, if any, with respect to Series 1998-5 for such Transfer Date;
provided, however, that if the aggregate amount of Shared Principal Collections
for all Series for such Transfer Date is less than the Cumulative Series
Principal Shortfall for such Transfer Date, then Shared Principal Collections
allocable to Series 1998-5 on such Transfer Date shall equal the product of (i)
Shared Principal Collections for all Series for such Transfer Date and (ii) a
fraction, the numerator of which is the Series Principal Shortfall with respect
to Series 1998-5 for such Transfer Date and the denominator of which is the
aggregate amount of Cumulative Series Principal Shortfall for all Series for
such Transfer Date.
SECTION IV.11. Principal Funding Account.
(a) The Trustee shall establish and maintain, in the name of the Trust,
on behalf of the Trust, for the benefit of the Investor Certificateholders, 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 Investor Certificateholders. 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
Investor Certificateholders. If at any time the Principal Funding Account ceases
to be an Eligible Deposit Account, the Transferor shall notify the Trustee, and
the Trustee upon being notified (or the Servicer on its behalf) shall, within 10
Business Days, establish a new Principal Funding Account meeting the conditions
specified in the definition of Eligible Deposit Account, and shall transfer any
cash or any investments to such new Principal Funding Account. The Trustee, at
the direction of the Servicer, shall (i) make withdrawals from the Principal
Funding Account from time to time, in the amounts and for the purposes set forth
in this Series Supplement, and (ii) on each Transfer Date (from and after the
commencement of the Controlled Accumulation Period) prior to termination of the
Principal Funding Account make a deposit into the Principal Funding Account in
the amount specified in, and otherwise in accordance with, subsection 4.9(e).
(b) Funds on deposit in the Principal Funding Account shall be invested
at the direction of the Servicer by the Trustee in Permitted Investments. Funds
on deposit in the Principal Funding Account on any Transfer Date, after giving
effect to any withdrawals from the Principal Funding 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
39
the next succeeding Transfer Date. The Trustee shall maintain for the benefit of
the Investor Certificateholders possession of the negotiable instruments or
securities, if any, evidencing such Permitted Investments. No Permitted
Investment shall be disposed of prior to its maturity.
On the Transfer Date occurring in the month following the commencement
of the Controlled Accumulation Period and on each Transfer Date thereafter with
respect to the Controlled Accumulation Period, the Trustee, acting at the
Servicer's direction given on or before such Transfer Date, shall transfer from
the Principal Funding Account to the Finance Charge Account the Principal
Funding Investment Proceeds on deposit in the Principal Funding Account, but not
in excess of the Covered Amount, for application as Class A Available Funds
applied pursuant to subsection 4.9(a)(i).
Any Excess Principal Funding Investment Proceeds shall be paid to the
Transferor on each Transfer Date. An amount equal to any Principal Funding
Investment Shortfall shall be deposited in the Finance Charge Account on each
Transfer Date from the Reserve Account to the extent funds are available
pursuant to subsection 4.15(d). Principal Funding Investment Proceeds (including
reinvested interest) shall not be considered part of the amounts on deposit in
the Principal Funding Account for purposes of this Series Supplement.
SECTION IV.12. Reserve Account.
(a) The Trustee shall establish and maintain, on behalf of the Trust,
for the benefit of the Investor Certificateholders, an Eligible Deposit Account
(the "Reserve Account"), bearing a designation clearly indicating that the funds
deposited therein are held for the benefit of the Investor Certificateholders.
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 Investor Certificateholders. If at any time the institution
holding the Reserve Account ceases to be an Eligible Deposit Account, the
Transferor shall notify the Trustee, and the Trustee upon being notified (or the
Servicer on its behalf) shall, within 10 Business Days, establish a new Reserve
Account meeting the conditions specified in the definition of 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 Series Supplement, and (ii) on each Transfer Date (from and after the
Reserve Account Funding Date) prior to termination of the Reserve Account make a
deposit into the Reserve Account in the amount specified in, and otherwise in
accordance with, subsection 4.11(i).
40
(b) Funds on deposit in the Reserve Account shall be invested at the
direction of the Servicer by the Trustee in Permitted 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 next succeeding Transfer Date. The Trustee shall
maintain for the benefit of the Investor Certificateholders possession of the
negotiable instruments or securities, if any, evidencing such Permitted
Investments. No Permitted Investment shall be disposed of prior to its maturity.
On each Transfer Date, all interest and earnings (net of losses and investment
expenses) accrued since the preceding Transfer 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 into the Finance Charge
Account and included in Class A Available Funds for such Transfer Date. For
purposes of determining the availability of funds or the balance in the Reserve
Account for any reason under this Series 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 or before each Transfer Date with respect to the Controlled
Accumulation Period prior to the payment in full of the Class A Investor
Interest and on or before the first Transfer Date with respect to the Rapid
Amortization Period, the Servicer shall calculate the "Reserve Draw Amount"
which shall be equal to the Principal Funding Investment Shortfall with respect
to each Transfer Date with respect to the Controlled Accumulation Period or the
first Transfer Date with respect to the Rapid Amortization Period; provided,
however, that such amount will be reduced to the extent that funds otherwise
would be available for deposit in the Reserve Account under Section 4.11(i) with
respect to such Transfer Date.
(d) In the event that for any Transfer 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 such Transfer Date by the
Trustee (acting in accordance with the instructions of the Servicer), deposited
into the Finance Charge Account and included in Class A Available Funds for such
Transfer Date.
(e) In the event that the Reserve Account Surplus on any Transfer Date,
after giving effect to all deposits to and withdrawals from the Reserve Account
with respect to such Transfer Date, is greater than zero, the Trustee, acting in
accordance with the instructions of the Servicer, shall withdraw from the
Reserve Account, and pay in accordance with the Loan Agreement, an amount equal
to such Reserve Account Surplus.
41
(f) Upon the earliest to occur of (i) the termination of the Trust
pursuant to Article XII of the Agreement, (ii) if the Controlled Accumulation
Period has not commenced, the first Transfer Date relating to the Rapid
Amortization Period and (iii) if the Controlled Accumulation Period has
commenced, the earlier of the first Transfer Date with respect to the Rapid
Amortization Period and the Transfer Date immediately preceding the Class A
Scheduled Payment Date, the Trustee, acting in accordance with the instructions
of the Servicer, after the prior payment of all amounts owing to the Series
1998-5 Certificateholders that are payable from the Reserve Account as provided
herein, shall withdraw from the Reserve Account and pay in accordance with the
Loan Agreement, all amounts, if any, on deposit in the Reserve Account and the
Reserve Account shall be deemed to have terminated for purposes of this Series
Supplement.
SECTION IV.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 (except that, for the purpose of
determining LIBOR, the initial Interest Period shall be one month) 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. 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.
(b) The Trustee shall provide the Class A Certificate Rate and the
Class B Certificate Rate applicable to the then current and immediately
preceding Interest Periods to any Investor Certificateholder requesting such
information by telephoning the Trustee at the telephone number which is
currently (000) 000-0000.
(c) On each LIBOR Determination Date prior to 12:00 noon New York City
time, the Trustee shall send to the Servicer by facsimile notification of LIBOR
for the following Interest Period.
42
SECTION IV.14. Transferor's or Servicer's Failure to Make a Deposit or
Payment.
If the Servicer or the Transferor fails to make, or give instructions
to make, any payment or deposit (other than as required by subsections 2.4(d)
and (e) and 12.2(a) or Sections 10.2 and 12.1) required to be made or given by
the Servicer or Transferor, respectively, at the time specified in the Agreement
(including applicable grace periods), the Trustee shall make such payment or
deposit from the applicable Investor Account without instruction from the
Servicer or Transferor. The Trustee shall be required to make any such payment,
deposit or withdrawal hereunder only to the extent that the Trustee has
sufficient information to allow it to determine the amount thereof; provid ed,
however, that the Trustee shall in all cases be deemed to have sufficient
information to determine the amount of interest payable to the Series 1998-5
Certificateholders on each Distribution Date. The Servicer shall, upon request
of the Trustee, promptly provide the Trustee with all information necessary to
allow the Trustee to make such payment, deposit or withdrawal. Such funds or the
proceeds of such withdrawal shall be applied by the Trustee in the manner in
which such payment or deposit should have been made by the Transferor or the
Servicer, as the case may be.
SECTION IV.15. Article V of the Agreement. Article V of the Agreement
shall read in its entirety as follows and shall be applicable only to the
Investor Certificateholders:
ARTICLE V
DISTRIBUTIONS AND REPORTS TO INVESTOR
CERTIFICATEHOLDERS
SECTION V.1. Distributions. (a) On each Distribution Date, the Trustee
shall distribute (in accordance with the certificate delivered on or before the
related Transfer Date by the Servicer to the Trustee pursuant to subsection
3.4(b)) to each Class A Certificateholder of record on the immediately preceding
Record Date (other than as provided in subsection 2.4(e) or Section 12.3
respecting a final distribution) such Certificateholder's pro rata share (based
on the aggregate Undivided Interests represented by Class A Certificates held by
such Certificateholder) of amounts on deposit in the Distribution Account as are
payable to the Class A Certificateholders pursuant to Section 4.9 by check
mailed to each Class A Certificateholder (at such Certificateholder's address as
it appears in the Certificate Register), except that with respect to Class A
Certificates registered in the name of the nominee of a Clearing Agency, such
distribution shall be made in immediately available funds.
43
(b) On each Distribution Date, the Trustee shall distribute (in
accordance with the certificate delivered on or before the related Transfer Date
by the Servicer to the Trustee pursuant to subsection 3.4(b)) to each Class B
Certificateholder of record on the immediately preceding Record Date (other than
as provided in subsection 2.4(e) or Section 12.3 respecting a final
distribution) such Certificateholder's pro rata share (based on the aggregate
Undivided Interests represented by Class B Certificates held by such
Certificateholder) of amounts on deposit in the Distribution Account as are
payable to the Class B Certificateholders pursuant to Section 4.9 by check
mailed to each Class B Certificateholder (at such Certificateholder's address as
it appears in the Certificate Register), except that with respect to Class B
Certificates registered in the name of the nominee of a Clearing Agency, such
distribution shall be made in immediately available funds.
SECTION V.2. Monthly Series 1998-5 Certificateholders' Statement.
(a) On or before each Distribution Date, the Trustee shall forward to
each Series 1998-5 Certificateholder, each Rating Agency and the Collateral
Interest Holder a statement substantially in the form of Exhibit C to this
Series Supplement prepared by the Servicer, delivered to the Trustee and setting
forth, among other things, the following information (which, in the case of
subclauses (i) and (ii) below, shall be stated on the basis of an original
principal amount of $1,000 per Certificate and, in the case of subclauses (viii)
and (ix) shall be stated on an aggregate basis and on the basis of an original
principal amount of $1,000 per Certificate, as applicable):
(i) the amount of the current distribution allocable to Class A Monthly
Principal, Class B Monthly Principal and Collateral Monthly Principal,
respectively;
(ii) the amount of the current distribution allocable to Class A
Monthly Interest, Class A Deficiency Amounts, Class A Additional Interest,
Class B Monthly Interest, Class B Deficiency Amounts, Class B Additional
Interest and Collateral Monthly Interest, and any accrued and unpaid
Collateral Monthly Interest, respectively;
(iii) the amount of Collections of Principal Receivables processed
during the related Monthly Period and allocated in respect of the Class A
Certificates, the Class B Certificates and the Collateral Interest,
respectively;
(iv) the amount of Collections of Finance Charge Receivables processed
during the related Monthly Period and allocated in respect of the Class A
Certificates, the Class B Certificates and the Collateral Interest,
respectively;
44
(v) the aggregate amount of Principal Receivables, the Investor
Interest, the Adjusted Investor Interest, the Class A Investor Interest, the
Class A Adjusted Investor Interest, the Class B Investor Interest, the
Collateral Interest, the Floating Investor Percentage, the Class A Floating
Allocation, the Class B Floating Allocation, the Collateral Floating
Allocation and the Fixed Investor Percentage, Class A Fixed Allocation, the
Class B Fixed Allocation and the Collateral Fixed Allocation with respect to
the Principal Receivables in the Trust as of the close of business on the
Distribution Date preceding such Transfer Date (after giving effect to all
of the transactions occurring on such date);
(vi) the aggregate outstanding balance of Accounts which were 30 to 59,
60 to 89, and 90 or more days delinquent as of the end of the day on the
Record Date;
(vii) the Aggregate Investor Default Amount, the Class A Investor
Default Amount, the Class B Investor Default Amount and the Collateral
Default Amount for the related Monthly Period;
(viii) the aggregate amount of Class A Investor Charge-Offs, Class B
Investor Charge-Offs and Collateral Charge-Offs for the related Monthly
Period;
(ix) the aggregate amount of Class A Investor Charge-Offs, Class B
Investor Charge-Offs and Collateral Charge-Offs reimbursed on the Transfer
Date immediately preceding such Distribution Date;
(x) the amount of the Class A Servicing Fee, the Class B Servicing Fee
and the Collateral Servicing Fee for the related Monthly Period;
(xi) the Portfolio Yield for the preceding Monthly Period;
(xii) the amount of Reallocated Collateral Principal Collections and
Reallocated Class B Principal Collections with respect to such Distribution
Date;
(xiii) the Class B Investor Interest and the Collateral Interest as of
the close of business on such Distribution Date;
(xiv) LIBOR for the Interest Period ending on such Distribution Date;
(xv) the Principal Funding Account Balance on the Transfer Date;
(xvi) the Accumulation Shortfall;
45
(xvii) the Principal Funding Investment Proceeds transferred to the
Finance Charge Account on the related Transfer Date;
(xviii) the Principal Funding Investment Shortfall on the related
Transfer Date;
(xix) the amount of Class A Available Funds and Class B Available Funds
on deposit in the Finance Charge Account on the related Transfer Date;
(xx) the current Class A Certificate Rate, Class B Certificate Rate and
Collateral Rate; and
(xxi) such other items as are set forth in Exhibit C to this Series
Supplement.
(b) Annual Certificateholders' Tax Statement. On or before January 31
of each calendar year, beginning with calendar year 1999, the Trustee shall
distribute to each Person who at any time during the preceding calendar year was
a Series 1998-5 Certificateholder, a statement prepared by the Servicer
containing the information required to be contained in the regular monthly
report to Series 1998-5 Certificateholders, as set forth in subclauses (i) and
(ii) above, aggregated for such calendar year or the applicable portion thereof
during which such Person was a Series 1998-5 Certificateholder, together with
such other customary information (consistent with the treatment of the
Certificates as debt) as the Servicer deems necessary or desirable to enable the
Series 1998-5 Certificateholders to prepare their tax returns. Such obligations
of the Trustee shall be deemed to have been satisfied to the extent that
substantially comparable information shall be provided by the Trustee pursuant
to any requirements of the Internal Revenue Code as from time to time in effect.
SECTION V.3. Series 1998-5 Pay Out Events. If any one of the following
events shall occur with respect to the Investor Certificates:
(a) failure on the part of the Transferor (i) to make any payment or
deposit required by the terms of (A) the Agreement or (B) this Series
Supplement, on or before the date occurring five days after the date such
payment or deposit is required to be made herein or (ii) duly to observe or
perform in any material respect any covenants or agreements of the Transferor
set forth in the Agreement or this Series Supplement, which failure has a
material adverse effect on the Series 1998-5 Certificateholders (which
determination shall be made without reference to the amount of the Collateral
Interest) 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, or to the Transferor and
the Trustee by the Holders of Investor Certificates evidencing
46
Undivided Interests aggregating not less than 50% of the Investor Interest of
this Series 1998-5, and continues to affect materially and adversely the
interests of the Series 1998-5 Certificateholders (which determination shall be
made without reference to the amount of the Collateral Interest) for such
period;
(b) any representation or warranty made by the Transferor in the
Agreement or this Series 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 2.6, (i) shall prove to have been incorrect in any material
respect when made or when delivered, which continues to be incorrect in any
material respect for a period of 60 days after the date on which written notice
of such failure, requiring the same to be remedied, shall have been given to the
Transferor by the Trustee, or to the Transferor and the Trustee by the Holders
of Investor Certificates evidencing Undivided Interests aggregating not less
than 50% of the Investor Interest of this Series 1998-5, and (ii) as a result of
which the interests of the Series 1998-5 Certificateholders are materially and
adversely affected (which determination shall be made without reference to the
amount of the Collateral Interest) and continue to be materially and adversely
affected for such period; provided, however, that a Series 1998-5 Pay Out Event
pursuant to this subsection 9(b) hereof shall not be deemed to have occurred
hereunder if the Transferor has accepted reassignment of the related Receivable,
or all of such Receivables, if applicable, during such period in accordance with
the provisions of the Agreement;
(c) the average Portfolio Yield for any three consecutive Monthly
Periods is reduced to a rate which is less than the average Base Rate for such
period;
(d) the Transferor shall fail to convey Receivables arising under
Additional Accounts, or Participations, to the Trust, as required by subsection
2.6(a);
(e) any Servicer Default shall occur which would have a material
adverse effect on the Series 1998-5 Certificateholders; or
(f) the Class A Investor Interest shall not be paid in full on the
Class A Scheduled Payment Date or the Class B Investor Interest shall not be
paid in full on the Class B Scheduled Payment Date;
then, in the case of any event described in subsection 9(a), (b) or (e) hereof,
after the applicable grace period set forth in such subparagraphs, either the
Trustee or Holders of Investor Certificates and the Collateral Interest Holder
evidencing Undivided Interests aggregating not less than 50% of the Investor
Interest of this Series 1998-5 by notice then given in writing to
47
the Transferor and the Servicer (and to the Trustee if given by the
Certificateholders) may declare that a pay out event (a "Series 1998-5 Pay Out
Event") has occurred as of the date of such notice, and in the case of any event
described in subsection 9(c), (d) or (f) hereof, a Series 1998-5 Pay Out Event
shall occur without any notice or other action on the part of the Trustee or the
Investor Certificateholders immediately upon the occurrence of such event.
SECTION V.4. Issuance of Additional Certificates.
(a) During the Revolving Period, the Transferor may, in its discretion
and subject to the terms of subsection (b) below, request the Trustee to issue
additional Investor Certificates of each Class (all such additional
certificates, the "Additional Certificates") in an amount and on the date (the
"Additional Certificate Date") determined by the Transferor. Upon issuance, the
Additional Certificates will be identical in all respects (except that the
principal amount of such Additional Certificates may be different) to the
Investor Certificates currently outstanding and will be equally and ratably
entitled to the benefits of this Series Supplement and the Pooling and Servicing
Agreement. The outstanding principal amounts of all Classes of Investor
Certificates shall be increased pro rata. The Controlled Accumulation Amount for
each Class shall be increased proportionally to reflect the additional amounts
represented by the Additional Certificates.
(c) Additional Certificates shall only be issued upon satisfaction of
all of the following conditions:
(i) On or before the fifth Business Day imme diately preceding the date
on which the Additional Certificates are to be issued, the Transferor shall
give notice to the Trustee, the Servicer, the Collateral Interest Holder and
the Rating Agencies of such issuance and the date upon which it is to occur;
(ii) After giving effect to the Additional Certificates, the total
amount of Principal Receivables in the Trust shall be greater than or equal
to the Minimum Aggregate Principal Receivables;
(iii) The Transferor shall have delivered evidence of the proportional
increase in the Collateral Interest to the Trustee and the Rating Agencies;
(iv) On or before the Additional Certificate Date, the Trustee shall
have been provided evidence that the Rating Agency Condition shall have been
satisfied with respect to such issuance;
(v) The Transferor shall have delivered to the Trustee an Officer's
Certificate dated as of the Additional
48
Certificate Date, stating that the Transferor reasonably believes that the
issuance of such Additional Certificates will not have a material adverse
effect on any outstanding Class of Investor Certificates;
(vi) As of the Additional Certificate Date, the amount of Investor
Charge-Offs for all Classes of Investor Certificates shall be zero; and
(vii) The Transferor shall have delivered to the Trustee a Tax Opinion
with respect to such issuance.
SECTION V.5. Series 1998-5 Termination. The right of the Investor
Certificateholders to receive payments from the Trust will terminate on the
first Business Day following the Series 1998-5 Termination Date.
SECTION V.6. Counterparts. This Series Supplement may be executed in
any number of counterparts, each of which so executed shall be deemed to be an
original, but all of such counterparts shall together constitute but one and the
same instrument.
SECTION V.7. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS, AND WITHOUT,
LIMITING THE GENERALITY OF THE FOREGOING, THE IMMUNITY AND STANDARD OF CARE OF
THE TRUSTEE IN THE ADMINISTRATION OF THE TRUST HEREUNDER SHALL BE GOVERNED BY
THE LAWS OF THE STATE OF NEW YORK.
SECTION V.8. No Petition. The Transferor, the Servicer and the Trustee,
by entering into this Series Supplement and each Certificateholder, by accepting
a Series 1998-5 Certificate hereby covenant and agree that they will not at any
time institute against the Trust, or join in any institution against the Trust
of, any bankruptcy proceedings under any United States Federal or state
bankruptcy or similar law in connection with any obligations relating to the
Investor Certificateholders, the Agreement or this Series Supplement.
SECTION V.9. Tax Representation and Covenant. Any Collateral Interest
Holder shall be required to represent and covenant in connection with such
acquisition that (x) it has neither acquired, nor will it sell, trade or
transfer any interest in the Trust or cause any interest in the Trust to be
marketed on or through an "established securities market" within the meaning of
Code section 7704(b)(1), including without limitation an interdealer quotation
system that regularly disseminates firm buy or sell quotations by identified
brokers or dealers by electronic means or otherwise, (y) unless the Transferor
consents otherwise, such holder (i) is properly classified as, and will remain
classified as, a "corporation" as
49
described in Code section 7701(a)(3) and (ii) is not, and will not become, an S
corporation as described in Code section 1361, and (z) it will (i) cause any
participant with respect to such interest otherwise permitted hereunder to make
similar representations and covenants for the benefit of the Transferor and the
Trust and (ii) forward a copy of such representations and covenants to the
Trustee. Each such holder shall further agree in connection with its acquisition
of such interest that, in the event of any breach of its (or its participant's)
representation and covenant that it (or its participant) is and shall remain
classified as a corporation other than an S corporation, the Transferor shall
have the right to procure a replacement investor to replace such holder (or its
participant), and further that such holder shall take all actions necessary to
permit such replacement investor to succeed to its rights and obligations as a
holder (or to the rights of its participant).
SECTION V.10. Amendment to Agreement. By purchasing their Series 1998-5
Certificates each Investor Certificateholder shall be deemed to have consented
that The Chase Manhattan Bank shall be replaced as Servicer with The Chase
Manhattan Bank USA, National Association, as a successor servicer pursuant to an
amendment of the Agreement to be executed at such time as shall be agreed to by
the parties thereto.
50
IN WITNESS WHEREOF, the Transferor, the Servicer and the Trustee have
caused this Series 1998-5 Supplement to be duly executed by their respective
officers as of the day and year first above written.
CHASE MANHATTAN BANK USA,
NATIONAL ASSOCIATION
Transferor on and after June 1, 1996
By: /s/ Xxxxx Xxxxxx
------------------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
THE CHASE MANHATTAN BANK,
Transferor prior to June 1, 1996
and Servicer
By: /s/ Xxxxxxx Xxxxxx
------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Vice President
THE BANK OF NEW YORK,
Trustee
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
EXHIBIT A-1
FORM OF CERTIFICATE
CLASS A
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO CHASE MANHATTAN
BANK USA, NATIONAL ASSOCIATION, OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR IN SUCH OTHER NAME AS 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 CHASE
MANHATTAN BANK USA, NATIONAL ASSOCIATION, THAT UNLESS SUCH PURCHASER, AT ITS
EXPENSE, DELIVERS TO THE TRUSTEE, THE SERVICER AND THE TRANSFEROR AN OPINION OF
COUNSEL SATISFACTORY TO THEM TO THE EFFECT THAT THE PURCHASE OR HOLDING OF THIS
CERTIFICATE BY SUCH PURCHASER WILL NOT RESULT IN THE ASSETS OF THE TRUST BEING
DEEMED TO BE "ASSETS OF THE BENEFIT PLAN" OR SUBJECT TO THE PROHIBITED
TRANSACTION PROVISIONS OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974,
AS AMENDED ("ERISA")AND THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE") AND WILL NOT SUBJECT THE TRUSTEE, THE TRANSFEROR OR THE SERVICER TO ANY
OBLIGATION IN ADDITION TO THOSE UNDERTAKEN IN THE POOLING AND SERVICING
AGREEMENT, SUCH PURCHASER IS NOT (I) AN EMPLOYEE BENEFIT PLAN (AS DEFINED IN
SECTION 3(3) ERISA) THAT IS SUBJECT TO THE PROVISIONS OF TITLE I OF ERISA, (II)
A PLAN DESCRIBED IN SECTION 4975(E)(1) OF THE CODE, OR (III) AN ENTITY WHOSE
UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF A PLAN'S INVESTMENT IN THE
ENTITY.
A-1-2
No. ___ $_________
CUSIP NO.16157PAY3
CHASE CREDIT CARD MASTER TRUST
CLASS A FLOATING RATE
ASSET BACKED CERTIFICATE, SERIES 1998-5
Evidencing an Undivided Interest in a trust, the corpus of which consists of a
portfolio of MasterCard(R) and VISA(R)(1) credit card receivables generated or
acquired by Chase Manhattan Bank USA, National Association ("Chase USA") and
other assets and interests constituting the Trust under the Pooling and
Servicing Agreement described below.
(Not an interest in or obligation of
Chase USA
or any Affiliate thereof.)
This certifies that CEDE & CO. (the "Class A Certifi
cateholder") is the registered owner of an Undivided Interest in a trust (the
"Trust"), the corpus of which consists of a portfolio of receivables (the
"Receivables") now existing or hereafter created and arising in connection with
selected MasterCard and VISA credit card accounts (the "Accounts") of Chase USA,
all monies due or to become due in payment of the Receivables (including all
Finance Charge Receivables), the right to certain amounts received as
Interchange and Recoveries (if any), the benefits of the Collateral Interest,
all proceeds of the foregoing and the other assets and interests constituting
the Trust pursuant to the Second Amended and Restated Pooling and Servicing
Agreement dated as of September 1, 1996 as supplemented by the Series 1998-5
Supplement dated as of September 24, 1998 (collectively, the "Pooling and
Servicing Agreement"), by and among Chase USA, as Transferor on and after June
1, 1996, The Chase Manhattan Bank, as Transferor prior to June 1, 1996 and as
Servicer, and The Bank of New York, as Trustee (the "Trustee"). To the extent
not defined herein, capitalized terms used herein have the respective meanings
assigned to them in the Pooling and Servicing Agreement.
The Series 1998-5 Certificates are issued in two classes, the
Class A Certificates (of which this certificate is one) and the Class B
Certificates, which are subordinated to the Class A Certificates in certain
rights of payment as described herein and in the Pooling and Servicing
Agreement.
--------
(1) MasterCard(R) and VISA(R) are federally registered servicemarks
of MasterCard International Inc. and of Visa U.S.A., Inc.,
respectively.
A-1-3
The Transferor has structured the Pooling and Servicing
Agreement and the Series 1998-5 Certificates with the intention that the Series
1998-5 Certificates will qualify under applicable tax law as indebtedness, and
each of the Transferor, the Holder of the Transferor Certificate, the Servicer
and each Series 1998-5 Certificateholder (or Series 1998-5 Certificate Owner) by
acceptance of its Series 1998-5 Certificate (or in the case of a Series 1998-5
Certificate Owner, by virtue of such Series 1998-5 Certificate Owner's
acquisition of a beneficial interest therein), agrees to treat and to take no
action inconsistent with the treatment of the Series 1998-5 Certificates (or any
beneficial interest therein) as indebtedness for purposes of federal, state,
local and foreign income or franchise taxes and any other tax imposed on or
measured by income. Each Series 1998-5 Certificateholder agrees that it will
cause any Series 1998-5 Certificate Owner acquiring an interest in a Series
1998-5 Certificate through it to comply with the Pooling and Servicing Agreement
as to treatment of the Series 1998-5 Certificates as indebtedness for certain
tax purposes.
This Class A Certificate is issued under and is subject to the
terms, provisions and conditions of the Pooling and Servicing Agreement, to
which Pooling and Servicing Agreement, as amended from time to time, the Class A
Certificateholder by virtue of the acceptance hereof assents and by which the
Class A Certificateholder is bound. This Class A Certificate is one of a duly
authorized Series of Investor Certificates entitled "Class A Floating Rate Asset
Backed Certificates, Series 1998-5" (the "Class A Certificates"), each of which
represents an Undivided Interest in the Trust, including the right to receive
the Collections and other amounts allocated to the Class A Certificates at the
times and in the amounts specified in the Pooling and Servicing Agreement and to
be deposited in the Investor Accounts, the Principal Funding Account and the
Reserve Account or paid to the Class A Certificateholders.
Also issued under the Pooling and Servicing Agreement are the
"Class B Floating Rate Asset Backed Certificates, Series 1998-5" (the "Class B
Certificates"), which represent an Undivided Interest in the Trust subordinate
to the Class A Certificates, and the "Collateral Interest, Series 1998-5" (the
"Collateral Interest" and collectively with the Class A Certificates and the
Class B Certificates, the "Investor Certificates"), which is an undivided
interest in the Trust subordinated to the Class A Certificates and Class B
Certificates. The subordination of the Class B Certificates and the
subordination of the Collateral Interest to the Class A Certificates shall
constitute the Enhancement for the Class A Certificates.
The aggregate interest represented by the Class A Certificates
and the Class B Certificates at any time in the Principal Receivables in the
Trust shall not exceed an amount equal to the Class A Investor Interest and the
Class B Investor
A-1-4
Interest, respectively, at such time. As of the Closing Date, the Class A
Initial Investor Interest is $650,000,000, the Class B Initial Investor Interest
is $54,166,000 and the Collateral Initial Interest is $69,643,524.
The Class A Investor Interest on any date of determination
will be an amount equal to (a) the Class A Initial Investor Interest minus (b)
the aggregate amount of payments of principal made to the Class A
Certificateholders prior to such date of determination, and minus (c) the
excess, if any, of the aggregate amount of Class A Investor Charge-Offs pursuant
to subsection 4.10(a) of the Pooling and Servicing Agreement over Class A
Investor Charge-Offs reimbursed prior to such date of determination pursuant to
subsection 4.11(b) of the Pooling and Servicing Agreement; provided, however,
that the Class A Investor Interest may not be reduced below zero.
For the purpose of allocating Collections of Finance Charge
Receivables and Receivables in Defaulted Accounts for each Monthly Period during
the Controlled Accumulation Period, the Class A Investor Interest will be
further reduced (such reduced amount, the "Class A Adjusted Investor Interest")
by the aggregate principal amount of funds on deposit in the Principal Funding
Account. The Class A Investor Interest together with the aggregate interest
represented by the Class B Certificates in the Principal Receivables in the
Trust (the "Class B Investor Interest") and the aggregate interest represented
by the Collateral Interest in the Principal Receivables in the Trust are
sometimes collectively referred to herein as the "Investor Interest."
In addition to the Class A Certificates, the Class B
Certificates and the Collateral Interest, a Transferor Certificate representing
an undivided interest in the Trust will be issued to the Transferor pursuant to
the Pooling and Servicing Agreement. The Transferor Certificate will represent
the interest in the Principal Receivables not represented by all of the Series
of Investor Certificates issued by the Trust. The Transferor Certificate may be
exchanged by the Transferor pursuant to the Pooling and Servicing Agreement for
a newly issued Series of Investor Certificates and a reissued Transferor
Certificate upon the conditions set forth in the Pooling and Servicing
Agreement.
Interest will accrue on the Class A Certificates from the
Closing Date through November 15, 1998, and with respect to each Interest Period
thereafter, at the rate of LIBOR plus 0.16% per annum, as more specifically set
forth in the Pooling and Servicing Agreement (the "Class A Certificate Rate"),
and will be distributed on November 16, 1998 and on the 15th day of each
calendar month thereafter, or if such day is not a Business Day, on the next
succeeding Business Day (a "Distribution Date"), to the Class A
Certificateholders of record as of the last Business Day of the calendar month
preceding such Distribution Date (the
A-1-5
"Record Date"). During the Rapid Amortization Period, in addition to Class A
Monthly Interest, Class A Monthly Principal will be distributed to the Class A
Certificateholder on each Distribution Date until the Class A Certificates have
been paid in full. During the Controlled Accumulated Period, in addition to
monthly payments of Class A Monthly Interest, the amount on deposit in the
Principal Funding Account will be distributed as principal to the Class A
Certificateholders on the September 2003 Distribution Date (the "Class A
Scheduled Payment Date"), unless distributed earlier as a result of the
occurrence of a Pay Out Event in accordance with the Pooling and Servicing
Agreement.
On or before each Transfer Date, the Servicer shall instruct
the Trustee in writing to withdraw and the Trustee, acting in accordance with
such instructions, shall withdraw on such Transfer Date, from the Finance Charge
Account to the extent of funds on deposit therein (i) Collections of Finance
Charge Receivables processed as of the end of the preceding Monthly Period which
have been allocated to the Series 1998-5 Certificates, (ii) with respect to the
Class A Certificates, from other amounts constituting Class A Available Funds,
and (iii) with respect to the Class B Certificates, from other amounts
constituting Class B Available Funds, the following amounts: (x) an amount equal
to the product of (i) (A) a fraction, the numerator of which is the actual
number of days in the related Interest Period and the denominator of which is
360, times (B) the Class A Certificate Rate for such Interest Period and (ii)
the outstanding principal balance of the Class A Certificates determined as of
the close of business on the Distribution Date preceding the related Transfer
Date (after giving effect to all of the transactions occurring on such date)
("Class A Monthly Interest"), provided, however, that with respect to the first
Distribution Date, Class A Monthly Interest shall be equal to the interest
accrued on the Class A Initial Investor Interest at the applicable Class A
Certificate Rate for the period from the Closing Date through November 15, 1998;
and (y) amounts up to the Class B Monthly Interest followed by the Collateral
Monthly Interest, in the actual amounts and manner described in the Pooling and
Servicing Agreement.
On each Transfer Date, the Trustee shall apply the Class A
Available Funds withdrawn from the Finance Charge Account, as required by the
Pooling and Servicing Agreement, in the following order of priority: (i) an
amount equal to the Class A Monthly Interest for such Transfer Date, plus the
amount of any Class A Deficiency Amount for such Transfer Date, plus the amount
of any Class A Additional Interest for such Transfer Date, (ii) an amount equal
to the Class A Servicing Fee for such Transfer Date plus the amount of any Class
A Servicing Fee due but not paid on any prior Transfer Date and (iii) an amount
equal to the Class A Investor Default Amount, if any, for the preceding Monthly
Period. The Trustee on each Transfer Date shall apply the Class B Available
Funds withdrawn from the Finance Charge Account as required by the Pooling and
Servicing Agreement in the
A-1-6
following order of priority: (i) the Class B Monthly Interest for such Transfer
Date, plus the amount of any Class B Deficiency Amount for such Transfer Date,
plus the amount of any Class B Additional Interest for such Transfer Date, and
(ii) the Class B Servicing Fee for such Transfer Date plus the amount of any
Class B Servicing Fee due but not paid on any prior Transfer Date. The balance
of the amount withdrawn from the Finance Charge Account allocable to the Series
1998-5 Certificates, if any, after giving effect to the applications above shall
constitute "Excess Spread."
On or before the Transfer Date immediately succeeding the
Monthly Period in which the Controlled Accumulated Period or the Rapid
Amortization Period commences and on or before each Transfer Date thereafter,
the Servicer shall instruct the Trustee in writing to withdraw, and the Trustee,
acting in accordance with such instructions, shall withdraw on such Transfer
Date from the Principal Account an amount equal to the Available Investor
Principal Collections on deposit in the Principal Account and from such amounts,
(A) deposit an amount equal to Class A Monthly Principal (i) during the
Controlled Accumulation Period, into the Principal Funding Account, and (ii)
during the Rapid Amortization Period, into the Distribution Account, (B) after
the Class A Certificates have been paid in full, deposit an amount equal to
Class B Monthly Principal into the Distribution Account, and (C) any remaining
amounts in the Principal Account shall be used for payment of Collateral Monthly
Principal.
On the earlier to occur of the first Transfer Date with
respect to the Rapid Amortization Period or the Transfer Date immediately
preceding the Class A Scheduled Payment Date, the Servicer shall instruct the
Trustee to withdraw, and the Trustee shall withdraw from the Principal Funding
Account and deposit in the Distribution Account the amount on deposit in the
Principal Funding Account.
On the Class A Scheduled Payment Date or on each Distribution
Date with respect to a Rapid Amortization Period, the Trustee shall pay from
amounts on deposit in the Distribution Account an amount equal to the lesser of
the Class A Investor Interest and the amount of Available Investor Principal
Collections on deposit in the Distribution Account with respect to the related
Monthly Period, and after the Class A Certificates have been paid in full (after
taking into account distributions to be made on the related Distribution Date),
Available Investor Principal Collections shall be applied to the Class B Certifi
xxxxx and Collateral Interest as specified in the Pooling and Servicing
Agreement.
On each Distribution Date, the Trustee shall pay to the Class
A Certificateholders and the Class B Certificateholders the amount deposited on
the related Transfer Date into the Distribution Account in respect of Class A
Monthly Interest and Class B Monthly Interest, respectively. On each Transfer
Date,
A-1-7
the Trustee shall pay to the Collateral Interest Holder the Collateral Monthly
Interest, to the extent funds are available. Distributions with respect to this
Series 1998-5 Certificate will be made by the Trustee by, except as otherwise
provided in the Pooling and Servicing Agreement, check mailed to the address of
each Series 1998-5 Certificateholder of record appearing in the Certificate
Register and except for the final distribution in respect of this Series 1998-5
Certificate, without the presentation or surrender of this Series 1998-5
Certificate or the making of any notation thereon; provided, however, that with
respect to Series 1998-5 Certificates registered in the name of the nominee of a
Clearing Agency, distributions will be made in the form of immediately available
funds.
This Class A Certificate represents an interest in only the
Chase Credit Card Master Trust. This Class A Certificate does not represent an
obligation of, or an interest in, the Transferor or the Servicer, and neither
the Series 1998-5 Certificates nor the Accounts or Receivables are insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
governmental agency. This Series 1998-5 Certificate is limited in right of
payment to certain collections respecting the Receivables, all as more
specifically set forth hereinabove and in the Pooling and Servicing Agreement.
The Transfer of this Class A Certificate shall be registered
in the Certificate Register upon surrender of this agency maintained by the
Transfer Agent and Registrar accompanied by a written instrument of transfer in
a form satisfactory to the Trustee and the Transfer Agent and Registrar duly
executed by the Class A Certificateholder or such Class A Certificateholder's
attorney-in-fact duly authorized in writing, and thereupon one or more new Class
A Certificates of authorized denominations and for the same aggregate Undivided
Interests will be issued to the designated transferee or transferees.
The Servicer, the Trustee and the Transfer Agent and
Registrar, and any agent of any of them, may treat the Person in whose name this
Class A Certificate is registered as the owner hereof for all purposes, and
neither the Servicer, the Trustee, the Paying Agent, the Transfer Agent and
Registrar, nor any agent of any of them or of any such agent shall be affected
by notice to the contrary except in certain circumstances described in the
Pooling and Servicing Agreement.
The Pooling and Servicing Agreement provides that the right of
the Series 1998-5 Certificateholders to receive payment from the Trust will
terminate on the first Business Day following the Series 1998-5 Termination
Date. Upon the termination of the Trust pursuant to Section 12.1 of the Pooling
and Servicing Agreement, the Trustee shall assign and convey to the Holder of
the Transferor Certificate (without recourse, representation or warranty) all
right, title and interest of the Trust in the Receivables, whether then existing
or thereafter created, and all
A-1-8
proceeds of such Receivables and Insurance Proceeds relating to such
Receivables. The Trustee shall execute and deliver such instruments of transfer
and assignment, in each case without recourse, as shall be prepared by the
Servicer reasonably requested by the Holder of the Transferor Certificate to
vest in such Holder all right, title and interest which the Trustee had in the
Receivables.
Unless the certificate of authentication hereon has been
executed by or on behalf of the Trustee, by manual signature, this Class A
Certificate shall not be entitled to any benefit under the Pooling and Servicing
Agreement, or be valid for any purpose.
A-1-9
IN WITNESS WHEREOF, Chase Manhattan Bank USA, National
Association, has caused this Class A Certificate to be duly executed.
By:
-----------------------------
Authorized Officer
Dated:
A-1-10
Form of Trustee's Certificate of Authentication
CERTIFICATE OF AUTHENTICATION
This is one of the Class A Certificates of Chase Credit Card
Master Trust, Series 1998-5, referred to in the within-mentioned Pooling and
Servicing Agreement.
THE BANK OF NEW YORK,
Trustee
By:
----------------------------
Authorized Signatory
Dated:
EXHIBIT A-2
FORM OF CERTIFICATE
CLASS B
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO CHASE MANHATTAN
BANK USA, NATIONAL ASSOCIATION, OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR IN SUCH OTHER NAME AS 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 CHASE
MANHATTAN BANK USA, NATIONAL ASSOCIATION, THAT UNLESS SUCH PURCHASER, AT ITS
EXPENSE, DELIVERS TO THE TRUSTEE, THE SERVICER AND THE TRANSFEROR AN OPINION OF
COUNSEL SATISFACTORY TO THEM TO THE EFFECT THAT THE PURCHASE OR HOLDING OF THIS
CERTIFICATE BY SUCH PURCHASER WILL NOT RESULT IN THE ASSETS OF THE TRUST BEING
DEEMED TO BE "ASSETS OF THE BENEFIT PLAN" OR SUBJECT TO THE PROHIBITED
TRANSACTION PROVISIONS OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974,
AS AMENDED ("ERISA")AND THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE") AND WILL NOT SUBJECT THE TRUSTEE, THE TRANSFEROR OR THE SERVICER TO ANY
OBLIGATION IN ADDITION TO THOSE UNDERTAKEN IN THE POOLING AND SERVICING
AGREEMENT, SUCH PURCHASER IS NOT (I) AN EMPLOYEE BENEFIT PLAN (AS DEFINED IN
SECTION 3(3) ERISA) THAT IS SUBJECT TO THE PROVISIONS OF TITLE I OF ERISA, (II)
A PLAN DESCRIBED IN SECTION 4975(E)(1) OF THE CODE, OR (III) AN ENTITY WHOSE
UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF A PLAN'S INVESTMENT IN THE
ENTITY.
A-2-2
No. ___ $__________
CUSIP NO.16157PAZ0
CHASE CREDIT CARD MASTER TRUST
CLASS B FLOATING RATE
ASSET BACKED CERTIFICATE, SERIES 1998-5
Evidencing an Undivided Interest in a trust, the corpus of which consists of a
portfolio of MasterCard(R) and VISA(R)(2) credit card receivables generated or
acquired by Chase Manhattan Bank USA, National Association ("Chase USA"), and
other assets and interests constituting the Trust under the Pooling and
Servicing Agreement described below.
(Not an interest in or obligation of
Chase USA
or any Affiliate thereof.)
This certifies that CEDE & CO. (the "Class B
Certificateholder") is the registered owner of an Undivided Interest in a trust
(the "Trust"), the corpus of which consists of a portfolio of receivables (the
"Receivables") now existing or hereafter created and arising in connection with
selected MasterCard and VISA credit card accounts (the "Accounts") of Chase USA,
all monies due or to become due in payment of the Receivables (including all
Finance Charge Receivables), the right to certain amounts received as
Interchange and Recoveries (if any), the benefits of the Collateral Interest,
all proceeds of the foregoing and the other assets and interests constituting
the Trust pursuant to the Second Amended and Restated Pooling and Servicing
Agreement dated as of September 1, 1996 as supplemented by the Series 1998-5
Supplement dated as of September 24, 1998 (collectively, the "Pooling and
Servicing Agreement"), by and among Chase USA, as Transferor on and after June
1, 1996, The Chase Manhattan Bank, as Transferor prior to June 1, 1996 and as
Servicer, and The Bank of New York, as Trustee (the "Trustee"). To the extent
not defined herein, capitalized terms used herein have the respective meanings
assigned to them in the Pooling and Servicing Agreement.
The Series 1998-5 Certificates are issued in two classes, the
Class A Certificates and the Class B Certificates (of which this certificate is
one), which are subordinated to the Class A Certificates in certain rights of
payment as described herein and in the Pooling and Servicing Agreement.
The Transferor has structured the Pooling and Servicing
Agreement and the Series 1998-5 Certificates with the intention
--------
(2) MasterCard(R) and VISA(R) are federally registered servicemarks
of MasterCard International Inc. and of Visa U.S.A., Inc.,
respectively.
A-2-3
that the Series 1998-5 Certificates will qualify under applicable tax law as
indebtedness, and each of the Transferor, the Holder of the Transferor
Certificate, the Servicer and each Series 1998-5 Certificateholder (or Series
1998-5 Certificate Owner) by acceptance of its Series 1998-5 Certificate (or in
the case of a Series 1998-5 Certificate Owner, by virtue of such Series 1998-5
Certificate Owner's acquisition of a beneficial interest therein), agrees to
treat and to take no action inconsistent with the treatment of the Series 1998-5
Certificates (or any beneficial interest therein) as indebtedness for purposes
of federal, state, local and foreign income or franchise taxes and any other tax
imposed on or measured by income. Each Series 1998-5 Certificateholder agrees
that it will cause any Series 1998-5 Certificate Owner acquiring an interest in
a Series 1998-5 Certificate through it to comply with the Pooling and Servicing
Agreement as to treatment of the Series 1998-5 Certificates as indebtedness for
certain tax purposes.
This Class B Certificate is issued under and is subject to the
terms, provisions and conditions of the Pooling and Servicing Agreement, to
which Pooling and Servicing Agreement, as amended from time to time, the Class B
Certificateholder by virtue of the acceptance hereof assents and by which the
Class B Certificateholder is bound. This Class B Certificate is one of a duly
authorized Series of Investor Certificates entitled "Class B Floating Rate Asset
Backed Certificates, Series 1998-5" (the "Class B Certificates"), each of which
represents an Undivided Interest in the Trust, including the right to receive
the Collections and other amounts allocated to the Class B Certificates at the
times and in the amounts specified in the Pooling and Servicing Agreement and to
be deposited in the Investor Accounts, the Principal Funding Account and the
Reserve Account or paid to the Class B Certificateholders.
Also issued under the Pooling and Servicing Agreement are the
"Class A Floating Rate Asset Backed Certificates, Series 1998-5" (the "Class A
Certificates"), which represent an Undivided Interest in the Trust senior to the
Class B Certificates, and the "Collateral Interest, Series 1998-5" (the
"Collateral Interest" and collectively with the Class A Certificates and the
Class B Certificates, the "Investor Certificates"), which is an undivided
interest in the Trust subordinated to the Class A Certificates and Class B
Certificates. The subordination of the Collateral Interest to the Class B
Certificates shall constitute the Enhancement for the Class B Certificates.
The aggregate interest represented by the Class A Certificates
and the Class B Certificates at any time in the Principal Receivables in the
Trust shall not exceed an amount equal to the Class A Investor Interest and the
Class B Investor Interest, respectively, at such time. As of the Closing Date,
the Class A Initial Investor Interest is $650,000,000, the Class
A-2-4
B Initial Investor Interest is $54,166,000 and the Collateral Initial Interest
is $69,643,524.
The Class B Investor Interest shall mean, on any date of
determination, an amount equal to (a) the Class B Initial Investor Interest,
minus (b) the aggregate amount of principal payments made to Class B
Certificateholders prior to such date, minus (c) the aggregate amount of Class B
Investor Charge-Offs for all prior Transfer Dates pursuant to subsection 4.10(b)
of the Pooling and Servicing Agreement, minus (d) the amount of the Reallocated
Class B Principal Collections allocated pursuant to subsection 4.12(a) of the
Pooling and Servicing Agreement on all prior Transfer Dates for which the
Collateral Interest has not been reduced, minus (e) an amount equal to the
amount by which the Class B Investor Interest has been reduced on all prior
Transfer Dates pursuant to subsection 4.10(a) of the Pooling and Servicing
Agreement and plus (f) the aggregate amount of Excess Spread allocated and
available on all prior Transfer Dates pursuant to subsection 4.11(d) of the
Pooling and Servicing Agreement, for the purpose of reimbursing amounts deducted
pursuant to the foregoing clauses (c), (d) and (e); provided, however, that the
Class B Investor Interest may not be reduced below zero.
The Class B Investor Interest together with the aggregate
interest represented by the Class A Certificates in the Principal Receivables in
the Trust (the "Class A Investor Interest") and the aggregate interest
represented by the Collateral Interest in the Principal Receivables in the Trust
are sometimes collectively referred to herein as the "Investor Interest."
In addition to the Class A Certificates, the Class B
Certificates and the Collateral Interest, a Transferor Certificate representing
an undivided interest in the Trust will be issued to the Transferor pursuant to
the Pooling and Servicing Agreement. The Transferor Certificate will represent
the interest in the Principal Receivables not represented by all of the Series
of Investor Certificates issued by the Trust. The Transferor Certificate may be
exchanged by the Transferor pursuant to the Pooling and Servicing Agreement for
a newly issued Series of Investor Certificates and a reissued Transferor
Certificate upon the conditions set forth in the Pooling and Servicing
Agreement.
Interest will accrue on the Class B Certificates from the
Closing Date through November 15, 1998 and with respect to each Interest Period
thereafter, at the rate of LIBOR plus 0.36% per annum, as more specifically set
forth in the Pooling and Servicing Agreement (the "Class B Certificate Rate"),
and will be distributed on November 16, 1998 and on the 15th day of each
calendar month thereafter, or if such day is not a Business Day, on the next
succeeding Business Day (a "Distribution Date"), to the Class B
Certificateholders of record as of the last Business
A-2-5
Day of the calendar month preceding such Distribution Date (the "Record Date").
Class B Monthly Principal will be distributed to the Class B Certificateholder
(i) during the Rapid Amortization Period, in addition to Class B Monthly
Interest, on each Distribution Date until the Class B Certificates have been
paid in full or (ii) during the Controlled Accumulated Period following the
payment in full of the Class A Investor Interest, on the October 2003
Distribution Date (the "Class B Scheduled Payment Date"), unless distributed
earlier as a result of the occurrence of a Pay Out Event in accordance with the
Pooling and Servicing Agreement.
On or before each Transfer Date, the Servicer shall instruct
the Trustee in writing to withdraw and the Trustee, acting in accordance with
such instructions, shall withdraw on such Transfer Date, from the Finance Charge
Account to the extent of funds on deposit therein (i) Collections of Finance
Charge Receivables processed as of the end of the preceding Monthly Period which
have been allocated to the Series 1998-5 Certificates, (ii) with respect to the
Class A Certificates, from other amounts constituting Class A Available Funds,
and (iii) with respect to the Class B Certificates, from other amounts
constituting Class B Available Funds, the following amounts: (x) an amount equal
to the Class A Monthly Interest; (y) an amount equal to the product of (i) (A) a
fraction, the numerator of which is the actual number of days in the related
Interest Period and the denominator of which is 360, times (B) the Class B
Certificate Rate for such Interest Period and (ii) the outstanding principal
balance of the Class B Certificates determined as of the close of business on
the Distribution Date preceding the related Transfer Date ("Class B Monthly
Interest"), provided, however, that with respect to the first Distribution Date,
Class B Monthly Interest shall be equal to the interest accrued on the Class B
Initial Investor Interest at the applicable Class B Certificate Rate for the
period from the Closing Date through November 15, 1998; and (Z) amounts up to
the Collateral Monthly Interest, in the actual amounts and manner described in
the Pooling and Servicing Agreement.
On each Transfer Date, the Trustee shall apply the Class A
Available Funds withdrawn from the Finance Charge Account, as required by the
Pooling and Servicing Agreement, in the following order of priority: (i) an
amount equal to the Class A Monthly Interest for such Transfer Date, plus the
amount of any Class A Deficiency Amount for such Transfer Date, plus the amount
of any Class A Additional Interest for such Transfer Date, (ii) an amount equal
to the Class A Servicing Fee for such Transfer Date plus the amount of any Class
A Servicing Fee due but not paid on any prior Transfer Date and (iii) an amount
equal to the Class A Investor Default Amount, if any, for the preceding Monthly
Period. The Trustee on each Transfer Date shall apply the Class B Available
Funds withdrawn from the Finance Charge Account as required by the Pooling and
Servicing Agreement in the following order of priority: (i) the Class B Monthly
Interest for
A-2-6
such Transfer Date, plus the amount of any Class B Deficiency Amount for such
Transfer Date, plus the amount of any Class B Additional Interest for such
Transfer Date, and (ii) the Class B Servicing Fee for such Transfer Date plus
the amount of any Class B Servicing Fee due but not paid on any prior Transfer
Date. The balance of the amount withdrawn from the Finance Charge Account
allocable to the Series 1998-5 Certificates, if any, after giving effect to the
applications above shall constitute "Excess Spread."
On or before the Transfer Date immediately succeeding the
Monthly Period in which the Controlled Accumulated Period or the Rapid
Amortization Period commences and on or before each Transfer Date thereafter,
the Servicer shall instruct the Trustee in writing to withdraw, and the Trustee,
acting in accordance with such instructions, shall withdraw on such Transfer
Date from the Principal Account an amount equal to the Available Investor
Principal Collections on deposit in the Principal Account and from such amounts,
(A) deposit an amount equal to Class A Monthly Principal (i) during the
Controlled Accumulation Period, into the Principal Funding Account, and (ii)
during the Rapid Amortization Period, into the Distribution Account, (B) after
the Class A Certificates have been paid in full, deposit an amount equal to
Class B Monthly Principal into the Distribution Account, and (C) any remaining
amounts in the Principal Account shall be used for payment of Collateral Monthly
Principal.
On the earlier to occur of the first Transfer Date with
respect to the Rapid Amortization Period after payment in full of the Class A
Investor Interest or the Transfer Date immediately preceding the Class B
Scheduled Payment Date, the Servicer shall instruct the Trustee to withdraw, and
the Trustee shall withdraw from the Principal Account and deposit in the
Distribution Account the amount on deposit in the Principal Account.
On the Class B Scheduled Payment Date or on each Distribution
Date after payment in full of the Class A Investor Interest with respect to a
Rapid Amortization Period, the Trustee shall pay from amounts on deposit in the
Distribution Account an amount equal to the lesser of the Class B Investor
Interest and the amount of Available Investor Principal Collections on deposit
in the Distribution Account with respect to the related Monthly Period, and
after the Class B Certificates have been paid in full (after taking into account
distributions to be made on the related Distribution Date), Available Investor
Principal Collections shall be applied to the Collateral Interest as specified
in the Pooling and Servicing Agreement.
On each Distribution Date, the Trustee shall pay to the Class
A Certificateholders and the Class B Certificateholders the amount deposited on
the related Transfer Date into the Distribution Account in respect of Class A
Monthly Interest and Class B Monthly Interest, respectively. On each Transfer
Date, the Trustee shall pay to the Collateral Interest Holder the
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Collateral Monthly Interest, to the extent funds are available. Distributions
with respect to this Series 1998-5 Certificate will be made by the Trustee by,
except as otherwise provided in the Pooling and Servicing Agreement, check
mailed to the address of each Series 1998-5 Certificateholder of record
appearing in the Certificate Register and except for the final distribution in
respect of this Series 1998-5 Certificate, without the presentation or surrender
of this Series 1998-5 Certificate or the making of any notation thereon;
provided, however, that with respect to Series 1998-5 Certificates registered in
the name of the nominee of a Clearing Agency, distributions will be made in the
form of immediately available funds.
This Class B Certificate represents an interest in only the
Chase Credit Card Master Trust. This Class A Certificate does not represent an
obligation of, or an interest in, the Transferor or the Servicer, and neither
the Series 1998-5 Certificates nor the Accounts or Receivables are insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
governmental agency. This Series 1998-5 Certificate is limited in right of
payment to certain collections respecting the Receivables, all as more
specifically set forth hereinabove and in the Pooling and Servicing Agreement.
The Transfer of this Class B Certificate shall be registered
in the Certificate Register upon surrender of this agency maintained by the
Transfer Agent and Registrar accompanied by a written instrument of transfer in
a form satisfactory to the Trustee and the Transfer Agent and Registrar duly
executed by the Class B Certificateholder or such Class B Certificateholder's
attorney-in-fact duly authorized in writing, and thereupon one or more new Class
B Certificates of authorized denominations and for the same aggregate Undivided
Interests will be issued to the designated transferee or transferees.
The Servicer, the Trustee and the Transfer Agent and
Registrar, and any agent of any of them, may treat the Person in whose name this
Class B Certificate is registered as the owner hereof for all purposes, and
neither the Servicer, the Trustee, the Paying Agent, the Transfer Agent and
Registrar, nor any agent of any of them or of any such agent shall be affected
by notice to the contrary except in certain circumstances described in the
Pooling and Servicing Agreement.
The Pooling and Servicing Agreement provides that the right of
the Series 1998-5 Certificateholders to receive payment from the Trust will
terminate on the first Business Day following the Series 1998-5 Termination
Date. Upon the termination of the Trust pursuant to Section 12.1 of the Pooling
and Servicing Agreement, the Trustee shall assign and convey to the Holder of
the Transferor Certificate (without recourse, representation or warranty) all
right, title and interest of the Trust in the Receivables, whether then existing
or thereafter created, and all proceeds of such Receivables and Insurance
Proceeds relating to
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such Receivables. The Trustee shall execute and deliver such instruments of
transfer and assignment, in each case without recourse, as shall be prepared by
the Servicer reasonably requested by the Holder of the Transferor Certificate to
vest in such Holder all right, title and interest which the Trustee had in the
Receivables.
Unless the certificate of authentication hereon has been
executed by or on behalf of the Trustee, by manual signature, this Class B
Certificate shall not be entitled to any benefit under the Pooling and Servicing
Agreement, or be valid for any purpose.
A-2-9
IN WITNESS WHEREOF, Chase Manhattan Bank USA, National
Association, has caused this Class B Certificate to be duly executed.
By:
-------------------------
Authorized Officer
Dated:
A-2-10
Form of Trustee's Certificate of Authentication
CERTIFICATE OF AUTHENTICATION
This is one of the Class B Certificates of Chase Credit Card
Master Trust, Series 1998-5, referred to in the within-mentioned Pooling and
Servicing Agreement.
THE BANK OF NEW YORK,
Trustee
By:
--------------------------
Authorized Signatory
Dated:
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TABLE OF CONTENTS
Page
----
SECTION I.1. Designation................................................... 1
SECTION I.2. Definitions.................................................. 2
SECTION I.3. Servicing Compensation and Assignment of
Interchange....................................................... 19
SECTION I.4. Reassignment and Transfer Terms.............................. 21
SECTION I.5. Delivery and Payment for the Investor
Certificates...................................................... 21
SECTION I.6. Depository; Form of Delivery of Investor
Certificates...................................................... 21
SECTION I.7. Article IV of Agreement...................................... 21
SECTION IV.1. Rights of Certificateholders and the
Collateral Interest Holder........................................ 21
SECTION IV.2. Allocations................................................. 22
SECTION IV.5. Coverage of Required Amount................................. 28
SECTION IV.6. Monthly Payments............................................ 29
SECTION IV.8. Excess Spread............................................... 35
SECTION IV.9. Reallocated Principal Collections........................... 37
SECTION IV.14. Transferor's or Servicer's Failure to Make a
Deposit or Payment................................................ 42
SECTION IV.15. Article V of the Agreement................................. 42
SECTION V.1. Distributions................................................ 42
SECTION V.2. Monthly Series 1998-5 Certificateholders'
Statement......................................................... 43
SECTION V.3. Series 1998-5 Pay Out Events................................. 45
SECTION V.4. Issuance of Additional Certificates.......................... 47
SECTION V.5. Series 1998-5 Termination.................................... 48
SECTION V.6. Counterparts................................................. 48
Page
----
SECTION V.7. Governing Law................................................ 48
SECTION V.8. No Petition.................................................. 48
SECTION V.9. Tax Representation and Covenant.............................. 48
SECTION V.10. Amendment to Agreement....................................... 49
EXHIBITS
EXHIBIT A-1 Form of Class A Certificate
EXHIBIT A-2 Form of Class B Certificate
EXHIBIT B Form of Monthly Payment Instructions
and Notification to the Trustee
EXHIBIT C Form of Monthly Series 1998-5 Certificateholders'
Statement
SCHEDULE I Schedule to Exhibit C of the Pooling and Servicing
Agreement with respect to the Investor
Certificates
