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EXHIBIT 4.2
FORM OF
XXXXXXXX'X CREDIT CORPORATION
TRANSFEROR
XXXXXXXX'X, INC.
SERVICER
AND
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
TRUSTEE
ON BEHALF OF THE CERTIFICATEHOLDERS
______________________________
SERIES 1997-2 SUPPLEMENT
DATED AS OF JULY___, 1997
TO THE
MASTER POOLING AND SERVICING AGREEMENT
DATED AS OF JULY_______, 1997
______________________________
$_______________
XXXXXXXX'X CREDIT CARD MASTER TRUST
SERIES 1997-2
THIS SERIES 1997-2 SUPPLEMENT, dated as of July___, 1997 (this "Series
Supplement"), is by and among XXXXXXXX'X CREDIT CORPORATION, a Nevada
corporation, as Transferor, XXXXXXXX'X, INC., a Tennessee corporation, as
Servicer, and NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, a national banking
association organized and existing under the laws of the United States
(together with its successors in trust thereunder the "Trustee"), as trustee
under the Master Pooling and Servicing Agreement, dated as of July__, 1997 (the
"Agreement"), by and among the Transferor, the Servicer and the Trustee.
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PRELIMINARY STATEMENT
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 one
or more Supplements to the Agreement for the purpose of authorizing the
issuance by the Trust to the Transferor, for execution and redelivery to the
Trustee for authentication, one or more Series of Investor Certificates.
SECTION A DESIGNATION. The Certificates issued hereunder shall be
designated generally as the "Series 1997-2 Certificates." The Series 1997-2
Certificates shall be one of the Series of Investor Certificates in Group One
and shall be a Principal Sharing Series. The Transferor and the Servicer each
hereby enter into this Series Supplement with the Trustee as required by
Section 6.9(c) of the Agreement to provide for the issuance, authentication and
delivery of the Class A Asset Backed Certificates, Series 1997-2, the Class B
Asset Backed Certificates, Series 1997-2 and the Class D Asset Backed
Certificates, Series 1997-2. In addition, this Supplement further creates a
fourth Class of uncertificated interests in the Trust which, except as
expressly provided for herein, shall be deemed to be "Investor Certificates"
for all purposes under the Agreement and this Series Supplement and which shall
be known as "Collateral Indebtedness Interest, Series 1997-2". The first
Distribution Date with respect to Series 1997-2 shall be the ______________,
1997 Distribution Date. In the event that any term or provision contained
herein shall conflict with or be inconsistent with any term or provision
contained in the Agreement, the terms and provisions of this Series Supplement
shall govern.
SECTION B DEFINITIONS. All capitalized terms not otherwise defined
herein are defined in the Agreement. All Article, Section or subsection
references herein shall mean Articles, Sections or subsections of the
Agreement, except as otherwise provided herein. Unless otherwise stated
herein, as the context otherwise requires or if such term is otherwise defined
in the Agreement, each capitalized term used or defined herein shall relate
only to the Series 1997-2 Certificates and no other Series of Certificates
issued by the Trust. The following words and phrases shall have the following
meanings with respect to the Series 1997-2 Certificates and the definitions of
such terms are applicable to the singular as well as the plural form of such
terms and to the masculine as well as the feminine and neuter genders of such
terms:
"Accumulation Commencement Monthly Period" shall mean the Monthly Period
in which the Accumulation Period commences.
"Accumulation Period" shall mean the Class A Accumulation Period and the
Class B 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
amounts of all outstanding Series, and the denominator of which is equal to
the sum of (a) the Initial
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Investor Amount (plus the aggregate initial principal amount of any
Additional Class D Certificates), (b) the initial investor amounts (or other
applicable amounts) of all outstanding Series (other than Series 1997-2) which
are not expected to be in their revolving periods during such Monthly Period
and (c) the initial investor amounts (or other applicable amounts) of all other
outstanding Series which are not allocating Shared Principal Collections to
other Series and are expected to be in their revolving periods during such
Monthly Period.
"Accumulation Period Length" shall have the meaning specified in Section
4.15.
"Additional Class D Certificates" shall have the meaning specified in
Section 4.16.
"Allocable Amounts" shall mean with respect to any Distribution Date, the
sum of the Class A Allocable Amount, the Class B Allocable Amount, the
Collateral Allocable Amount and the Class D Allocable Amount.
"Adjusted Investor Amount" shall mean, as of any date of determination, an
amount equal to the sum of the Class A Adjusted Investor Amount, the Class B
Adjusted Investor Amount, the Collateral Indebtedness Amount and the Class D
Investor Amount, in each case as of such date.
"Amortization Period" shall mean the Accumulation Period or the Rapid
Amortization Period.
"Available Cash Collateral Amount" shall mean, with respect to any
Distribution Date, the amount held in and available to be withdrawn from the
Cash Collateral Account on such date.
"Available Enhancement Amount" shall mean an amount equal to the sum of
the Available Cash Collateral Amount, the Collateral Indebtedness Amount and
the Class D Investor Amount.
"Available Principal Collections" shall mean, with respect to any
Distribution Date, an amount equal to (a) the applicable Investor Percentage of
Collections of Principal Receivables for the related Monthly Period, plus (b)
amounts designated as Available Principal Collections pursuant to Section 4.8,
minus (c) Reallocated Principal Collections for the related Monthly Period,
plus (d) Shared Principal Collections allocated to Series 1997-2.
"Available Reserve Account Amount" shall mean, with respect to any
Distribution Date, the lesser of (a) the amount held in and available to be
withdrawn from the Reserve Account on such date (before giving effect to any
deposit or withdrawal to be
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made to or from the Reserve Account on such date) and (b) the Required Reserve
Account Amount for such Distribution Date.
"Base Rate" shall mean, with respect to any Monthly Period, the sum of (a)
the annualized percentage equivalent of a fraction, the numerator of which is
equal to the Monthly Interest payable on the Series on the Distribution Date
immediately following the last day of such Monthly Period and the denominator
of which is the Investor Amount as of the last day of the preceding Monthly
Period and (b) the product of (i) 2.00% per annum and (ii) a fraction the
numerator of which is an amount equal to the Adjusted Investor Amount and the
denominator of which is the Investor Amount, in each case determined as of the
last day of such preceding Monthly Period.
"Business Day" shall have the meaning provided in the Agreement.
"Cash Collateral Account" shall have the meaning specified in Section
4.12(a).
"Cash Enhancement Surplus" shall mean, as of any date of determination,
the lesser of (a) the Enhancement Surplus and (b) the excess of the amount held
in and available to be withdrawn from the Cash Collateral Account over the
Required Cash Collateral Amount.
"Class A Accumulation Period" shall mean, unless a Pay Out Event with
respect to Series 1997-2 shall have occurred prior thereto, the period
commencing at the close of business on the last day of the _______________
Monthly Period, or such later date as shall be determined in accordance with
Section 4.15, and ending on the first to occur of (a) the commencement of the
Rapid Amortization Period, (b) the payment in full to Class A
Certificateholders of the Class A Investor Amount or (c) the Stated Series
Termination Date.
"Class A Additional Interest" shall have the meaning specified in Section
4.3(a).
"Class A Adjusted Investor Amount" shall mean, on any date of
determination while the Class A Certificates are outstanding, an amount equal
to the Class A Investor Amount minus the Principal Account Balance (but not
less than zero).
"Class A Adjustment Amount" shall mean, with respect to each Distribution
Date, an amount equal to the product of (i) the Series Adjustment Amount for
Series 1997-2 with respect to the related Monthly Period and (ii) the
percentage equivalent of a fraction the numerator of which is the Class A
Adjusted Investor Amount and the denominator of which is the Adjusted Investor
Amount, each as of the last day of the Monthly Period preceding the related
Monthly Period.
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"Class A Allocable Amount" shall mean, with respect to any Distribution
Date, the sum of the Class A Investor Default Amount and the Class A Adjustment
Amount.
"Class A Available Funds" shall mean, with respect to any Monthly Period,
an amount equal to the sum of (a) the applicable Class A Investor Percentage of
Collections of Finance Charge Receivables and any other amounts that are to be
treated as Collections of Finance Charge Receivables in accordance with the
Agreement, (b) if such Monthly Period immediately precedes a Distribution Date
that occurs prior to the Class B Principal Commencement Date, the earnings (net
of losses and investment expenses), if any, earned on the Principal Account
with respect to such Monthly Period, (c) the amount, if any, to be withdrawn
from the Reserve Account on the Distribution Date immediately following the
last day of such Monthly Period and included in Class A Available Funds
pursuant to Section 4.14(d), and (d) the amount, if any, of investment earnings
(net of losses and investment expenses), if any, on amounts held in the Reserve
Account required to be included in Class A Available Funds pursuant to Section
4.14(b).
"Class A Certificate Rate" shall mean, with respect to the Class A
Certificates and each Interest Period, a per annum rate of ______%.
"Class A Certificateholder" shall mean any Person in whose name a Class A
Certificate is registered in the Certificate Register.
"Class A Certificates" shall mean any one of the Certificates executed by
the Transferor and authenticated by or on behalf of the Trustee, substantially
in the form of Exhibit A-1.
"Class A Expected Payment Date" shall mean the ______________ 200__
Distribution Date.
"Class A Initial Investor Amount" shall mean the aggregate initial
principal amount of the Class A Certificates, which is $____________.
"Class A Interest Shortfall" shall have the meaning specified in Section
4.3(a).
"Class A Investor Amount" shall mean, on any date of determination, an
amount equal to (a) the Class A Initial Investor Amount, minus (b) the
aggregate amount of principal payments made to the Class A Certificateholders
prior to such date, minus (c) the excess, if any, of the aggregate amount of
Class A Investor Charge Offs for all prior Distribution Dates over the sum of
the aggregate amount of Class A Investor Charge Offs reimbursed pursuant to
Section 4.8(b) and, without duplication, the aggregate amount of the reductions
of the Series Adjustment Amounts allocable to the Class A Certificates
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pursuant to Section 4.7(f) prior to such date; provided, however, that the
Class A Investor Amount may not be reduced below zero.
"Class A Investor Charge Offs" shall have the meaning specified in Section
4.7(a).
"Class A Investor Default Amount" shall mean, with respect to each
Distribution Date, an amount equal to the product of (i) the Default Amount for
the related Monthly Period and (ii) the applicable Class A Investor Percentage
for such Monthly Period.
"Class A Investor Percentage" shall be calculated by substituting the
Class A Adjusted Investor Amount and the Class A Initial Investor Amount in all
references to the Adjusted Investor Amount and the Initial Investor Amount,
respectively, in the definition of Investor Percentage.
"Class A Monthly Interest" shall have the meaning specified in Section
4.3(a).
"Class A Monthly Principal" shall have the meaning specified in Section
4.4(a).
"Class A Penalty Rate" shall mean the sum of the Class A Certificate Rate
and 2.00% per annum.
"Class A Required Amount" shall have the meaning specified in Section
4.5(a).
"Class A Servicing Fee" shall have the meaning specified in Section G
hereof.
"Class B Accumulation Amount" means for any Distribution Date with respect
to the Class B Accumulation Period, an amount equal to one-half (1/2) of the
Class B Investor Amount as of the beginning of the Accumulation Period.
"Class B Accumulation Period" shall mean, unless a Pay Out Event with
respect to Series 1997-2 shall have occurred prior thereto, the period
commencing on the Distribution Date on which the Class A Investor Amount is
paid in full or if the Class A Investor Amount is paid in full on the Class A
Expected Payment Date, at the close of business on the Class A Expected Payment
Date, and ending on the first to occur of (a) the commencement of the Rapid
Amortization Period, (b) the payment in full to Class B Certificateholders of
the Class B Investor Amount or (c) the Stated Series Termination Date.
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"Class B Additional Interest" shall have the meaning specified in Section
4.3(b).
"Class B Adjusted Investor Amount" shall mean, on any date of
determination, an amount equal to the Class B Investor Amount minus, prior to
the payment in full of the Class A Investor Amount, the excess of the Principal
Account Balance over the Class A Investor Amount, and after the payment in full
of the Class A Investor Amount, the Principal Account Balance, if any (but not
less than zero).
"Class B Adjustment Amount" shall mean, with respect to each Distribution
Date, an amount equal to the product of (i) the Series Adjustment Amount for
Series 1997-2 with respect to the related Monthly Period and (ii) the
percentage equivalent of a fraction the numerator of which is the Class B
Adjusted Investor Amount and the denominator of which is the Adjusted Investor
Amount, each as of the last day of the Monthly Period preceding the related
Monthly Period.
"Class B Allocable Amount" shall mean, with respect to any Distribution
Date, the sum of the Class B Investor Default Amount and the Class B Adjustment
Amount.
"Class B Available Funds" shall mean, with respect to any Monthly Period,
an amount equal to the sum of (i) the applicable Class B Investor Percentage of
Collections of Finance Charge Receivables and any other amounts that are to be
treated as Collections of Finance Charge Receivables in accordance with the
Agreement, (b) if such Monthly Period immediately precedes a Distribution Date
that occurs on or after the Class B Principal Commencement Date, the amount of
Principal Investment Proceeds, if any, with respect to such Monthly Period, (c)
the amount, if any, to be withdrawn from the Reserve Account on the
Distribution Date immediately following the last day of such Monthly Period and
included in Class B Available Funds pursuant to Section 4.14(d), and (d) the
amount, if any, required to be included in Class B Available Funds pursuant to
Section 4.14(b).
"Class B Certificate Rate" shall mean, with respect to the Class B
Certificates and each Interest Period, a per annum rate of _____%.
"Class B Certificateholder" shall mean any Person in whose name a Class B
Certificate is registered in the Certificate Register.
"Class B Certificates" shall mean any one of the Certificates executed by
the Transferor and authenticated by or on behalf of the Trustee, substantially
in the form of Exhibit A-2.
"Class B Expected Payment Date" shall mean the _______________ 200__
Distribution Date.
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"Class B Initial Investor Amount" shall mean the aggregate initial
principal amount of the Class B Certificates, which is $______________.
"Class B Interest Shortfall" shall have the meaning specified in Section
4.3(b).
"Class B Investor Amount" shall mean, on any date of determination, an
amount equal to (a) the Class B Initial Investor Amount, minus (b) the
aggregate amount of principal payments made to the Class B Certificateholders
prior to such date, minus (c) the aggregate amount of Class B Investor Charge
Offs for all prior Distribution Dates, minus (d) the amount of Class B
Subordinated Principal Collections allocated on all prior Distribution Dates
pursuant to Section 4.9(a), minus (e) an amount equal to the amount by which
the Class B Investor Amount has been reduced on all prior Distribution Dates
pursuant to Section 4.7(a), plus (f) the sum of the amount of Excess Spread and
Shared Excess Finance Charge Collections allocated and available on all prior
Distribution Dates pursuant to Section 4.8(e) for the purpose of reimbursing
amounts deducted pursuant to the foregoing clauses (c), (d) and (e) and,
without duplication, the aggregate amount of the reductions of the Series
Adjustment Amounts allocable to the Class B Investor Amount pursuant to Section
4.7(f) prior to such date; provided, however, that the Class B Investor Amount
may not be reduced below zero.
"Class B Investor Charge Offs" shall have the meaning specified in Section
4.7(b).
"Class B Investor Default Amount" shall mean, with respect to each
Distribution Date, an amount equal to the product of (i) the Default Amount for
the related Monthly Period and (ii) the applicable Class B Investor Percentage
for such Monthly Period.
"Class B Investor Percentage" shall be calculated by substituting the
Class B Adjusted Investor Amount and the Class B Initial Investor Amount in all
references to the Adjusted Investor Amount and the Initial Investor Amount
respectively, in the definition of Investor Percentage.
"Class B Monthly Interest" shall have the meaning specified in Section
4.3(b).
"Class B Monthly Principal" shall have the meaning specified in Section
4.4(b).
"Class B Penalty Rate" shall mean the sum of the Class B Certificate Rate
and 2.00% per annum.
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"Class B Principal Commencement Date" shall mean the Distribution Date on
which the Class A Investor Amount is paid in full or, if the Class A Investor
Amount is paid in full on the Class A Expected Payment Date and a Pay Out Event
has not commenced, the Distribution Date following the Class A Expected Payment
Date.
"Class B Required Amount" shall have the meaning specified in Section
4.5(b).
"Class B Servicing Fee" shall have the meaning specified in Section G
hereof.
"Class B Subordinated Principal Collections" shall mean, with respect to
any Monthly Period, an amount equal to the product of (i) the applicable Class
B Investor Percentage with respect to Collections of Principal Receivables and
(ii) the aggregate amount of Collections of Principal Receivables for such
Monthly Period.
"Class D Additional Interest" shall have the meaning specified in Section
4.3(d).
"Class D Adjustment Amount" shall mean, with respect to each Distribution
Date, an amount equal to the product of (i) the Series Adjustment Amount for
Series 1997-2 with respect to the related Monthly Period and (ii) the
percentage equivalent of a fraction the numerator of which is the Class D
Investor Amount and the denominator of which is the Adjusted Investor Amount,
each as of the last day of the Monthly Period preceding the related Monthly
Period.
"Class D Allocable Amount" shall mean, with respect to any Distribution
Date, the sum of the Class D Investor Default Amount and the Class D Adjustment
Amount.
"Class D Available Funds" shall mean, with respect to any Monthly Period,
an amount equal to the sum of the applicable Class D Investor Percentage of
Collections of Finance Charge Receivables and any other amounts that are to be
treated as Collections of Finance Charge Receivables in accordance with the
Agreement.
"Class D Certificate Rate" shall mean, for any Interest Period with
respect to the Class D Certificates, the rate designated in the letter
agreement, dated ________________, 1997, between the Transferor and the
Trustee; provided, in no event shall the Class D Certificate Rate exceed LIBOR
plus 1.00% per annum.
"Class D Certificateholder" shall mean any Person in whose name a Class D
Certificate is registered in the Certificate Register.
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"Class D Certificates" shall mean any one of the Certificates executed by
the Transferor and authenticated by or on behalf of the Trustee, substantially
in the form of Exhibit A-3.
"Class D Initial Investor Amount" shall mean the aggregate initial
principal amount of the Class D Certificates, which is $_____________.
"Class D Interest Shortfall" shall have the meaning specified in Section
4.3(d).
"Class D Investor Amount" shall mean, on any date of determination, an
amount equal to (a) the Class D Initial Investor Amount (plus the aggregate
initial principal amount of any Additional Class D Certificates), minus (b) the
aggregate amount of principal payments made to the Class D Certificateholders
prior to such date, minus (c) the amount of Class D Subordinated Principal
Collections allocated on all prior Distribution Dates pursuant to Section
4.9(a), (b) and (c), minus (d) an amount equal to the amount by which the Class
D Investor Amount has been reduced on all prior Distribution Dates pursuant to
Section 4.7(a), (b), (c) and (d), plus (e) the sum of the amount of Excess
Spread and Shared Excess Finance Charge Collections allocated and available on
all prior Distribution Dates pursuant to Section 4.8(n) for the purpose of
reimbursing amounts deducted pursuant to the foregoing clauses (c) and (d) and,
without duplication, the aggregate amount of the reductions of the Series
Adjustment Amounts allocable to the Class D Investor Amount pursuant to Section
4.7(f) prior to such date; provided, however, that the Class D Investor Amount
may not be reduced below zero.
"Class D Investor Charge Off" shall have the meaning provided in Section
4.7(d).
"Class D Investor Default Amount" shall mean, with respect to each
Distribution Date, an amount equal to the product of (i) the Default Amount for
the related Monthly Period and (ii) the applicable Class D Investor Percentage
for such Monthly Period.
"Class D Investor Percentage" shall be calculated by substituting the
Class D Investor Amount and the Class D Initial Investor Amount in all
references to the Adjusted Investor Amount and the Initial Investor Amount,
respectively, in the definition of Investor Percentage.
"Class D Monthly Interest" shall have the meaning specified in Section
4.3(d).
"Class D Monthly Principal" shall have the meaning specified in Section
4.4(d).
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"Class D Penalty Rate" shall mean, for any Interest Period, the sum of the
Class D Certificate Rate for such Interest Period and 2.00% per annum.
"Class D Servicing Fee" shall have the meaning specified in Section G
hereof.
"Class D Subordinated Principal Collections" shall mean, with respect to
any Monthly Period, an amount equal to the product of (i) the applicable Class
D Investor Percentage with respect to Collections of Principal Receivables and
(ii) the aggregate amount of Collections of Principal Receivables for such
Monthly Period.
"Closing Date" shall mean ______, 1997.
"Collateral Additional Interest" shall have the meaning specified in
Section 4.3(c).
"Collateral Adjustment Amount" shall mean, with respect to each
Distribution Date, an amount equal to the product of (i) the Series Adjustment
Amount for Series 1997-2 with respect to the related Monthly Period and (ii)
the percentage equivalent of a fraction the numerator of which is the
Collateral Indebtedness Amount and the denominator of which is the Adjusted
Investor Amount, each as of the last day of the Monthly Period preceding the
related Monthly Period.
"Collateral Allocable Amount" shall mean, with respect to any Distribution
Date, the sum of the Collateral Default Amount and the Collateral Adjustment
Amount.
"Collateral Available Funds" shall mean, with respect to any Monthly
Period, an amount equal to the applicable Collateral Investor Percentage of
Collections of Finance Charge Receivables and any other amounts that are to be
treated as Collections of Finance Charge Receivables in accordance with the
Agreement.
"Collateral Default Amount" shall mean, with respect to each Distribution
Date, an amount equal to the product of (i) the Default Amount for the related
Monthly Period and (ii) the applicable Collateral Investor Percentage
applicable during such Monthly Period.
"Collateral Indebtedness Amount" shall mean, on any date of determination,
an amount equal to (a) the Collateral Initial Indebtedness Amount, minus (b)
the aggregate amount of principal payments made to the Collateral Indebtedness
Holder on or prior to such date, minus (c) the amount of Collateral
Subordinated Principal Collections allocated on all prior Distribution Dates
pursuant to Sections 4.9(a) and 4.9(b), minus (d) an amount equal to the amount
by which the Collateral Indebtedness Amount has been reduced on all prior
Distribution Dates pursuant to Sections 4.7(a) and 4.7(b), plus (e) the sum of
the Excess Spread and Shared Excess Finance Charge Collections allocated and
available on all prior Distribution Dates for the purpose of
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reimbursing amounts deducted pursuant to the foregoing clauses (c)
and (d) and, without duplication, reductions of the Series Adjustment Amount
allocable to the Collateral Indebtedness Interest; provided, however, the
Collateral Indebtedness Amount may not be reduced below zero.
"Collateral Indebtedness Charge Off" shall have the meaning specified in
Section 4.7(c).
"Collateral Indebtedness Holder" shall mean the entity designated as such
in the Loan Agreement.
"Collateral Indebtedness Interest" shall mean a fractional undivided
interest in the Trust which shall consist of the right to receive, to the
extent necessary to make the required payments to the Collateral Indebtedness
Holder under this Series Supplement, the portion of Collections allocable
thereto under the Agreement and this Series Supplement, funds held in the
Collection Account allocable thereto pursuant to the Agreement and this Series
Supplement and, subject to the rights of the Series 1997-2 Certificateholders
with respect thereto, funds held in the Cash Collateral Account and the Reserve
Account.
"Collateral Initial Indebtedness Amount" shall mean the aggregate initial
principal amount of the Collateral Indebtedness Interest, which is
$______________.
"Collateral Interest Shortfall" shall have the meaning specified in
Section 4.3(c).
"Collateral Investor Percentage" shall be calculated by substituting the
Collateral Indebtedness Amount and the Collateral Initial Indebtedness Amount
in all references to the Adjusted Investor Amount and the Initial Investor
Amount, respectively, in the definition of Investor Percentage.
"Collateral Interest Shortfall" shall have the meaning specified in
Section 4.3(c).
"Collateral Monthly Interest" shall have the meaning specified in Section
4.3(c).
"Collateral Monthly Principal" shall have the meaning specified in Section
4.4(c).
"Collateral Penalty Rate" shall mean, for any Interest Period, the sum of
the Collateral Rate for such Interest Period and 2.00% per annum.
"Collateral Rate" shall mean the rate designated as such in the Loan
Agreement.
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"Collateral Required Amount" shall have the meaning specified in Section
4.5(c).
"Collateral Servicing Fee" shall have the meaning specified in Section G
hereof.
"Collateral Subordinated Principal Collections" shall mean, with respect
to any Monthly Period, an amount equal to the product of (i) the applicable
Collateral Investor Percentage with respect to Collections of Principal
Receivables and (ii) the aggregate amount of Collections of Principal
Receivables for such Monthly Period.
"Controlled Accumulation Amount" shall mean (a) for any Distribution Date
with respect to the Class A Accumulation Period, $___________; provided,
however, if the Accumulation Period Length shall be determined to be less than
12 months in accordance with Section 4.15, the Controlled Accumulation Amount
with respect to the Class A Certificates shall be equal to (i) the product of
(x) the Class A Initial Investor Amount and (y) the Accumulation Period Factor
for such Monthly Period divided by (ii) the Required Accumulation Factor Number
and (b) for any Distribution Date with respect to the Class B Accumulation
Period, $__________.
"Controlled Deposit Amount" shall mean, for any Distribution Date with
respect to the Accumulation Period, an amount equal to the sum of the
Controlled Accumulation Amount for such Distribution Date and any Deficit
Controlled Accumulation Amount for the immediately preceding Distribution Date.
"Covered Amount" shall mean (a) for any Distribution Date with respect to
the Class A Accumulation Period or the first Special Distribution Date, if such
Special Distribution Date occurs on or prior to the Distribution Date on which
the Class A Investor Amount shall be paid in full, an amount equal to the
product of (i) a fraction, the numerator of which is the actual number of days
in the related Interest Period and the denominator of which is 360, (ii) the
Class A Certificate Rate and (iii) the Principal Account Balance, if any, as of
the preceding Distribution Date and (b) for any Distribution Date with respect
to the Class B Accumulation Period or the first Special Distribution Date, if
such Special Distribution Date occurs after the Distribution Date on which the
Class A Investor Amount shall have been paid in full, an amount equal to the
product of (i) a fraction, the numerator of which is the actual number of days
in the related Interest Period and the denominator of which is 360, (ii) the
Class B Certificate Rate and (iii) the Principal Account Balance, if any, as of
the preceding Distribution Date.
"Defaulted Receivables" shall mean for any Monthly Period, the Principal
Receivables in Accounts which became Defaulted Accounts during such Monthly
Period.
"Deficit Controlled Accumulation Amount" shall mean (a) on the first
Distribution Date with respect to the Class A Accumulation Period or the Class
B Accumulation Period, the excess, if any, of the applicable Controlled
Accumulation
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Amount for such Distribution Date over the amount deposited into the Principal
Account as Class A Monthly Principal or Class B Monthly Principal, as the case
may be, for such Distribution Date, and (b) on each subsequent Distribution
Date with respect to the Class A Accumulation Period or the Class B
Accumulation Period, the excess, if any, of the applicable Controlled Deposit
Amount for such subsequent Distribution Date over the amount deposited into the
Principal Account as Class A Monthly Principal or Class B Monthly Principal, as
the case may be, for such subsequent Distribution Date.
"Enhancement Surplus" shall mean, with respect to any Distribution Date,
the excess, if any, of (a) the sum of the amount held in and available to be
withdrawn from the Cash Collateral Account, the Collateral Indebtedness Amount
and the Class D Investor Amount over (b) the Required Enhancement Amount.
"Excess Spread" shall mean, with respect to any Distribution Date, the sum
of the amounts, if any, specified pursuant to Sections 4.6(a)(iv), 4.6(b)(iii),
4.6(c)(ii), 4.6(d)(ii) and 4.12(b) with respect to such Distribution Date.
"Finance Charge Shortfall" shall have the meaning specified in Section
4.11.
"Initial Investor Amount" shall mean the aggregate initial principal
amount of the Series 1997-2 Certificates, which is $_______________.
"Interest Period" shall mean, with respect to any Distribution Date, the
period from and including the Distribution Date immediately preceding such
Distribution Date (or, in the case of the first Distribution Date, from and
including the Closing Date) to, but excluding, such Distribution Date.
"Investor Amount" shall mean, as of any date of determination, an amount
equal to the sum of the Class A Investor Amount, the Class B Investor Amount,
the Collateral Indebtedness Amount and the Class D Investor Amount, in each
case as of such date.
"Investor Default Amount" shall mean, with respect to any Distribution
Date, an amount equal to the product of (a) the Default Amount for the
immediately preceding Monthly Period and (b) the applicable Investor Percentage
applicable to Allocable Amounts for such Monthly Period.
"Investor Monthly Servicing Fee" shall have the meaning specified in
Section G hereof.
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15
"Investor Percentage" shall mean:
(a) with respect to (A) Principal Receivables during any Monthly
Period with respect to the Revolving Period, (B) Finance Charge Receivables
during any Monthly Period other than during a Rapid Amortization Period,
and (C) the Allocable Amount during any Monthly Period, the percentage
equivalent of a fraction the numerator of which is equal to the Adjusted
Investor Amount as of the last day of the immediately preceding Monthly
Period (or the Initial Investor Amount, in the case of the first Monthly
Period applicable to Series 1997-2) and the denominator of which is the
greater of (i) the sum of the aggregate Principal Receivables in the Trust
and the Excess Funding Amount, in each case at the close of business on the
last day of the immediately preceding Monthly Period and (ii) the sum of
the numerators used to calculate the applicable investor percentages with
respect to Principal Receivables, Finance Charge Receivables or the
Allocable Amount, as applicable, for all Series outstanding as of the date
on which such determination is being made;
(b) with respect to Finance Charge Receivables (and any other amounts
treated as Finance Charge Receivables) during any Monthly Period with
respect to a Rapid Amortization Period, the percentage equivalent of a
fraction the numerator of which is equal to the Adjusted Investor Amount as
of the last day of the Revolving Period and the denominator of which is the
greater of (i) the sum of the aggregate Principal Receivables in the Trust
and the Excess Funding Amount, in each case at the close of business on the
last day of the immediately preceding Monthly Period and (ii) the sum of
the numerators use to calculate the investor percentages with respect to
Finance Charge Receivables for all Series outstanding as of the date on
which such determination is being made; and
(c) with respect to Principal Receivables during any Monthly Period
with respect to an Amortization Period, the percentage equivalent of a
fraction the numerator of which is equal to the Adjusted Investor Amount as
of the last day of the Revolving Period and the denominator of which is the
greater of (i) the sum of the aggregate Principal Receivables in the Trust
and the Excess Funding Amount, in each case at the close of business on the
last day of the immediately preceding Monthly Period and (ii) the sum of
the numerators used to calculate the investor percentages with respect to
Principal Receivables for all Series outstanding as of the date on which
such determination is being made; provided, however, that during an
Accumulation Period, (A) the Investor Percentage of Principal Receivables
may be reset by and at the option of the Transferor in connection with the
issuance of a new Series (and any such reset Investor
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16
Percentage with respect to Principal Receivables will also apply in
any Rapid Amortization Period following the Accumulation Period) for each
Monthly Period to a fixed percentage, which shall not be greater than the
fraction described above and shall not be less than the greater of (i) a
fraction, (I) the numerator of which shall be the Adjusted Investor Amount
on the last day of the preceding Monthly Period, and (II) the denominator
of which shall be the greater of (x) the sum of Principal Receivables and
the Excess Funding Amount as of the end of such day and (y) the sum of the
numerators used to calculate the investor percentages with respect to
Principal Receivables for all Series outstanding as of such date of
determination, and (ii) a fraction that when multiplied by the amount of
collections allocable to Principal Receivables for the preceding Monthly
Period will equal 110% of the sum of the Controlled Accumulation Amount for
such preceding Monthly Period, and (B) if the Series 1997-2 Certificates
are paired with a Paired Series and a Rapid Amortization Period commences
for such Paired Series, the Transferor may, by written notice to the
Trustee and Servicer, designate a different numerator to be used to
determine such percentage.
"LIBOR" shall have the meaning specified in the Loan Agreement.
"Loan Agreement" shall mean the agreement among the Transferor, the
Servicer, the Trustee and the Collateral Indebtedness Holder, dated as of the
date hereof, as amended, supplemented or otherwise modified from time to time
in accordance with its terms.
"Minimum Transferor Interest Percentage" shall have the meaning specified
in Section C.
"Monthly Interest" shall mean, with respect to any Distribution Date, the
sum of the Class A Monthly Interest, the Class B Monthly Interest, the
Collateral Monthly Interest and the Class D Monthly Interest for such
Distribution Date.
"Paired Series" shall have the meaning specified in Section L2.
"Portfolio Adjusted Yield" shall mean, with respect to any Monthly Period,
the Portfolio Yield with respect to such Monthly Period minus the Base Rate
with respect to such Monthly Period.
"Portfolio Yield" shall mean, with respect to any Monthly Period, the
annualized percentage equivalent of a fraction, the numerator of which is (x)
the sum of (i) the amount of collections of Finance Charge Receivables and
Shared Excess Finance Charge Collections allocated to the Series 1997-2
Certificates for such Monthly Period, plus (ii) the amount of investment
earnings (net of investment expenses and losses), if any, on the Principal
Account and Reserve Account balances, plus (iii) interest and
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17
earnings (net of investment expenses and losses, if any) on funds held in
the Cash Collateral Account and included as Excess Spread pursuant to Section
4.12(b) plus (iv) the amount of funds withdrawn from the Reserve Account minus
(v) an amount equal to the amount of Defaulted Receivables allocable to the
Series 1997-2 Certificates for such Monthly Period, and the denominator of
which is (y) the Investor Amount as of the last day of the preceding Monthly
Period.
"Principal Account" shall have the meaning specified in Section 4.13(a).
"Principal Account Balance" shall mean, with respect to any date of
determination during the Accumulation Period, the amount, if any, of funds held
in the Principal Account on such date of determination.
"Principal Investment Proceeds" shall have the meaning specified in
Section 4.13(b).
"Principal Shortfall" shall have the meaning specified in Section 4.10.
"Rapid Amortization Period" shall mean the period commencing at the close
of business on the day on which a Pay Out Event with respect to Series 1997-2
is deemed to have occurred, and ending on the first to occur of (a) the payment
in full of the Class A Investor Amount, the Class B Investor Amount, the
Collateral Indebtedness Amount and the Class D Investor Amount, respectively or
(b) the Stated Series Termination Date.
"Rating Agencies" shall mean Xxxxx'x, Standard & Poor's, and, if
applicable, such other nationally recognized statistical rating organization
that has rated the Certificates at the request of the Company.
"Reallocated Principal Collections" shall mean, with respect to any
Monthly Period, an amount equal to the sum of Class B Subordinated Principal
Collections, Collateral Subordinated Principal Collections and Class D
Subordinated Principal Collections for such Monthly Period.
"Reference Banks" shall mean four major banks in the London interbank
market selected by the Servicer upon notice to the Trustee.
"Required Accumulation Factor Number" shall be 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
for the 12 months preceding the date of such calculation (or any lower monthly
principal payment rate selected by the Servicer at its option in its sole
discretion), expressed as a decimal.
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18
"Required Cash Collateral Amount" shall mean the amount specified as such
in the Loan Agreement or such higher amount designated by the Transferor.
"Required Draw Amount" shall have the meaning specified in Section
4.12(c).
"Required Enhancement Amount" shall mean, with respect to any Distribution
Date, an amount equal to the product of the Adjusted Investor Amount (after
giving effect to all reductions thereof to be made on such Distribution Date)
and ___%, but not less than $____________; provided, however, that (i) if a Pay
Out Event shall have occurred, the Required Enhancement Amount for each
Distribution Date thereafter (subject to clause (ii) below) shall equal the
Required Enhancement Amount for the Distribution Date immediately preceding the
occurrence of such Pay Out Event, (ii) in no event shall the Required
Enhancement Amount exceed the sum of the Class A Adjusted Investor Amount and
the Class B Adjusted Investor Amount on such date and (iii) the Required
Enhancement Amount may be reduced without the consent of the Series 1997-2
Certificateholders if (x) the Transferor shall have received written notice
from each Rating Agency (with a copy delivered to the Trustee) that such
reduction will not result in the reduction or withdrawal of the then current
rating of the Class A or Class B Certificates, (y) the Transferor shall have
delivered to the Trustee an Officer's Certificate to the effect that, based on
the facts known to such officer at such time, in the reasonable belief of the
Transferor, such reduction will not cause a Pay Out Event or an event that,
after the giving of notice or the lapse of time, would constitute a Pay Out
Event, to occur with respect to Series 1997-2 and (z) the Transferor shall have
provided an Opinion of Counsel addressed to the Trustee, dated the date of such
reduction, that such reduction will not (a) adversely affect the tax
characterization of any outstanding Series or Class with respect to which an
Opinion of Counsel addressed to the Trustee was delivered at the time of their
issuance that such Investor Certificates would be characterized as debt, (b)
cause the Trust to be classified, for federal income tax purposes, as an
association (or publicly traded partnership) taxable as a corporation and (c)
cause or constitute an event in which gain or loss would be recognized by any
Certificateholder.
"Required Reserve Account Amount" shall mean, with respect to any
Distribution Date prior to the Reserve Account Funding Date, $0, and on or
after the Reserve Account Funding Date, an amount equal to (a) ____% of the
Class A Investor Amount as of the preceding Distribution Date (after giving
effect to all changes therein on such date) or (b) any other amount designated
by the Transferor; provided, however, that if such designation pursuant to (b)
above is of a lesser amount, (i) the Rating Agency Condition shall have been
satisfied and (ii) the Transferor shall have delivered to the Trustee an
Officer's Certificate to the effect that, based on the facts known to such
officer at such time, in the reasonable belief of such officer, 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 1997-2.
"Reserve Account" shall have the meaning specified in Section 4.14(a).
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"Reserve Account Funding Date" shall mean the Distribution Date with
respect to the Monthly Period which commences three (3) months prior to the
Class A Accumulation Period, provided that the Reserve Account Funding Date
shall be accelerated to (a) the Distribution Date with respect to the Monthly
Period which commences four (4) months prior to the Class A Accumulation Period
if the average of the Portfolio Adjusted Yields for any three consecutive
Monthly Periods shall be less than ____%; (b) the Distribution Date with
respect to the Monthly Period which commences six (6) months prior to the Class
A Accumulation Period if the average of the Portfolio Adjusted Yields for any
three (3) consecutive Monthly Periods shall be less than ____%; or (c) the
Distribution Date which commences 12 months prior to the Class A Accumulation
Period if the average of the Portfolio Adjusted Yields for any three (3)
consecutive Monthly Periods shall be less than ____%.
"Reserve Account Surplus" shall mean, as of any date of determination, the
amount, if any, by which the amount held in the Reserve Account exceeds the
Required Reserve Account Amount.
"Reserve Draw Amount" shall have the meaning specified in Section 4.14(c).
"Revolving Period" shall mean the period beginning on the Closing Date and
ending on the earlier of (a) the close of business on the day preceding the
commencement of the Class A Accumulation Period and (b) the close of business
on the day preceding the commencement of the Rapid Amortization Period.
"Series Adjustment Amount" shall mean, with respect to each Distribution
Date, an amount equal to the product of (i) any unpaid Adjustment Payment
Obligation for the related Monthly Period and (ii) the Investor Percentage
applicable to allocations of Allocable Amounts during the related Monthly
Period, as calculated on the last day of the Monthly Period preceding the
related Monthly Period.
"Series 1997-2" shall mean the Series the terms of which are specified in
this Series Supplement.
"Series 1997-2 Certificate" shall mean a Class A Certificate, a Class B
Certificate, a Class D Certificate and/or, unless the context requires
otherwise, the Collateral Indebtedness Interest.
"Series 1997-2 Certificateholder" shall mean a Class A Certificateholder,
a Class B Certificateholder, a Class D Certificateholder and/or, unless the
context requires otherwise, the Collateral Indebtedness Holder.
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20
"Servicing Fee" shall mean the amount paid monthly from the Trust to the
Servicer and which shall be equal to one-twelfth (1/12th) of the product of the
Servicing Fee Percentage and the Adjusted Investor Amount.
"Servicing Fee Percentage" shall mean 2.00% per annum.
"Shared Excess Finance Charge Collections" shall mean, with respect to any
Monthly Period, the aggregate amount for all outstanding Series in Group One of
Collections of Finance Charge Receivables which the related Supplements specify
are to be treated as "Shared Excess Finance Charge Collections" for such
Monthly Period.
"Shared Principal Collections" shall mean, with respect to any Monthly
Period, the aggregate amount for all outstanding Series in Group One of
Collections of Principal Receivables available after covering required
distributions and deposits under each Series Supplement and that are to be
treated as "Shared Principal Collections" pursuant to Section 4.6(e)(iii) and
Section 4.6(f)(v) and the respective applicable sections of any Supplement for
other Series in Group One.
"Special Distribution Date" shall mean each Distribution Date with respect
to the Rapid Amortization Period.
"Stated Series Termination Date" shall mean the October 200__ Distribution
Date.
"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).
"Treasury" shall mean the United States Department of the Treasury and any
successor Governmental Authority thereto.
SECTION MINIMUM TRANSFEROR INTEREST PERCENTAGE AND MINIMUM AGGREGATE
PRINCIPAL RECEIVABLES. The Minimum Transferor Interest Percentage applicable
to the Series 1997-2 Certificates shall be 0%; provided, however, that (a) the
Transferor may, at its option and in its sole discretion, designate a higher
percentage as the Minimum Transferor Interest Percentage so long as, after
giving effect to such designation and any repurchase of Investor Certificates
or designation of Additional Accounts, the Transferor Amount shall equal or
exceed the Minimum Transferor Amount and (b) if on any Distribution Date during
the Revolving Period (after giving effect to all distributions and adjustments
to be made on such Distribution Date), the portion of the Class D Investor
Amount owned by the Transferor is less than 2% of the Investor Amount and the
Minimum Transferor Interest Percentage is less than 2%, the Transferor shall,
on or before the last day of the second Monthly Period following the Monthly
Period in which such Distribution Date occurred (unless the portion of the
Class D Investor Amount owned by the Transferor shall then equal or exceed 2%
of the Investor Amount), (i) repurchase or
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otherwise repay Investor Certificates (to the extent permitted by any
Supplement) or designate Additional Accounts to the extent necessary to permit
the designation of a Minimum Transferor Interest Percentage of 2%
without causing the Transferor Amount to be less than the Minimum Transferor
Amount and (ii) upon compliance with clause (i), designate 2% as the Minimum
Transferor Interest Percentage. In the event that the Transferor shall have
designated a Minimum Transferor Interest Percentage in excess of 0%, the
Transferor may, during the Revolving Period, designate a lower percentage (but
not less than 0%) if the portion of the Class D Investor Amount owned by the
Transferor as a percentage of the Investor Amount averaged over the three
Distribution Dates preceding such designation (after giving effect to all
distributions and adjustments made on each such Distribution Date) shall equal
or exceed 4%; provided, however, that such lower percentage may not be less
than 2% if the portion of the Class D Investor Amount owned by the Transferor
as a percentage of the Investor Amount on the Distribution Date preceding such
designation (after giving effect to all distributions and adjustments made on
such Distribution Date) shall not equal or exceed 2%.
SECTION D OPTIONAL PURCHASE; REASSIGNMENT AND TRANSFER TERMS. All the
Series 1997-2 Certificates may be repurchased by, and reassigned and
transferred to, the Transferor in the Transferor's sole discretion, on any
Distribution Date on or after the Distribution Date on which the sum of the
Class A Adjusted Investor Amount, the Class B Adjusted Investor Amount, the
Collateral Indebtedness Amount and the amount of the Class D Investor Amount
held by parties other than the Transferor or any of its affiliates is less than
or equal to 10% of the sum of the Class A Investor Amount on the Closing Date,
the Class B Investor Amount on the Closing Date, the Collateral Indebtedness
Amount on the Closing Date and the highest amount of the Class D Investor
Amount held by parties other than the Transferor or any of its affiliates since
the Closing Date. The repurchase price for the Series 1997-2 Certificates will
be equal to (a) the Adjusted Investor Amount, plus (b) accrued and unpaid
interest on the 1997-2 Certificates, less (c) the amount held in the Collection
Account allocable to Series 1997-2 to be applied other than to deposits to the
Reserve Account and any excess payable to the Transferor as holder of the
Exchangeable Transferor Certificate. The provisions of this Section are
subject to the provisions of Section 12.2 of the Agreement.
SECTION E DELIVERY AND PAYMENT FOR THE CERTIFICATES. The Trustee shall
deliver the Series 1997-2 Certificates when authenticated in accordance with
Section 6.2 of the Agreement (except in the case of the Collateral Indebtedness
Interest, which shall be in uncertificated form). The Class D and Collateral
Indebtedness Interest shall bear legends appropriately limiting their transfer
in accordance herewith and applicable securities laws.
SECTION F FORM OF DELIVERY OF THE SERIES 1997-2 CERTIFICATES. The Class
A Certificates and the Class B Certificates shall be delivered as provided in
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Section 6.11 of the Agreement. The Class D Certificates shall be delivered in
registered form. The Collateral Indebtedness Interest shall be issued in
uncertificated form.
SECTION SERVICING COMPENSATION. The share of the Monthly Servicing Fee
allocable to the Series 1997-2 Certificateholders with respect to any
Distribution Date (the "Investor Monthly Servicing Fee") shall be equal to
one-twelfth (1/12th) of the product of (a) the Servicing Fee Percentage and (b)
each of the Class A Adjusted Investor Amount, the Class B Adjusted Investor
Amount, the Collateral Indebtedness Amount and the Class D Investor Amount,
respectively, as of the last day of the immediately preceding Monthly Period;
provided, however, with respect to the first Distribution Date, the Investor
Monthly Servicing Fee shall be equal to $__________. The share of the Investor
Monthly Servicing Fee allocable to the Class A Certificateholders with respect
to any Distribution Date (the "Class A Servicing Fee") shall be equal to the
product of (a) the Class A Investor Percentage applicable for allocation of
Allocable Amounts divided by the Investor Percentage applicable for allocation
of Allocable Amounts and (b) the Investor Monthly Servicing Fee; provided,
however, that with respect to the first Distribution Date, the Class A
Servicing Fee shall be equal to $____________. The share of the Investor
Monthly Servicing Fee allocable to the Class B Certificateholders with respect
to any Distribution Date (the "Class B Servicing Fee") shall be equal to the
product of (a) the Class B Investor Percentage applicable for allocation of
Allocable Amounts divided by the Investor Percentage applicable for allocation
of Allocable Amounts and (b) the Investor Monthly Servicing Fee; provided,
however, that with respect to the first Distribution Date, the Class B
Servicing Fee shall be equal to $____________. The share of the Investor
Monthly Servicing Fee allocable to the Collateral Indebtedness Holder with
respect to any Distribution Date (the "Collateral Servicing Fee") shall be
equal to the product of (a) the Collateral Investor Percentage applicable for
allocation of Allocable Amounts divided by the Investor Percentage applicable
for allocation of Allocable Amounts and (b) the Investor Monthly Servicing Fee;
provided, however, that with respect to the first Distribution Date, the
Collateral Servicing Fee shall be equal to $____________. The share of the
Investor Monthly Servicing Fee allocable to the Class D Certificateholders with
respect to any Distribution Date (the "Class D Servicing Fee") shall be equal
to the product of (a) the Class D Investor Percentage applicable for allocation
of Allocable Amounts divided by the Investor Percentage applicable for
allocation of Allocable Amounts and (b) the Investor Monthly Servicing Fee;
provided, however, that with respect to the first Distribution Date, the Class
D Servicing Fee shall be equal to $___________. The Class A Servicing Fee, the
Class B Servicing Fee, the Collateral Servicing Fee and the Class D Servicing
Fee shall be payable solely to the extent amounts are available for
distribution in respect thereof pursuant to this Series Supplement. The
remainder of the Monthly Servicing Fee shall be paid [by the Transferor or]
from amounts allocable to other Series (as provided in the Agreement and the
Supplements relating to such other Series) and in no event shall the Trust, the
Trustee or the Series 1997-2 Certificateholders be liable for the share of the
Monthly Servicing Fee to be paid [by the Transferor or] from amounts allocable
to any other Series.
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SECTION H. ARTICLE IV OF THE AGREEMENT. Any provisions of Article IV of
the Agreement which distribute Collections to the Transferor on the basis of
the Transferor Percentage shall continue to apply irrespective of the issuance
of the Series 1997-2 Certificates. Section 4.1 of the Agreement shall read in
its entirety as provided in the Agreement. Article IV of the Agreement (except
for Section 4.1) as it relates to Series 1997-2 shall read in its entirety as
follows:
ARTICLE IV
RIGHTS OF SERIES 1997-2 CERTIFICATEHOLDERS AND
ALLOCATION AND APPLICATION OF COLLECTIONS
SECTION 4.2. COLLECTIONS AND ALLOCATIONS. The Servicer shall apply, or
shall instruct the Trustee to apply, all Collections, and other funds held in
the Collection Account that are allocated to the Series 1997-2 Certificates as
described in this Article IV. During the Revolving Period and the Accumulation
Period, Collections of Finance Charge Receivables allocable to Series 1997-2
with respect to each Monthly Period need not be deposited into the Collection
Account on a daily basis after an amount equal to Monthly Interest for the
related Distribution Date plus, if Xxxxxxxx'x, Inc. is no longer the Servicer,
the Investor Monthly Servicing Fee for the related Distribution Date, has been
deposited into the Collection Account. During the Revolving Period, so long as
the Available Enhancement Amount is not less than the Required Enhancement
Amount, Collections of Principal Receivables allocable to Series 1997-2 with
respect to each Monthly Period need not be deposited into the Collection
Account on a daily basis during such Monthly Period; provided, however, that in
the event that the Minimum Transferor Amount exceeds the Transferor Amount on
any date, such Collections of Principal Receivables shall be deposited into the
Excess Funding Account until the Transferor Amount equals the Minimum
Transferor Amount; and provided, further, that on any date on which the sum of
the Aggregate Principal Receivables and the Excess Funding Amount is less than
the Aggregate Investor Amount, such Collections of Principal Receivables shall
be deposited into the Collection Account on a daily basis. During the
Accumulation Period, after an amount of Collections of Principal Receivables
allocable to Series 1997-2 equal to the Controlled Deposit Amount with respect
to each Monthly Period has been deposited into the Collection Account, and so
long as the Available Enhancement Amount is not less than the Required
Enhancement Amount, Collections of Principal Receivables allocable to Series
1997-2 with respect to each Monthly Period need not be deposited into the
Collection Account on a daily basis during such Monthly Period; provided,
however, that in the event that the Minimum Transferor Amount exceeds the
Transferor Amount on any date, such Collections of Principal Receivables shall
be deposited into the Excess Funding Account until the Transferor Amount equals
the Minimum Transferor Amount; and, provided, further, that on any date on
which the sum of the Aggregate Principal Receivables and the Excess Funding
Amount is less than the Aggregate Investor Amount, such Collections of
Principal Receivables shall be deposited into the Collection Account
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on a daily basis. Notwithstanding the foregoing, the Servicer need not make
daily deposits of Collections into the Collection Account at any time when the
requirements of Section 4.1(f) of the Agreement are satisfied.
SECTION 4.3 DETERMINATION OF MONTHLY INTEREST.
(a) The amount of monthly interest ("Class A Monthly Interest")
distributable from the Collection Account with respect to the Class A
Certificates on any Distribution Date shall be an amount equal to one-twelfth
(1/12th) of the product of (i) the Class A Certificate Rate for the related
Interest Period, and (ii) the outstanding principal amount of the Class A
Certificates as of the preceding Record Date; provided, however, with respect to
the first Distribution Date, Class A Monthly Interest shall be equal to
$____________.
On the Determination Date preceding each Distribution Date, the
Servicer shall determine the excess, if any (the "Class A Interest Shortfall"),
of (x) the Class A Monthly Interest for such Distribution Date over (y) the
aggregate amount of funds allocated and available to pay such Class A Monthly
Interest on such Distribution Date. If the Class A Interest Shortfall with
respect to any Distribution Date is greater than zero, an additional amount
("Class A Additional Interest") equal to one-twelfth (1/12th) of the product of
(i) the Class A Penalty Rate for the related Interest Period, and (ii) such
Class A Interest Shortfall (or the portion thereof which has not theretofore
been paid to Class A Certificateholders), shall be payable as provided herein
with respect to the Class A Certificates on each Distribution Date following
such Distribution Date to and including the Distribution Date on which such
Class A Interest Shortfall is paid to Class A Certificateholders.
Notwithstanding anything to the contrary herein, Class A Additional Interest
shall be payable or distributed to Class A Certificateholders only to the extent
permitted by applicable law.
(b) The amount of monthly interest ("Class B Monthly Interest")
distributable from the Collection Account with respect to the Class B
Certificates on any Distribution Date shall be an amount equal to one-twelfth
(1/12th) of the product of (i) the Class B Certificate Rate for the related
Interest Period, and (ii) the outstanding principal amount of the Class B
Certificates as of the preceding Record Date; provided, however, with respect to
the first Distribution Date, Class B Monthly Interest shall be equal to
$___________.
On the Determination Date preceding each Distribution Date, the
Servicer shall determine the excess, if any (the "Class B Interest Shortfall"),
of (x) the Class B Monthly Interest for such Distribution Date over (y) the
aggregate amount of funds allocated and available to pay such Class B Monthly
Interest on such Distribution Date. If the Class B Interest Shortfall with
respect to any Distribution Date is greater than zero, an additional amount
("Class B Additional Interest") equal to one-twelfth (1/12th) of the product of
(i) the Class B Penalty Rate for the related Interest Period, and (ii) such
Class B Interest Shortfall (or the portion thereof which has not theretofore
been paid to
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Class B Certificateholders), shall be payable as provided herein with respect
to the Class B Certificates on each Distribution Date following such
Distribution Date to and including the Distribution Date on which such Class B
Interest Shortfall is paid to Class B Certificateholders. Notwithstanding
anything to the contrary herein, Class B Additional Interest shall be payable
or distributed to Class B Certificateholders only to the extent permitted by
applicable law.
(c) The amount of monthly interest ("Collateral Monthly Interest")
distributable from the Collection Account with respect to the Collateral
Indebtedness Interest on any Distribution Date shall be an amount equal to the
product of (i) the outstanding principal amount of the Collateral Indebtedness
Interest as of the preceding Record Date,(ii) the Collateral Rate for the
related interest Period, and (iii) a fraction, the numerator of which is the
actual number of days in such Interest Period and the denominator of which is
360; provided, however, with respect to the first Distribution Date, the
Collateral Monthly Interest shall be equal to $ ____.
On the Determination Date preceding each Distribution Date, the
Servicer shall determine the excess, if any (the "Collateral Interest
Shortfall"), of (x) the Collateral Monthly Interest for such Distribution Date
over (y) the aggregate amount of funds allocated and available to pay such
Collateral Monthly Interest on such Distribution Date. If the Collateral
Interest Shortfall with respect to any Distribution Date is greater than zero,
an additional amount ("Collateral Additional Interest") equal to the product of
(i) (A) a fraction, the numerator of which is the actual number of days in such
Interest Period and the denominator of which is 360, times (B) the Collateral
Penalty Rate and (ii) such Collateral Interest Shortfall (or the portion thereof
which has not theretofore been paid to the Collateral Indebtedness Holder) shall
be payable as provided herein with respect to the Collateral Indebtedness
Interest on each Distribution Date following such Distribution Date to and
including the Distribution Date on which such Collateral Interest Shortfall is
paid to the Collateral Indebtedness Holder. Notwithstanding anything to the
contrary herein, Collateral Additional Interest shall be payable or distributed
to the Collateral Indebtedness Holder only to the extent permitted by applicable
law.
(d) The amount of monthly interest ("Class D Monthly Interest")
distributable from the Collection Account with respect to the Class D
Certificates on any Distribution Date shall be an amount equal to the product of
(i) the Class D Certificate Rate for the related Interest Period; (ii) the
outstanding principal amount of the Class D Certificates as of the preceding
Record Date; and (iii) a fraction, the numerator of which is the actual number
of days in such Interest Period and the denominator of which is 360; provided,
however, with respect to the first Distribution Date, Class D Monthly Interest
shall be equal to $ ______.
On the Determination Date preceding each Distribution Date, the
Servicer shall determine the excess, if any (the "Class D Interest Shortfall"),
of (x) the Class D Monthly Interest for such Distribution Date over (y) the
aggregate amount of funds allocated and available to pay such Class D Monthly
Interest on such Distribution
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Date. If the Class D Interest Shortfall with respect to any Distribution Date
is greater than zero, an additional amount ("Class D Additional Interest")
equal to the product of (i) (A) the actual number of days in the related
Interest Period divided by 360, times (B) the Class D Penalty Rate and (ii)
such Class D Interest Shortfall (or the portion thereof which has not
theretofore been paid to Class D Certificateholders) shall be payable as
provided herein with respect to the Class D Certificates on each Distribution
Date following such Distribution Date to and including the Distribution Date on
which such Class D Interest Shortfall is paid to Class D Certificateholders.
Notwithstanding anything to the contrary herein, Class D Additional Interest
shall be payable or distributed to Class D Certificateholders only to the
extent permitted by applicable law.
SECTION 4.4 DETERMINATION OF MONTHLY PRINCIPAL.
(a) The amount of monthly principal ("Class A Monthly Principal")
distributable or available for deposit into the Principal Account from the
Collection Account with respect to the Class A Certificates on each Distribution
Date, beginning with the Distribution Date in the month following the month in
which an Amortization Period begins, shall be equal to the least of (x) the
Available Principal Collections held in the Collection Account and available for
distribution with respect to such Distribution Date, (y) with respect to the
Accumulation Period prior to the Class A Expected Payment Date, the Controlled
Deposit Amount for such Distribution Date and (z) the Class A Adjusted Investor
Amount on such Distribution Date.
(b) The amount of monthly principal ("Class B Monthly Principal")
distributable or available for deposit into the Principal Account from the
Collection Account with respect to the Class B Certificates on each Distribution
Date relating to an Amortization Period, beginning with the Class B Principal
Commencement Date, shall be equal to the least of (x) the Available Principal
Collections held in the Collection Account and available for distribution with
respect to such Distribution Date, minus the portion of such amounts applied to
Class A Monthly Principal on such Distribution Date, (y) for each Distribution
Date with respect to the Accumulation Period prior to the Class B Expected
Payment Date, the Controlled Deposit Amount for such Distribution Date and (z)
the Class B Adjusted Investor Amount on such Distribution Date.
(c) The amount, if any, of monthly principal ("Collateral Monthly
Principal") distributable with respect to the Collateral Indebtedness Interest
on each Distribution Date shall be equal to:
(i) on any Distribution Date prior to the payment in full of
the Class B Certificates, the lesser of (x) the Available
Principal Collections held in the Collection Account and available
for distribution with respect to such Distribution Date minus the
portion of Available Principal Collections held in the Collection
Account and available for distribution as Class A Monthly
Principal or
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Class B Monthly Principal on such Distribution Date and (y) the
Enhancement Surplus on such Distribution Date, provided that the
Transferor shall have elected to pay such Collateral Monthly Principal
(after giving effect to any increase in the amount held in the Cash
Collateral Account or increase in the Class D Investor Amount on such
Distribution Date); and
(ii) beginning with the Distribution Date on which the Class B
Certificates have been paid in full, the lesser of (x) the Available
Principal Collections held in the Collection Account and available for
distribution with respect to such Distribution Date minus the portion
of such Available Principal Collections applied to any Class A Monthly
Principal or Class B Monthly Principal on such Distribution Date and
(y) the Collateral Indebtedness Amount on such Distribution Date.
(d) The amount of monthly principal ("Class D Monthly Principal")
distributable with respect to the Class D Certificates on each Distribution
Date, beginning with the Distribution Date on which the Collateral Indebtedness
Amount has been paid in full, or prior thereto subject to satisfaction of the
requirements of the Loan Agreement (and p rovided that such distribution would
not require the Transferor to designate a Minimum Transferor Interest Percentage
in accordance with Section C hereof, shall be equal to the least of (x) the
Available Principal Collections held in the Collection Account with respect to
such Distribution Date minus the amount portion of such Available Principal
Collections applied to any Class A Monthly Principal, Class B Monthly Principal
or Collateral Monthly Principal on such Distribution Date, (y) the Enhancement
Surplus on such Distribution Date and (z) the Class D Investor Amount on such
Distribution Date.
SECTION 4.5 REQUIRED AMOUNTS.
(a) On each Determination Date, the Servicer shall determine the
amount (the "Class A Required Amount"), if any, by which (x) the sum of (i)
Class A Monthly Interest for the following Distribution Date, (ii) any Class A
Monthly Interest previously due but not paid to the Class A Certificateholders
on a prior Distribution Date, (iii) any Class A Additional Interest for the
following Distribution Date and any Class A Additional Interest previously due
but not paid to Class A Certificateholders on a prior Distribution Date, (iv)
the Class A Allocable Amount, if any, for such Distribution Date and (v) if
Xxxxxxxx'x, Inc. is no longer the Servicer, the Class A Servicing Fee for the
related Distribution Date and the amount of any Class A Servicing Fee previously
due but not distributed to the Servicer on a prior Distribution Date exceeds (y)
the Class A Available Funds with respect to the preceding Monthly Period. In the
event that the Class A Required Amount for such Distribution Date is greater
than zero, the Servicer shall give written notice to the Trustee of such
positive Class A Required Amount on the date of computation and all or a portion
of the Excess Spread and the Shared Excess Finance Charge Collections allocable
to Series 1997-2 pursuant to Section 4.1(i) with respect to the related Monthly
Period in an amount equal to the Class A Required Amount for such
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Distribution Date shall be distributed from the Collection Account on
such Distribution Date pursuant to Section 4.8(a). In the event that the Class
A Required Amount for such Distribution Date exceeds the amount of the Excess
Spread and the Shared Excess Finance Charge Collections allocable to Series
1997-2 with respect to the related Monthly Period, all or a portion of the
Available Cash Collateral Amount with respect to such Distribution Date in an
amount equal to such excess shall be applied to fund the Class A Required
Amount. In the event that the Class A Required Amount for such Distribution
Date exceeds the amount of the Excess Spread, the Shared Excess Finance Charge
Collections allocable to Series 1997-2 with respect to the related Monthly
Period and the Available Cash Collateral Amount with respect to such
Distribution Date, all or a portion of the Reallocated Principal Collections
with respect to such Monthly Period in an amount equal to such excess shall be
distributed from the Collection Account on such Distribution Date pursuant to
Section 4.9(a).
(b) On each Determination Date, the Servicer shall determine the
amount (the "Class B Required Amount"), if any, equal to the sum of (x) the
amount, if any, by which the sum of (i) Class B Monthly Interest for the
following Distribution Date, (ii) any Class B Monthly Interest previously due
but not paid to the Class B Certificateholders on a prior Distribution Date,
(iii) any Class B Additional Interest for the following Distribution Date and
any Class B Additional Interest previously due but not paid to Class B
Certificateholders on a prior Distribution Date and (iv) if Xxxxxxxx'x, Inc. is
no longer the Servicer, the Class B Servicing Fee for the related Distribution
Date and the amount of any Class B Servicing Fee previously due but not
distributed to the Servicer on a prior Distribution Date exceeds Class B
Available Funds with respect to the preceding Monthly Period and (y) the amount,
if any, by which the Class B Allocable Amount, if any, for such Distribution
Date exceeds the amount available to make payments with respect thereto pursuant
to Section 4.8(d). In the event that the Class B Required Amount for such
Distribution Date is greater than zero, the Servicer shall give written notice
to the Trustee of such positive Class B Required Amount on the date of
computation and all or a portion of the Excess Spread and the Shared Excess
Finance Charge Collections allocable to Series 1997-2 pursuant to Section 4.1(i)
with respect to the related Monthly Period shall be distributed from the
Collection Account on such Distribution Date pursuant to Sections 4.8(c) and
(d). In the event that the Class B Required Amount for such Distribution Date
exceeds such amounts distributed pursuant to Sections 4.8(c) and (d), all or a
portion of the Available Cash Collateral Amount with respect to such
Distribution Date (other than that portion of the Available Cash Collateral
Amount applied to fund the amounts described in Sections 4.8(a) and (b) with
respect to such Distribution Date) in an amount equal to such excess shall be
applied to fund the Class B Required Amount. In the event that the Class B
Required Amount for such Distribution Date exceeds such portion of the Available
Cash Collateral Amount and the amounts distributed pursuant to Sections 4.8(c)
and (d), all or a portion of the Reallocated Principal Collections with respect
to such Monthly Period (other than the portion of the Reallocated Principal
Collections applied to fund the Class A Required Amount and other than Class B
Subordinated Principal Collections) in an amount equal to such excess shall
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be distributed from the Collection Account on such Distribution Date pursuant
to Section 4.9(b).
(c) On each Determination Date, the Servicer shall determine the
amount (the "Collateral Required Amount"), if any, equal to the sum of (x) the
amount, if any, by which the sum of (i) Collateral Monthly Interest for the
following Distribution Date, (ii) any Collateral Monthly Interest previously due
but not paid to the Collateral Indebtedness Holder on a prior Distribution Date,
(iii) any Collateral Additional Interest for the following Distribution Date and
any Collateral Additional Interest previously due but not paid to the Collateral
Indebtedness Holder on a prior Distribution Date and (iv) if Xxxxxxxx'x, Inc. is
no longer the Servicer, the Collateral Servicing Fee for the related
Distribution Date and the amount of any Collateral Servicing Fee previously due
but not distributed to the Servicer on a prior Distribution Date exceeds the
amount available to make payments with respect thereto pursuant to Sections
4.6(c)(i) and 4.8(f) with respect to the preceding Monthly Period and (y) the
amount, if any, by which the Collateral Allocable Amount, if any, for such
Distribution Date exceeds the amount available to make payments with respect
thereto pursuant to Section 4.8(h). In the event that the Collateral Required
Amount for such Distribution Date is greater than zero, the Servicer shall give
written notice to the Trustee of such positive Collateral Required Amount on the
date of computation and all or a portion of the Available Cash Collateral Amount
with respect to such Distribution Date (other than that portion of the Available
Cash Collateral Amount applied to fund the amounts described in Sections 4.8(a),
(b), (c) (d) and (e) with respect to such Distribution Date) in an amount equal
to such excess shall be applied to fund the Collateral Required Amount. In the
event that the Collateral Required Amount for such Distribution Date exceeds the
portion of the Available Cash Collateral Amount with respect to such
Distribution Date not used to fund the amounts described in Sections 4.8(a),
(b), (c), (d) and (e) with respect to such Distribution Date, all or a portion
of the Reallocated Principal Collections with respect to such Monthly Period
(other than the portion of the Reallocated Principal Collections applied to fund
the Class A Required Amount or the Class B Required Amount and other than Class
B Subordinated Principal Collections or Collateral Subordinated Principal
Collections) in an amount equal to such excess shall be distributed from the
Collection Account on such Distribution Date pursuant to Section 4.9(c).
SECTION 4.6 APPLICATION OF CLASS A AVAILABLE FUNDS, CLASS B AVAILABLE
FUNDS, COLLATERAL AVAILABLE FUNDS, CLASS D AVAILABLE FUNDS AND COLLECTIONS OF
PRINCIPAL RECEIVABLES.
The Servicer shall apply or shall instruct the Trustee to apply, on each
Distribution Date, Class A Available Funds, Class B Available Funds, Collateral
Available Funds, Class D Available Funds and Collections of Principal
Receivables allocable to Series 1997-2 held in the Collection Account with
respect to the Monthly Period immediately preceding such Distribuiton Date to
make the following distributions:
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(a) On each Distribution Date, Class A Available Funds with respect
to the Monthly Period immediately preceding such Distribution Date shall be
distributed in the following priority:
(i) an amount equal to Class A Monthly Interest for such
Distribution Date, plus the amount of any Class A Monthly Interest
previously due but not paid to Class A Certificateholders on a prior
Distribution Date, plus the amount of any Class A Additional Interest
for such Distribution Date and any Class A Additional Interest
previously due but not distributed to Class A Certificateholders on a
prior Distribution Date, shall be distributed to the Paying Agent for
payment to the Class A Certificateholders;
(ii) if Xxxxxxxx'x, Inc. is no longer the Servicer, an
amount equal to the Class A Servicing Fee for such Distribution
Date, plus the amount of any Class A Servicing Fee previously due but
not distributed to the Servicer on a prior Distribution Date, shall be
distributed to the Servicer;
(iii) an amount equal to the Class A Allocable Amount
for such Distribution Date shall be treated as a portion of
Collections of Principal Receivables allocable to Series 1997-2 for
such Distribution Date; and
(iv) the balance, if any, shall constitute Excess Spread and
shall be allocated and distributed as set forth in Section 4.8.
(b) On each Distribution Date, Class B Available Funds with
respect to the Monthly Period immediately preceding such Distribution Date
shall be applied in the following priority:
(i) an amount equal to the Class B Monthly Interest for such
Distribution Date plus the amount of any Class B Monthly Interest
previously due but not distributed to Class B Certificateholders on a
prior Distribution Date, plus the amount of any Class B Additional
Interest for such Distribution Date and any Class B Additional
Interest previously due but not distributed to Class B
Certificateholders on a prior Distribution Date, shall be distributed
to the Paying Agent for payment to the Class B Certificateholders;
(ii) if Xxxxxxxx'x, Inc. is no longer the Servicer, an
amount equal to the Class B Servicing Fee for such Distribution
Date, plus the amount of any Class B Servicing Fee previously due but
not distributed to the Servicer on a prior Distribution Date, shall be
distributed to the Servicer; and
(iii) the balance, if any, shall constitute Excess Spread and
shall be allocated and distributed as set forth in Section 4.8.
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(c) On each Distribution Date, Collateral Available Funds with
respect to the Monthly Period immediately preceding such Distribution Date
shall be applied in the following priority:
(i) if Xxxxxxxx'x, Inc. is no longer the Servicer, an
amount equal to the Collateral Servicing Fee for such
Distribution Date, plus the amount of any Collateral Servicing Fee
previously due but not distributed to the Servicer on a prior
Distribution Date, shall be distributed to the Servicer; and
(ii) the balance, if any, shall constitute Excess Spread and
shall be allocated and distributed as set forth in Section 4.8.
(d) On each Distribution Date, Class D Available Funds with
respect to the Monthly Period immediately preceding such Distribution Date
shall be applied in the following priority:
(i) if Xxxxxxxx'x, Inc. is no longer the Servicer, an amount
equal to the Class D Servicing Fee for such Distribution Date,
plus the amount of any Class D Servicing Fee previously due but not
distributed to the Servicer on a prior Distribution Date, shall be
distributed to the Servicer; and
(ii) the balance, if any, shall constitute Excess Spread and
shall be allocated and distributed as set forth in Section 4.8.
(e) On each Distribution Date with respect to the Revolving
Period, all such Available Principal Collections (after giving effect to any
reallocation thereof pursuant to Section 4.9), shall be applied in the
following priority:
(i) an amount equal to Collateral Monthly Principal for such
Distribution Date shall be applied in accordance with the Loan
Agreement;
(ii) an amount equal to Class D Monthly Principal for such
Distribution Date shall be distributed to the Paying Agent for
payment to the Class D Certificateholders; and
(iii) the balance, if any, shall be treated as "Shared
Principal Collections" with respect to Group One to be applied in
accordance with Section 4.1(h) (and be retained in the Excess Funding
Account if required by such provision).
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(f) On each Distribution Date following the commencement of an
Amortization Period, all such Available Principal Collections shall be applied
in the following priority:
(i) an amount equal to Class A Monthly Principal for such
Distribution Date shall, during the Class A Accumulation Period, be
deposited in the Principal Account for payment to Class A
Certificateholders on the earlier to occur of the Class A Expected
Payment Date or the first Special Distribution Date or, during the
Rapid Amortization Period, be distributed to the Paying Agent for
payment to the Class A Certificateholders;
(ii) an amount equal to Class B Monthly Principal for such
Distribution Date shall, during the Class B Accumulation
Period, be deposited in the Principal Account for payment to Class B
Certificateholders on the earlier to occur of the Class B Expected
Payment Date or the first Special Distribution Date or, during the
Rapid Amortization Period, be distributed to the Paying Agent for
payment to the Class B Certificateholders;
(iii) an amount equal to Collateral Monthly Principal for
such Distribution Date shall be applied in accordance with the
Loan Agreement;
(iv) an amount equal to Class D Monthly Principal for such
Distribution Date shall be distributed to the Paying Agent for
payment to the Class D Certificateholders; and
(v) the balance, if any, shall be treated as "Shared
Principal Collections" as provided in Section 4.1(h) and allocated
among each Series in Group One as specified in each Supplement for
Series included in Group One.
SECTION 4.7 DEFAULTED AMOUNTS; ADJUSTMENT AMOUNTS; INVESTOR CHARGE OS;
REDUCTIONS OF ADJUSTMENT AMOUNTS.
(a) On each Determination Date, the Servicer shall calculate
the Class A Required Amount, if any, for the related Distribution Date. If, on
any Distribution Date, the Class A Required Amount for such Distribution Date
exceeds the sum of (x) the amount of the Excess Spread and the Shared Excess
Finance Charge Collections allocable to Series 1997-2 with respect to such
Distribution Date, (y) the Available Cash Collateral Amount with respect to such
Distribution Date and (z) the amount of Reallocated Principal Collections
available pursuant to Section 4.9(a) with respect to the preceding Monthly
Period, the Class D Investor Amount (after giving effect to any reduction
thereof pursuant to Section 4.7(d)) shall be reduced by the amount of such
excess, but not by more than the excess of the Class A Allocable Amount for such
Distribution Date over the amount of Excess Spread and Shared Excess Finance
Charge Collections, the amount withdrawn from the Cash Collateral Account and
the amount of Reallocated Principal Collections used to fund the Class A
Allocable Amount for such Distribution Date. In the
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33
event that such reduction would cause the Class D Investor Amount to be a
negative number, the Class D Investor Amount shall be reduced to zero and the
Collateral Indebtedness Amount (after giving effect to any reduction thereof
pursuant to Section 4.7(c)) shall be reduced by the amount by which the Class D
Investor Amount would have been reduced below zero, but not by more than the
excess, if any, of the Class A Allocable Amount for such Distribution Date over
the amount of such reduction, if any, of the Class D Investor Amount with
respect to such Distribution Date and the amount of Excess Spread and Shared
Excess Finance Charge Collections, the amount withdrawn from the Cash Collateral
Account and the amount of Reallocated Principal Collections used to fund the
Class A Allocable Amount for such Distribution Date. In the event that such
reduction would cause the Collateral Indebtedness Amount to be a negative
number, the Collateral Indebtedness Amount shall be reduced to zero and the
Class B Investor Amount (after giving effect to any reduction thereof pursuant
to Section 4.7(b)) shall be reduced by the amount by which the Collateral
Indebtedness Amount would have been reduced below zero, but not by more than the
excess, if any, of the Class A Allocable Amount for such Distribution Date over
the aggregate amount of the reductions, if any, of the Collateral Indebtedness
Amount and the Class D Investor Amount with respect to such Distribution Date
and the amount of Excess Spread and Shared Excess Finance Charge Collections,
the amount withdrawn from the Cash Collateral Account and the amount of
Reallocated Principal Collections used to fund the Class A Allocable Amount for
such Distribution Date. In the event that such reduction would cause the Class B
Investor Amount to be a negative number, the Class B Investor Amount shall be
reduced to zero, and the Class A Investor Amount shall be reduced by the amount
by which the Class B Investor Amount would have been reduced below zero, but not
by more than the excess, if any, of the Class A Allocable Amount for such
Distribution Date over the aggregate amount of the reductions, if any, of the
Class D Investor Amount, the Collateral Indebtedness Amount and the Class B
Investor Amount for such Distribution Date and the amount of Excess Spread and
Shared Excess Finance Charge Collections, the amount withdrawn from the Cash
Collateral Account and the amount of Reallocated Principal Collections used to
fund the Class A Investor Allocable Amount for such Distribution Date (a "Class
A Investor Charge Off"). Class A Investor Charge Offs shall thereafter be
reimbursed and the Class A Investor Amount increased (but not by an amount in
excess of the aggregate unreimbursed Class A Investor Charge Offs) on any
Distribution Date by (i) the amount of Excess Spread and Shared Excess Finance
Charge Collections allocated and available for that purpose pursuant to Section
4.8(b), and (ii) without duplication, the aggregate amount of the reductions of
the Series Adjustment Amounts allocable to the Class A Investor Amount pursuant
to Section 4.7(f).
(b) On each Determination Date, the Servicer shall calculate
the Class B Required Amount, if any, for the related Distribution Date. If, on
any Distribution Date, the Class B Required Amount for such Distribution Date
exceeds the sum of (x) the amount of the Excess Spread and the Shared Excess
Finance Charge Collections allocable to Series 1997-2 with respect to such
Distribution Date which are not used to fund the Class A Required Amount and
Class A Investor Charge Offs on the related Distribution Date, (y) the portion,
if any, of the Available Cash Collateral Amount which is remaining
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34
after applying the Available Cash Collateral Amount to fund the Class A
Required Amount with respect to such Distribution Date and (z) the amount of
Reallocated Principal Collections which are available to fund the Class B
Required Amount on such Distribution Date pursuant to Section 4.9(b), then the
Class D Investor Amount (after giving effect to any reduction thereof pursuant
to Sections 4.7(a) and (d)) shall be reduced by the amount of such excess, but
not by more than the excess of the Class B Allocable Amount for such
Distribution Date over the amount of Excess Spread and Shared Excess Finance
Charge Collections, the amount withdrawn from the Cash Collateral Account and
the amount of Reallocated Principal Collections used to fund the Class B
Allocable Amount for such Distribution Date. In the event that such reduction
would cause the Class D Investor Amount to be a negative number, the Class D
Investor Amount shall be reduced to zero, and the Collateral Indebtedness
Amount (after giving effect to any reduction thereof pursuant to Sections
4.7(a) and (c)) shall be reduced by the amount by which the Class D Investor
Amount would have been reduced below zero, but not by more than the excess, if
any, of the Class B Allocable Amount for such Distribution Date over the amount
of the reductions, if any, of the Class D Investor Amount with respect to such
Distribution Date and the amount of Excess Spread and Shared Excess Finance
Charge Collections, the amount withdrawn from the Cash Collateral Account and
the amount of Reallocated Principal Collections used to fund the Class B
Allocable Amount for such Distribution Date. In the event that such reduction
would cause the Collateral Indebtedness Amount to be a negative number, the
Collateral Indebtedness Amount shall be reduced to zero, and the Class B
Investor Amount shall be reduced by the amount by which the Collateral
Indebtedness Amount would have been reduced below zero, but not by more than
the excess, if any, of the Class B Allocable Amount for such Distribution Date
over the aggregate amount of the reductions, if any, of the Collateral
Indebtedness Amount and the Class D Investor Amount with respect to such
Distribution Date and the amount of Excess Spread and Shared Excess Finance
Charge Collections, the amount withdrawn from the Cash Collateral Account and
the amount of Reallocated Principal Collections used to fund the Class B
Allocable Amount for such Distribution Date (a "Class B Investor Charge Off").
Class B Investor Charge Offs shall thereafter be reimbursed and the Class B
Investor Amount increased (but not by an amount in excess of the aggregate
unreimbursed Class B Investor Charge Offs) on any Distribution Date by (i) the
amount of Excess Spread and Shared Excess Finance Charge Collections allocated
and available for that purpose pursuant to Section 4.8(e), and (ii) without
duplication, the aggregate amount of the reductions of the Series Adjustment
Amounts allocable to the Class B Investor Amount pursuant to Section 4.7(f).
(c) If, on any Distribution Date, the Collateral Allocable
Amount exceeds the amount of Excess Spread and Shared Excess Finance Charge
Collections available to fund the Collateral Allocable Amount pursuant to
Section 4.8(h) on such Distribution Date, then the Class D Investor Amount
(after giving effect to any reduction thereof pursuant to Sections 4.7(a), (b)
and (d)) shall be reduced by the amount of such excess. In the event that such
reduction would cause the Class D Investor Amount to be a negative number, the
Class D Investor Amount shall be reduced to zero, and the Collateral
Indebtedness Amount shall be reduced by the amount by which the
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35
Class D Investor Amount would have been reduced below zero; provided, however,
that the Collateral Indebtedness Amount shall not be reduced below zero (a
"Collateral Indebtedness Charge Off"). Collateral Indebtedness Charge Offs shall
thereafter be reimbursed and the Collateral Indebtedness Amount increased (but
not by an amount in excess of the aggregate unreimbursed Collateral Indebtedness
Charge Offs) on any Distribution Date by (i) the amount of Excess Spread and
Shared Excess Finance Charge Collections allocated and available for that
purpose pursuant to Section 4.8(i), and (ii) without duplication, the aggregate
amount of the reductions of the Series Adjustment Amounts allocable to the
Collateral Indebtedness Amount pursuant to Section 4.7(f).
(d) If, on any Distribution Date, the Class D Allocable Amount
exceeds the amount of Excess Spread and Shared Excess Finance Charge Collections
available to fund the Class D Allocable Amount pursuant to Section 4.8(m) on
such Distribution Date, then the Class D Investor Amount shall be reduced by the
amount of such excess; provided, however, that the Class D Investor Amount shall
not be reduced below zero (a "Class D Investor Charge Off"). Class D Investor
Charge Offs shall thereafter be reimbursed and the Class D Investor Amount
increased (but not by an amount in excess of the aggregate unreimbursed Class D
Investor Charge Offs) on any Distribution Date by (i) the amount of Excess
Spread and Shared Excess Finance Charge Collections allocated and available for
that purpose pursuant to Section 4.8(n), and (ii) without duplication, the
aggregate amount of the reductions of the Series Adjustment Amounts allocable to
the Collateral Indebtedness Amount pursuant to Section 4.7(f).
(e) Whenever funds or other amounts are available hereunder in
respect of the Class A Allocable Amount, the Class B Allocable Amount, the
Collateral Allocable Amount or the Class D Allocable Amount, as the case may be,
such funds or other amounts shall be applied first to the elimination of any
deficiency resulting from Default Amounts and then to any deficiency resulting
from Series Adjustment Amounts.
(f) Any reduction of the Series Adjustment Amount for Series
1997-2 as a result of the deposit of funds into the Excess Funding Account, the
repurchase or other repayment of Investor Certificates or the increase of
Principal Receivables in the Trust shall be allocated first to the Class A
Certificates, then to the Class B Certificates, then to the Collateral
Indebtedness Interest and finally to the Class D Certificates, in each case to
the extent of any unreimbursed reduction of the Investor Amount thereof
attributable to Series Adjustment Amounts.
SECTION 4.8 EXCESS SPREAD; SHARED EXCESS FINANCE CHARGE COLLECTIONS. The
Servicer shall apply, or shall instruct the Trustee to apply, on each
Distribution Date, Excess Spread (including interest and earnings on funds held
in the Cash Collateral Account and included as Excess Spread pursuant to
Section 4.12(b)) and Shared Excess Finance Charge Collections allocable to
Series 1997-2 pursuant to Section 4.1(i) with respect to the related Monthly
Period, to make the following distributions in the following priority:
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(a) an amount up to the Class A Required Amount, if any, with
respect to such Distribution Date shall be distributed by the Trustee to fund
any deficiency pursuant to Sections 4.6(a)(i), (ii) and (iii), in that order of
priority;
(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 Available Principal Collections allocable to Series 1997-2 for such
Distribution Date;
(c) an amount up to the Class B Required Amount, if any, with
respect to such Distribution Date shall be distributed by the Trustee to fund
any deficiency pursuant to Sections 4.6(b)(i) and (ii), in that order of
priority;
(d) an amount equal to any remaining portion of the Class B
Required Amount for such Distribution Date shall be treated as a portion of
Available Principal Collections allocable to Series 1997-2 for such Distribution
Date;
(e) an amount equal to the aggregate amount by which the Class
B Investor Amount has been reduced pursuant to clauses (c), (d) and (e) of the
definition of "Class B Investor Amount" (but not in excess of the aggregate
amount of such reductions which have not been previously reimbursed) shall be
treated as a portion of Available Principal Collections allocable to Series
1997-2 for such Distribution Date;
(f) an amount equal to Collateral Monthly Interest for such
Distribution Date, plus the amount of Collateral Monthly Interest previously due
but not distributed to the Collateral Indebtedness Holder on a prior
Distribution Date, plus the amount of Collateral Additional Interest for such
Distribution Date and any Collateral Additional Interest previously due but not
distributed to the Collateral Indebtedness Holder shall be applied in accordance
with the Loan Agreement;
(g) an amount equal to the Class A Servicing Fee, the Class B
Servicing and the Collateral Servicing Fee for such Distribution Date (or if
Xxxxxxxx'x, Inc. is no longer the Servicer, the portion thereof not paid
pursuant to Section 4.6), plus the amount of any Class A Servicing Fee, Class B
Servicing Fee or Collateral Servicing Fee previously due but not distributed to
the Servicer on a prior Distribution Date, shall be distributed to the Servicer;
(h) an amount equal to the Collateral Allocable Amount for such
Distribution Date shall be treated as a portion of Available Principal
Collections allocable to Series 1997-2 for such Distribution Date;
(i) an amount equal to the aggregate amount by which the
Collateral Indebtedness Amount has been reduced pursuant to clauses (c) and (d)
of the definition of "Collateral Indebtedness Amount" (but not in excess of the
aggregate amount of such reductions which have not been previously reimbursed)
shall be treated as a
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portion of Available Principal Collections allocable to Series 1997-2 for such
Distribution Date;
(j) an amount equal to the excess, if any, of the Required Cash
Collateral Amount over the Available Cash Collateral Amount (without giving
effect to any deposit made on such date hereunder and after giving effect to any
payment of Collateral Monthly Principal or Class D Monthly Principal being made
on such date) shall be deposited into the Cash Collateral Account;
(k) an amount equal to Class D Monthly Interest for such
Distribution Date, plus the amount of Class D Monthly Interest previously due
but not distributed to the Class D Certificateholders on a prior Distribution
Date, plus the amount of Class D Additional Interest for such Distribution Date
and any Class D Additional Interest previously due but not distributed shall be
distributed to the Paying Agent for payment to the Class D Certificateholders;
(l) an amount equal to the Class D Servicing Fee for such
Distribution Date (or if Xxxxxxxx'x, Inc. is no longer the Servicer, the portion
of the Class D Servicing Fee for such Distribution Date not paid pursuant to
Section 4.6(d)(i)), plus the amount of any Class D Servicing Fee previously due
but not distributed to the Servicer on a prior Distribution Date, shall be
distributed to the Servicer;
(m) an amount equal to the Class D Allocable Amount for such
Distribution Date shall be treated as a portion of Available Principal
Collections allocable to Series 1997-2 for such Distribution Date;
(n) an amount equal to the aggregate amount by which the Class
D Investor Amount has been reduced pursuant to clauses (c) and (d) of the
definition of "Class D Investor Amount" (but not in excess of the aggregate
amount of such reductions which have not been previously reimbursed) shall be
treated as a portion of Available Principal Collections allocable to Series
1997-2 for such Distribution Date;
(o) an amount equal to the aggregate of any other amounts then
due to the Collateral Indebtedness Holder pursuant to the Loan Agreement shall
be applied in accordance with the Loan Agreement;
(p) an amount equal to the excess, if any, of the Required
Reserve Account Amount over the amount held in the Reserve Account shall be
deposited into the Reserve Account; and
(q) the balance, if any, shall constitute "Shared Excess
Finance Charge Collections" with respect to Group One to be applied in
accordance with Section 4.1(i).
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SECTION 4.9 REALLOCATED PRINCIPAL COLLECTIONS. The Servicer shall apply,
or shall instruct the Trustee to apply, on each Distribution Date, Reallocated
Principal Collections (applying all Class D Subordinated Principal Collections
prior to applying any Collateral Subordinated Principal Collections, and
applying all Collateral Subordinated Principal Collections prior to applying
any Class B Subordinated Principal Collections, and applying no Class B
Subordinated Principal Collections with respect to the Class B Required Amount
pursuant to clause (b) below and applying no Class B Subordinated Principal
Collections or Collateral Subordinated Principal Collections with respect to
the Collateral Required Amount pursuant to clause (c) below) with respect to
such Distribution Date, to make the following distributions 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 Distribution Date over (ii) the
sum of (x) the amount of Excess Spread and Shared Excess Finance Charge
Collections allocable to Series 1997-2 with respect to the related Monthly
Period and (y) the Available Cash Collateral Amount with respect to such
Distribution Date shall be distributed by the Trustee to fund any deficiency
pursuant to Sections 4.6(a)(i), (ii) and (iii), in that order of priority;
(b) an amount equal to the excess, if any, of (i) the Class B
Required Amount, if any, with respect to such Distribution Date over (ii) the
sum of (x) the amount of Excess Spread and Shared Excess Finance Charge
Collections allocable to Series 1997-2 with respect to the related Monthly
Period available in respect of the Class B Required Amount pursuant to Section
4.8(c) and (d) on such Distribution Date and (y) the amount withdrawn from the
Cash Collateral Account in respect of the Class B Required Amount with respect
to such Distribution Date shall be distributed by the Trustee to fund any
deficiency pursuant to Sections 4.8(c) and (d), in that order of priority; and
(c) an amount equal to the excess, if any, of (i) the
Collateral Required Amount, if any, with respect to such Distribution Date over
(ii) the sum of (x) the amount of Excess Spread and Shared Excess Finance Charge
Collections allocable to Series 1997-2 with respect to the related Monthly
Period available in respect of the Collateral Required Amount pursuant to
Sections 4.8(f) and (h) on such Distribution Date and (y) the amount withdrawn
from the Cash Collateral Account in respect of the Collateral Required Amount
with respect to such Distribution Date shall be distributed by the Trustee to
fund any deficiency pursuant to Section 4.6(c)(i) and Sections 4.8(f) and (h),
in that order of priority.
SECTION 4.10 PRINCIPAL SHORTFALL. The "Principal Shortfall" for Series
1997-2 shall be equal to (a) for any Distribution Date with respect to the
Revolving Period zero, or such higher amount designated by the Servicer in an
Officer's Certificate, (b) for any Distribution Date with respect to the
Accumulation Period (on or prior to the Class B Expected Payment Date), the
excess, if any, of the Controlled Deposit Amount with respect to such
Distribution Date over the amount of Available Principal Collections for
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such Distribution Date (excluding any portion thereof attributable to Shared
Principal Collections, (c) for each Distribution Date with respect to a Rapid
Amortization Period, unless and until the Class A Investor Amount and the Class
B Investor Amount shall have been paid in full, the excess, if any, of the
Class A Investor Amount and the Class B Investor Amount over the amount of
Available Principal Collections for such Distribution Date (excluding any
portion thereof attributable to Shared Principal Collections) and (d) for each
Distribution Date after the Class A Investor Amount and the Class B Investor
Amount have been paid in full, the excess, if any, of the Investor Amount over
the amount of Available Principal Collections for such Distribution Date, or
such lesser amount designated by the Servicer.
SECTION 4.11 FINANCE CHARGE SHORTFALL. The "Finance Charge Shortfall" for
Series 1997-2 for any Distribution Date shall be equal to the excess, if any,
of (a) the full amount required to be paid, without duplication, pursuant to
Sections 4.6(a), 4.6(b), 4.6(c) and 4.6(d) and Sections 4.8 (a)-(o) on such
Distribution Date over (b) the Investor Percentage of Collections of Finance
Charge Receivables with respect to the related Monthly Period.
SECTION 4.12 CASH COLLATERAL ACCOUNT.
(a) The Servicer shall establish and maintain, in the name of
the Trustee, for the benefit of the Series 1997-2 Certificateholders, with a
Qualified Institution a segregated trust account (the "Cash Collateral
Account"), bearing a designation clearly indicating that the funds held therein
are held for the benefit of the Series 1997-2 Certificateholders. The Cash
Collateral Account shall initially be established with the Trustee. The Trustee
shall possess all right, title and interest in all funds held from time to time
in the Cash Collateral Account and in all proceeds thereof. The Cash Collateral
Account shall be under the sole dominion and control of the Trustee for the
benefit of the Series 1997-2 Certificateholders. If, at any time, the
institution holding the Cash Collateral Account ceases to be a Qualified
Institution, the Trustee (or the Servicer on its behalf) shall within five (5)
Business Days establish a new Cash Collateral Account meeting the conditions
specified above with a Qualified Institution and shall transfer any cash and/or
any investments to such new Cash Collateral Account. The Trustee, at the
direction of the Servicer, shall make deposits to and withdrawals from the Cash
Collateral Account in the amounts and at the times set forth in this Agreement
and the Loan Agreement. All withdrawals from the Cash Collateral Account shall
be made in the priority set forth below. The interest of the Collateral
Indebtedness Holder in the Cash Collateral Account shall be subordinated to the
interests of the Class A Certificateholders and the Class B Certificateholders
as provided herein and in the Loan Agreement. The Collateral Indebtedness
Holder shall not be entitled to reimbursement from the Trust Property for any
withdrawals from the Cash Collateral Account except as specifically provided in
this Agreement and the Loan Agreement.
(b) Funds held in the Cash Collateral Account shall be invested
at the direction of the Servicer by the Trustee in Permitted Investments. Funds
held in the
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Cash Collateral Account on any Distribution Date, after giving effect to any
withdrawals from the Cash Collateral Account on such Distribution Date, shall
be invested in such investments that will mature so that such funds will be
available for withdrawal on or prior to the following Distribution Date. No
Permitted Investment shall be disposed of prior to its maturity; provided,
however, that the Trustee may sell, liquidate or dispose of a Permitted
Investment before its maturity, if so directed by the Servicer, the Servicer
having reasonably determined that the interest of the 1997-2 Certificateholders
may be adversely affected if such Permitted Investment is held to its maturity.
The proceeds of any such investments shall be invested in such investments that
will mature so that such funds will be available for withdrawal on or prior to
the Distribution Date immediately following the date of such investment. The
Trustee shall maintain for the benefit of the Series 1997-2 Certificateholders
possession of the negotiable instruments or securities, if any, evidencing such
Permitted Investments. On each Distribution Date, all interest and earnings (net
of losses and investment expenses) on funds held in the Cash Collateral Account
shall be treated as a portion of Excess Spread for such Distribution Date and
applied in accordance with Section 4.8.
(c) On each Determination Date, the Servicer shall calculate
the amount (the "Required Draw Amount") by which the amounts specified in
clauses (a) through (f) and clause (h) of Section 4.8 with respect to the
related Distribution Date exceed the amount of Excess Spread and Shared Excess
Finance Charge Collections allocable to Series 1997-2 with respect to the
related Monthly Period available to pay such specified amounts. In the event
that for any Distribution Date the Required Draw Amount is greater than zero,
the Servicer shall give written notice to the Trustee of such positive Required
Draw Amount on the related Determination Date. On the Distribution Date, the
Required Draw Amount, if any, up to the Available Cash Collateral Amount, shall
be withdrawn from the Cash Collateral Account and distributed to fund any
deficiency pursuant to clauses (a) through (f) and clause (h) of Section 4.8 (in
the order of priority set forth in Section 4.8).
(d) In the event that the Cash Enhancement Surplus on any
Distribution Date, after giving effect to all deposits to and withdrawals from
the Cash Collateral Account and all payments of principal to Series 1997-2
Certificateholders with respect to such Distribution Date, is greater than zero,
the Trustee, acting in accordance with the instructions of the Servicer, shall
withdraw from the Cash Collateral Account, and pay to the Transferor, an amount
equal to such Cash Enhancement Surplus; provided, however, that the Transferor,
at its option, to be exercised in its sole discretion, may instruct the Servicer
not to instruct the Trustee to withdraw such Cash Enhancement Surplus (or any
portion thereof), in which event the Trustee shall not withdraw such Cash
Enhancement Surplus (or portion thereof) from the Cash Collateral Account.
SECTION 4.13 PRINCIPAL ACCOUNT.
(a) The Servicer shall establish and maintain, in the name of
the Trustee, for the benefit of the Series 1997-2 Certificateholders, with a
Qualified Institution
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a segregated trust account (the "Principal Account"), bearing a designation
clearly indicating that the funds deposited therein are held for the benefit of
the Series 1997-2 Certificateholders. The Principal Account shall initially be
established with the Trustee. The Trustee shall possess all right, title and
interest in all funds held from time to time in the Principal Account and in all
proceeds thereof. The Principal Account shall be under the sole dominion and
control of the Trustee for the benefit of the Series 1997-2 Certificateholders.
If, at any time, the institution holding the Principal Account ceases to be a
Qualified Institution, the Trustee (or the Servicer on its behalf) shall within
five (5) Business Days establish a new Principal Account meeting the conditions
specified above with a Qualified Institution and shall transfer any cash and/or
any investments to such new Principal Account. Pursuant to the authority granted
to the Servicer in Section 3.1(b) of the Agreement, the Servicer shall have the
power, revocable by the Trustee, to make withdrawals and payments or to instruct
the Trustee to make withdrawals and payments from the Principal Account for the
purposes of carrying out the Servicer's or the Trustee's duties hereunder.
(b) Funds held in the Principal Account shall be invested at
the direction of the Servicer by the Trustee in Permitted Investments. All such
Permitted Investments shall be held by the Trustee for the benefit of the Series
1997-2 Certificateholders; provided, however, that on each Distribution Date all
interest and other investment income (net of losses and investment expenses)
("Principal Investment Proceeds") on funds held therein shall be applied as set
forth in Section 4.13(c) below. Funds held in the Principal Account shall be
invested in Permitted Investments that will mature so that such funds will be
available for withdrawal on or prior to the following Distribution Date. No
Permitted Investment shall be disposed of prior to its maturity; provided,
however, that the Trustee may sell, liquidate or dispose of a Permitted
Investment before its maturity, if so directed by the Servicer, the Servicer
having reasonably determined that the interest of the 1997-2 Certificateholders
may be adversely affected if such Permitted Investment is held to its maturity.
(c) On each Distribution Date with respect to the Accumulation
Period, the Servicer shall direct the Trustee to withdraw from the Principal
Account and deposit into the Collection Account all Principal Investment
Proceeds then held in the Principal Account and such Principal Investment
Proceeds shall be treated as a portion of (x) prior to the payment in full of
the Class A Investor Amount, Class A Available Funds and (y) thereafter, Class
B Available Funds, in each case for such Distribution Date.
(d) Reinvested interest and other investment income on funds
deposited in the Principal Account shall not be considered to be principal
amounts held therein for purposes of this Agreement.
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SECTION 4.14 RESERVE ACCOUNT.
(a) The Servicer shall establish and maintain, in the name of
the Trustee, for the benefit of the Series 1997-2 Certificateholders, with a
Qualified Institution a segregated trust account (the "Reserve Account"),
bearing a designation clearly indicating that the funds deposited therein are
held for the benefit of the Series 1997-2 Certificateholders. The Reserve
Account shall initially be established with the Trustee. The Trustee shall
possess all right, title and interest in all funds held from time to time in the
Reserve Account and in all proceeds thereof. The Reserve Account shall be under
the sole dominion and control of the Trustee for the benefit of the Series
1997-2 Certificateholders. If at any time the institution holding the Reserve
Account ceases to be a Qualified Institution, the Trustee (or the Servicer on
its behalf) shall within five (5) Business Days establish a new Reserve Account
meeting the conditions specified above with a Qualified Institution, and shall
transfer any cash and/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 Agreement, and
(ii) on each Distribution Date (from and after the Reserve Account Funding Date)
prior to the termination of the Reserve Account shall make a deposit into the
Reserve Account in the amount specified in, and otherwise in accordance with,
Section 4.8(p).
(b) Funds held in the Reserve Account shall be invested at the
direction of the Servicer by the Trustee in Permitted Investments. Funds held in
the Reserve Account on any Distribution Date, after giving effect to any
withdrawals from the Reserve Account on such Distribution Date, shall be
invested in such investments that will mature so that such funds will be
available for withdrawal on or prior to the following Distribution Date. The
Trustee shall maintain for the benefit of the Series 1997-2 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; provided, however, that the Trustee may sell, liquidate or
dispose of an Permitted Investment before its maturity, if so directed by the
Servicer, the Servicer having reasonably determined that the interest of
the Series 1997-2 Certificateholders may be adversely affected if such
Permitted Investment is held to its maturity. On each Distribution Date, all
interest and earnings (net of losses and investment expenses) on funds held 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
Amount) and the balance, if any, shall be deposited in the Collection Account
and treated as a portion of (x) until the payment in full of the Class A
Investor Amount, Class A Available Funds and (y) thereafter, Class B Available
Funds, in each case for such Distribution Date. For purposes of determining
the availability of funds or the balance in the Reserve Account for any reason
under this Agreement, except as otherwise provided in the preceding sentence,
investment earnings on such funds shall be deemed not to be available or held.
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(c) On the Determination Date preceding each Distribution Date
with respect to the Accumulation Period (prior to the Class B Expected Payment
Date) and the first Special Distribution Date, the Servicer shall calculate the
"Reserve Draw Amount" which shall be equal to the excess, if any, of the Covered
Amount with respect to such Distribution Date or Special Distribution Date over
the Principal Investment Proceeds with respect to such Distribution Date or
Special Distribution Date.
(d) In the event that for any Distribution Date the Reserve
Draw Amount is greater than zero, the Reserve Draw Amount, up to the Available
Reserve Account Amount, shall be withdrawn from the Reserve Account on such
Distribution Date by the Trustee (acting in accordance with the instructions of
the Servicer), deposited into the Collection Account and included in (i) until
the payment in full of the Class A Investor Amount, Class A Available Funds and
(ii) thereafter, Class B Available Funds, in each case for such Distribution
Date.
(e) In the event that the Reserve Account Surplus on any
Distribution Date, after giving effect to all deposits to and withdrawals from
the Reserve Account with respect to such Distribution Date, is greater than
zero, the Trustee, acting in accordance with the instructions of the Servicer,
shall withdraw from the Reserve Account, and pay an amount equal to such Reserve
Account Surplus.
(f) Upon the earliest to occur of (i) the termination of the
Trust pursuant to Article XII of the Agreement, (ii) the day on which the Class
A Investor Amount and Class B Investor Amount have been paid in full, (iii) if
the Accumulation Period has not commenced, the occurrence of a Pay Out Event
with respect to Series 1997-2 and (iv) if the Accumulation Period has commenced,
the earlier of the first Special Distribution Date and the Class B Expected
Payment Date, the Trustee, acting in accordance with the instructions of the
Servicer, after the prior payment of all amounts owing to the Series 1997-2
Certificateholders which 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, held in the Reserve Account, and the Reserve
Account shall be deemed to have terminated for all purposes of the Agreement.
SECTION 4.15 POSTPONEMENT OF ACCUMULATION PERIOD. The Accumulation Period
is scheduled to commence at the end of the day on the last day of the ______
Monthly Period; provided, however, that, if the Accumulation Period Length
(determined as described below) shall be less than 12 months, the date on which
the Accumulation Period actually commences may, at the option of the
Transferor, be delayed to the first day of any month that is a number of whole
months prior to the Class A
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Expected Payment Date at least equal to the Accumulation Period Length and, as a
result, the number of Monthly Periods in the Accumulation Period shall at least
equal the Accumulation Period Length. On each Determination Date until the
Accumulation Period begins, the Servicer shall determine the "Accumulation
Period Length," which shall 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; provided,
however, that the Accumulation Period Length shall not be determined to be less
than one month.
SECTION 4.16 ADDITIONAL ISSUANCES OF CLASS D CERTIFICATES.
(a) On any day in the Revolving Period, the Trustee shall issue
to the Transferor for execution, upon the Transferor's request, and the Trustee
shall authenticate and deliver, in accordance with the Transferor's
instructions, an additional principal amount of Class D Certificates
("Additional Class D Certificates") as provided below.
(b) Additional Class D Certificates may be issued, executed and
delivered upon satisfaction of the following conditions:
(i) after giving effect to the issuance of such Additional
Class D Certificates, the Transferor Amount shall be at least
equal to the Minimum Transferor Amount and the Aggregate
Principal Receivables shall be at least equal to the Minimum
Aggregate Principal Receivables;
(ii) the Transferor shall have given notice by 10:00 A.M.,
New York City time, on the date such Additional Class D
Certificates are to be issued to the Trustee, the Paying Agent,
the Servicer and the Collateral Indebtedness Holder of the
proposed issuance of such Additional Class D Certificates;
(iii) on or before the date on which such Additional Class
D Certificates are issued, the Transferor shall have delivered an
Opinion of Counsel addressed to the Trustee, dated the date of
such issuance, to the effect that such issuance will not
adversely affect the tax characterization as debt of Investor
Certificates of any outstanding Series or Class with respect to
which an Opinion of Counsel addressed to the Trustee was
delivered at the time of their issuance that such Investor
Certificates would be characterized as debt, cause the Trust to
be classified, for federal income tax purposes, as an association
(or publicly
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traded partnership) taxable as a corporation, and cause or
constitute an event in which gain or loss would be recognized by
any Certificateholder; and
(iv) on or before the date such Additional Class D
Certificates are issued, the Transferor shall deliver to the
Trustee an Officer's Certificate confirming the matters set forth
in clause (i) above. The Trustee may conclusively rely on such
certificate, shall have no duty to make inquiries with regard to
matters set forth therein and shall incur no liability in so
relying.
SECTION I. ARTICLE V OF THE AGREEMENT. Article V of the
Agreement as it relates to Series 1997-2 shall read in its entirety as follows:
ARTICLE V
DISTRIBUTIONS AND REPORTS TO CERTIFICATEHOLDERS
SECTION 5.1 DISTRIBUTIONS.
(a) On each Determination Date, the Servicer shall deliver to
the Trustee and Paying Agent a certificate substantially in the form of Exhibit
B prepared by the Servicer. The Trustee shall be under no duty to recalculate,
verify or recompute the information on such certificate.
(b) On each Distribution Date, the Paying Agent shall
distribute to each Class A Certificateholder of record as of the preceding
Record Date (other than as provided in Section 12.2 respecting a final
distribution) such Class A Certificateholder's pro rata share of the amounts
that are available on such Distribution Date to pay interest on the Class A
Certificates pursuant to this Agreement.
(c) On the Class A Expected Payment Date and each Special
Distribution Date, the Paying Agent shall distribute to each Class A
Certificateholder of record as of the preceding Record Date (other than as
provided in Section 12.2 respecting a final distribution) such Class A
Certificateholder's pro rata share of the amounts that are available on such
date to pay principal of the Class A Certificates pursuant to this Agreement.
(d) On each Distribution Date, the Paying Agent shall
distribute to each Class B Certificateholder of record as of the preceding
Record Date (other than as provided in Section 12.2 respecting a final
distribution) such Class B Certificateholder's
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pro rata share of the amounts that are available on such Distribution Date to
pay interest on the Class B Certificates pursuant to this Agreement.
(e) On the Class B Expected Final Distribution Date and each
Special Distribution Date, the Paying Agent shall distribute to each Class B
Certificateholder of record as of the preceding Record Date (other than as
provided in Section 12.2 respecting a final distribution) such Class B
Certificateholder's pro rata share of the amounts that are available on such
date to pay principal of the Class B Certificates pursuant to this Agreement.
(f) On each Distribution Date, the Paying Agent shall
distribute to each Class D Certificateholder of record as of the preceding
Record Date (other than as provided in Section 12.2 respecting a final
distribution) such Class D Certificateholder's pro rata share of the amounts
that are available on such Distribution Date to pay interest on the Class D
Certificates pursuant to this Agreement.
(g) On each Distribution Date, the Paying Agent shall
distribute to each Class D Certificateholder of record as of the preceding
Record Date (other than as provided in Section 12.2 respecting a final
distribution) such Class D Certificateholder's pro rata share of the amounts
that are available on such date to pay principal of the Class D Certificates
pursuant to this Agreement.
(h) Except as provided in Section 12.2 with respect to a final
distribution and Section 5.3 with respect to payments to the Collateral
Indebtedness Holder, distributions to Series 1997-2 Certificateholders
hereunder shall be made by check mailed to each such Certificateholder at such
Certificateholder's address appearing in the Certificate Register without
presentation or surrender of any such Series 1997-2 Certificate or the making
of any notation thereon; provided, however, that with respect to such
Certificates registered in the name of a Clearing Agency, such distributions
shall be made to such Clearing Agency in immediately available funds.
SECTION 5.2 STATEMENTS TO SERIES 1997-2 CERTIFICATEHOLDERS. On each
Distribution Date, the Paying Agent, on behalf of the Trustee, shall forward to
each Series 1997-2 Certificateholder, including, for the avoidance of doubt,
the Collateral Indebtedness Holder, a statement substantially in the form of
Exhibit C prepared by the Servicer setting forth certain information relating
to the Trust and the Series 1997-2 Certificates.
On or before June 30 of each calendar year, beginning with 1998, the
Paying Agent, on behalf of the Trustee, shall furnish or cause to be furnished
to each Person who at any time during the preceding calendar year was a Series
1997-2 Certificateholder a statement prepared by the Servicer containing the
information which is required to be contained in Exhibit C, aggregated for such
calendar year or the applicable portion thereof during which such Person was a
Certificateholder of such Series, together with other information as is
required to be provided by an issuer of indebtedness under the
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Code and such other customary information as is necessary to enable the
Certificateholders of such Series to prepare their tax returns. Such obligation
of the Servicer shall be deemed to have been satisfied to the extent that
substantially comparable information shall have been provided by the Paying
Agent pursuant to any requirements of the Code as from time to time in effect.
SECTION 5.3 DISTRIBUTIONS TO COLLATERAL INDEBTEDNESS HOLDER.
Notwithstanding the foregoing provisions of this Article V, amounts payable to
the Collateral Indebtedness Holder pursuant to this Series Supplement shall be
distributed in the manner provided for in the Loan Agreement.
[END OF ARTICLE V]
SECTION J. PAY OUT EVENTS. If any one of the events specified
in Section 9.1 of the Agreement or any of the following events shall occur
during either the Revolving Period or the Accumulation Period with respect to
the Series 1997-2 Certificates:
(a) failure on the part of the Transferor or the Servicer (x)
to make any payment or deposit required by the terms of the Agreement or this
Series Supplement on or before the date occurring five (5) Business Days after
the date such payment or deposit is required to be made or (y) duly to observe
or perform in any material respect any other covenants or agreements applicable
to such party set forth in the Agreement or this Series Supplement, which
failure has a material adverse effect on the Series 1997-2 Certificateholders,
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 Series 1997-2 Certificateholders representing
not less than 50% of the Investor Amount, and continues to materially and
adversely affect the Series 1997-2 Certificateholders for such period;
(b) any representation or warranty made by the Transferor in
the Agreement or this Series Supplement, or information contained in a computer
file, microfiche or written list required to be delivered by the Transferor
pursuant to the Agreement, shall prove to have been incorrect in any material
respect when made or when delivered, (i) 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 Series
1997-2 Certificateholders representing not less than 50% of the Investor Amount,
and (ii) as a result of which the interests of the Series 1997-2
Certificateholders are materially and adversely affected and continue to be
materially and adversely affected for such period; provided, however, a Pay Out
Event shall not be deemed to have occurred if the Transferor has accepted
reassignment
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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 of the Portfolio Yields for any three (3)
consecutive Monthly Periods is less than the average Base Rate for such three
(3) Monthly Periods;
(d) the failure to pay the Class A Investor Amount on the Class
A Expected Payment Date or the failure to pay the Class B Investor Amount on the
Class B Expected Payment Date;
(e) the Transferor shall fail to designate, or be unable to
designate, Additional Accounts, the Receivables of which will be Eligible
Receivables, as required by the Agreement, and such failure shall continue for a
period of five (5) Business Days; or
(f) any Servicer Default shall occur which would have a
material adverse effect on the Series 1997-2 Certificateholders;
then, (i) in the case of any event described in clause (a), (b) or (f), after
the applicable grace period set forth in such subparagraphs, either the Trustee
or Series 1997-2 Certificateholders representing more than 50% of the Investor
Amount, by notice then given in writing to the Transferor and the Servicer (and
to the Trustee, if given by the Series 1997-2 Certificateholders) may declare
that a Pay Out Event has occurred with respect to only the Series 1997-2
Certificates as of the date of such notice and (ii) in the case of any event
described in Section 9.1 of the Agreement or in clauses (c), (d) or (e) above, a
Pay Out Event with respect to only the Series 1997-2 Certificates will be deemed
to have occurred without any notice or other action on the part of the Trustee
or the Series 1997-2 Certificateholders or all certificateholders, as
appropriate, immediately upon the occurrence of such event.
SECTION K. RESTRICTIONS ON TRANSFER.
(a) The Collateral Indebtedness Interest shall be subject to
the restrictions on transfer set forth in the Loan Agreement.
(b) The Transferor may at any time, without the consent of the
Investor Certificateholders, (i) sell or transfer all or a portion of the Class
D Certificates, provided that (A) the Transferor shall have given notice to the
Trustee, the Servicer and the Rating Agencies of such proposed sale or transfer
of the Class D Certificates at least five (5) Business Days prior to the
consummation of such sale or transfer; (B) the Rating Agency Condition shall
have been satisfied; (C) no Pay Out Event shall have occurred prior to the
consummation of such proposed sale or transfer of Class D Certificates; (D) the
Transferor shall have delivered an Officer's Certificate dated the date of the
consummation of such proposed sale or transfer to the effect that, in the
reasonable belief of the Transferor, such action will not, based on the facts
known to such officer at the
- 47 -
49
time of such certification, cause a Pay Out Event to occur with respect to any
Series, and (E) the Transferor shall have provided an Opinion of Counsel
addressed to the Trustee, dated the date of such certificate with respect to
such action, that such proposed sale or transfer will not adversely affect the
tax characterization as debt of Investor Certificates of any outstanding Series
or Class with respect to which an Opinion of Counsel addressed to the Trustee
was delivered at the time of their issuance that such Investor Certificates
would be characterized as debt, cause the Trust to be classified, for federal
income tax purposes, as an association (or publicly traded partnership) taxable
as a corporation and cause or constitute an event in which gain or loss would be
recognized by any Certificateholder.
(c) Each initial transferee of the Class D Certificates or any
interest therein and any assignee thereof or participant therein (each a
"holder") shall certify to the Transferor, the Servicer and the Trustee that it
has neither acquired nor will it sell, transfer, assign participate, pledge,
hypothecate, or otherwise dispose (any such act, a "transfer") of any interest
in its Class D Certificates or cause an interest in its Class D Certificates to
be marketed on or through (i) an "established securities market" within the
meaning of Section 7704(b)(1) of Code and any Treasury regulation thereunder,
including, without limitation, an over-the-counter market or an interdealer
quotation system that regularly disseminates firm buy or sell quotations or (ii)
a "secondary market" within the meaning of Section 7704(b)(2) of the Code and
any Treasury regulation thereunder, including, without limitation, a market
wherein interests in the Class D Certificates are regularly quoted by any Person
making a market in such interests and a market wherein any Person regularly
makes available bid or offer quotes with respect to interests in the Class D
Certificates and stands ready to effect buy or sell transactions at the quoted
price for itself or on behalf of others. In addition, each holder shall certify,
prior to any delivery or transfer to it of a Class D Certificate or interest
therein, that it is not and will not become a partnership, Subchapter S
corporation or grantor trust for United States federal income tax purposes. If a
holder cannot make the certification described in the preceding sentence, the
Transferor, the Trustee or the Servicer may prohibit a transfer to such entity;
provided, however, that if the Transferor, the Trustee or the Servicer agrees to
permit such a transfer, the Transferor, the Servicer or the Trustee may require
additional certifications in order to prevent the Trust from being treated as a
publicly traded partnership. Each holder acknowledges that special tax counsel
to the Transferor may render Opinions of Counsel from time to time to the
Transferor and others that the Trust will not be treated as an association or as
a publicly traded partnership taxable as a corporation, and that such Opinions
of Counsel will rely in part on the accuracy of the certifications in this
subsection K(c).
SECTION K1. TAX CHARACTERIZATION OF THE CLASS D CERTIFICATES
AND THE COLLATERAL INDEBTEDNESS INTEREST. It is the intention of the parties
hereto that the Class D Certificates and the Collateral Indebtedness Interest be
treated under applicable tax law as indebtedness. In the event that either the
Class D Certificates or the Collateral Indebtedness Interest are not so treated,
it is the intention of the parties that the Class D Certificates or the
Collateral Indebtedness Interest, as the case may be, be treated under
- 48 -
50
applicable tax law as interests in a partnership that owns the Receivables. In
the event that either the Class D Certificates or the Collateral Indebtedness
Interest are treated under applicable tax law as interests in a partnership, it
is the intention of the parties that the Class D Certificates or the Collateral
Indebtedness Interest, as the case may be, be treated as guaranteed payments
and, if for any reason they are not so treated, that the holders of the Class D
Certificates or the Collateral Indebtedness Interest, as the case may be, be
specially allocated gross interest income equal to the interest accrued during
each Interest Period on the Class D Certificates and on the Collateral
Indebtedness Interest.
SECTION L. RATIFICATION OF MASTER POOLING AND SERVICING
AGREEMENT. As supplemented by this Series Supplement, the Agreement is in all
respects ratified and confirmed and the Agreement as so supplemented by this
Series Supplement shall be read, taken, and construed as one and the same
instrument; provided, however, that pursuant to Section 9.2(a) of the Agreement,
the Trustee shall sell the portion of the Receivables allocable to Series 1997-2
unless instructed not to sell, dispose of or otherwise liquidate the Receivables
by holders of interests aggregating more than 50% of each Class of each Series
(including a majority in interest in each collateral indebtedness interest),
each holder of an interest in the Transferor Interest other than the Transferor
and any other Person specified in a Supplement.
SECTION L1. FASIT ELECTION. Each Series 1997-2
Certificateholder, by acquiring an interest in a Series 1997-2 Certificate, is
deemed to consent to any amendment to the Agreement or this Series Supplement
necessary for the Transferor to elect for the Trust or any portion thereof to be
treated as a FASIT within the meaning of Section 860L of the Code (or any
successor provision thereto), provided that, such election may not be made
unless the Transferor delivers to the Trustee (i) an Opinion of Counsel to the
effect that (x) the issuance of FASIT regular interests will not adversely
affect the tax characterization as debt of Investor Certificates of any
outstanding Series or Class with respect to which an Opinion of Counsel was
delivered at the time of their issuance that such Investor Certificates would
be characterized as debt, (y) following such issuance, the Trust will not be
classified, for federal income tax purposes, as an association (or publicly
traded partnership) taxable as a corporation, and (z) such issuance will not
cause or constitute an event in which gain or loss would be recognized by any
Investor Certificateholder, and (ii) an Officer's Certificate to the effect
that such issuance will not have a material adverse effect on Investor
Certificateholders of any outstanding Series or class (viewed as a Series or a
class, as applicable).
SECTION L2. PAIRED SERIES. Subject to obtaining confirmation by
each Rating Agency of the then existing ratings of each class of Series 1997-2
Certificates which are then rated, and prior to a Pay Out Event, the Series
1997-2 Certificates may be paired with one or more other Series (each a "Paired
Series"). Each Paired Series either will be pre-funded with an initial deposit
to a pre-funding account in an amount up to the initial principal balance of
such Paired Series and primarily from the proceeds of the sale of such Paired
Series or will have a variable principal amount. Any such pre-funding account
will be held for the benefit of such Paired Series and not for the benefit of
the Series 1997-
- 49 -
51
2 Certificateholders. As principal is paid with respect to the Series 1997-2
Certificates, either (i) in the case of a pre-funded Paired Series, an equal
amount of funds held in any pre-funding account for such pre-funded Paired
Series will be released (which funds will be distributed to the Transferor) or
(ii) in the case of a Paired Series having a variable principal amount, an
interest in such variable Paired Series in an equal or lesser amount may be
sold by the Trust (and the proceeds thereof will be distributed to the
Transferor) and, in either case, the invested amount in the Trust of such
Paired Series will increase by up to a corresponding amount. Upon payment in
full of the Certificates, assuming that there have been no unreimbursed charge
offs with respect to any related Paired Series, the aggregate investor amount
of such related Paired Series will have been increased by an amount up to an
aggregate amount equal to the Investor Amount paid to the Certificateholders
since the issuance of such Paired Series. The issuance of a Paired Series will
be subject to the conditions described in Section 6.9(b) of the Agreement.
SECTION M. COUNTERPARTS. This Series Supplement may be executed
in any number of counterparts (and by different parties on separate
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 N. GOVERNING LAW. THIS SERIES SUPPLEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
- 50 -
52
SECTION O. SUBORDINATION OF CERTAIN TERMINATION PAYMENTS.
Notwithstanding anything contained in Section 12.2(c) of the Agreement, upon the
sale of Receivables or interests therein as provided in Section 12.2(c) of the
Agreement, the proceeds of any such sale payable in respect of the Series 1997-2
Certificates shall be payable first to the Class A Certificates until paid in
full, then to the Class B Certificates until paid in full, then to the
Collateral Indebtedness Interest until paid in full and then to the Class D
Certificates until paid in full.
IN WITNESS WHEREOF, the Transferor, the Servicer and the
Trustee have caused this Series Supplement to be duly executed by their
respective officers thereunto duly authorized as of the day and year first above
written.
XXXXXXXX'X CREDIT CORPORATION,
as Transferor
By:
-----------------------------------
Name:
Title:
XXXXXXXX'X, INC.,
as Servicer
By:
------------------------------------
Name:
Title:
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION,
as Trustee
By:
-------------------------------------
Name:
Title:
- 51 -
53
EXHIBIT A-1
TO THE
SERIES 1997-2 SUPPLEMENT
FORM OF CLASS A CERTIFICATE
54
EXHIBIT A-1
TO THE
SERIES 1997-2 SUPPLEMENT
FORM OF CLASS A CERTIFICATE
REGISTERED $________
NO. A-1 CUSIP No. ________
Unless this Class A Certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to the issuer or
its agent for registration of transfer, exchange or payment, and any
certificate issued is registered in the name of Cede & Co. or in such other
name as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
XXXXXXXX'X CREDIT CARD MASTER TRUST
CLASS A ASSET BACKED CERTIFICATE, SERIES 1997-2
Class A Expected Payment Date:
________, 200__Distribution Date
Each $1,000 minimum denomination represents a
_______ undivided interest
in certain assets of the
XXXXXXXX'X CREDIT CARD MASTER TRUST
Evidencing an undivided interest in a trust, the corpus of which consists
primarily of receivables generated from time to time in a portfolio of consumer
revolving credit card accounts of
XXXXXXXX'X CREDIT CORPORATION
(Not an interest in or obligation of Xxxxxxxx'x Credit Corporation
or any Affiliate thereof)
A-1-1
55
This certifies that Cede & Co.(the "Class A Certificateholder")
is the registered owner of a fractional undivided interest in certain assets of
a trust (the "Trust") created pursuant to the Master Pooling and Servicing
Agreement, dated as of July _______, 1997 (as amended and supplemented, the
"Agreement"), as supplemented by the Series 1997-2 Supplement, dated as of July
__, 1997 (as amended and supplemented, the "Series Supplement"), among
Xxxxxxxx'x Credit Corporation, as Transferor, Xxxxxxxx'x, Inc., as Servicer, and
Norwest Bank Minnesota, National Association, a national banking association, as
trustee (the "Trustee"). The corpus of the Trust consists of (i) receivables
(the "Receivables") generated from time to time in a portfolio of consumer
revolving credit card accounts identified under the Agreement (the "Accounts"),
(ii) all monies due or to become due in payment of the Receivables, (iii) all
proceeds of the Receivables and proceeds of Insurance Policies relating to the
Receivables, (iv) all monies held in certain accounts of the Trust (excluding
investment earnings, unless otherwise specified in the Agreement or any
Supplement), (v) all Recoveries and Collections of the Receivables, (vi) any
Enhancement with respect to any Series (or class thereof) and (vii) all other
assets and interests constituting the Trust Property. Although a summary of
certain provisions of the Agreement and the Series Supplement is set forth below
and on the Summary of Terms and Conditions attached hereto and made a part
hereof, this Class A Certificate does not purport to summarize the Agreement and
the Series Supplement and reference is made to the Agreement and the Series
Supplement for information with respect to the interests, rights, benefits,
obligations, proceeds and duties evidenced hereby and the rights, duties and
obligations of the Trustee. A copy of the Agreement and the Series Supplement
(without schedules) may be requested from the Trustee by writing to the Trustee
at Norwest Bank Minnesota, N.A., Norwest Center, Sixth and Marquette,
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000, Attention: Asset Backed Securities Corporate
Trust Department. To the extent not defined herein, the capitalized terms used
herein have the meanings ascribed to them in the Agreement or the Series
Supplement, as applicable.
This Class A Certificate is issued under and is subject to the
terms, provisions and conditions of the Agreement and the Series Supplement, to
which Agreement and Series Supplement, each as amended and supplemented from
time to time, the Class A Certificateholder by virtue of the acceptance hereof
assents and is bound.
It is the intent of the Transferor and the Investor
Certificateholders (and Certificate Owners) that, for Federal, state and local
income and franchise tax purposes only, the Investor Certificates will qualify
as indebtedness of the Transferor secured by the Receivables (unless otherwise
specified in the related Supplement). The Class A Certificateholder (and each
Certificate Owner of a Class A Certificate), by the acceptance of this Class A
Certificate (or its interest therein), is deemed to agree to treat this Class A
Certificate for Federal, state and local income and franchise tax purposes and
any other tax imposed on or measured by income as indebtedness of the
Transferor.
A-1-2
56
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 Agreement or the
Series Supplement or be valid for any purpose.
IN WITNESS WHEREOF, the Transferor has caused this Class A
Certificate to be duly executed by its undersigned officer thereunto duly
authorized.
XXXXXXXX'X CREDIT CORPORATION
By:
--------------------------
Name:
Title:
Dated: , 1997
--------------------
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class A Certificates described in the within-mentioned
Agreement and Series Supplement.
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION,
as Trustee
By:
-----------------------
Authorized Officer
Dated: , 1997
------------------
A-1-3
57
XXXXXXXX'X CREDIT CARD MASTER TRUST
CLASS A ASSET BACKED CERTIFICATE, SERIES 1997-2
Summary of Terms and Conditions
This Class A Certificate is one of a Series of Certificates entitled
"Xxxxxxxx'x Credit Card Master Trust, Series 1997-2 Certificates" (the "Series
1997-2 Certificates"), and one of a class thereof entitled "Class A Asset
Backed Certificates, Series 1997-2" (the "Class A Certificates"), each of which
represents a fractional undivided interest in certain assets of the Trust. The
Trust Property is allocated in part to the Investor Certificateholders of all
outstanding Series (the "Certificateholders' Interest") and the interests, if
any, of any Enhancement Providers, with the remainder allocated to the
Transferor. The aggregate interest represented by the Class A Certificates at
any time in the Principal Receivables in the Trust shall not exceed an amount
equal to the Class A Investor Amount at such time. The Class A Initial
Investor Amount is $______. The Class A Investor Amount on any date will be an
amount equal to (a) the Class A Initial Investor Amount, minus (b) the
aggregate amount of principal payments made to the Class A Certificateholders
prior to such date, minus (c) the excess, if any, of the aggregate amount of
Class A Investor Charge Offs for all prior Distribution Dates over the sum of
the aggregate amount of Class A Investor Charge Offs reimbursed pursuant to the
Series Supplement and, without duplication, the aggregate amount of the
reductions of the Series Adjustment Amounts allocable to the Class A Investor
Amount pursuant to the Series Supplement prior to such date; provided, however,
that the Class A Investor Amount may not be reduced below zero. The Class A
Adjusted Investor Amount shall mean, on any date of determination while the
Class A Certificates are outstanding, an amount equal to the Class A Investor
Amount minus the Principal Account Balance (but not less than zero). In
addition, classes of the Series 1997-2 Certificates entitled "Class B Asset
Backed Certificates, Series 1997-2" (the "Class B Certificates"), "Collateral
Indebtedness Interest, Series 1997-2" (the "Collateral Indebtedness Interest")
and "Class D Asset Backed Certificates, Series 1997-2" (the "Class D
Certificates") will be issued. The Exchangeable Transferor Certificate has
been issued to Xxxxxxxx'x Credit Corporation pursuant to the Agreement, which
represents the Transferor Interest.
Subject to the terms and conditions of the Agreement, the Transferor may
from time to time direct the Trustee, on behalf of the Trust, to issue one or
more new Series of Investor Certificates, and/or Additional Class D
Certificates, which will represent fractional undivided interests in certain
Trust Property.
Each Class A Certificate represents the right to receive payments of (i)
interest at the rate of ____% accruing from ________, __________, payable on
_______, _________ and on the 15th day of each month thereafter (or, if such
15th day is not a Business Day, the next succeeding Business Day) (each, a
"Distribution Date") and (ii)
A-1-4
58
principal on the __________ Distribution Date (and on each Distribution Date
thereafter, if the Class A Certificates are not paid in full on the ________,
_____________ Distribution Date) or, upon the occurrence of a Pay Out Event,
on each Distribution Date relating to the Rapid Amortization Period, in each
case funded from a percentage of the payments received with respect to the
Receivables and certain other funds, all as more fully described in the
Agreement and the Series Supplement. Interest on the Class A Certificates will
be calculated on the basis of a 360-day year consisting of twelve 30-day
months.
The Class B Certificates, the Collateral Indebtedness Interest and the
Class D Certificates are subordinated to the Class A Certificates to the extent
set forth in the Series Supplement.
On each Distribution Date, the Paying Agent shall distribute to each Class
A Certificateholder of record at the close of business on the last Business Day
of the immediately preceding calendar month (each a "Record Date") such Class A
Certificateholder's pro rata share of such amounts (including amounts held in
the Principal Account) as are payable to the Class A Certificateholders
pursuant to the Agreement and the Series Supplement. Distributions with
respect to this Class A Certificate will be made by the Paying Agent by check
mailed to the address of the Class A Certificateholder of record appearing in
the Certificate Register without the presentation or surrender of this Class A
Certificate or the making of any notation thereon (except for the final
distribution in respect of this Class A Certificate), except that with respect
to Class A Certificates registered in the name of Cede & Co., as nominee for
The Depository Trust Company, distributions will be made in the form of
immediately available funds. Final payment of this Class A Certificate will be
made only upon presentation and surrender of this Class A Certificate at the
office or agency specified in the notice of final distribution delivered by the
Trustee in accordance with the Agreement and the Series Supplement.
On any Distribution Date occurring on or after the day on which the sum of
the Class A Adjusted Investor Amount, the Class B Adjusted Investor Amount, the
Collateral Indebtedness Amount and the amount of the Class D Investor Amount
held by parties other than the Transferor or any of its affiliates is less than
or equal to 10% of the sum of the Class A Investor Amount on the Closing Date,
the Class B Investor Amount on the Closing Date, the Collateral Indebtedness
Amount on the Closing Date and the highest amount of the Class D Investor
Amount held by parties other than the Transferor or any of its affiliates since
the Closing Date, the Class A Certificates are subject to optional repurchase
by the Transferor, if certain conditions set forth in the Agreement or the
Series Supplement are satisfied. The repurchase price will be equal to the
Class A Adjusted Investor Amount plus accrued but unpaid interest thereon.
Subject to certain conditions in the Agreement, if the Investor Amount is
greater than zero on the _________ Distribution Date (the "Stated Series
Termination Date"), the Trustee shall sell or cause to be sold an amount of
Receivables up to 110% of the Adjusted Investor Amount at the close of business
on such date, but not more than the
A-1-5
59
total amount of Receivables allocable to the Series 1997-2 Certificates, and
apply the proceeds of such sale as provided in the Agreement and the Series
Supplement.
This Class A Certificate does not represent a recourse obligation of, or
an interest in, the Transferor, the Servicer or any Affiliate of any of them
and is not insured or guaranteed by the Federal Deposit Insurance Corporation
or any other governmental agency or instrumentality. This Class A Certificate
is limited in right of payment to certain Collections with respect to the
Receivables (and certain other amounts), all as more specifically set forth
hereinabove and in the Agreement and the Series Supplement.
The Agreement and any Supplement may be amended from time to time by the
Servicer, the Transferor and the Trustee, without the consent of any of the
Investor Certificateholders, to cure any ambiguity, to revise certain exhibits
and schedules, to correct or supplement any provision therein which may be
inconsistent with any other provision therein or to add other identifying code
numbers or identifying characteristics to the definition of Account or to add
any other provisions with respect to matters or questions raised under the
Agreement which shall not be inconsistent with the provisions of the Agreement;
provided, however, that such action shall not adversely affect in any material
respect the interests of any of the Investor Certificateholders. Additionally,
the Agreement and any Supplement may be amended from time to time by the
Servicer, the Transferor and the Trustee, without the consent of any of the
Investor Certificateholders, to add to or change any of the provisions of the
Agreement to enable Bearer Certificates to be issued in conformity with the
Bearer Rules, to provide that Bearer Certificates may be registrable as to
principal, to change or eliminate any restrictions on the payment of principal
(or premium, if any) or any interest on Bearer Certificates to comply with the
Bearer Rules, to permit Bearer Certificates to be issued in exchange for
Registered Certificates (if then permitted by the Bearer Rules), to permit
Bearer Certificates to be issued in exchange for Bearer Certificates of other
authorized denominations or to permit the issuance of Investor Certificates in
uncertificated form, provided any such action shall not adversely affect the
interest of the holders of Bearer Certificates of any Series or any related
Coupons in any material respect unless such amendment is necessary to comply
with the Bearer Rules.
The Agreement and any Supplement may also be amended from time to time by
the Servicer, the Transferor and the Trustee, without the consent of any of the
Investor Certificateholders, for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of the Agreement,
or of modifying in any manner the rights of the Holders of Investor
Certificates; provided that (i) the Servicer shall have provided an Officer's
Certificate to the Trustee to the effect that such amendment will not
materially and adversely affect the interests of the Investor
Certificateholders of any outstanding Series, (ii) such amendment shall not
cause the Trust to be characterized as a corporation for Federal income tax
purposes or otherwise have a material adverse effect on the Federal income
taxation of any Series and (iii) the Servicer shall have given each Rating
Agency ten (10) Business Days' prior written notice of such amendment and shall
have received written confirmation from each Rating Agency that the
A-1-6
60
Rating Agency Condition will be met. No such amendment, however, may effect
any of the amendments that require unanimous Certificateholder consent
as set forth herein, in the Agreement or the Series Supplement or (i) reduce
in any manner the amount of, or delay the timing of, distributions which are
required to be made on any Investor Certificates of any Series, (ii) change
the definition of or the manner of calculating the interest of any
Certificateholder, (iii) alter the requirements for changing the percentage by
which the Minimum Transferor Amount is determined, or (iv) reduce the
percentage required by Section 13.1(b) of the Agreement to consent to such
amendment. Notwithstanding the foregoing, any amendment providing for the
transfer of Receivables to, and the generation of new Receivables by, the Bank,
the appointment of the Bank as Servicer, as a Seller, Transferor and/or
Eligible Originator, and/or the assignment of this Agreement, including any
Supplement to the Bank in connection with such transfer and any amendments
necessary to reflect such Bank and any related special purpose, bankruptcy
remote entity that is an Affiliate of Xxxxxxxx'x, Inc. and that is organized
for the purpose of purchasing Accounts and Receivables from such Bank and
serving as Transferor will be deemed not to materially and adversely affect the
interests of the Certificateholders.
The Agreement and any Supplement may also be amended from time to time by
the Servicer, the Transferor and the Trustee with the consent of the Investor
Certificateholders evidencing Undivided Interests aggregating not more than 50%
of the Investor Amount of all Series adversely affected for the purpose of
adding any provisions to, changing in any manner or eliminating any of the
provisions of the Agreement or of modifying in any manner the rights of the
Investor Certificateholders of any Series then issued and outstanding;
provided, however, that no such amendment shall (i) reduce in any manner the
amount of, or delay the timing of, distributions which are required to be made
on any Investor Certificate of such Series without the consent of all holders
of the related Investor Certificates; (ii) change the definition of or the
manner of calculating the Investor Amount, the Investor Percentage, the
required amount under any Enhancement or the Investor Default Amount of such
Series without the consent of all holders of the related Investor Certificates
adversely affected thereby; or (iii) reduce the aforesaid percentage required
to consent to any such amendment, without the consent of all holders of the
related Investor Certificates of all Series adversely affected thereby. Any
amendment pursuant to this paragraph shall require prior written confirmation
from the applicable Rating Agency that the Rating Agency Condition will be met.
Subject to Section 13.1(c) of the Agreement, each Certificateholder by its
acceptance of this Certificate or any interest in this Certificate, consents to
any amendment to the Agreement or any Supplement necessary for the Transferor
to elect FASIT status for the Trust or any portion thereof under the Code.
The Class A Certificates are issuable only in minimum denominations of
$1,000 and integral multiples of $1,000. The transfer of this Class A
Certificate shall be registered in the Certificate Register upon surrender of
this Class A Certificate for registration of transfer at any office or agency
maintained by the Transfer Agent and
A-1-7
61
Registrar, and thereupon one or more new Class A Certificates in authorized
denominations representing like aggregate undivided interests in the Trust will
be issued to the designated transferee or transferees.
As provided in the Agreement and subject to certain limitations therein
set forth, Class A Certificates are exchangeable for new Class A Certificates
in authorized denominations of like aggregate undivided interests in the Trust
as requested by the Class A Certificateholder surrendering such Class A
Certificates. No service charge may be imposed for any transfer or exchange
but the Transfer Agent and Registrar and the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be
imposed in connection therewith.
The Trustee, the Paying Agent and the Transfer Agent and Registrar and any
agent or representative 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 Trustee, the Paying Agent, the Transfer Agent and Registrar, nor
any agent or representative of any of them, shall be affected by notice to the
contrary.
THE AGREEMENT AND THIS CLASS A CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES UNDER THE AGREEMENT SHALL BE DETERMINED IN ACCORDANCE
WITH SUCH LAWS.
A-1-8
62
ASSIGNMENT
Social Security or other Taxpayer Identification number (T.I.N.) of assignee
____________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
(name and address of assignee)
the within Certificate and all rights thereunder, and hereby irrevocably
constitutes and appoints ______________________, attorney, to transfer said
certificate on the books kept for registration thereof, with full power of
substitution in the premises.
Dated: *
---------------------
Signature Guaranteed:
(*) NOTE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Certificate in every
particular, without alteration, enlargement or any change whatsoever.
X-0-0
00
XXXXXXX X-0
TO THE
SERIES 1997-2 SUPPLEMENT
FORM OF CLASS B CERTIFICATE
64
EXHIBIT A-2
TO THE
SERIES 1997-2 SUPPLEMENT
FORM OF CLASS B CERTIFICATE
REGISTERED $__________
NO. B-1 CUSIP No. __________
Unless this Class B Certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to the issuer or
its agent for registration of transfer, exchange or payment, and any
certificate issued is registered in the name of Cede & Co. or in such other
name as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
XXXXXXXX'X CREDIT CARD MASTER TRUST
CLASS B ASSET BACKED CERTIFICATE, SERIES 1997-2
Class B Expected Payment Date:
________, 200__ Distribution Date
Each $1,000 minimum denomination represents a
_______ undivided interest
in certain assets of the
XXXXXXXX'X CREDIT CARD MASTER TRUST
Evidencing an undivided interest in a trust, the corpus of which consists
primarily of receivables generated from time to time in a portfolio of consumer
revolving credit card accounts of
XXXXXXXX'X CREDIT CORPORATION
(Not an interest in or obligation of Xxxxxxxx'x Credit Corporation
or any Affiliate thereof)
65
This certifies that Cede & Co.(the "Class B Certificateholder") is the
registered owner of a fractional undivided interest in certain assets of a
trust (the "Trust") created pursuant to the Master Pooling and Servicing
Agreement, dated as of ________, 1997, (as amended and supplemented, the
"Agreement"), as supplemented by the Series 1997-2 Supplement, dated as of July
__,1997 (as amended and supplemented, the "Series Supplement"), among
Xxxxxxxx'x Credit Corporation, as Transferor, Xxxxxxxx'x, Inc., as Servicer,
and Norwest Bank Minnesota, National Association, a national banking
association, as trustee (the "Trustee"). The corpus of the Trust consists of
(i) receivables (the "Receivables") generated from time to time in a portfolio
of consumer revolving credit card accounts identified under the Agreement (the
"Accounts"), (ii) all monies due or to become due in payment of the
Receivables, (iii) all proceeds of the Receivables and proceeds of Insurance
Policies relating to the Receivables, (iv) all monies held in certain bank
accounts of the Trust (excluding investment earnings, unless otherwise
specified in the Agreement or any Supplement), (v) all Recoveries and
Collections of the Receivables, (vi) any Enhancement with respect to any Series
(or class thereof) and (vii) all other assets and interests constituting the
Trust Property. Although a summary of certain provisions of the Agreement and
the Series Supplement is set forth below and on the Summary of Terms and
Conditions attached hereto and made a part hereof, this Class B Certificate
does not purport to summarize the Agreement and the Series Supplement and
reference is made to the Agreement and the Series Supplement for information
with respect to the interests, rights, benefits, obligations, proceeds and
duties evidenced hereby and the rights, duties and obligations of the Trustee.
A copy of the Agreement and the Series Supplement (without schedules) may be
requested from the Trustee by writing to the Trustee at Norwest Bank Minnesota,
N.A., Norwest Center, Sixth and Marquette, Xxxxxxxxxxx, Xxxxxxxxx 00000-0000,
Attention: Asset Backed Securities, Corporate Trust Department. To the extent
not defined herein, the capitalized terms used herein have the meanings
ascribed to them in the Agreement or the Series Supplement, as applicable.
This Class B Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement and the Series Supplement, to which
Agreement and Series Supplement, each as amended and supplemented from time to
time, the Class B Certificateholder by virtue of the acceptance hereof assents
and is bound.
It is the intent of the Transferor and the Investor Certificateholders
(and Certificate Owners) that, for Federal, state and local income and
franchise tax purposes only, the Investor Certificates will qualify as
indebtedness of the Transferor secured by the Receivables (unless otherwise
specified in the related Supplement). The Class B Certificateholder (and each
Certificate Owner of a Class B Certificate), by the acceptance of this Class B
Certificate (or its interest therein), is deemed to agree to treat this Class B
Certificate for Federal, state and local income and franchise tax purposes and
any other tax imposed on or measured by income as indebtedness of the
Transferor.
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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 Agreement or the Series Supplement or be
valid for any purpose.
IN WITNESS WHEREOF, the Transferor has caused this Class B Certificate to
be duly executed by its undersigned officer thereunto duly authorized.
XXXXXXXX'X CREDIT CORPORATION
By:
-----------------------
Name:
Title:
Dated: , 1997
--------------------
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class B Certificates described in the within-mentioned
Agreement and Series Supplement.
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION,
as Trustee
By:
------------------------
Authorized Officer
Dated: , 1997
----------------------
67
XXXXXXXX'X CREDIT CARD MASTER TRUST
CLASS B ASSET BACKED CERTIFICATE, SERIES 1997-2
SUMMARY OF TERMS AND CONDITIONS
This Class B Certificate is one of a Series of Certificates entitled
"Xxxxxxxx'x Credit Card Master Trust, Series 1997-2 Certificates" (the "Series
1997-2 Certificates"), and one of a class thereof entitled "Class B Asset
Backed Certificates, Series 1997-2" (the "Class B Certificates"), each of which
represents a fractional undivided interest in certain assets of the Trust. The
Trust Property is allocated in part to the Investor Certificateholders of all
outstanding Series (the "Certificateholders' Interest") and the interests, if
any, of any Enhancement Providers, with the remainder allocated to the
Transferor. The aggregate interest represented by the Class B Certificates at
any time in the Principal Receivables in the Trust shall not exceed an amount
equal to the Class B Investor Amount at such time. The Class B Initial
Investor Amount is $________. The Class B Investor Amount on any date will be
an amount equal to (a) the Class B Initial Investor Amount, minus (b) the
aggregate amount of principal payments made to the Class B Certificateholders
prior to such date, minus (c) the aggregate amount of Class B Investor Charge
Offs for all prior Distribution Dates, minus (d) the amount of Class B
Subordinated Principal Collections allocated to certain shortfalls in respect
of the Class A Certificates on all prior Distribution Dates pursuant to the
Series Supplement (excluding any Class B Subordinated Principal Collections
that have resulted in a reduction in the Collateral Indebtedness Amount or the
Class D Investor Amount pursuant to the Series Supplement), minus (e) an amount
equal to the amount by which the Class B Investor Amount has been reduced on
all prior Distribution Dates to avoid certain reductions in respect of the
Class A Certificates, plus (f) the sum of the amount of Excess Spread and
Shared Excess Finance Charge Collections allocated and available on all prior
Distribution Dates pursuant to the Series Supplement for the purpose of
reimbursing amounts deducted pursuant to the foregoing clauses (c), (d) and (e)
and, without duplication, the aggregate amount of the reductions of the Series
Adjustment Amounts allocable to the Class B Investor Amount pursuant to the
Series Supplement prior to such date; provided, however, that the Class B
Investor Amount may not be reduced below zero. The "Class B Adjusted Investor
Amount" shall mean, on any date of determination, an amount equal to the Class
B Investor Amount minus, prior to the payment in full of the Class A Investor
Amount, the excess of the Principal Account Balance over the Class A Investor
Amount, and after the payment in full of the Class A Investor Amount, the
Principal Account Balance, if any (but not less than zero). In addition,
classes of the Series 1997-2 Certificates entitled "Class A Asset Backed
Certificates, Series 1997-2" (the "Class A Certificates"), "Collateral
Indebtedness Interest, Series 1997-2" (the "Collateral Indebtedness Interest")
and "Class D Asset Backed Certificates, Series 1997-2" (the "Class D
Certificates") will be issued. The Exchangeable Transferor Certificate has
been issued to Xxxxxxxx'x Credit Corporation pursuant to the Agreement, which
represents the Transferor Interest.
68
Subject to the terms and conditions of the Agreement, the Transferor may
from time to time direct the Trustee, on behalf of the Trust, to issue one or
more new Series of Investor Certificates, and/or Additional Class D
Certificates, which will represent fractional undivided interests in certain
Trust Property.
Each Class B Certificate represents the right to receive payments of (i)
interest at the rate of _____% per annum accruing from _____________, payable
on ______________ and on the 15th day of each month thereafter (or, if such
15th day is not a Business Day, the next succeeding Business Day) (each, a
"Distribution Date") and (ii) principal on the ________ Distribution Date (and
each Distribution Date thereafter, if the Class B Certificates are not paid in
full on the __________ Distribution Date) or, upon the occurrence of a Pay Out
Event, on each Distribution Date relating to the Rapid Amortization Period,
provided that no principal payments will be made on the Class B Certificates
until the Class A Certificates have been paid in full, in each case funded from
a percentage of the payments received with respect to the Receivables and
certain other funds, all as more fully described in the Agreement and the
Series Supplement. Interest on the Class B Certificates will be calculated on
the basis of a 360-day year consisting of twelve 30-day months.
THE CLASS B CERTIFICATES ARE SUBORDINATED TO THE CLASS A CERTIFICATES TO
THE EXTENT SET FORTH IN THE SERIES SUPPLEMENT. THE COLLATERAL INDEBTEDNESS
INTEREST AND THE CLASS D CERTIFICATES ARE SUBORDINATED TO THE CLASS A
CERTIFICATES AND THE CLASS B CERTIFICATES TO THE EXTENT SET FORTH IN THE
AGREEMENT.
On each Distribution Date, the Paying Agent shall distribute to each Class
B Certificateholder of record on the last Business Day of the immediately
preceding calendar month (each a "Record Date") such Class B
Certificateholder's pro rata share of such amounts (including, after the Class
A Certificates have been paid in full, amounts held in the Principal Account)
as are payable to the Class B Certificateholders pursuant to the Agreement and
the Series Supplement. Distributions with respect to this Class B Certificate
will be made by the Paying Agent by check mailed to the address of the Class B
Certificateholder of record appearing in the Certificate Register without the
presentation or surrender of this Class B Certificate or the making of any
notation thereon (except for the final distribution in respect of this Class B
Certificate), except that with respect to Class B Certificates registered in
the name of Cede & Co., as nominee for The Depository Trust Company,
distributions will be made in the form of immediately available funds. Final
payment of this Class B Certificate will be made only upon presentation and
surrender of this Class B Certificate at the office or agency specified in the
notice of final distribution delivered by the Trustee in accordance with the
Agreement and the Series Supplement.
On any Distribution Date occurring on or after the day on which the sum of
the Class A Adjusted Investor Amount, the Class B Adjusted Investor Amount, the
Collateral Indebtedness Amount and the amount of the Class D Investor Amount
held by
69
parties other than the Transferor or any of its affiliates is less than or
equal to 10% of the sum of the Class A Investor Amount on the Closing Date, the
Class B Investor Amount on the Closing Date, the Collateral Indebtedness Amount
on the Closing Date and the highest amount of the Class D Investor Amount held
by parties other than the Transferor or any of its affiliates since the Closing
Date, the Class B Certificates are subject to optional repurchase by the
Transferor, if certain conditions set forth in the Agreement or the Series
Supplement are satisfied. The purchase price will be equal to the Class B
Adjusted Investor Amount plus accrued but unpaid interest thereon.
Subject to certain conditions in the Agreement, if the Investor Amount is
greater than zero on the ______________ Distribution Date (the "Stated Series
Termination Date"), the Trustee shall sell or cause to be sold an amount of
Receivables up to 110% of the Adjusted Investor Amount at the close of business
on such date, but not more than the total amount of Receivables allocable to
the Series 1997-2 Certificates, and apply the proceeds of such sale as provided
in the Agreement and the Series Supplement.
This Class B Certificate does not represent a recourse obligation of, or
an interest in, the Transferor, the Servicer, or any Affiliate of any of them
and is not insured or guaranteed by the Federal Deposit Insurance Corporation
or any other governmental agency or instrumentality. This Class B Certificate
is limited in right of payment to certain Collections with respect to the
Receivables (and certain other amounts), all as more specifically set forth
hereinabove and in the Agreement and the Series Supplement.
The Agreement and any Supplement may be amended from time to time by the
Servicer, the Transferor and the Trustee, without the consent of any of the
Investor Certificateholders, to cure any ambiguity, to revise certain exhibits
and schedules, to correct or supplement any provisions therein which may be
inconsistent with any other provisions therein or to add other identifying code
numbers or identifying characteristics to the definition of Account or to add
any other provisions with respect to matters or questions raised under the
Agreement which shall not be inconsistent with the provisions of the Agreement;
provided, however, that such action shall not adversely affect in any material
respect the interests of any of the Investor Certificateholders. Additionally,
the Agreement and any Supplement may be amended from time to time by the
Servicer, the Transferor and the Trustee, without the consent of any of the
Investor Certificateholders, to add to or change any of the provisions of the
Agreement to enable Bearer Certificates to be issued in conformity with the
Bearer Rules, to provide that Bearer Certificates may be registrable as to
principal, to change or eliminate any restrictions on the payment of principal
(or premium, if any) or any interest on Bearer Certificates to comply with the
Bearer Rules, to permit Bearer Certificates to be issued in exchange for
Registered Certificates (if then permitted by the Bearer Rules), to permit
Bearer Certificates to be issued in exchange for Bearer Certificates of other
authorized denominations or to permit the issuance of Investor Certificates in
uncertificated form, provided any such action shall not adversely affect the
interest of the holders of Bearer
70
Certificates of any Series or any related Coupons in any material respect
unless such amendment is necessary to comply with the Bearer Rules.
The Agreement and any Supplement may also be amended from time to time by
the Servicer, the Transferor and the Trustee, without the consent of any of the
Investor Certificateholders, for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of the Agreement,
or of modifying in any manner the rights of the Holders of Investor
Certificates; provided that (i) the Servicer shall have provided an Officer's
Certificate to the Trustee to the effect that such amendment will not
materially and adversely affect the interests of the Investor
Certificateholders of any outstanding Series, (ii) such amendment shall not,
as evidenced by an Opinion of Counsel, cause the Trust to be characterized as a
corporation for Federal income tax purposes or otherwise have a material
adverse effect on the Federal income taxation of any Series and (iii) the
Servicer shall have given each Rating Agency ten (10) Business Days' prior
written notice of such amendment and shall have received written confirmation
from each Rating Agency that the Rating Agency Condition will be met. No such
amendment, however, may effect any of the amendments that require unanimous
Certificateholder consent as set forth herein in the Agreement or the Series
Supplement or (i) reduce in any manner the amount of, or delay the timing of,
distributions which are required by Section 13.1(b) of the Agreement to be made
on any Investor Certificates of any Series, (ii) change the definition of or
the manner of calculating the interest of any Certificateholder, (iii) alter
the requirements for changing the percentage by which the Minimum Transferor
Amount is determined, or (iv) reduce the percentage required for consents to
amendments pursuant to the following paragraph. Notwithstanding the foregoing,
any amendment providing for the transfer of Receivables to, and the generation
of new Receivables by, the Bank, the appointment of the Bank as Servicer, as a
Seller, Transferor, and/or Eligible Originator, and/or the assignment of this
Agreement, including any Supplement, to the Bank in connection with such
transfer and any amendments necessary to reflect Bank and any related special
purpose, bankruptcy remote entity that is an Affiliate of Xxxxxxxx'x, Inc. and
that is organized for the purpose of purchasing Accounts and Receivables from
such Bank and serving as Transferor will be deemed not to materially and
adversely affect the interests of the Certificateholders.
The Agreement and any Supplement may also be amended from time to time by
the Servicer, the Transferor and the Trustee with the consent of the Investor
Certificateholders evidencing Undivided Interests aggregating not more than
50% of the Investor Amount of all Series adversely affected, for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of the Agreement or of modifying in any manner the rights of the
Investor Certificateholders of any Series then issued and outstanding;
provided, however, that no such amendment shall (i) reduce in any manner the
amount of, or delay the timing of, distributions which are required to be made
on any Investor Certificate of such Series without the consent of all holders
of the related Investor Certificates; (ii) change the definition of or the
manner of calculating the Investor Amount, the Investor Percentage, the
required amount under any Enhancement or the Investor Default Amount of such
Series without the consent of all
71
holders of the related Investor Certificates adversely affected thereby; or
(iii) reduce the aforesaid percentage required to consent to any such
amendment, without the consent of all holders of the related Investor
Certificates of all Series adversely affected thereby. Any amendment pursuant
to this paragraph shall require prior written confirmation from the applicable
Rating Agency that the Rating Agency Conditions will be met.
Subject to Section 13.1(c) of the Agreement, each Certificateholder, by
its acceptance of this Certificate or any interest in this Certificate,
consents to any amendment to this Agreement or any Supplement necessary for the
Transferor to elect FASIT status for the Trust or any portion thereof under the
Code.
The Class B Certificates are issuable only in minimum denominations of
$1,000 and integral multiples of $1,000. The transfer of this Class B
Certificate shall be registered in the Certificate Register upon surrender of
this Class B Certificate for registration of transfer at any office or agency
maintained by the Transfer Agent and Registrar, and thereupon one or more new
Class B Certificates in authorized denominations representing like aggregate
undivided interests in the Trust will be issued to the designated transferee or
transferees.
As provided in the Agreement and subject to certain limitations therein
set forth, Class B Certificates are exchangeable for new Class B Certificates
in authorized denominations of like aggregate undivided interests in the Trust
as requested by the Class B Certificateholder surrendering such Class B
Certificates. No service charge may be imposed for any transfer or exchange
but the Transfer Agent and Registrar and the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be
imposed in connection therewith.
The Trustee, the Paying Agent and the Transfer Agent and Registrar and any
agent or representative 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 Trustee, the Paying Agent, the Transfer Agent and Registrar, nor
any agent or representative of any of them, shall be affected by notice to the
contrary.
THE AGREEMENT AND THIS CLASS B CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES UNDER THE AGREEMENT SHALL BE DETERMINED IN ACCORDANCE
WITH SUCH LAWS.
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ASSIGNMENT
Social Security or other Taxpayer Identification Number (T.I.N.) of assignee
_________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
(name and address of assignee)
the within Certificate and all rights thereunder, and hereby irrevocably
constitutes and appoints ______________________, attorney, to transfer said
Certificate on the books kept for registration thereof, with full power of
substitution in the premises.
Dated:
*
------- ---------------------
Signature Guaranteed:
(*) NOTE: The signature to this assignment must correspond with the name of
the registered owner as it appears on the face of the within Certificate in
every particular, without alteration, enlargement or any change whatsoever.
