-------------------------------
WORLD FINANCIAL NETWORK NATIONAL BANK
Transferor and Servicer
and
XXXXXX TRUST AND SAVINGS BANK
Trustee
on behalf of the Investor Holders
-------------------------------
SERIES 1999-A SUPPLEMENT
Dated as of September 17, 1999
to
POOLING AND SERVICING AGREEMENT
Dated as of January 17, 1996
and amended and restated as of September 17, 1999
WORLD FINANCIAL NETWORK CREDIT CARD MASTER TRUST
$473,400,000 Class A Floating Rate Asset-Backed
Certificates, Series 1999-A
$51,600,000 Class B Floating Rate Asset-Backed
Certificates, Series 1999-A
$75,000,000 Class C Floating Rate Asset-Backed
Interests, Series 1999-A
-------------------------------
TABLE OF CONTENTS
Page
SECTION 1. Designation....................................................1
SECTION 2. Definitions....................................................2
SECTION 3. Servicing Fee.................................................22
SECTION 3A. Interest Rate Swap............................................22
SECTION 4. Optional Repurchase; Reassignment and Termination
Provisions....................................................23
SECTION 5. Delivery and Payment for the Investor Certificates............25
SECTION 6. Depository; Form of Delivery of Investor Certificates;
Legends; Transfer Restrictions and Procedures.................25
SECTION 7. Article IV of Agreement.......................................29
SECTION 4.6 Rights of Holders and the Class C Interest Holders..29
SECTION 4.7 Allocations.........................................30
SECTION 4.8 Determination of Monthly Interest...................34
SECTION 4.9 Determination of Monthly Principal..................35
SECTION 4.10 Coverage of Required Amount.........................36
SECTION 4.11 Monthly Payments....................................38
SECTION 4.12 Investor Charge-Offs................................42
SECTION 4.13 Excess Spread.......................................43
SECTION 4.14 Reallocated Principal Collections...................45
SECTION 4.15 Shared Principal Collections; Amounts Transferred
from the Excess Funding Account to the Principal
Account.............................................47
SECTION 4.16 Finance Charge Account, Principal Account,
Principal Funding Account and Distribution Account..48
SECTION 4.17 Reserve Account.....................................50
SECTION 4.18 Cash Collateral Account.............................52
SECTION 4.19 Determination of LIBOR..............................53
SECTION 4.20 Transferor's or Servicer's Failure to Make a
Deposit or Payment..................................54
SECTION 4.21 Investments.........................................54
i
Page
SECTION 8. Article V of the Agreement....................................54
SECTION 5.1 Distributions.......................................54
SECTION 5.2 Reports.............................................55
SECTION 9. Series 1999-A Early Amortization Events.......................56
SECTION 10. Series 1999-A Termination.....................................58
SECTION 11. Counterparts..................................................58
SECTION 12. Governing Law.................................................58
SECTION 13. Additional Provisions.........................................58
SECTION 14. No Petition...................................................58
SECTION 15. Amendments....................................................59
EXHIBITS
EXHIBIT A-1 Form of Class A Certificate
EXHIBIT A-2 Form of Class B Certificate
EXHIBIT B Form of Monthly Payment Instructions
and Notification to Trustee
EXHIBIT C Form of Monthly Series 1999-A Holders' Statement
EXHIBIT D Form of Certificate to be Given by Certificate Owner
EXHIBIT E Form of Certificate to be Given by Euroclear Operator or CEDEL
EXHIBIT F Form of Certificate to be Given by Transferee of Beneficial
Interest in a Regulation S Temporary Book-Entry Certificate
EXHIBIT G Form of Transfer Certificate for Exchange or Transfer from 144A
Book-Entry Certificate to Regulation S Book-Entry Certificate
EXHIBIT H Form of Placement Agent Exchange Instructions
EXHIBIT I Form of Swap Agreement
||
ii
SERIES 1999-A SUPPLEMENT, dated as of September 17, 1999 (this
"Series Supplement"), between WORLD FINANCIAL NETWORK NATIONAL BANK, a
national banking association, as Transferor ("Transferor") and Servicer
("Servicer"), and XXXXXX TRUST AND SAVINGS BANK (replacing Bank of New
York), as Trustee ("Trustee"), under the Pooling and Servicing Agreement
dated as of January 17, 1996 and amended and restated as of September 17,
1999 between the same parties (the "Agreement").
Section 6.3 of the Agreement provides, among other things, that
Transferor and Trustee may at any time and from time to time enter into a
supplement to the Agreement for the purpose of authorizing the delivery by
Trustee to Transferor for the execution and redelivery to Trustee for
authentication of one or more Series of Certificates.
Pursuant to this Series Supplement, Transferor and the Trust shall
create a new Series of Investor Certificates and shall specify the
Principal Terms thereof.
SECTION 1. Designation. (a) There is hereby created a Series of
Investor Certificates to be issued in two classes pursuant to the Agreement
and this Series Supplement and to be known together as the "Series 1999-A
Certificates." The two classes shall be designated the Class A Floating
Rate Asset-Backed Certificates, Series 1999-A (the "Class A Certificates")
and the Class B Floating Rate Asset- Backed Certificates, Series 1999-A
(the "Class B Certificates"). The Class A Certificates and the Class B
Certificates shall be substantially in the form of Exhibits A-1 and A-2,
respectively. In addition, there is hereby created a third Class which
constitutes an uncertificated interest in the Trust, shall be deemed to be
an "Investor Certificate" for all purposes under the Agreement and this
Series Supplement, except as expressly provided in Section 1(c) of this
Series Supplement, and shall be designated as the Class C Floating Rate
Asset-Backed Interests, Series 1999-A (the "Class C Interests") and have
the rights assigned to the Class C Interests in this Series Supplement. The
Class C Interest Holders shall be deemed to be "Investor Holders" for all
purposes under the Agreement and this Series Supplement, except as
expressly provided in Section 1(c) of this Series Supplement.
(b) Series 1999-A shall be included in Group One (as defined
below). Series 1999-A shall not be subordinated to any other Series.
(c) The Class C Interest Holders, as holders of an "Investor
Certificate" under the Agreement, shall be entitled to the benefits of the
Agreement and this Series Supplement. Notwithstanding the foregoing, except
as expressly provided herein, the provisions of Article VI and Article XII
of the Agreement relating to the registration, authentication, delivery,
presentation, cancellation and surrender of Registered Certificates shall
not be applicable to the Class C Interests.
1
SECTION 2. Definitions. If any term or provision contained herein
shall conflict with or be inconsistent with any provision contained in the
Agreement, the terms and provisions of this Series Supplement shall govern.
References to any Article or Section are references to Articles or Sections
of the Agreement, except as otherwise expressly provided. All capitalized
terms not otherwise defined herein are defined in the Agreement, and the
interpretive provisions set out in Section 1.2 of the Agreement apply to
this Series Supplement. Each capitalized term defined herein relates only
to the Investor Certificates and no other Series of Certificates issued by
the Trust.
"Accumulation Shortfall" initially means zero and thereafter
means, with respect to any Monthly Period during the Controlled
Accumulation Period, the excess, if any, of the Controlled Deposit Amount
for the previous Monthly Period over the amount deposited into the
Principal Funding Account pursuant to Section 4.11(e)(i) with respect to
the Class A Certificates for the previous Monthly Period.
"Additional Minimum Transferor Amount" means (a) as of any date of
determination falling in November, December and January of each calendar
year, the product of (i) 2% and (ii) the sum of (A) the aggregate Principal
Receivables and (B) amounts on deposit in the Excess Funding Account and
(b) as of any date of determination falling in any other month, zero;
provided that the amount specified in clause (a) shall be without
duplication with the amount specified as the "Additional Minimum Transferor
Amount" in the Supplements relating to the Series 1996-VFC Certificates,
Series 1996-A Certificates and Series 1996-B Certificates issued by the
Trust (or in any future Supplement that specifies such an amount and
indicates that such amount is without duplication of the amount specified
in clause (a)). The Additional Minimum Transferor Amount is specified
pursuant to Section 13 of this Series Supplement as an additional amount to
be considered part of the Minimum Transferor Amount.
"Adjusted Invested Amount" means, on any date of determination, an
amount equal to the sum of (a) the Class A Adjusted Invested Amount and (b)
the Class B Invested Amount and (c) the Class C Invested Amount.
"Aggregate Investor Default Amount" means, as to any Monthly
Period, the sum of the Investor Default Amounts in respect of such Monthly
Period.
"Available Funds" means, as to any Monthly Period, an amount equal
to the sum of (a) the Collections of Finance Charge Receivables allocated
to the Investor Certificates and deposited in the Finance Charge Account
for such Monthly Period (or required to be deposited in the Finance Charge
Account on the related Transfer Date (before giving effect to any netting)
with respect to the preceding Monthly Period pursuant to Section 4.7(d))
2
plus (b) the interest and earnings on the Cash Collateral Account to be
treated as Collections of Finance Charge Receivables pursuant to Section
4.18(b) on the related Transfer Date.
"Available Cash Collateral Amount" means with respect to any
Transfer Date, the lesser of (a) the amount on deposit in the Cash
Collateral Account on such date (before giving effect to any deposit to, or
withdrawal from the Cash Collateral Account to be made with respect to such
date) and (b) the Required Enhancement Amount as of the prior Transfer
Date.
"Available Investor Principal Collections" means, as to any
Monthly Period, an amount equal to (a) the Investor Principal Collections
for such Monthly Period, minus (b) the amount of Reallocated Principal
Collections with respect to such Monthly Period which pursuant to Section
4.14 are required to fund the Class A Required Amount and the Class B
Required Amount (other than any portions thereof that are applied pursuant
to (x) Section 4.11(a)(iii) and (y) Section 4.13(c) (to the extent such
portions pursuant to Section 4.13(c) are available to pay the Class B
Investor Default Amount or the Class B Uncovered Dilution Amount), which
shall, without duplication, be included as Available Investor Principal
Collections), plus (c) the amount of Shared Principal Collections with
respect to Group One that are allocated to Series 1999-A in accordance with
Section 4.15(b).
"Available Reserve Account Amount" means, as to any Transfer Date,
the lesser of (a) the amount on deposit in the Reserve Account on such date
(after taking into account any interest and earnings retained in the
Reserve Account pursuant to Section 4.17(b) on such date, but before giving
effect to any deposit made or to be made pursuant to Section 4.13(i) to the
Reserve Account on such date) and (b) the Required Reserve Account Amount.
"Base Rate" means, as to any Monthly Period, the annualized
percentage equivalent of a fraction, the numerator of which is equal to the
sum of the Class A Monthly Interest, the Class B Monthly Interest and the
Class C Monthly Interest, each for the related Distribution Period, and the
Servicing Fee with respect to such Monthly Period and the denominator of
which is the Invested Amount as of the close of business on the last day of
such Monthly Period.
"Cash Collateral Account" is defined in Section 4.18(a).
"Class A Additional Interest" is defined in Section 4.8(a).
"Class A Adjusted Invested Amount" means, on any date of
determination, an amount equal to the Class A Invested Amount minus the
Principal Funding Account Balance on such date of determination.
3
"Class A Available Funds" means, as to any Monthly Period, an
amount equal to the result of (a) the Class A Floating Allocation
Percentage of the Available Funds for such Monthly Period, plus (b) any
Class A Net Swap Receipt for the related Transfer Date, plus (c) with
respect to any Monthly Period during the Controlled Accumulation Period
prior to the payment in full of the Class A Invested Amount, (i) the
Principal Funding Investment Proceeds arising pursuant to Section 4.16(b),
if any, with respect to the related Transfer Date and (ii) amounts, if any,
to be withdrawn from the Reserve Account which will be deposited into the
Finance Charge Account on the related Transfer Date pursuant to Sections
4.17(b) and 4.17(d).
"Class A Certificate Rate" means, with respect to each
Distribution Period, a per annum rate equal to LIBOR as of the related
LIBOR Determination Date for such Distribution Period plus 0.33%.
"Class A Certificates" is defined in Section 1(a) of this Series
Supplement.
"Class A Deficiency Amount" is defined in Section 4.8(a).
"Class A Fixed Allocation Percentage" means, for any Monthly
Period following the Revolving Period, the percentage equivalent (which
percentage shall never exceed 100% or be less than zero) of a fraction, the
numerator of which is the Class A Invested Amount as of the close of
business on the last day of the Revolving Period and the denominator of
which is equal to the numerator used in determining the related Fixed
Allocation Percentage; provided that if Series 1999-A is paired with a
Paired Series and an Early Amortization Event occurs with respect to such
Paired Series during the Controlled Accumulation Period, Transferor may, by
written notice delivered to Trustee and Servicer, but only after
satisfaction of the Rating Agency Condition with respect to the Class A
Certificates (if any Class A Certificates remain outstanding) and the Class
B Certificates (if any Class B Certificates remain outstanding), designate
a different numerator (provided that such numerator is not less than the
Class A Adjusted Invested Amount (less the balance on deposit in the
Principal Account that is not subject to being treated as Reallocated
Principal Collections or Shared Principal Collections) as of the last day
of the revolving period for such Paired Series).
"Class A Floating Allocation Percentage" means, for any Monthly
Period, the percentage equivalent (which percentage shall never exceed
100%) of a fraction, the numerator of which is the Class A Adjusted
Invested Amount as of the close of business on the last day of the
preceding Monthly Period and the denominator of which is equal to the
Adjusted Invested Amount as of the close of business on such last day;
provided that, with respect to the first Monthly Period, the Class A
Floating Allocation Percentage means the percentage equivalent of a
4
fraction, the numerator of which is the Class A Initial Invested Amount and
the denominator of which is the Initial Invested Amount.
"Class A Holder" means the Person in whose name a Class A
Certificate is registered in the Certificate Register.
"Class A Initial Invested Amount" means the aggregate initial
principal amount of the Class A Certificates, which is $ 473,400,000.
"Class A Invested Amount" means, on any date of determination, an
amount equal to (a) the Class A Initial Invested Amount, minus (b) the
aggregate amount of principal payments made to Class A Holders prior to
such date and minus (c) the excess, if any, of the aggregate amount of
Class A Investor Charge-Offs pursuant to Section 4.12(a) over Class A
Investor Charge-Offs reimbursed pursuant to Section 4.13(b) prior to such
date of determination, minus (d) the amount of any reduction in the Class A
Invested Amount as a result of the purchase by Transferor and subsequent
cancellation of the Class A Certificates pursuant to Section 4(d) of this
Series Supplement; provided that the Class A Invested Amount may not be
reduced below zero.
"Class A Investor Allocation Percentage" means, for any Monthly
Period, (a) with respect to Default Amounts, Uncovered Dilution Amounts and
Finance Charge Receivables at any time and Principal Receivables during the
Revolving Period, the Class A Floating Allocation Percentage, and (b) with
respect to Principal Receivables during the Controlled Accumulation Period
or Early Amortization Period, the Class A Fixed Allocation Percentage.
"Class A Investor Charge-Off" is defined in Section 4.12(a).
"Class A Investor Default Amount" means, as to each Transfer Date,
an amount equal to the product of (a) the Aggregate Investor Default Amount
for the related Monthly Period and (b) the Class A Floating Allocation
Percentage applicable for the related Monthly Period.
"Class A Monthly Interest" is defined in Section 4.8(a).
"Class A Monthly Principal" is defined in Section 4.9(a).
"Class A Net Swap Payment" means, for any Transfer Date, the net
amount payable by the Trust to the Counterparty pursuant to the Class A
Swap on that Transfer Date.
5
"Class A Net Swap Receipt" means, for any Transfer Date, the net
amount payable to the Trust from the Counterparty pursuant to the Class A
Swap on that Transfer Date.
"Class A Reduction Amount" is defined in Section 4.12(a).
"Class A Required Amount" is defined in Section 4.10(a).
"Class A Scheduled Payment Date" means the September, 2002
Distribution Date.
"Class A Servicing Fee" is defined in Section 3(a).
"Class A Swap" means any Interest Rate Swap Agreement relating to
Series 1999-A that has a notional amount equal to the outstanding principal
amount of the Class A Certificates from time to time.
"Class A Uncovered Dilution Amount" means, as to each Transfer
Date, an amount equal to the product of (a) the Uncovered Dilution Amount
for the related Monthly Period and (b) the Class A Investor Allocation
Percentage applicable for the related Monthly Period.
"Class B Additional Interest" is defined in Section 4.8(b).
"Class B Available Funds" means, as to any Monthly Period, an
amount equal to the result of (a) the Class B Floating Allocation
Percentage of the Available Funds for such Monthly Period, plus (b) any
Class B Net Swap Receipt for the related Transfer Date.
"Class B Certificate Rate" means, with respect to each
Distribution Period, a per annum rate equal LIBOR as of the related LIBOR
Determination Date for such Distribution Period plus 0.80%.
"Class B Certificates" is defined in Section 1(a) of this Series
Supplement.
"Class B Deficiency Amount" is defined in Section 4.8(b).
"Class B Fixed Allocation Percentage" means, for any Monthly
Period following the Revolving Period, the percentage equivalent (which
percentage shall never exceed 100% or be less than zero) of a fraction, the
numerator of which is the Class B Invested Amount as of the close of
business on the last day of the Revolving Period and the denominator of
which is equal to the numerator used in determining the related Fixed
Allocation Percentage; provided that if Series 1999-A is paired with a
Paired Series and an Early Amortization Event occurs with respect to such
6
Paired Series during the Controlled Accumulation Period, Transferor may, by
written notice delivered to Trustee and Servicer, but only after
satisfaction of the Rating Agency Condition with respect to the Class A
Certificates (if any Class A Certificates remain outstanding) and the Class
B Certificates (if any Class B Certificates remain outstanding), designate
a different numerator (provided that such numerator is not less than the
Class B Invested Amount (less, if the Class A Fixed Allocation Percentage
is zero, the balance on deposit in the Principal Account (that is not
subject to being treated as Reallocated Principal Collections or Shared
Principal Collections) and on deposit in the Principal Funding Account, in
each case to the extent not subtracted in reducing the Class A Fixed
Allocation Percentage to zero) as of the last day of the revolving period
for such Paired Series).
"Class B Floating Allocation Percentage" means, for any Monthly
Period, the percentage equivalent (which percentage shall never exceed
100%) of a fraction, the numerator of which is the Class B Invested Amount
as of the close of business on the last day of the preceding Monthly Period
and the denominator of which is equal to the Adjusted Invested Amount as of
the close of business on such last day; provided that, with respect to the
first Monthly Period, the Class B Floating Allocation Percentage means the
percentage equivalent of a fraction, the numerator of which is the Class B
Initial Invested Amount and the denominator of which is the Initial
Invested Amount.
"Class B Holder" means the Person in whose name a Class B
Certificate is registered in the Certificate Register.
"Class B Initial Invested Amount" means the aggregate initial
principal amount of the Class B Certificates, which is $51,600,000.
"Class B Invested Amount" means, on any date of determination, an
amount equal to (a) the Class B Initial Invested Amount, minus (b) the
aggregate amount of principal payments made to Class B Holders prior to
such date, minus (c) the aggregate amount of Class B Investor Charge-Offs
for all prior Transfer Dates pursuant to Section 4.12(b), minus (d) the
amount of the Reallocated Class B Principal Collections allocated pursuant
to Section 4.14(a) on all prior Transfer Dates for which the Class C
Invested Amount has not been reduced, minus (e) an amount equal to the
amount by which the Class B Invested Amount has been reduced on all prior
Transfer Dates pursuant to Section 4.12(a) and plus (f) the aggregate
amount of Excess Spread allocated and available on all prior Transfer Dates
pursuant to Section 4.13(d), for the purpose of reimbursing amounts
deducted pursuant to the foregoing clauses (c), (d) and (e), minus (g) the
amount of any reduction in the Class B Invested Amount as a result of the
purchase by Transferor and subsequent cancellation of Class B Certificates
pursuant to Section 4(d) of this Series Supplement; provided that the Class
B Invested Amount may not be reduced below zero.
7
"Class B Investor Allocation Percentage" means, for any Monthly
Period, (a) with respect to Default Amounts, Uncovered Dilution Amounts and
Finance Charge Receivables at any time and Principal Receivables during the
Revolving Period, the Class B Floating Allocation Percentage, and (b) with
respect to Principal Receivables during the Controlled Accumulation Period
or Early Amortization Period, the Class B Fixed Allocation Percentage.
"Class B Investor Charge-Off" is defined in Section 4.12(b).
"Class B Investor Default Amount" means, as to each Transfer Date,
an amount equal to the product of (a) the Aggregate Investor Default Amount
for the related Monthly Period and (b) the Class B Floating Allocation
Percentage applicable for the related Monthly Period.
"Class B Monthly Interest" is defined in Section 4.8(b).
"Class B Monthly Principal" is defined in Section 4.9(b).
"Class B Net Swap Payment" means, for any Transfer Date, the net
amount payable by the Trust to the Counterparty pursuant to the Class B
Swap on that Transfer Date.
"Class B Net Swap Receipt" means, for any Transfer Date, the net
amount payable to the Trust from the Counterparty pursuant to the Class B
Swap on that Transfer Date.
"Class B Reduction Amount" is defined in Section 4.12(b).
"Class B Required Amount" is defined in Section 4.10(b).
"Class B Scheduled Payment Date" means the October, 2002
Distribution Date.
"Class B Servicing Fee" is defined in Section 3(a).
"Class B Swap" means any Interest Rate Swap Agreement relating to
Series 1999-A that has a notional amount equal to the outstanding principal
amount of the Class B Certificates from time to time.
"Class B Uncovered Dilution Amount" means, as to each Transfer
Date, an amount equal to the product of (a) the Uncovered Dilution Amount
for the related Monthly Period and (b) the Class B Investor Allocation
Percentage applicable for the related Monthly Period.
8
"Class C Available Funds" means, as to any Monthly Period, an
amount equal to the Class C Floating Allocation Percentage of the Available
Funds for such Monthly Period.
"Class C Charge-Off" is defined in Section 4.12(c).
"Class C Default Amount" means, as to any Transfer Date, an amount
equal to the product of (a) the Aggregate Investor Default Amount for the
related Monthly Period and (b) the Class C Floating Allocation Percentage
applicable for the related Monthly Period.
"Class C Fixed Allocation Percentage" means, for any Monthly
Period following the Revolving Period, the percentage equivalent (which
percentage shall never exceed 100% or be less than zero) of a fraction, the
numerator of which is the Class C Invested Amount as of the close of
business on the last day of the Revolving Period and the denominator of
which is equal to the numerator used in determining the related Fixed
Allocation Percentage; provided that if Series 1999-A is paired with a
Paired Series and an Early Amortization Event occurs with respect to such
Paired Series during the Controlled Accumulation Period, Transferor may, by
written notice delivered to Trustee and Servicer, but only after
satisfaction of the Rating Agency Condition with respect to the Class A
Certificates (if any Class A Certificates remain outstanding) and the Class
B Certificates (if any Class B Certificates remain outstanding), designate
a different numerator (provided that such numerator is not less than the
Class C Invested Amount (less, if the Class A Fixed Allocation Percentage
and the Class B Fixed Allocation Percentage are zero, the balance on
deposit in the Principal Account that is not subject to being treated as
Reallocated Principal Collections or Shared Principal Collections, to the
extent not subtracted in reducing the Class A Fixed Allocation Percentage
and/or the Class B Fixed Allocation Percentage to zero) as of the last day
of the revolving period for such Paired Series).
"Class C Floating Allocation Percentage" means, for any Monthly
Period, the percentage equivalent (which percentage shall never exceed
100%) of a fraction, the numerator of which is the Class C Invested Amount
as of the close of business on the last day of the preceding Monthly Period
and the denominator of which is equal to the Adjusted Invested Amount as of
the close of business on such last day; provided that, with respect to the
first Monthly Period, the Class C Floating Allocation Percentage means the
percentage equivalent of a fraction, the numerator of which is the Class C
Initial Invested Amount and the denominator of which is the Initial
Invested Amount.
"Class C Interests" is defined in Section 1(a) of this Series
Supplement.
9
"Class C Interest Holder" means the person in whose name the Class
C Interest is registered in the Certificate Register.
"Class C Interest Rate" means, for any Distribution Period, the
rate specified in the Class C Supplemental Agreement; provided that the
Class C Interest Rate shall not exceed a per annum rate of 1.4% in excess
of LIBOR for such Distribution Period for purposes of this Supplement and
the Agreement.
"Class C Invested Amount" means $75,000,000.
"Class C Invested Amount" means, on any date of determination, an
amount equal to (a) the Class C Initial Invested Amount, minus (b) the
aggregate amount of principal payments made to the Class C Interest Holders
prior to such date, minus (c) the aggregate amount of Class C Charge-Offs
for all prior Transfer Dates pursuant to Section 4.12(c), minus (d) the
amount of Reallocated Principal Collections allocated pursuant to Sections
4.14(a) and (b) on all prior Transfer Dates, minus (e) an amount equal to
the amount by which the Class C Invested Amount has been reduced on all
prior Transfer Dates pursuant to Sections 4.12(a) and (b), and plus (f) the
aggregate amount of Excess Spread allocated and available on all prior
Transfer Dates pursuant to Section 4.13(h), for the purpose of reimbursing
amounts deducted pursuant to the foregoing clauses (c), (d) and (e);
provided that the Class C Invested Amount may not be reduced below zero.
"Class C Investor Allocation Percentage" means, for any Monthly
Period, (a) with respect to Default Amounts, Uncovered Dilution Amounts and
Finance Charge Receivables at any time and Principal Receivables during the
Revolving Period, the Class C Floating Allocation Percentage, and (b) with
respect to Principal Receivables during the Controlled Accumulation Period
or Early Amortization Period, the Class C Fixed Allocation Percentage.
"Class C Monthly Interest" is defined in Section 4.8(c).
"Class C Monthly Principal" is defined in Section 4.9(c).
"Class C Reduction Amount" is defined in Section 4.12(c).
"Class C Servicing Fee" is defined in Section 3(a) of this Series
Supplement.
"Class C Supplemental Agreement" means the agreement among
Transferor, Servicer and Trustee, dated as of September 17, 1999, as
amended, supplemented or modified from time to time.
"Class C Uncovered Dilution Amount" means, as to each Transfer
Date, an amount equal to the product of (a) the Uncovered Dilution Amount
10
for the related Monthly Period and (b) the Class C Investor Allocation
Percentage applicable for the related Monthly Period.
"Closing Date" means September 17, 1999.
"Controlled Accumulation Amount" means (a) for any Transfer Date
with respect to the Controlled Accumulation Period prior to the payment in
full of the Class A Invested Amount, $39,450,000; provided that if the
Controlled Accumulation Period Length is modified pursuant to Section
4.11(i), (i) the Controlled Accumulation Amount for each Transfer Date with
respect to the Controlled Accumulation Period shall mean the amount
determined in accordance with Section 4.11(i) on the date on which the
Controlled Accumulation Period has most recently been modified and (ii) the
sum of the Controlled Accumulation Amounts for all Transfer Dates with
respect to the modified Controlled Accumulation Period shall not be less
than the Class A Invested Amount.
"Controlled Accumulation Date" means September 1, 2001.
"Controlled Accumulation Period" means, unless an Early
Amortization Event shall have occurred prior thereto, the period commencing
at the beginning of business on the Controlled Accumulation Date or such
later date as is determined in accordance with Section 4.11(i) and ending
on the first to occur of (a) the Early Amortization Commencement Date and
(b) the Series 1999-A Termination Date.
"Controlled Accumulation Period Length" is defined in Section 4.11(i).
"Controlled Deposit Amount" means, with respect to any Transfer
Date, the sum of (a) the Controlled Accumulation Amount for such Transfer
Date and (b) any existing Accumulation Shortfall.
"Counterparty" means Xxxxxx Guaranty Trust Company of New York or
any other counterparty under the initial Interest Rate Swap Agreements or
any successor agreement to either initial Interest Rate Swap Agreement.
"Covered Amount" means an amount determined as of each Transfer
Date with respect to any Distribution Period as the product of (a) (i) the
actual number of days in the related Distribution Period, times (ii) 1/360,
times (ii) the Class A Certificate Rate, and (b) the Principal Funding
Account Balance as of the Record Date preceding such Transfer Date.
"Cumulative Principal Shortfall" means the sum of the Principal
Shortfalls (as such term is defined in each of the related Supplements) for
each Series in Group One.
11
"Default Amount" means, as to any Defaulted Account, the amount of
Principal Receivables (other than Ineligible Receivables, unless there is
an Insolvency Event with respect to Transferor) in such Defaulted Account
on the day it became a Defaulted Account.
"Defaulted Account" means an Account in which there are Defaulted
Receivables.
"Deficiency Amount" means, at any time of determination, the sum
of the Class A Deficiency Amount and the Class B Deficiency Amount.
"Depository" means the Depository Trust Company.
"Dilution" means any downward adjustment made by Servicer in the
amount of any Receivable (a) because of a rebate, refund, unauthorized
charge, fraudulent or counterfeit charge or billing error to an
accountholder, (b) because such Receivable was created in respect of
merchandise which was refused or returned by an accountholder or (c) for
any other reason other than receiving Collections therefor or charging off
such amount as uncollectible.
"Distribution Account" is defined in Section 4.16(a).
"Distribution Date" means October 15, 1999 and the fifteenth day
of each calendar month thereafter, or if such fifteenth day is not a
Business Day, the next succeeding Business Day.
"Distribution Period" means, with respect to any Distribution
Date, the period from and including the previous Distribution Date through
the day preceding such Distribution Date, except the initial Distribution
Period will be the period from and including the Closing Date through the
day preceding the initial Distribution Date.
"Early Amortization Commencement Date" means the date on which an
Early Amortization Event is deemed to occur pursuant to Section 9.1 of the
Agreement or a Series 1999-A Early Amortization Event is deemed to occur
pursuant to Section 9 of this Series Supplement.
"Early Amortization Period" means the period commencing on the
Early Amortization Commencement Date and ending on the Series 1999-A
Termination Date.
"Eligible Counterparty" means a Person that has (a) a long-term
unsecured debt rating of not less than Aa3 by Moodys, (b) either a
12
short-term unsecured debt rating of A-1+ or a long term unsecured debt
rating of AAA by S&P, and (c) if rated by Fitch, AA- or F-1+ by Fitch (the
"Requisite Counterparty Rating").
"Enhancement" means, with respect to the Class A Certificates, the
subordination of the Class B Certificates and the Class C Interests and the
Cash Collateral Account, and with respect to the Class B Certificates, the
subordination of the Class C Interests and the Cash Collateral Account.
"Enhancement Surplus" means, with respect to any Transfer Date,
the excess, if any, of (a) the amount on deposit in the Cash Collateral
Account, plus the Class C Invested Amount (in each case after giving effect
to any withdrawals, increases or reductions made with respect to such date
other than as the result of the existence of an Enhancement Surplus) over
(b) the Required Enhancement Amount.
"Excess Principal Funding Investment Proceeds" means, with respect
to each Transfer Date relating to the Controlled Accumulation Period, the
amount, if any, by which the Principal Funding Investment Proceeds for such
Transfer Date exceed the Covered Amount determined on such Transfer Date.
"Excess Spread" means, with respect to any Transfer Date and
subject to Section 4.7(d), the sum of (a) the sum of the amounts, if any,
with respect to such Transfer Date specified pursuant to Sections
4.11(a)(iv), 4.11(b)(iii) and 4.11(c)(ii), plus (b) the Excess Finance
Charge Collections, if any, allocated to Series 1999-A pursuant to Section
4.5 for that Transfer Date.
"Finance Charge Account" is defined in Section 4.16(a).
"Finance Charge Shortfall" means, with respect to any Transfer
Date, an amount equal to the excess, if any, of (a) the sum of the amounts
specified in clauses (a) through (k) of Section 4.13 for that Transfer Date
over (b) the sum of the amounts, if any, with respect to such Transfer Date
specified pursuant to Sections 4.11(a)(iv), 4.11(b)(iii) and 4.11(c)(ii).
"Fitch" means Fitch IBCA, Inc., or its successors.
"Fixed Allocation Percentage" means, with respect to any Monthly
Period, the percentage equivalent of a fraction, the numerator of which is
the Invested Amount as of the close of business on the last day of the
Revolving Period and the denominator of which is the greater of (a) the
aggregate amount of Principal Receivables in the Trust determined as of the
close of business on the last day of the prior Monthly Period and (b) the
sum of the numerators used to calculate the Investor Percentages (as such
term is defined in the Agreement) for allocations with respect to Principal
Receivables for all outstanding Series on such date of determination;
provided that if Series 1999-A is paired with a Paired Series and an Early
13
Amortization Event occurs with respect to such Paired Series during the
Controlled Accumulation Period, Transferor may, by written notice delivered
to Trustee and Servicer, but only after satisfaction of the Rating Agency
Condition with respect to the Class A Certificates (if any Class A
Certificates remain outstanding) and the Class B Certificates (if any Class
B Certificates remain outstanding), designate a different numerator
(provided that such numerator is not less than the Adjusted Invested Amount
(less the balance on deposit in the Principal Account that is not subject
to being treated as Reallocated Principal Collections or Shared Principal
Collections) as of the last day of the revolving period for such Paired
Series); provided further that if one or more Reset Dates occur in a
Monthly Period, the Fixed Allocation Percentage for the portion of the
Monthly Period falling on and after each such Reset Date (the "subject
Reset Date") and prior to any subsequent Reset Date will be determined
using a denominator equal to the greater of the amounts specified in
clauses (a) and (b) above determined as of the close of business on the
subject Reset Date.
"Floating Allocation Percentage" means, with respect to any
Monthly Period, the percentage equivalent of a fraction, the numerator of
which is the Adjusted Invested Amount as of the close of business on the
last day of the preceding Monthly Period (or with respect to the first
Monthly Period, the Initial Invested Amount) and the denominator of which
is the greater of (a) the aggregate amount of Principal Receivables as of
the close of business on the last day of the preceding Monthly Period (or
with respect to the first Monthly Period, the aggregate amount of Principal
Receivables in the Trust as of the close of business on the day immediately
preceding the Closing Date), and (b) the sum of the numerators used to
calculate the Investor Percentages (as such term is defined in the
Agreement) for allocations with respect to Finance Charge Receivables,
Default Amounts, Uncovered Dilution Amounts or Principal Receivables, as
applicable, for all outstanding Series on such date of determination;
provided that if one or more Reset Dates occur in a Monthly Period, the
Floating Allocation Percentage for the portion of the Monthly Period
falling on and after each such Reset Date (the "subject Reset Date") and
prior to any subsequent Reset Date will be determined using a denominator
equal to the greater of the amounts specified in clauses (a) and (b) above
determined as of the close of business on the subject Reset Date.
"Group One" means Series 1999-A and each other Series specified in
the related Supplement to be included in Group One.
"Initial Invested Amount" means $600,000,000.
"Interest Rate Swap Agreement" means an interest rate swap
agreement between Trustee, on behalf of the Trust, and the Counterparty
substantially in the form of Exhibit I; provided, however, that the
14
Interest Rate Swap Agreement can deviate from the terms described in
Exhibit I if the Rating Agency Condition is satisfied.
"Invested Amount" means, on any date of determination, an amount
equal to the sum of (a) the Class A Invested Amount, (b) the Class B
Invested Amount and (c) the Class C Invested Amount, each as of such date.
"Investor Certificates" means the Class A Certificates, the Class
B Certificates and the Class C Interests.
"Investor Default Amount" means, with respect to any Receivable in
a Defaulted Account, an amount equal to the product of (a) the Default
Amount and (b) the Floating Allocation Percentage on the day such Account
became a Defaulted Account.
"Investor Holder" means, for all purposes of the Agreement and
this Series Supplement, (a) with respect to the Class A Certificates, the
holder of record of a Class A Certificate, (b) with respect to the Class B
Certificates, the holder of record of a Class B Certificate and (c) with
respect to the Class C Interests, the holder of record of a Class C
Interest.
"Investor Percentage" means, for any Monthly Period, (a) with
respect to Finance Charge Receivables and Default Amounts at any time and
Principal Receivables during the Revolving Period, the Floating Allocation
Percentage and (b) with respect to Principal Receivables during the
Controlled Accumulation Period or the Early Amortization Period, the Fixed
Allocation Percentage.
"Investor Principal Collections" means, with respect to any
Monthly Period, the sum of (a) the aggregate amount deposited (or required
to be deposited on the related Transfer Date (before giving effect to any
permitted netting) pursuant to Section 4.7(d)) into the Principal Account
for such Monthly Period pursuant to Sections 4.7(a)(ii) and (iii),
4.7(b)(ii), (iii) and (iv), or 4.7(c)(ii), (iii) and (iv), in each case, as
applicable to such Monthly Period, (b) the aggregate amount to be treated
as Investor Principal Collections pursuant to Sections 4.11(a)(iii), and
4.13(a), (b), (c), (d), (g) and (h) for such Monthly Period (other than
such amount paid from Reallocated Principal Collections), and (c) the
aggregate amount transferred or required to be transferred on the related
Transfer Date (before giving effect to any permitted netting pursuant to
Section 4.7(d)) from the Excess Funding Account into the Principal Account
pursuant to Section 4.15(d).
"LIBOR" means, for each Distribution Period, the London interbank
offered rate for one-month United States dollar deposits (reserve adjusted
as provided for therein), as determined by Trustee in accordance with
Section 4.19.
15
"LIBOR Determination Date" means September 15, 1999 for the
initial Distribution Period and the second London Business Day prior to the
commencement of each subsequent Distribution Period.
"Monthly Servicer Certificate" means the certificate forwarded by
the Servicer under Section 3.4(b).
"London Business Day" means any Business Day on which dealings in
deposits in United States dollars are transacted in the London interbank
market.
"Net Swap Payment" means, for any Transfer Date, the sum of the
Class A Net Swap Payment (if any) and the Class B Net Swap Payment (if any)
for that Transfer Date.
"Net Swap Receipt" means, for any Transfer Date, the sum of the
Class A Net Swap Receipt (if any) and the Class B Net Swap Receipt (if any)
for that Transfer Date.
"Paired Series" means a Series that has been paired with Series
1999-A (which Series may be prefunded or partially prefunded or may be a
Variable Interest) such that a reduction of the Adjusted Invested Amount
results in (or permits) an increase of the invested amount of the paired
Series.
"Portfolio Adjusted Yield" means, with respect to any Transfer
Date, the average of the percentages obtained for each of the three
preceding Monthly Periods by subtracting the Base Rate from the Portfolio
Yield for such Monthly Period and deducting 0.50% from the result for each
Monthly Period.
"Portfolio Yield" means, with respect to any Monthly Period, the
annualized percentage equivalent of a fraction, the numerator of which is
an amount equal to the result of (a) the Available Funds for such Monthly
Period (excluding any Excess Finance Charge Collections), plus (b) any Net
Swap Receipt for the related Transfer Date, minus (c) any Net Swap Payment
for the related Transfer Date, plus (d) the Principal Funding Investment
Proceeds deposited or required to be deposited into the Finance Charge
Account on the Transfer Date (before giving effect to any permitted
netting) related to such Monthly Period, plus (e) the amount of the Reserve
Draw Amount (up to the Available Reserve Account Amount) plus any amounts
of interest and earnings described in Section 4.17, such result to be
calculated on a cash basis after subtracting the Aggregate Investor Default
Amount and the Uncovered Dilution Amount for such Monthly Period, and the
denominator of which is the Invested Amount as of the close of business on
the last day of such Monthly Period.
"Principal Account" is defined in Section 4.16(a).
16
"Principal Funding Account" is defined in Section 4.16(a).
"Principal Funding Account Balance" means, with respect to any
date of determination, the principal amount, if any, on deposit in the
Principal Funding Account on such date of determination.
"Principal Funding Investment Proceeds" means, with respect to
each Transfer Date, the investment earnings on funds in the Principal
Funding Account (net of investment expenses and losses) for the period from
and including the immediately preceding Transfer Date to but excluding such
Transfer Date.
"Principal Funding Investment Shortfall" means, with respect to
each Transfer Date relating to the Controlled Accumulation Period, the
amount, if any, by which the Principal Funding Investment Proceeds for such
Transfer Date are less than the Covered Amount determined as of such
Transfer Date.
"Principal Shortfall" means, with respect to any Transfer Date,
the excess, if any, of (a) (i) with respect to any Transfer Date relating
to the Controlled Accumulation Period, the sum of (A) the Controlled
Deposit Amount for such Transfer Date, (B) on any Transfer Date after the
Transfer Date on which the Class A Adjusted Invested Amount is reduced to
zero, the Class B Invested Amount and (C) the lesser of the Enhancement
Surplus (if any) and the Class C Invested Amount for such Transfer Date,
(ii) with respect to any Transfer Date during the Early Amortization
Period, zero and (iii) with respect to any Transfer Date relating to the
Revolving Period, the amount specified in clause (a)(i)(C) above (b) the
Investor Principal Collections minus the Reallocated Principal Collections
(other than any portions thereof that are applied pursuant to (x) Section
4.11(a)(iii) and (y) Section 4.13(c) (to the extent such portions pursuant
to Section 4.13(c) are available to pay the Class B Investor Default Amount
or the Class B Uncovered Dilution Amount)) for such Transfer Date.
"Rating Agency" means Xxxxx'x, S&P and Fitch.
"Rating Agency Condition" means the notification in writing by
each Rating Agency to Transferor, Servicer and Trustee that an action will
not result in any Rating Agency reducing or withdrawing its then existing
rating of the Class A Certificates or the Class B Certificates.
"Reallocated Class B Principal Collections" is defined in Section 4.14.
"Reallocated Class C Principal Collections" is defined in Section 4.14.
"Reallocated Principal Collections" is defined in Section 4.14.
17
"Record Date" means, with respect to any Distribution Date, the
last Business Day of the calendar month preceding such Distribution Date.
"Reference Banks" means four major banks in the London interbank
market selected by Servicer.
"Required Cash Collateral Amount" means, with respect to any date
of determination, the Required Enhancement Amount less the Class C Invested
Amount.
"Required Draw Amount" is defined in Section 4.18(c).
"Required Enhancement Amount" means, with respect to each Transfer
Date, the greater of (a) an amount equal to 15% of the Adjusted Invested
Amount on such Transfer Date, after taking into account deposits into the
Principal Funding Account on such Transfer Date and payments (including
payments on the Class C Interests) to be made on the related Distribution
Date and (b) $18,000,000; provided that (x) if, on or prior to such
Transfer Date, there has been any Required Draw Amount pursuant to Section
4.18(c) or any reductions in the Class C Invested Amount pursuant to
clauses (c), (d) or (e) of the definition of such term, or an Early
Amortization Event has occurred with respect to Series 1999-A, then the
Required Enhancement Amount for such Transfer Date shall, subject to
clauses (y) and (z), equal the Required Enhancement Amount on the Transfer
Date immediately preceding such reduction, Required Draw Amount or Early
Amortization Event, (y) in no event shall the Required Enhancement Amount
exceed the sum of the outstanding principal amounts of (i) the Class A
Certificates and (ii) the Class B Certificates, each as of the last day of
the Monthly Period preceding such Transfer Date after taking into account
the payments to be made on the related Distribution Date and (z) the
Required Enhancement Amount may be reduced or increased at Transferor's
option at any time if Transferor, Servicer, the Class C Interest Holders
and Trustee have been provided evidence that the Rating Agency Condition
has been satisfied.
"Required Reserve Account Amount" means, with respect to any
Transfer Date prior to the Reserve Account Funding Date, $0, and on or
after the Reserve Account Funding Date, an amount equal to (a) 0.5% of the
Class A Invested Amount as of the preceding Distribution Date (after giving
effect to all changes therein on such date) or (b) any other amount
designated by Transferor, provided that, if such designation is of a lesser
amount, the Rating Agency Condition must be satisfied.
"Required Retained Transferor Percentage" means, for purposes of Series
1999-A, 4%.
18
"Requisite Counterparty Rating" is defined in the definition of
"Eligible Counterparty".
"Reserve Account" is defined in Section 4.17(a).
"Reserve Account Funding Date" means the Transfer Date which
occurs not later than the earliest of: (a) the Transfer Date with respect
to the Monthly Period which commences no later than 3 months prior to
August 1, 2002; (b) the first Transfer Date for which the Portfolio
Adjusted Yield is less than 2.00%, but in such event the Reserve Account
Funding Date shall not be required to occur earlier than the Transfer Date
with respect to the Monthly Period which commences 12 months prior to the
anticipated commencement of the Controlled Accumulation Period; (c) the
first Transfer Date for which the Portfolio Adjusted Yield is less than
3.00%, but in such event the Reserve Account Funding Date shall not be
required to occur earlier than the Transfer Date with respect to the
Monthly Period which commences 6 months prior to the anticipated
commencement of the Controlled Accumulation Period; and (d) the first
Transfer Date for which the Portfolio Adjusted Yield is less than 4.00%,
but in such event the Reserve Account Funding Date shall not be required to
occur earlier than the Transfer Date with respect to the Monthly Period
which commences 4 months prior to the anticipated commencement of the
Controlled Accumulation Period.
"Reserve Account Surplus" means, as of any Transfer Date following
the Reserve Account Funding Date, the amount, if any, by which the amount
on deposit in the Reserve Account exceeds the Required Reserve Account
Amount.
"Reserve Draw Amount" is defined in Section 4.17(c).
"Reset Date" means each of (a) an Addition Date on which
Receivables from Supplemental Accounts are added to the Trust, (b) a
Removal Date on which, if any Series has been paid in full, Principal
Receivables in an aggregate amount approximately equal to the initial
investor interest of such Series are removed from the Trust, (c) a date on
which there is an increase in the Invested Amount of any Variable Interest
issued by the Trust and (d) any date on which a new Series is issued.
"Revolving Period" means the period from and including the Closing
Date to, but not including, the earlier of (a) the Controlled Accumulation
Date and (b) the Early Amortization Commencement Date.
"Series Account" means, as to Series 1999-A, the Distribution
Account, the Finance Charge Account, the Principal Account, the Principal
Funding Account, the Cash Collateral Account and the Reserve Account.
19
"Series Allocation Percentage" means, with respect to any Monthly
Period, the percentage equivalent of a fraction, the numerator of which is
the numerator used in determining the Floating Allocation Percentage for
that Monthly Period and the denominator of which is the sum of the
numerators used to calculate the Investor Percentages (as such term is
defined in the Agreement) for allocations with respect to Finance Charge
Receivables for all outstanding Series on such date of determination;
provided that if one or more Reset Dates occur in a Monthly Period, the
Series Allocation Percentage for the portion of the Monthly Period falling
on and after each such Reset Date (the "subject Reset Date") and prior to
any subsequent Reset Date will be determined using a denominator which is
equal to the sum of the numerators used to calculate the Investor
Percentages for allocations with respect to Finance Charge Receivables for
all outstanding Series as of the close of business on the subject Reset
Date.
"Series 1999-A" means the Series of the World Financial Network
Credit Card Master Trust represented by the Investor Certificates.
"Series 1999-A Certificates" means the Class A Certificates and
the Class B Certificates.
"Series 1999-A Holder" means the holder of record of a Series 1999-A
Certificate.
"Series 1999-A Termination Date" means the earliest to occur of
(a) the Distribution Date on which the Invested Amount is paid in full, (b)
the termination of the Trust pursuant to the Agreement and (c) the July,
2006 Distribution Date.
"Series Servicing Fee Percentage" means 2.0%.
"Servicing Fee" is defined in Section 3(a) of this Series Supplement.
"Shared Principal Collections" means, as the context requires,
either (a) the amount allocated to the Investor Certificates which are
treated as Shared Principal Collections pursuant to Sections 4.7(a),
4.7(b)(iv)(B), 4.7(c)(iv)(B), 4.11(d)(ii) and 4.11(e)(iv) and which may be
applied to the principal shortfall with respect to other outstanding Series
in Group One or (b) the amounts allocated to the investor certificates of
other Series in Group One which the applicable Supplements for such Series
specify are to be treated as "Shared Principal Collections" and which may
be applied to cover the Principal Shortfall with respect to the Investor
Certificates.
"Specified Transferor Amount" means, at any time, the Minimum
Transferor Amount (including the Additional Minimum Transferor Amount, if
any) at that time.
"Target Amount" is defined in Section 4.7(d).
20
"Telerate Page 3750" means the display page currently so
designated on the Dow Xxxxx Telerate Service for the purpose of displaying
London interbank offered rates for deposits in United States dollars as
presented by the British Banker's Association or, if such page has been
replaced or deleted, then such other page on Telerate or such other service
that displays the London interbank offered rate for deposits in United
States dollars as presented by the British Banker's Association.
"Uncovered Dilution Amount" means an amount equal to the product
of (x) the Series Allocation Percentage for the related Monthly Period
(determined on a weighted average basis, if a Reset Date occurs during that
Monthly Period), times (y) the aggregate Dilutions occurring during that
Monthly Period as to which any deposit is required to made to the Excess
Funding Account pursuant to Section 3.9(a) but has not been made; provided
that, if the Transferor Amount is greater than zero at the time the deposit
referred to in clause (y) is required to be made, the Uncovered Dilution
Amount for such amount to be deposited shall be deemed to be zero.
SECTION 3. Servicing Fee. The share of the Servicing Fee allocable
to Series 1999-A with respect to any Transfer Date (the "Servicing Fee")
shall be equal to one-twelfth of the product of (i) the Series Servicing
Fee Percentage and (ii) the Adjusted Invested Amount as of the last day of
the Monthly Period preceding such Transfer Date; provided that with respect
to the first Transfer Date, the Servicing Fee shall equal $500,000. The
share of the Servicing Fee allocable to the Class A Invested Amount (the
"Class A Servicing Fee"), the Class B Invested Amount (the "Class B
Servicing Fee") and the Class C Invested Amount (the "Class C Servicing
Fee") with respect to any Transfer Date shall equal the Class A Floating
Allocation Percentage, Class B Floating Allocation Percentage and Class C
Floating Allocation Percentage, respectively, of such Servicing Fee. Except
as specifically provided above, the Servicing Fee shall be paid by the cash
flows from the Trust allocated to Transferor or the certificateholders of
other Series (as provided in the related Supplements) and in no event shall
the Trust, Trustee or the Investor Holders be liable therefor. The Class A
Servicing Fee shall be payable to Servicer solely to the extent amounts are
available for distribution in respect thereof pursuant to Sections
4.11(a)(ii) and 4.13(a). The Class B Servicing Fee shall be payable solely
to the extent amounts are available for distribution in respect thereof
pursuant to Sections 4.11(b)(ii) and 4.13(c). The Class C Servicing Fee
shall be payable solely to the extent amounts are available for
distribution in respect thereof pursuant to Section 4.13(f) or if
applicable Section 4.11(c)(i).
SECTION 3A. Interest Rate Swap. (a) The Trustee shall, on behalf
of the Trust, enter into on or prior to the Closing Date, a Class A Swap
and a Class B Swap, for the benefit of the Investor Holders, with Eligible
Counterparties, such that the aggregate notional amount under all such
agreements shall, at any time, be at least equal to the aggregate
outstanding principal amount of the Class A Certificates and the Class B
Certificates at such time. Net Swap Receipts shall be deposited by the
21
Trustee in the Finance Charge Account and invested as provided in Section
4.16. Any earnings on Net Swap Receipts invested pursuant to Section 4.16
shall be deposited and held in the Finance Charge Account and applied in
the same manner and priority as Class A Net Swap Receipts and Class B Net
Swap Receipts, respectively. On any Transfer Date when the Class A Net Swap
Payment or the Class B Net Swap Payment is greater than zero (as calculated
and reported by Servicer in the Monthly Servicer's Certificate), Trustee
shall pay such Class A Net Swap Payment or Class B Net Swap Payment from
Class A Available Funds and Class B Available Funds, respectively, as
provided in Sections 4.11(a)(1), 4.11(b)(i) and 4.13. The Counterparty is a
third party beneficiary of this Series Supplement and of the Agreement as
it relates to the Investor Certificates.
(b) Each Interest Rate Swap Agreement will provide, among other
things, that if the Counterparty thereunder ceases to be an Eligible
Counterparty, such Counterparty shall promptly notify the Trustee of such
fact in writing, and shall no later than the Required Substitution Date (as
defined below), at the expense of such Counterparty, either (x) obtain a
substitute swap provider that is an Eligible Counterparty and replace the
Interest Rate Swap Agreement with a substantially identical Interest Rate
Swap Agreement, or (y) enter into a "Qualifying Substitute Arrangement" (as
defined in the Interest Rate Swap Agreement). Upon receipt of notice of any
such reduction or withdrawal, the Trustee, at the direction of the
Servicer, shall, unless such a substitute or Qualifying Substitute
Arrangement has theretofore been established or obtained, use its best
efforts (or, if the Trustee is acting as successor Servicer, commercially
reasonable efforts) to establish or obtain or cause the affected
Counterparty to establish or obtain, with respect to each such Interest
Rate Swap Agreement, a replacement Interest Rate Swap Agreement or
Qualifying Substitute Arrangement; provided, however, that in the event at
any time any Qualifying Substitute Arrangement established pursuant to this
Section 3A or pursuant to the applicable Interest Rate Swap Agreement shall
cease to be satisfactory to the Rating Agency or shall terminate prior to
the Series Termination Date, then the provisions of this Section 3A shall
again be applied and in connection therewith the 30-day period referred to
above shall commence on the date the Servicer receives notice of such
cessation or termination, as the case may be.
(c) Subject to satisfaction of the Rating Agency Condition, the
Servicer may at any time obtain a replacement Interest Rate Swap Agreement.
SECTION 4. Optional Repurchase; Reassignment and Termination
Provisions. (a) The Investor Certificates shall be subject to retransfer to
Transferor at its option on any Distribution Date, on or after the
Distribution Date on which the Invested Amount is reduced to an amount less
than or equal to 5% of the Initial Invested Amount by deposit into the
Collection Account for application in accordance with Section 12.2 of an
amount equal to the sum of (i) the outstanding principal amount of the
22
Class A Certificates, Class B Certificates and Class C Interests (less any
amounts then on deposit in the Principal Funding Account or the Principal
Account), plus (ii) accrued and unpaid interest on the Investor
Certificates through the day preceding the Distribution Date on which the
repurchase occurs. Upon the tender of the outstanding Series 1999-A
Certificates by the Holders (and without tender in the case of the Class C
Interests), Trustee shall distribute such amount, together with all funds
on deposit in the Principal Account and Principal Funding Account to the
Investor Holders on the next Distribution Date in repayment of the
principal amount and accrued and unpaid interest owing to the Investor
Holders. Following any redemption, the Investor Holders shall have no
further rights with respect to the Receivables. If Transferor fails for any
reason to deposit in the Collection Account the aggregate purchase price
for the Investor Certificates, payments shall continue to be made to the
Investor Holders in accordance with the terms of the Agreement and this
Series Supplement.
(b) The amount required to be deposited by Transferor with respect
to the Investor Certificates in connection with any reassignment of
Receivables pursuant to Section 2.6 shall equal the sum of (i) the Adjusted
Invested Amount (less any amounts then on deposit in the Principal
Account), plus (ii) accrued and unpaid interest on the Investor
Certificates through the day preceding the Distribution Date on which the
repurchase occurs. The amount so deposited together with the amount then on
deposit in the Principal Account and the Principal Funding Account shall be
distributed to the Holders of the Investor Certificates in final payment of
the Invested Amount and all such other amounts on the Distribution Date on
which it is deposited.
(c) Proceeds available from the sale of Receivables in accordance
with Section 12.2(c) on the Series 1999-A Termination Date shall be
treated, to the extent of the Invested Amount, as Collections of Principal
Receivables that have been allocated to the Investor Certificates and any
excess shall be treated as Collections of Finance Charge Receivables that
have been allocated to the Investor Certificates, in each case with respect
to the prior Monthly Period.
(d) Transferor may from time to time, purchase Class A and Class B
Certificates on the secondary market and request Trustee to cancel such
Class A and Class B Certificates held by Transferor and reduce the Class A
or Class B Invested Amount, as applicable, by a corresponding amount;
provided that Transferor may make such purchases and requests for
cancellation of Class B Certificates resulting in a reduction of the Class
B Invested Amount only to the extent that it has made (or will make
contemporaneously with any such purchase and request for cancellation of
Class B Certificates) purchases and requests for cancellations of Class A
Certificates that result in at least a pro rata reduction of the Class A
Invested Amount; provided, further, that no purchase of Class B
Certificates shall be made if Class A Certificates remain outstanding and
the sum of the Collateral Interest plus the balance on deposit in the
Excess Funding Account is less than the Required Enhancement Amount.
23
SECTION 5. Delivery and Payment for the Investor Certificates.
Transferor shall execute and deliver the Series 1999-A Certificates to
Trustee (in definitive, fully registered form) for authentication in
accordance with Section 6.1. Trustee shall deliver such Certificates when
authenticated in accordance with Section 6.2. The Class C Interests shall
be issued as provided in this Series Supplement and the Class C
Supplemental Agreement.
SECTION 6. Depository; Form of Delivery of Investor Certificates;
Legends; Transfer Restrictions and Procedures. (a) The Class A Certificates
and the Class B Certificates shall be delivered as Book-Entry Certificates
as provided in Sections 6.1 and 6.10.
(b) The Depository for Series 1999-A shall be The Depository Trust
Company, and the Class A Certificates shall be initially registered in the
name of Cede & Co., its nominee.
(c) Class B Certificates sold to "Qualified Institutional Buyers"
(as defined in Rule 144A under the Securities Act, "QIB's") in reliance on
Rule 144A under the Securities Act shall be represented by one or more
Book-Entry Certificates (the "144A Book-Entry Certificates"), in registered
form, without coupons, which will be deposited upon the order of Transferor
on the Closing Date with Trustee as custodian for and registered in the
name of Cede & Co., as nominee of the Depository.
(d) Class B Certificates sold in offshore transactions in reliance
on Regulation S under the Securities Act shall be represented initially by
temporary Book-Entry Certificates (the "Regulation S Temporary Book-Entry
Certificates"). The Regulation S Temporary Book-Entry Certificates shall be
exchanged on the later of (i) 40 days after the Closing Date and (ii) the
date on which the requisite certifications are due to and provided to
Trustee (the later of clauses (i) and (ii) is referred to as the "Exchange
Date") for permanent Book-Entry Certificates (the "Unrestricted Book-Entry
Certificates," and together with the Regulation S Temporary Book-Entry
Certificates, the "Regulation S Book-Entry Certificates"). The Regulation S
Temporary Book-Entry Certificates shall be issued in registered form,
without coupons, and deposited upon the order of Transferor with Trustee as
custodian for and registered in the name of a nominee of the Depository for
credit to the account of the depositaries for the Euroclear Operator and
CEDEL, which depositaries shall, on behalf of the Euroclear Operator and
CEDEL, hold the interests on behalf of account holders (each a "Member
Organization"), which have rights in respect of the Class B Certificates
credited to their securities accounts with the Euroclear Operator or CEDEL
from time to time.
(e) A Certificate Owner holding an interest in a Regulation S
Temporary Book-Entry Certificate may receive payments in respect of the
Class B Certificates on the Regulation S Temporary Book-Entry Certificate
24
only after delivery to the Euroclear Operator or CEDEL, as the case may be,
of a written certification substantially in the form of a certification in
the form set forth in Exhibit D, and upon delivery by the Euroclear
Operator or CEDEL, as the case may be, to the Transfer Agent and Registrar
of a certification or certifications substantially in the form set forth in
Exhibit E. The delivery by a Certificate Owner of the certification
referred to above shall constitute its irrevocable instruction to the
Euroclear Operator or CEDEL, as the case may be, to arrange for the
exchange of the Certificate Owner's interest in the Regulation S Temporary
Book-Entry Certificate for a beneficial interest in the Unrestricted
Book-Entry Certificate after the Exchange Date in accordance with the
paragraph below.
After (i) the Exchange Date and (ii) receipt by the Transfer Agent
and Registrar of written instructions from the Euroclear Operator or CEDEL,
as the case may be, directing the Transfer Agent and Registrar to credit or
cause to be credited to either the Euroclear Operator's or CEDEL's, as the
case may be, depositary's account a beneficial interest in the Unrestricted
Book-Entry Certificate in a principal amount not greater than that of the
beneficial interest in the Regulation S Temporary Book-Entry Certificate,
the Transfer Agent and Registrar shall instruct the Depository to reduce
the principal amount of the Regulation S Temporary Book- Entry Certificate
and increase the principal amount of the Unrestricted Book-Entry
Certificate, by the principal amount of the beneficial interest in the
Regulation S Temporary Book-Entry Certificate to be so transferred, and to
credit or cause to be credited to the account of the Euroclear Operator,
CEDEL or another Clearing Agency Participant, as the case may be, a
beneficial interest in the Unrestricted Book-Entry Certificate having a
principal amount of the Regulation S Temporary Book-Entry Certificate that
was reduced upon the transfer.
Upon return of the entire principal amount of the Regulation S
Temporary Book-Entry Certificate to Trustee in exchange for beneficial
interests in the Unrestricted Book-Entry Certificate, Trustee shall cancel
the Regulation S Temporary Book-Entry Certificate by perforation and shall
forthwith destroy it.
(f) Transfers of beneficial interests in the Class B Certificates
between different Book-Entry Certificates shall be made in accordance with
this Section.
(i) For transfer of an interest in an Unrestricted
Book-Entry Certificate for an interest in the 144A Book-Entry
Certificate, if the Class B Holder of a beneficial interest in an
Unrestricted Book-Entry Certificate deposited with the Depository
wishes at any time to exchange its interest in the Unrestricted
Book-Entry Certificate, or to transfer its interest in the
Unrestricted Book-Entry Certificate to a Person who wishes to take
delivery thereof in the form of an interest in the 144A Book-Entry
Certificate, the Class B Holder may, subject to the rules and
procedures of the Euroclear Operator or CEDEL and the Depository,
as the case may be, give directions
25
for the Transfer Agent and Registrar to exchange or cause the
exchange or transfer or cause the transfer of the interest for an
equivalent beneficial interest in the 144A Book-Entry Certificate.
Upon receipt by the Transfer Agent and Registrar of instructions
from the Euroclear Operator or CEDEL (based on instructions from a
Member Organization) or from a Clearing Agency Participant, as
applicable, or the Depository, as the case may be, directing the
Transfer Agent and Registrar to credit or cause to be credited a
beneficial interest in the 144A Book-Entry Certificate equal to
the beneficial interest in the Unrestricted Book-Entry Certificate
to be exchanged or transferred (such instructions to contain
information regarding the Clearing Agency Participant account to
be credited with the increase, and, with respect to an exchange or
transfer of an interest in the Unrestricted Book-Entry
Certificate, information regarding the Clearing Agency Participant
account to be debited with the decrease), the Transfer Agent and
Registrar shall instruct the Depository to reduce the Unrestricted
Book-Entry Certificate by the aggregate principal amount of the
beneficial interest in the Unrestricted Book-Entry Certificate to
be exchanged or transferred, and the Transfer Agent shall instruct
the Depository, concurrently with the reduction, to increase the
principal amount of the 144A Book-Entry Certificate by the
aggregate principal amount of the beneficial interest in the
Unrestricted Book-Entry Certificate to be so exchanged or
transferred, and to credit or cause to be credited to the account
of the Person specified in the instructions a beneficial interest
in the 144A Book-Entry Certificate equal to the reduction in the
principal amount of the Unrestricted Book-Entry Certificate.
(ii) For transfers of an interest in the 144A Book-Entry
Certificate for an interest in a Regulation S Book-Entry
Certificate, if a Certificate Owner holding a beneficial interest
in the 144A Book-Entry Certificate wishes at any time to exchange
its interest in the 144A Book-Entry Certificate for an interest in
a Regulation S Book-Entry Certificate, or to transfer its interest
in the 144A Book-Entry Certificate to a Person who wishes to take
delivery thereof in the form of an interest in the Regulation S
Book-Entry Certificate, the Class B Holder may, subject to the
rules and procedures of the Depository, give directions for the
Transfer Agent and Registrar to exchange or cause the exchange or
transfer or cause the transfer of the interest for an equivalent
beneficial interest in the Regulation S Book-Entry Certificate.
Upon receipt by the Transfer Agent and Registrar of (A)
instructions given in accordance with the Depository procedures
from a Clearing Agency Participant directing the Transfer Agent
and Registrar to credit or cause to be credited a beneficial
interest in the Regulation S Book-Entry Certificate in an amount
equal to the beneficial interest in the 144A Book-Entry
Certificate to be exchanged or transferred, (B) a written order
given in accordance with the Depository's procedures containing
information regarding the account of the depositaries for the
Euroclear Operator or CEDEL or another Clearing
26
Agency Participant, as the case may be, to be credited with the
increase and the name of the account and (C) certificates in the
forms of Exhibits F and G, respectively, given by the Certificate
Owner and the proposed transferee of the interest, the Transfer
Agent and Registrar shall instruct the Depository to reduce the
144A Book-Entry Certificate by the aggregate principal amount of
the beneficial interest in the 144A Book-Entry Certificate to be
so exchanged or transferred and the Transfer Agent and Registrar
shall instruct the Depository, concurrently with the reduction, to
increase the principal amount of the Regulation S Book-Entry
Certificate by the aggregate principal amount of the beneficial
interest in the 144A Book-Entry Certificate to be so exchanged or
transferred, and to credit or cause to be credited to the account
of the Person specified in the instructions a beneficial interest
in the Regulation S Book-Entry Certificate equal to the reduction
in the principal amount of the 144A Book-Entry Certificate.
(iii) Notwithstanding any other provisions of this
section, a placement agent for the Class B Certificates may
exchange beneficial interests in the Regulation S Temporary
Book-Entry Certificate held by it for interests in the 144A
Book-Entry Certificate only after delivery by the placement agent
of instructions for the exchange substantially in the form of
Exhibit H. Upon receipt of the instructions provided in the
preceding sentence, the Transfer Agent and Registrar shall
instruct the Depository to reduce the principal amount of the
Regulation S Temporary Book-Entry Certificate to be so transferred
and shall instruct the Depository to increase the principal amount
of the 144A Book-Entry Certificate and credit or cause to be
credited to the account of the placement agent a beneficial
interest in the 144A Book-Entry Certificate having a principal
amount equal to the amount by which the principal amount of the
Regulation S Temporary Book- Entry Certificate was reduced upon
the transfer pursuant to the instructions provided in the first
sentence of this subclause.
(iv) If a Book-Entry Certificate is exchanged for a
Definitive Certificate, the Certificates may be exchanged or
transferred for one another only in accordance with such
procedures as are substantially consistent with the provisions of
clauses (i) through (iii) above (including the certification
requirements intended to ensure that the exchanges or transfers
comply with Rule 144 or Regulation S under the Securities Act, as
the case may be, and that no transfer is made to a Benefit Plan
unless it is an insurance company meeting the specific
requirements described in subsection (v) immediately below) and as
may be from time to time adopted by Trustee.
(v) Notwithstanding any other provisions of this section,
no transfer of a beneficial interest in a Class B Certificate may
be made unless the transferee represents and warrants (and each
transferee of a Class B
27
Certificate in uncertificated form will be deemed to represent and
warrant) that it is either (A) not an "employee benefit plan"
within the meaning of Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended (whether or not subject to
ERISA and including foreign and governmental plans), any plan,
trust or account (including an individual retirement plan)
described in Section 4975(e)(1) of the Internal Revenue Code of
1986, as amended, or any collective investment fund, insurance
company separate or general account or other entity deemed to hold
plan assets of the foregoing by reason of any such plan's
investment in such entity (collectively, "Benefit Plans") or (B)
is an insurance company general account that, at the time of
acquisition and throughout its holding of the certificate, is not
a service provider to the trust or an affiliate of the foregoing,
and would not otherwise be excluded under 29 C.F.R.
2510.3.101(f)(1), and each of the accounts to which such
certificate is allocated is an insurance company general account
(1) that is eligible for and meets the requirements of Department
of Labor Prohibited Transaction Class Exemption 95-60 and (2) of
which less than 25% of the assets are (or represent) assets of a
Benefit Plan.
SECTION 7. Article IV of Agreement. Sections 4.1 through 4.5 shall
read in their entirety as provided in the Agreement. Article IV (except for
Sections 4.1 through 4.5 thereof) shall be read in its entirety as follows
and shall be applicable only to the Investor Certificates:
ARTICLE IV RIGHTS OF HOLDERS; ALLOCATIONS
SECTION 4.6 Rights of Holders and the Class C Interest Holders.
The Investor Certificates shall represent undivided interests in the Trust,
consisting of the right to receive, to the extent necessary to make the
required payments with respect to such Investor Certificates at the times
and in the amounts specified in this Agreement, (a) the applicable Investor
Percentage of Collections received with respect to the Receivables and (b)
funds on deposit in the Collection Account, the Finance Charge Account, the
Principal Account, the Principal Funding Account, the Cash Collateral
Account, the Reserve Account and the Distribution Account. The Class C
Interests shall be subordinate to the Class A Certificates and the Class B
Certificates to the extent described herein. The Class B Certificates shall
be subordinate to the Class A Certificates to the extent described herein.
Transferor shall not have any interest in the Collection Account, the
Finance Charge Account, the Principal Account, the Principal Funding
Account, the Cash Collateral Account, the Reserve Account and the
Distribution Account, except as specifically provided in this Article IV.
28
SECTION 4.7 Allocations. (a) Allocations During the Revolving Period.
During the Revolving Period, Servicer shall allocate Collections to the Investor
Holders as follows:
(i) allocate to the Investor Holders an amount equal to
the product of (A) the Investor Percentage on the Date of
Processing of such Collections and (B) the aggregate amount of
Collections processed in respect of Finance Charge Receivables on
such Date of Processing;
(ii) allocate to the Investor Holders an amount equal to
the product of (A) the Class C Investor Allocation Percentage on
the Date of Processing of such Collections, (B) the Investor
Percentage on the Date of Processing of such Collections and (C)
the aggregate amount of Collections processed in respect of
Principal Receivables on such Date of Processing; and
(iii) allocate to the Investor Holders an amount equal to
the product of (A) the Class B Investor Allocation Percentage on
the Date of Processing of such Collections, (B) the Investor
Percentage on the Date of Processing of such Collections and (C)
the aggregate amount of Collections processed in respect of
Principal Receivables on such Date of Processing.
In addition, an amount equal to the product of (1) the Class A
Investor Allocation Percentage on the Date of Processing of such
Collections, (2) the Investor Percentage on the Date of Processing of such
Collections and (3) the aggregate amount of Collections processed in
respect of Principal Receivables on each Date of Processing shall be
treated as Shared Principal Collections.
(b) Allocations During the Controlled Accumulation Period. During the
Controlled Accumulation Period, Servicer shall allocate Collections to the
Investor Holders as follows:
(i) allocate to the Investor Holders an amount equal to
the product of (A) the Investor Percentage on the Date of
Processing of such Collections and (B) the aggregate amount of
Collections processed in respect of Finance Charge Receivables on
such Date of Processing;
(ii) allocate to the Investor Holders an amount equal to
the product of (A) the Class C Investor Allocation Percentage on
the Date of Processing of such Collections, (B) the Investor
Percentage on the Date of Processing of such Collections and (C)
the aggregate amount of Collections processed in respect of
Principal Receivables on such Date of Processing;
(iii) allocate to the Investor Holders an amount equal to
the product of (A) the Class B Investor Allocation Percentage on
the Date of Processing
29
of such Collections, (B) the Investor Percentage on the Date of
Processing of such Collections and (C) the aggregate amount of
Collections processed in respect of Principal Receivables on such
Date of Processing; and
(iv) (A) allocate to the Investor Holders an amount equal
to the product of (1) the Class A Investor Allocation Percentage
on the Date of Processing of such Collections, (2) the Investor
Percentage on the Date of Processing of such Collections and (3)
the aggregate amount of Collections processed in respect of
Principal Receivables on such Date of Processing; provided that
the amount allocated pursuant to this Section 4.7(b)(iv)(A) during
any Monthly Period shall not exceed the Controlled Deposit Amount
for the related Transfer Date (after taking into account any
payments to be made on the immediately preceding Distribution
Date) and (B) treat as Shared Principal Collections any amount not
allocated as a result of the proviso to clause (A).
(c) Allocations During the Early Amortization Period. During the
Early Amortization Period, Servicer shall allocate Collections to the Investor
Holders as follows:
(i) allocate to the Investor Holders an amount equal to
the product of (A) the Investor Percentage on the Date of
Processing of such Collections and (B) the aggregate amount of
Collections processed in respect of Finance Charge Receivables on
such Date of Processing;
(ii) allocate to the Investor Holders an amount equal to
the product of (A) the Class C Investor Allocation Percentage on
the Date of Processing of such Collections and (B) the Investor
Percentage on the Date of Processing of such Collections and (C)
the aggregate amount of Collections processed in respect of
Principal Receivables on such Date of Processing;
(iii) allocate to the Investor Holders an amount equal to
the product of (A) the Class B Investor Allocation Percentage on
the Date of Processing of such Collections, (B) the Investor
Percentage on the Date of Processing of such Collections and (C)
the aggregate amount of Collections processed in respect of
Principal Receivables on such Date of Processing; and
(iv) (A) allocate to the Investor Holders an amount equal
to the product of (1) the Class A Investor Allocation Percentage
on the Date of Processing of such Collections and (2) the Investor
Percentage on the Date of Processing of such Collections and (3)
the aggregate amount of Collections processed in respect of
Principal Receivables on such Date of Processing; provided that
the aggregate amount allocated pursuant to this
30
Section 4.7(c)(iv)(A) during any Monthly Period shall not exceed
the Invested Amount as of the close of business on the last day of
the prior Monthly Period (after taking into account any payments
to be made on the Distribution Date relating to such prior Monthly
Period and deposits and any adjustments to be made to the Invested
Amount to be made on the Transfer Date relating to such Monthly
Period) and (B) treat as Shared Principal Collections any amount
not allocated as a result of the proviso to clause (A).
(d) During any period when Servicer is permitted by Section 4.3 to
make a single monthly deposit to the Collection Account, amounts allocated
to the Investor Holders pursuant to Sections 4.7(a), (b) and (c) with
respect to any Monthly Period need not be deposited into the Collection
Account or any Series Account prior to the related Transfer Date, and, when
so deposited, (x) may be deposited net of any amounts required to be
distributed to Transferor and, if WFN is Servicer, Servicer and (y) shall
be deposited into the Finance Charge Account (in the case of Collections of
Finance Charge Receivables) and the Principal Account (in the case of
Collections of Principal Receivables (not including any Shared Principal
Collections allocated to Series 1999-A pursuant to Section 4.15)), subject
in either case to the proviso to the next sentence. At any other time,
amounts so allocated on each Date of Processing shall be deposited on that
Date of Processing into the Finance Charge Account (in the case of
Collections of Finance Charge Receivables) and the Principal Account (in
the case of Collections of Principal Receivables (not including any Shared
Principal Collections allocated to Series 1999-A pursuant to Section
4.15)), provided that:
(i) so long as no draw has been made on the Cash
Collateral Account, with respect to each Monthly Period falling in
the Revolving Period (and with respect to that portion of each
Monthly Period in the Controlled Accumulation Period falling on or
after the day on which Collections of Principal Receivables equal
to the related Controlled Deposit Amount have been allocated
pursuant to Section 4.7(b)(iv) and deposited pursuant to Section
4.7(d)), Collections of Finance Charge Receivables shall be
deposited into the Finance Charge Account only until such time as
the aggregate amount so deposited equals the sum (the "Target
Amount") of (A) the amounts of Class A Monthly Interest, plus any
Class A Net Swap Payment, Class B Monthly Interest, plus any Class
B Net Swap Payment, Class A Deficiency Amount and Class A
Additional Interest (if any), Class B Deficiency Amount and Class
B Additional Interest (if any), (B) if WFN is not Servicer, the
Servicing Fee, each due on the related Distribution Date, (C) any
Class C Monthly Interest due on the related Transfer Date and any
amounts that the Transferor or Servicer knows will be required to
be deposited into the Spread Account under (and as defined in) the
Class C Supplemental Agreement on the related Transfer Date, (D)
any amount required to be deposited in the Reserve Account on the
31
related Transfer Date and (E) any Finance Charge Shortfalls for
any other Series in Group One (as defined in the related
Supplement); and
(ii) with respect to each Monthly Period falling in the
Revolving Period, Collections of Principal Receivables allocated
to the Investor Holders pursuant to Section 4.7(a)(ii) and (iii)
shall (after an amount equal to any Class C Monthly Principal for
that Monthly Period has been deposited into the Principal Account)
be paid to Transferor (or, if the Transferor Amount is less than
the Specified Transferor Amount, deposited into the Excess Funding
Account), but Transferor shall make an amount equal to the
Reallocated Principal Collections for the related Transfer Date
available on that Transfer Date for application in accordance with
Section 4.14.
With respect to any Monthly Period when deposits of Collections of Finance
Charge Receivables into the Finance Charge Account are limited in
accordance with clause (i) of the preceding proviso, notwithstanding such
limitation: (1) "Excess Spread" for the related Transfer Date shall be
calculated as if the full amount of Finance Charge Collections allocated to
the Investor Certificates during that Monthly Period had been deposited in
the Finance Charge Account and applied on such Transfer Date in accordance
with Sections 4.11(a), 4.11(b) and 4.11(c); and (2) Collections of Finance
Charge Receivables released to Transferor pursuant to such clause (i) shall
be deemed, for purposes of all calculations under this Supplement and the
Class C Supplemental Agreement, to have been applied to the items specified
in Sections 4.11(a), 4.11(b), 4.11(c) and 4.13 to which such amounts would
have been applied (and in the priority in which they would have been
applied) had such amounts been available in the Finance Charge Account on
such Transfer Date. To avoid doubt, the calculations referred to in the
preceding clause (2) include the calculations required by clause (c) of the
definition of Class A Invested Amount, clause (f) of the definition of
Class B Invested Amount, clause (f) of the definition of Class C Invested
Amount and Section 4.10.
Notwithstanding clause (i) above, if on any Business Day Servicer
determines that the Target Amount for a Monthly Period exceeds the Target
Amount for that Monthly Period as previously calculated by Servicer, then
(x) Servicer shall (on the same Business Day) inform Transferor of such
determination, and (y) within two Business Days of receiving such notice
Transferor shall deposit into the Finance Charge Account funds in an amount
equal to the amount of Collections of Finance Charge Receivables allocated
to the Investor Certificates for that Monthly Period but not deposited into
the Finance Charge Account due to the operation of clause (i) (but not in
excess of the amount required so that the aggregate amount deposited for
the subject Monthly Period equals the Target Amount). In addition, if on
any Transfer Date the Transferor Amount will be less than the Specified
Transferor Amount after giving effect to all transfers and deposits on that
Transfer Date, Transferor shall, on that Transfer Date, deposit into the
Principal Account funds in an amount equal to
32
the amounts of Class A Available Funds and Excess Spread that are required
to be treated as Investor Principal Collections pursuant to Sections
4.11(a)(iii) and 4.13 but are not available from funds in the Finance
Charge Account as a result of the operation of clause (i).
(e) On any date, Servicer may withdraw from the Collection Account
or any Series Account any amounts inadvertently deposited in such account
that should have not been so deposited.
SECTION 4.8 Determination of Monthly Interest. (a) The amount of
monthly interest distributable to the Class A Certificates shall equal the
product of (i) a fraction, the numerator of which is the actual number of
days in the related Distribution Period and the denominator of which is
360, times (ii) the Class A Certificate Rate, times (iii) the outstanding
principal balance of the Class A Certificates determined as of the Record
Date preceding the related Transfer Date (the "Class A Monthly Interest");
provided that (x) Class A Monthly Interest for the first Distribution
Period will be $2,102,882.25 and (y) in addition to Class A Monthly
Interest an amount equal to the amount of any unpaid Class A Deficiency
Amounts, plus an amount equal to the product of (A) (1) a fraction, the
numerator of which is the actual number of days in the related Distribution
Period and the denominator of which is 360, times (2) the sum of the Class
A Certificate Rate, plus 2% per annum, and (B) any Class A Deficiency
Amount from the prior Transfer Date (or the portion thereof which has not
theretofore been paid to Class A Holders) (the "Class A Additional
Interest"), shall also be distributable to the Class A Certificates, and on
such Transfer Date Trustee shall deposit such funds, to the extent
available, into the Distribution Account. The "Class A Deficiency Amount"
for any Transfer Date shall equal the excess, if any, of the aggregate
amount accrued pursuant to this Section 4.8(a) as of the prior Distribution
Period over the amount actually transferred from the Distribution Account
for payment of such amount.
(b) The amount of monthly interest distributable to the Class B
Certificates shall equal the product of (i) a fraction, the numerator of
which is the actual number of days in the related Distribution Period and
the denominator of which is 360, times (ii) the Class B Certificate Rate,
times (iii) the outstanding principal balance of the Class B Certificates
determined as of the Record Date preceding the related Transfer Date (the
"Class B Monthly Interest"); provided that (x) Class B Monthly Interest for
the first Distribution Period will be $248,074.17 and (y) in addition to
the Class B Monthly Interest an amount equal to the amount of any unpaid
Class B Deficiency Amounts, plus an amount equal to the product of (A) (1)
a fraction, the numerator of which is the actual number of days in the
related Distribution Period and the denominator of which is 360, times (2)
the sum of the Class B Certificate Rate, plus 2% per annum, and (B) any
Class B Deficiency Amount from the prior Transfer Date (or the portion
thereof which has not theretofore been paid to Class B Holders) (the "Class
B Additional Interest"), shall also be distributable to the Class B
33
Certificates, and on such Transfer Date Trustee shall deposit such funds,
to the extent available, into the Distribution Account. The "Class B
Deficiency Amount" for any Transfer Date shall equal the excess, if any, of
the aggregate amount accrued pursuant to this Section 4.8(b) as of the
prior Distribution Period over the amount actually transferred from the
Distribution Account for payment of such amount.
(c) The amount of monthly interest distributable to the Class C
Interest (the "Class C Monthly Interest") shall equal the product of (i)
(A) a fraction, the numerator of which is the actual number of days in the
related Distribution Period and the denominator of which is 360, times (B)
the Class C Interest Rate in effect with respect to the related
Distribution Period, times (ii) the Class C Invested Amount determined as
of the Record Date preceding such Transfer Date.
SECTION 4.9 Determination of Monthly Principal. (a) The amount of
monthly principal distributable from the Principal Account with respect to
the Class A Certificates on each Transfer Date ("Class A Monthly
Principal"), beginning with the Transfer Date in the month following the
month in which the Controlled Accumulation Period or, if earlier, the Early
Amortization Period, begins, shall be equal to the least of (i) the
Available Investor Principal Collections on deposit in the Principal
Account with respect to such Transfer Date, (ii) for each Transfer Date
with respect to the Controlled Accumulation Period prior to the Class A
Scheduled Payment Date, the Controlled Deposit Amount for such Transfer
Date and (iii) the Class A Adjusted Invested Amount on such Transfer Date
prior to any deposit into the Principal Funding Account to be made on such
day.
(b) The amount of monthly principal distributable from the
Principal Account with respect to the Class B Certificates on each Transfer
Date (the "Class B Monthly Principal") for the Controlled Accumulation
Period, beginning with the Transfer Date after the one on which the Class A
Adjusted Invested Amount is reduced to zero, and for the Early Amortization
Period beginning with the Transfer Date on which the Class A Invested
Amount is reduced to zero (in either case after giving effect to payments
to be made on the related Distribution Date), shall be an amount equal to
the lesser of (i) the excess, if any, of (A) the Available Investor
Principal Collections on such Transfer Date over (B) any Class A Monthly
Principal on such Transfer Date and (ii) the Class B Invested Amount (after
taking into account any adjustments to be made on such Transfer Date
pursuant to Sections 4.12 and 4.14) on such Transfer Date.
(c) The amount of monthly principal (the "Class C Monthly
Principal") distributable from the Principal Account with respect to the
Class C Interests on each Transfer Date shall be (i) during the Revolving
Period following any reduction of the Required Enhancement Amount, an
amount equal to the lesser of (A) the Enhancement Surplus on such Transfer
Date and (B) the Available Investor Principal Collections on such Transfer
34
Date or (ii) during the Controlled Accumulation Period or Early
Amortization Period an amount equal to the lesser of (A) the Enhancement
Surplus on such Transfer Date, (B) the excess, if any, of (1) the Available
Investor Principal Collections on such Transfer Date over (2) the sum of
the Class A Monthly Principal and the Class B Monthly Principal for such
Transfer Date and (C) the Class C Invested Amount on such Transfer Date
(after taking into account any adjustments to be made on such Transfer Date
pursuant to Sections 4.12 and 4.14).
SECTION 4.10 Coverage of Required Amount. (a) On or before each
Transfer Date, Servicer shall determine the amount (the "Class A Required
Amount"), if any, by which the sum of (i) the Class A Monthly Interest and
any Class A Net Swap Payment for such Transfer Date, plus (ii) the Class A
Deficiency Amount, if any, for such Transfer Date, plus (iii) the Class A
Additional Interest, if any, for such Transfer Date, plus (iv) the Class A
Servicing Fee for the prior Monthly Period plus (v) the Class A Servicing
Fee, if any, due but not paid on any prior Transfer Date, plus (vi) the
Class A Investor Default Amount, if any, for such Transfer Date, plus (vii)
the Class A Uncovered Dilution Amount for the related Monthly Period,
exceeds the Class A Available Funds for the related Monthly Period.
(b) On or before each Transfer Date, Servicer shall also determine
the amount (the "Class B Required Amount"), if any, equal to the sum of (i)
the amount, if any, by which the sum of (A) the Class B Monthly Interest
and any Class B Net Swap Payment for such Transfer Date, plus (B) the Class
B Deficiency Amount, if any, for such Transfer Date plus (C) the Class B
Additional Interest, if any, for such Transfer Date, plus (D) the Class B
Servicing Fee for the prior Monthly Period plus (E) the Class B Servicing
Fee, if any, due but not paid on any prior Transfer Date, exceeds the Class
B Available Funds for the related Monthly Period plus (ii) the sum of (A)
the Class B Investor Default Amount, if any, for such Transfer Date and (B)
the Class B Uncovered Dilution Amount for the related Monthly Period.
(c) If the sum of the Class A Required Amount and the Class B
Required Amount for such Transfer Date is greater than zero, Servicer shall
give written notice to Trustee of such positive Class A Required Amount or
Class B Required Amount on or before such Transfer Date. In addition:
(i) If the Class A Required Amount for such Transfer Date
is greater than zero, all or a portion of the Excess Spread (and
any Required Draw Amount) with respect to such Transfer Date in an
amount equal to the Class A Required Amount, to the extent
available, for such Transfer Date shall be distributed (or, in the
case of Excess Spread, deemed, in accordance with Section 4.7(d),
to be distributed) from the Finance Charge Account (and the Cash
Collateral Account) on such Transfer Date pursuant to Section
4.13(a). If the Class A Required Amount for such Transfer Date
exceeds the amount of Excess Spread (and any Required Draw Amount)
with respect to
35
such Transfer Date, the Collections of Principal Receivables
allocable to the Class C Interests and the Class B Certificates
with respect to the prior Monthly Period shall be applied as
specified in Section 4.14.
(ii) If the Class B Required Amount for such Transfer
Date is greater than zero, all or a portion of the Excess Spread
(and any Required Draw Amount) with respect to such Transfer Date
in an amount equal to the Class B Required Amount, to the extent
available, for such Transfer Date shall be distributed (or, in the
case of Excess Spread, deemed, in accordance with Section 4.7(d),
to be distributed) from the Finance Charge Account (and the Cash
Collateral Account) on such Transfer Date pursuant to Section
4.13(c). If the Class B Required Amount for such Transfer Date
exceeds the amount of Excess Spread (and any Required Draw Amount)
available to fund the Class B Required Amount pursuant to Section
4.13(c), the Collections of Principal Receivables allocable to the
Class C Interests (after application to the Class A Required
Amount) shall be applied as specified in Section 4.14;
provided that the sum of any payments pursuant to this paragraph shall not
exceed the sum of the Class A Required Amount and the Class B Required
Amount.
SECTION 4.11 Monthly Payments. On or before each Transfer Date,
Servicer shall instruct Trustee in writing (which writing shall be
substantially in the form of Exhibit B) to withdraw, and Trustee, acting in
accordance with such instructions, shall withdraw on such Transfer Date or
the related Distribution Date, as applicable, to the extent of available
funds, the amounts required to be withdrawn from the Finance Charge
Account, the Principal Account, the Principal Funding Account and the
Distribution Account as follows:
(a) An amount equal to the Class A Available Funds for the related
Monthly Period will be distributed on each Transfer Date, to the extent
available, in the following priority:
(i) on a pro rata basis (A) an amount equal to Class A
Monthly Interest, plus any Class A Deficiency Amount, plus any
Class A Additional Interest (in each case for such Transfer Date)
shall be deposited by Servicer or Trustee into the Distribution
Account and (B) any Class A Net Swap Payment shall be paid to the
Swap Counterparty;
(ii) an amount equal to the Class A Servicing Fee for
such Transfer Date plus any Class A Servicing Fee due but not paid
to Servicer on any prior Transfer Date (less, if WFN is Servicer,
amounts previously retained toward payment of such fees) shall be
distributed to Servicer;
36
(iii) an amount equal to the sum of the Class A Investor
Default Amount and the Class A Uncovered Dilution Amount, if any,
for the preceding Monthly Period shall be treated (or deemed, in
accordance with Section 4.7(d), to be treated) as a portion of
Investor Principal Collections and, during the Controlled
Accumulation Period or the Early Amortization Period, deposited
into the Principal Account on such Transfer Date; and
(iv) the balance, if any, shall constitute Excess Spread
and shall be allocated and distributed as set forth in Section
4.13.
(b) An amount equal to the Class B Available Funds for the related
Monthly Period will be distributed on each Transfer Date, to the extent
available, in the following priority:
(i) on a pro rata basis, (A) an amount equal to the Class
B Monthly Interest, plus any Class B Deficiency Amount, plus any
Class B Additional Interest (in each case for such Transfer Date)
shall be deposited by Servicer or Trustee into the Distribution
Account and (B) any Class B Net Swap Payment shall be paid to the
Swap Counterparty;
(ii) an amount equal to the Class B Servicing Fee for
such Transfer Date, plus any Class B Servicing Fee due but not
paid to Servicer on any prior Transfer Date for such Transfer Date
(less, if WFN is Servicer, amounts previously retained toward
payment of such fees) shall be distributed to Servicer; and
(iii) the balance, if any, shall constitute Excess Spread
and shall be allocated and distributed as set forth in Section
4.13.
(c) An amount equal to the Class C Available Funds for the related
Monthly Period will be distributed on each Transfer Date, to the extent
available, in the following priority:
(i) if neither Transferor nor any of its Affiliates is
Servicer, an amount equal to the Class C Servicing Fee for such
Transfer Date, plus any Class C Servicing Fee due but not paid to
Servicer on any prior Transfer Date shall be distributed to
Servicer; and
(ii) the balance, if any, shall constitute Excess Spread
and shall be allocated and distributed as set forth in Section
4.13.
(d) During the Revolving Period, an amount equal to the Available
Investor Principal Collections for the related Monthly Period will be
distributed on each Transfer Date, to the extent available, in the
following priority:
37
(i) an amount equal to the Class C Monthly Principal for
such Transfer Date shall be distributed to the Class C Interest
Holders in accordance with the Class C Supplemental Agreement; and
(ii) an amount equal to the Available Investor Principal
Collections remaining after the application specified in Section
4.11(d)(i) shall be treated as Shared Principal Collections.
(e) On each Transfer Date commencing with the Transfer Date
falling in the calendar month following the one in which the Controlled
Accumulation Period or the Early Amortization Period (whichever is earlier)
commences, an amount equal to the Available Investor Principal Collections
for the related Monthly Period will be distributed on such Transfer Date,
to the extent available, in the following priority:
(i) an amount equal to the Class A Monthly Principal for
such Transfer Date, shall be (A) with respect to the Controlled
Accumulation Period, deposited into the Principal Funding Account,
and (B) during the Early Amortization Period, deposited into the
Distribution Account;
(ii) after giving effect to the distribution referred to
in clause (i), an amount equal to the Class B Monthly Principal,
shall be deposited into the Distribution Account;
(iii) for each Transfer Date (other than the Transfer
Date immediately preceding the Series 1999-A Termination Date, in
which case on the Series 1999-A Termination Date) after giving
effect to the distribution referred to in clauses(i) and (ii)
above, an amount equal to Class C Monthly Principal shall be
distributed to the Class C Interest Holders in accordance with the
Class C Supplemental Agreement; and
(iv) an amount equal to the Available Investor Principal
Collections remaining after the applications specified in clauses
(i), (ii) and (iii) above shall be treated as Shared Principal
Collections.
(f) On the earlier to occur of (i) the first Transfer Date with
respect to the Early Amortization Period and (ii) the Transfer Date
immediately preceding the Class A Scheduled Payment Date, Trustee, acting
in accordance with instructions from Servicer, shall withdraw from the
Principal Funding Account and deposit in the Distribution Account the
amount on deposit in the Principal Funding Account.
(g) On each Distribution Date, Trustee shall pay in accordance
with Section 5.1(a) to the Class A Holders from the Distribution Account,
the amount deposited into the Distribution Account pursuant to Section
38
4.11(a)(i) on the preceding Transfer Date and to the Class B Holders from
the Distribution Account, the amount deposited into the Distribution
Account pursuant to Section 4.11(b)(i) on the preceding Transfer Date.
(h) On the earlier to occur of (i) the first Distribution Date
with respect to the Early Amortization Period and (ii) the Class A
Scheduled Payment Date and on each Distribution Date thereafter, Trustee,
acting in accordance with instructions from Servicer, shall pay in
accordance with Section 5.1 from the Distribution Account the amount so
deposited into the Distribution Account pursuant to Sections 4.11(e) and
(f) on the related Transfer Date in the following priority:
(i) an amount equal to the lesser of such amount on
deposit in the Distribution Account and the Class A Invested
Amount shall be paid to the Class A Holders; and
(ii) for each Distribution Date with respect to the Early
Amortization Period and on or after the Class B Scheduled Payment
Date, after giving effect to the distributions referred to in
clause (i) above, an amount equal to the lesser of such amount on
deposit in the Distribution Account and the Class B Invested
Amount shall be paid to the Class B Holders.
(i) The Controlled Accumulation Period is scheduled to commence at
the beginning of business on the Controlled Accumulation Date; provided
that if the Controlled Accumulation Period Length (determined as described
below) on any Determination Date on or after the August 2001 Determination
Date is less than 12 months, upon written notice to Trustee, Transferor
and, each Rating Agency, Servicer, at its option, may elect to modify the
date on which the Controlled Accumulation Period actually commences to the
first day of the month that is a number of months prior to the month in
which the Class A Scheduled Payment Date occurs at least equal to the
Controlled Accumulation Period Length (so that, as a result of such
election, the number of Monthly Periods in the Controlled Accumulation
Period will at least equal the Controlled Accumulation Period Length);
provided that (i) the length of the Controlled Accumulation Period will not
be less than two months, (ii) such determination of the Controlled
Accumulation Period Length shall be made on each Determination Date on and
after the August 2001 Determination Date but prior to the commencement of
the Controlled Accumulation Period, and any election to shorten the
Controlled Accumulation Period shall be subject to the subsequent
lengthening of the Controlled Accumulation Period to the Controlled
Accumulation Period Length determined on any subsequent Determination Date,
but the Controlled Accumulation Period shall in no event commence prior to
the Controlled Accumulation Date, and (iii) notwithstanding any other
provision of this Series Supplement to the contrary, no election to
postpone the commencement of the Controlled Accumulation Period shall be
made after an Early Amortization Event shall have occurred and be
39
continuing with respect to any other Series. The "Controlled Accumulation
Period Length" will mean a number of whole months such that the amount
available for distribution of principal on the Class A Certificates on the
Class A Scheduled Payment Date is expected to equal or exceed the Class A
Invested Amount, assuming for this purpose that (1) the payment rate with
respect to Collections of Principal Receivables remains constant at the
lowest level of such payment rate during the twelve preceding Monthly
Periods (or such lower payment rate as Servicer may select), (2) the total
amount of Principal Receivables in the Trust (and the principal amount on
deposit in the Excess Funding Account, if any) remains constant at the
level on such date of determination, (3) no Early Amortization Event with
respect to any Series will subsequently occur and (4) no additional Series
(other than any Series being issued on such date of determination) will be
subsequently issued. Any notice by Servicer electing to modify the
commencement of the Controlled Accumulation Period pursuant to this Section
4.11(i) shall specify (i) the Controlled Accumulation Period Length, (ii)
the commencement date of the Controlled Accumulation Period and (iii) the
Controlled Accumulation Amount with respect to each Monthly Period during
the Controlled Accumulation Period.
SECTION 4.12 Investor Charge-Offs. (a) On or before each Transfer
Date, Servicer shall calculate the sum of the Class A Investor Default
Amount and the Class A Uncovered Dilution Amount (such sum being the "Class
A Reduction Amount"). If on any Transfer Date, the Class A Reduction Amount
for the prior Monthly Period exceeds the sum of the amount allocated with
respect thereto pursuant to Section 4.11(a)(iii), Section 4.13(a)
(including amounts withdrawn from the Cash Collateral Account for such
allocation) and Section 4.14 with respect to such Monthly Period, the Class
C Invested Amount (after giving effect to reductions for any Class C
Charge-Offs and any Reallocated Principal Collections on such Transfer
Date) will be reduced by the amount of such excess, but not by more than
the lesser of the Class A Reduction Amount and the Class C Invested Amount
(after giving effect to reductions for any Class C Charge-Offs and any
Reallocated Principal Collections on such Transfer Date) for such Transfer
Date. If such reduction would cause the Class C Invested Amount to be a
negative number, the Class C Invested Amount will be reduced to zero, and
the Class B Invested Amount (after giving effect to reductions for any
Class B Investor Charge-Offs and any Reallocated Class B Principal
Collections on such Transfer Date) will be reduced by the amount by which
the Class C Invested Amount would have been reduced below zero. If such
reduction would cause the Class B Invested Amount to be a negative number,
the Class B Invested Amount will be reduced to zero, and the Class A
Invested Amount will be reduced by the amount by which the Class B Invested
Amount would have been reduced below zero, but not by more than the Class A
Reduction Amount for such Transfer Date (a "Class A Investor Charge-Off").
If the Class A Invested Amount has been reduced by the amount of any Class
A Investor Charge-Offs, it will be reimbursed on any Transfer Date (but not
40
by an amount in excess of the aggregate Class A Investor Charge-Offs) by
the amount of Excess Spread allocated and available for such purpose
pursuant to Section 4.13(b).
(b) On or before each Transfer Date, Servicer shall calculate the
sum of the Class B Investor Default Amount and the Class B Uncovered
Dilution Amount (such sum being the "Class B Reduction Amount"). If on any
Transfer Date, the Class B Reduction Amount for the prior Monthly Period
exceeds the amount of Excess Spread and Reallocated Collateral Principal
Collections which are allocated and available to fund such amount pursuant
to Section 4.13(c) (including amounts withdrawn from the Cash Collateral
Account for such allocation) and Section 4.14, the Class C Invested Amount
(after giving effect to reductions for any Class C Charge-Offs and any
Reallocated Principal Collections on such Transfer Date and any adjustments
with respect thereto as described in Section 4.12(a)) will be reduced by
the amount of such excess but not by more than the lesser of the Class B
Reduction Amount and the Class C Invested Amount (after giving effect to
reductions for any Class C Charge-Offs and any Reallocated Principal
Collections on such Transfer Date and any adjustments with respect thereto
as described in Section 4.12(a)) for such Transfer Date. If such reduction
would cause the Class C Invested Amount to be a negative number, the Class
C Invested Amount shall be reduced to zero and the Class B Invested Amount
shall be reduced by the amount by which the Class C Invested Amount would
have been reduced below zero, but not by more than the Class B Reduction
Amount for such Transfer Date (a "Class B Investor Charge-Off"). The Class
B Invested Amount will also be reduced by the amount of Reallocated Class B
Principal Collections in excess of the Class C Invested Amount pursuant to
Section 4.14 and the amount of any portion of the Class B Invested Amount
allocated to the Class A Certificates to avoid a reduction in the Class A
Invested Amount pursuant to Section 4.12(a). The Class B Invested Amount
will thereafter be reimbursed (but not to an amount in excess of the unpaid
principal balance of the Class B Certificates) on any Transfer Date by the
amount of Excess Spread allocated and available for that purpose as
described under Section 4.13(d).
(c) On or before each Transfer Date, Servicer shall calculate the
sum of the Class C Default Amount and the Class C Uncovered Dilution Amount
(such sum being the "Class C Reduction Amount"). If on any Transfer Date,
the Class C Reduction Amount for the prior Monthly Period exceeds the
amount of Excess Spread which is allocated and available to fund such
amount pursuant to Section 4.13(g), the Class C Invested Amount will be
reduced by the amount of such excess but not by more than the lesser of the
Class C Reduction Amount and the Class C Invested Amount for such Transfer
Date (a "Class C Charge-Off"). The Class C Invested Amount will also be
reduced by the amount of Reallocated Principal Collections pursuant to
Section 4.14 and the amount of any portion of the Class C Invested Amount
allocated to the Class A Certificates or the Class B Certificates to avoid
a reduction in the Class A Invested Amount, pursuant to Section 4.12(a), or
the Class B Invested Amount, pursuant to Section 4.12(b), respectively. The
41
Class C Invested Amount will thereafter be reimbursed on any Transfer Date
by the amount of the Excess Spread allocated and available for that purpose
as described under Section 4.13(h).
SECTION 4.13 Excess Spread. On or before each Transfer Date,
Servicer shall instruct Trustee in writing (which writing shall be
substantially in the form of Exhibit B) to apply, and Trustee, acting in
accordance with such instructions shall apply (or be deemed, in accordance
with Section 4.7(d), to apply), Excess Spread with respect to the related
Monthly Period, to make the following distributions on each Transfer Date
in the following priority:
(a) an amount equal to the Class A Required Amount, if any, with
respect to such Transfer Date will be used to fund the Class A Required
Amount and be applied in accordance with, and in the priority set forth in,
Section 4.11(a);
(b) an amount equal to the aggregate amount of Class A Investor
Charge- Offs which have not been previously reimbursed will be treated as a
portion of Investor Principal Collections and, during the Controlled
Accumulation Period or the Early Amortization Period, deposited into the
Principal Account on such Transfer Date;
(c) an amount equal to the Class B Required Amount, if any, with
respect to such Transfer Date will be used to fund the Class B Required
Amount and be applied first in accordance with, and in the priority set
forth in, Section 4.11(b) and then any remaining amount available to pay
the Class B Reduction Amount shall be treated as a portion of Investor
Principal Collections and, during the Controlled Accumulation Period or the
Early Amortization Period, deposited into the Principal Account on such
Transfer Date;
(d) an amount equal to the aggregate amount by which the Class B
Invested Amount has been reduced below the initial Class B Invested Amount
for reasons other than the payment of principal to the Class B Holders (but
not in excess of the aggregate amount of such reductions which have not
been previously reimbursed) will be treated as a portion of Investor
Principal Collections and, during the Controlled Accumulation Period or the
Early Amortization Period, deposited into the Principal Account on such
Transfer Date;
(e) an amount equal to the Class C Monthly Interest plus the
amount of any past due Class C Monthly Interest for such Transfer Date will
be paid to the Class C Interest Holders in accordance with the Class C
Supplemental Agreement.
(f) if Transferor or any of its Affiliates is Servicer, an amount
equal to the aggregate amount of accrued but unpaid Class C Servicing Fees
42
(less, if WFN is Servicer, amounts previously retained towards payment of
such fee) will be paid to Servicer;
(g) an amount equal to the Class C Reduction Amount, if any, for
the related Monthly Period will be treated as a portion of Investor
Principal Collections and, during the Controlled Accumulation Period or the
Early Amortization Period, deposited into the Principal Account on such
Transfer Date;
(h) an amount equal to the aggregate amount by which the Class C
Invested Amount has been reduced for reasons other than the payment of
principal to the Class C Interest Holders (but not in excess of the
aggregate amount of such reductions which have not been previously
reimbursed) will be treated as a portion of Investor Principal Collections
and, during the Controlled Accumulation Period or the Early Amortization
Period, deposited into the Principal Account on such Transfer Date;
(i) an amount up to the excess, if any, of the Required Cash
Collateral Amount (determined after all deposits, withdrawals, reductions,
payments and adjustments to be made with respect to such date) over the
Available Cash Collateral Amount (without giving effect to any deposit made
on such date hereunder) shall be deposited in the Cash Collateral Account;
(j) on each Transfer Date from and after the Reserve Account
Funding Date, but prior to the date on which the Reserve Account terminates
as described in Section 4.17(f), an amount up to the excess, if any, of the
Required Reserve Account Amount over the Available Reserve Account Amount
shall be deposited into the Reserve Account;
(k) an amount equal to all other amounts due under the Class C
Supplemental Agreement shall be distributed in accordance with the Class C
Supplemental Agreement; and
(l) the balance, if any, after giving effect to the payments made
pursuant to clauses (a) through (k) shall constitute "Excess Finance Charge
Collections" to be applied with respect to other Series in accordance with
Section 4.5 of the Agreement.
SECTION 4.14 Reallocated Principal Collections. On or before each
Transfer Date, Servicer shall instruct Trustee in writing (which writing
shall be substantially in the form of Exhibit B) to, and Trustee in
accordance with such instructions shall, withdraw from the Principal
Account and apply Collections of Principal Receivables with respect to such
Transfer Date, to make the following distributions on each Transfer Date in
the following priority:
43
(a) an amount equal to the excess, if any, of (i) the
Class A Required Amount, if any, with respect to such Transfer
Date over (ii) the sum of (x) the amount of Excess Spread with
respect to the related Monthly Period and (y) the Available Cash
Collateral Amount with respect to such Transfer Date, shall be
applied pursuant to Sections 4.11(a)(i), (ii) and (iii); and
(b) an amount equal to the excess, if any, of (i) the
Class B Required Amount, if any, with respect to such Transfer
Date over (ii) the sum of (x) the amount of Excess Spread
allocated and available to the Class B Certificates pursuant to
Section 4.13(c) on such Transfer Date and (y) the amount withdrawn
from the Cash Collateral Account pursuant to Section 4.18(c) which
is remaining after application pursuant to Section 4.13(c) with
respect to such Transfer Date shall be applied first pursuant to
Sections 4.11(b)(i) and (ii) and then pursuant to Section 4.13(c);
provided, that:
(1) the aggregate amount of Collections of Principal
Receivables distributed pursuant to clauses (a) and (b) (the
"Reallocated Principal Collections") shall not exceed the lesser
of (A) the product of (x) the sum of the Class C Investor
Allocation Percentage and the Class B Investor Allocation
Percentage for the Monthly Period relating to such Transfer Date
and (y) the Investor Percentage for the Monthly Period relating to
such Transfer Date and (z) the amount of Collections of Principal
Receivables for the Monthly Period relating to such Transfer Date
and (B) the sum of the Class C Invested Amount and the Class B
Invested Amount after giving effect to any Class C Charge-Offs and
Class B Investor Charge-Offs for such Transfer Date; and
(2) the aggregate amount of Collections of Principal
Receivables distributed pursuant to clause (b) shall not exceed
the lesser of (A) the product of (x) the Class C Allocation
Percentage for the Monthly Period relating to such Transfer Date
and (y) the Investor Percentage for the Monthly Period relating to
such Transfer Date and (z) the amount of Collections of Principal
Receivables for the Monthly Period relating to such Transfer Date
and (B) the Class C Invested Amount after giving effect to any
Class C Charge-Offs for such Transfer Date.
With respect to any Transfer Date, any Reallocated Principal
Collections up to and including the amount specified in clause (2)(A) above
shall constitute "Reallocated Collateral Principal Collections," and any
Reallocated Principal Collections in excess of such amount shall constitute
"Reallocated Class B Principal Collections."
44
On each Transfer Date, the Class C Invested Amount shall be
reduced by the amount of Reallocated Collateral Principal Collections and
by the amount of Reallocated Class B Principal Collections for such
Transfer Date. If such reduction would cause the Class C Invested Amount
(after giving effect to any Class C Charge- Offs for such Transfer Date) to
be a negative number, the Class C Invested Amount (after giving effect to
any Collateral Charge-Offs for such Transfer Date) shall be reduced to zero
and the Class B Invested Amount shall be reduced by the amount by which the
Class C Invested Amount would have been reduced below zero. If the
reallocation of Reallocated Principal Collections would cause the Class B
Invested Amount (after giving effect to any Class B Investor Charge-Offs
for such Transfer Date) to be a negative number on any Transfer Date,
Reallocated Principal Collections shall be reallocated on such Transfer
Date in an aggregate amount not to exceed the amount which would cause the
Class B Invested Amount (after giving effect to any Class B Investor
Charge-Offs for such Transfer Date) to be reduced to zero.
SECTION 4.15 Shared Principal Collections; Amounts Transferred
from the Excess Funding Account to the Principal Account. (a) The Shared
Principal Collections allocable to Series 1999-A on any Transfer Date
pursuant to Section 4.15(b) shall be applied as Available Investor
Principal Collections pursuant to Section 4.11 and pursuant to such Section
4.11 shall be deposited in the Distribution Account or distributed in
accordance with the Class C Supplemental Agreement.
(b) Shared Principal Collections allocable to Series 1999-A with
respect to any Transfer Date means an amount equal to the Principal
Shortfall, if any, with respect to Series 1999-A for such Transfer Date;
provided that if the aggregate amount of Shared Principal Collections for
all Series in Group One for such Transfer Date is less than the Cumulative
Principal Shortfall for such Transfer Date, then Shared Principal
Collections allocable to Series 1999-A on such Transfer Date shall equal
the product of (i) Shared Principal Collections for all Series in Group One
for such Transfer Date and (ii) a fraction, the numerator of which is the
Principal Shortfall with respect to Series 1999-A for such Transfer Date
and the denominator of which is the aggregate amount of Cumulative
Principal Shortfall for all Series in Group One for such Transfer Date. On
each Transfer Date, Trustee (in accordance with instructions from Servicer)
shall withdraw Shared Principal Collections allocable to Series 1999-A from
the Collection Account and deposit the same into the Principal Account.
(c) Solely for the purpose of determining the amount of Available
Investor Principal Collections to be treated as Shared Principal
Collections on any Transfer Date allocable to other Series in Group One, on
each Determination Date, Servicer shall determine the Class A Required
Amount, Class B Required Amount, Excess Spread and Reallocated Principal
Collections as of such Determination Date for the following Transfer Date.
45
(d) The aggregate amount allocable to Series 1999-A and required
to be transferred from the Excess Funding Account into the Principal
Account with respect to any Transfer Date means an amount equal to the
Principal Shortfall, if any, with respect to Series 1999-A for such
Transfer Date minus the amount of Shared Principal Collections allocated to
Series 1999-A from other Series in Group One on that Transfer Date;
provided that if the aggregate amount required to be withdrawn from the
Excess Funding Account pursuant to Section 4.2 for all Series (whether or
not included in Group One) for such Transfer Date is less than the
cumulative Principal Shortfall minus available Shared Principal Collections
for all Series (whether or not included in Group One) for such Transfer
Date, then the aggregate amount allocable to Series 1999-A and required to
be transferred on such Transfer Date shall equal the product of (i) the
aggregate amount required to be withdrawn from the Excess Funding Account
pursuant to Section 4.2 for all Series for such Transfer Date and (ii) a
fraction, (A) the numerator of which is the Principal Shortfall with
respect to Series 1999-A for such Transfer Date minus the amount of Shared
Principal Collections allocated to Series 1999-A from other Series in Group
One on that Transfer Date and (B) the denominator of which is the
cumulative Principal Shortfall for all Series (whether or not included in
Group One) minus available Shared Principal Collections for all Series
(whether or not included in Group One) for such Transfer Date.
SECTION 4.16 Finance Charge Account, Principal Account, Principal
Funding Account and Distribution Account. (a) Trustee shall establish and
maintain with an Eligible Institution, which may be Trustee, in the name of
the Trust, on behalf of the Trust, for the benefit of the Investor Holders,
four segregated trust accounts (the "Finance Charge Account", the
"Principal Account", the "Principal Funding Account" and the "Distribution
Account"), bearing a designation clearly indicating that the funds
deposited therein are held for the benefit of the Investor Holders. Trustee
shall possess all right, title and interest in all funds on deposit from
time to time in the Finance Charge Account, the Principal Account, the
Principal Funding Account and the Distribution Account and in all proceeds
thereof. On the Closing Date, Servicer shall make an initial deposit of
$[_______] into the Finance Charge Account representing collections of
Finance Charge Receivables into the new Approved Portfolios. The Finance
Charge Account, the Principal Account, the Principal Funding Account and
the Distribution Account shall be under the sole dominion and control of
Trustee for the benefit of the Investor Holders. If at any time the
institution holding the Finance Charge Account, the Principal Account, the
Principal Funding Account and the Distribution Account ceases to be an
Eligible Institution, Transferor shall notify Trustee, and Trustee upon
being notified (or Servicer on its behalf) shall, within 10 Business Days,
establish a new Finance Charge Account, a new Principal Account, a new
Principal Funding Account and a new Distribution Account meeting the
conditions specified above, and shall transfer any cash or any investments
to such new Finance Charge Account, Principal Account, Principal Funding
46
Account and Distribution Account. Trustee, at the direction of Servicer,
shall (i) make withdrawals from the Finance Charge Account, the Principal
Account, the Principal Funding Account and the Distribution Account from
time to time, in the amounts and for the purposes set forth in this Series
Supplement and the Agreement, and (ii) on each Transfer Date (from and
after the commencement of the Controlled Accumulation Period) prior to
termination of the Principal Funding Account make a deposit into the
Principal Funding Account in the amount specified in, and otherwise in
accordance with, Section 4.11(e). Trustee at all times shall maintain
accurate records reflecting each transaction in the Finance Charge Account,
the Principal Account, the Principal Funding Account and the Distribution
Account and that the funds held therein shall at all times be held in trust
for the benefit of the Investor Holders.
(b) Funds on deposit in the Finance Charge Account, the Principal
Account and the Principal Funding Account from time to time shall be
invested and reinvested at the direction of Servicer by Trustee in Eligible
Investments that will mature so that such funds will be available for
withdrawal on the following Transfer Date. Trustee shall maintain for the
benefit of the Investor Holders possession of the negotiable instruments or
securities, if any, evidencing such Eligible Investments. No Eligible
Investment shall be disposed of prior to its maturity unless Servicer so
directs and either (i) such disposal will not result in a loss of all or
part of the principal portion of such Eligible Investment or (ii) prior to
the maturity of such Eligible Investment, a default occurs in the payment
of principal, interest or any other amount with respect to such Eligible
Investment. On each Distribution Date, all interest and other investment
earnings (net of losses and investment expenses) on funds (x) on deposit in
the Finance Charge Account and the Principal Account shall be treated as
Collections of Finance Charge Receivables allocated to the Invested Amount
for purposes of this Series Supplement and (y) on deposit in the Principal
Funding Account shall be treated as Collections of Finance Charge
Receivables allocated to the Invested Amount for purposes of this Series
Supplement and shall be applied in accordance with Section 4.16(c).
(c) On the Transfer Date occurring in the month following the
commencement of the Controlled Accumulation Period and on each Transfer
Date thereafter with respect to the Controlled Accumulation Period,
Trustee, acting at Servicer's direction given on or before such Transfer
Date, shall transfer from the Principal Funding Account to the Finance
Charge Account the Principal Funding Investment Proceeds on deposit in the
Principal Funding Account, but not in excess of the Covered Amount, for
application as Class A Available Funds applied pursuant to Section
4.11(a)(i).
(d) Any Excess Principal Funding Investment Proceeds shall be paid
to Transferor on each Transfer Date. An amount equal to any Principal
Funding Investment Shortfall will be deposited in the Finance Charge
Account on each Transfer Date from the Reserve Account to the extent funds
47
are available pursuant to Section 4.17(d). Principal Funding Investment
Proceeds (including reinvested interest) shall not be considered part of
the amounts on deposit in the Principal Funding Account for purposes of
this Series Supplement.
SECTION 4.17 Reserve Account. (a) Trustee shall establish and
maintain with an Eligible Institution, which may be Trustee, in the name of
the Trust, on behalf of the Trust, for the benefit of the Investor Holders,
a segregated trust account (the "Reserve Account"), bearing a designation
clearly indicating that the funds deposited therein are held for the
benefit of the Investor Holders. Trustee shall possess all right, title and
interest in all funds on deposit from time to time in the Reserve Account
and in all proceeds thereof. The Reserve Account shall be under the sole
dominion and control of Trustee for the benefit of the Investor Holders. If
at any time an Eligible Institution holding the Reserve Account ceases to
be a Eligible Institution, Transferor shall notify Trustee, and Trustee
upon being notified (or Servicer on its behalf) shall, within 10 Business
Days, establish a new Reserve Account meeting the conditions specified
above, and shall transfer any cash or any investments to such new Reserve
Account. Trustee, at the direction of Servicer, shall (i) make withdrawals
from the Reserve Account from time to time in an amount up to the Available
Reserve Account Amount at such time, for the purposes set forth in this
Series Supplement, and (ii) on each Transfer Date (from and after the
Reserve Account Funding Date) prior to termination of the Reserve Account
make a deposit into the Reserve Account in the amount specified in, and
otherwise in accordance with, Section 4.13(j).
(b) Funds on deposit in the Reserve Account shall be invested by
Trustee in Eligible Investments pursuant to the written direction of
Servicer. Funds on deposit in the Reserve Account on any Transfer Date,
after giving effect to any withdrawals from the Reserve Account on such
Transfer Date, shall be invested in such investments that will mature so
that such funds will be available for withdrawal on or prior to the
following Transfer Date. Trustee shall maintain for the benefit of the
Investor Holders possession of the negotiable instruments or securities, if
any, evidencing such Eligible Investments. No Eligible Investment shall be
disposed of prior to its maturity unless Servicer so directs and either (i)
such disposal will not result in a loss of all or part of the principal
portion of such Eligible Investment or (ii) prior to the maturity of such
Eligible Investment, a default occurs in the payment of principal, interest
or any other amount with respect to such Eligible Investment. On each
Transfer Date, all interest and earnings (net of losses and investment
expenses) accrued since the preceding Transfer Date on funds on deposit in
the Reserve Account shall be retained in the Reserve Account (to the extent
that the Available Reserve Account Amount is less than the Required Reserve
Account Amount) and the balance, if any, shall be deposited into the
Finance Charge Account and included in Class A Available Funds for such
Transfer Date. For purposes of determining the availability of funds or the
balance in the Reserve Account for any reason under this Series Supplement,
48
except as otherwise provided in the preceding sentence, investment earnings
on such funds shall be deemed not to be available or on deposit.
(c) On or before each Transfer Date with respect to the Controlled
Accumulation Period prior to the payment in full of the Class A Invested
Amount and on or before the first Transfer Date with respect to the Early
Amortization Period, Servicer shall calculate the "Reserve Draw Amount"
which shall be equal to the Principal Funding Investment Shortfall with
respect to each Transfer Date with respect to the Controlled Accumulation
Period or the first Transfer Date with respect to the Early Amortization
Period less, in each case, the amount of funds deposited into the Finance
Charge Account on such Transfer Date pursuant to Section 4.17(b).
(d) If the Reserve Draw Amount for any Transfer Date is greater
than zero, the Reserve Draw Amount, up to the Available Reserve Account
Amount, shall be withdrawn from the Reserve Account on such Transfer Date
by Trustee (acting in accordance with the instructions of Servicer),
deposited into the Finance Charge Account and included in Class A Available
Funds for such Transfer Date.
(e) If the Reserve Account Surplus on any Transfer Date, after
giving effect to all deposits to and withdrawals from the Reserve Account
with respect to such Transfer Date, is greater than zero, Trustee, acting
in accordance with the instructions of Servicer, shall withdraw from the
Reserve Account, and pay in accordance with the Class C Supplemental
Agreement, 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, (ii) the first Transfer Date relating to the Early
Amortization Period and (iii) the Transfer Date immediately preceding the
Class A Scheduled Payment Date, Trustee, acting in accordance with the
instructions of Servicer, after the prior payment of all amounts owing to
the Series 1999-A Holders that are payable from the Reserve Account as
provided herein, shall withdraw from the Reserve Account and pay in
accordance with the Class C Supplemental Agreement, all amounts, if any, on
deposit in the Reserve Account and the Reserve Account shall be deemed to
have terminated for purposes of this Series Supplement.
SECTION 4.18 Cash Collateral Account. (a) Servicer shall establish
and maintain with an Eligible Institution, which may be Trustee, in the
name of Trustee, on behalf of the Trust, a segregated trust account (the
"Cash Collateral Account") bearing a designation clearly indicating that
the funds deposited therein are held for the benefit of the Investor
Holders. Trustee shall possess all right, title and interest in all funds
on deposit 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 Trustee for the benefit of the Investor Holders. If
at any time an Eligible Institution holding the Cash Collateral Account
49
ceases to be an Eligible Institution, Transferor shall notify Trustee, and
Trustee upon being notified (or Servicer on its behalf) shall within 10
Business Days establish a new Cash Collateral Account meeting the
conditions specified above, and shall transfer any cash or any investments
to such new Cash Collateral Account. Trustee, at the direction of Servicer,
shall make deposits to and withdrawals from the Cash Collateral Account in
the amounts and at the times set forth in this Series Supplement and the
Class C Supplemental Agreement. All withdrawals from the Cash Collateral
Account shall be made in the priority set forth below.
(b) On the Closing Date, Transferor shall deposit $15,000,000 in
immediately available funds into the Cash Collateral Account. Funds on
deposit in the Cash Collateral Account from time to time shall be invested
and/or reinvested at the direction of Servicer by Trustee in Eligible
Investments that will mature so that such funds will be available for
withdrawal on the following Transfer Date. No Eligible Investment shall be
disposed of prior to its maturity unless Servicer so directs and either (i)
such disposal will not result in a loss of all or part of the principal
portion of such Eligible Investment or (ii) prior to the maturity of such
Eligible Investment, a default occurs in the payment of principal, interest
or any other amount with respect to such Eligible Investment. Trustee shall
maintain for the benefit of the Investor Holders possession of the
negotiable instruments or securities, if any, evidencing such Eligible
Investments. On each Transfer Date, all interest and earnings (net of
losses and investment expenses) accrued since the preceding Transfer Date
on funds on deposit in the Cash Collateral Account shall be treated as
Collections of Finance Charge Receivables allocated to the Invested Amount
and shall be part of Class A Available Funds, Class B Available Funds and
Class C Available Funds for such Transfer Date. For purposes of determining
the availability of funds or the balances in the Cash Collateral Account
for any reason under this Series Supplement, all investment earnings on
such funds shall be deemed not to be available or on deposit.
(c) On each Determination Date, Servicer shall calculate the
amount (the "Required Draw Amount") by which the sum of the amounts
specified in clauses (a) through (d) of Section 4.13 with respect to the
related Transfer Date exceeds the amount of Excess Spread allocated with
respect to the related Monthly Period. In the event that for any Transfer
Date the Required Draw Amount is greater than zero, Servicer shall give
written notice to Trustee and the Class C Interest Holders of such positive
Required Draw Amount on the related Determination Date. On the related
Transfer 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 Section 4.13(a) through (d)
(in the order of priority set forth in Section 4.13).
(d) If, after giving effect to all deposits to and withdrawals
from the Cash Collateral Account and adjustments to the Class C Invested
50
Amount with respect to any Transfer Date, the Class C Invested Amount has
been reduced to zero and there is an Enhancement Surplus (after giving
effect to such reduction), Trustee, acting in accordance with the
instructions of Servicer, shall withdraw an amount equal to such
Enhancement Surplus from the Cash Collateral Account, and apply in
accordance with the Class C Supplemental Agreement.
SECTION 4.19 Determination of LIBOR. (a) On each LIBOR
Determination Date, Trustee will determine LIBOR on the basis of the rate
for deposits in United States dollars for a period equal to the relevant
Distribution Period (commencing on the first day of such Distribution
Period) which appears on Telerate Page 3750 as of 11:00 a.m., London time,
on such date. If such rate does not appear on Telerate Page 3750, the rate
for that LIBOR Determination Date will be determined on the basis of the
rates at which deposits in United States dollars are offered by the
Reference Banks at approximately 11:00 a.m., London time, on that day to
prime banks in the London interbank market for a period equal to the
relevant Distribution Period (commencing on the first day of such
Distribution Period). The Trustee will request the principal London office
of each of the Reference Banks to provide a quotation of its rate. If at
least two such quotations are provided, the rate for that LIBOR
Determination Date will be the arithmetic mean of the quotations. If fewer
than two quotations are provided as requested, the rate for that LIBOR
Determination Date will be the arithmetic mean of the rates quoted by major
banks in New York City, selected by Servicer, at approximately 11:00 a.m.,
New York City time, on that day for loans in United States dollars to
leading European banks for a period equal to the relevant Distribution
Period (commencing on the first day of such Distribution Period).
(b) The Class A Certificate Rate and Class B Certificate Rate
applicable to the then current and the immediately preceding Distribution
Periods may be obtained by any Investor Holder by telephoning Trustee at
its Corporate Trust Office at (000) 000-0000.
(c) On each LIBOR Determination Date prior to 12:00 noon New York
City time, Trustee shall send to Servicer by facsimile, notification of
LIBOR for the following Distribution Period.
SECTION 4.20 Transferor's or Servicer's Failure to Make a Deposit
or Payment. If Servicer or Transferor fails to make, or give instructions
to make, any payment or deposit (other than as required by Sections 2.5,
2.6 or 12.2) required to be made or given by Servicer or Transferor,
respectively, at the time specified in the Agreement (including applicable
grace periods), Trustee shall make such payment or deposit from the Finance
Charge Account, the Principal Account, the Principal Funding Account, the
Cash Collateral Account, the Distribution Account and/or the Reserve
Account, as applicable, without instruction from Servicer or Transferor.
Trustee shall be required to make any such payment, deposit or withdrawal
51
hereunder only to the extent that Trustee has sufficient information to
allow it to determine the amount thereof; provided that Trustee shall in
all cases be deemed to have sufficient information to determine the amount
of interest payable to the Investor Holders on each Distribution Date.
Servicer shall, upon request of Trustee, promptly provide Trustee with all
information necessary to allow Trustee to make such payment, deposit or
withdrawal. Such funds or the proceeds of such withdrawal shall be applied
by Trustee in the manner in which such payment or deposit should have been
made by Transferor or Servicer, as the case may be.
SECTION 4.21 Investments. In no event shall the Trustee be liable
for the selection of investments or for investment losses incurred thereon.
The Trustee shall have no liability in respect of losses incurred as a
result of the liquidation of any such investment prior to its stated
maturity or the failure of the party directing such investment to provide
timely written investment direction. The Trustee shall have no obligation
to invest or reinvest any amounts held hereunder in the absence of such
written investment direction.
SECTION 8. Article V of the Agreement. Article V of the Agreement
shall read in its entirety as follows and shall be applicable only to the
Investor Holders:
ARTICLE V DISTRIBUTIONS AND REPORTS TO
INVESTOR HOLDERS
SECTION 5.1 Distributions. (a) On each Distribution Date, Trustee
shall distribute (in accordance with the certificate delivered on or before
the related Transfer Date by Servicer to Trustee pursuant to Section
3.4(b)) to each Class A Holder of record on the immediately preceding
Record Date (other than as provided in Section 2.6 or Section 12.2
respecting a final distribution) such Holder's pro rata share (based on the
share of the aggregate outstanding principal balance of all Class A
Certificates represented by the Class A Certificates held by such Holder)
of amounts on deposit in the Distribution Account as are payable to the
Class A Holders pursuant to Section 4.11 by check mailed to each Class A
Holder (at such Holder's address as it appears in the Certificate
Register), except that with respect to Class A Certificates registered in
the name of the nominee of a Clearing Agency, such distribution shall be
made by wire transfer in immediately available funds.
(b) On each Distribution Date, Trustee shall distribute (in
accordance with the certificate delivered on or before the related Transfer
Date by Servicer to Trustee pursuant to Section 3.4(b)) to each Class B
Holder of record on the immediately preceding Record Date (other than as
provided in Section 2.6 or Section 12.2 respecting a final distribution)
such Holder's pro rata share (based on the share of the aggregate
outstanding principal balance of all Class B Certificates represented by
the Class B Certificates held by such Holder) of amounts on deposit in the
52
Distribution Account as are payable to the Class B Holders pursuant to
Section 4.11 by check mailed to each Class B Holder (at such Holder's
address as it appears in the Certificate Register), except that with
respect to Class B Certificates registered in the name of the nominee of a
Clearing Agency, such distribution shall be made by wire transfer in
immediately available funds.
SECTION 5.2 Reports. (a) Monthly Series 1999-A Servicer's
Certificate. On or before each Distribution Date, Trustee shall forward to
each Investor Holder and each Rating Agency a statement substantially in
the form of Exhibit C prepared by Servicer and delivered to Trustee.
(b) Annual Holders' Tax Statement. On or before January 31 of each
calendar year, beginning with calendar year 2000, Trustee shall distribute
to each Person who at any time during the preceding calendar year was an
Investor Holder, a statement prepared by Servicer containing the following
information:
(i) the amount of the current distribution allocable to
Class A Monthly Principal, Class B Monthly Principal and Class C
Monthly Principal, respectively; and
(ii) the amount of the current distribution allocable to
Class A Monthly Interest, Class A Deficiency Amounts, Class A
Additional Interest, Class B Monthly Interest, Class B Deficiency
Amounts, Class B Additional Interest and Class C Monthly Interest,
and any accrued and unpaid Class C Monthly Interest, respectively.
Such information shall be aggregated for such calendar year or the
applicable portion thereof during which such Person was an Investor Holder,
together with such other customary information (consistent with the
treatment of the Certificates as debt) as Trustee or Servicer deems
necessary or desirable to enable the Investor Holders to prepare their tax
returns. Such obligations of Trustee shall be deemed to have been satisfied
to the extent that substantially comparable information shall be provided
by Trustee pursuant to any requirements of the Internal Revenue Code.
SECTION 9. Series 1999-A Early Amortization Events. If any one of the
following events shall occur with respect to the Investor Certificates:
(a) failure on the part of Transferor (i) to make any payment or
deposit required by the terms of (A) the Agreement or (B) this Series
Supplement, on or before the date occurring five days after the date such
payment or deposit is required to be made herein or (ii) duly to observe or
perform in any material respect any covenants or agreements of Transferor
set forth in the Agreement or this Series Supplement (including the
covenant of Transferor contained in Section 11 of this Series Supplement),
which failure has a material adverse effect on the Series 1999-A
53
Holders (which determination shall be made without reference to whether any
funds are available under the Class C Invested Amount or the Cash
Collateral Account) 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 Transferor by Trustee, or to
Transferor and Trustee by Investor Holders representing more than 50% of
the Invested Amount of this Series 1999-A, and continues to affect
materially and adversely the interests of the Series 1999-A Holders (which
determination shall be made without reference to whether any funds are
available under the Class C Invested Amount or the Cash Collateral Account)
for such period;
(b) any representation or warranty made by Transferor in the
Agreement or this Series Supplement, or any information contained in an
Account Schedule required to be delivered by Transferor pursuant to Section
2.1 or 2.8, (i) shall prove to have been incorrect in any material respect
when made or when delivered, which continues to be incorrect in any
material respect for a period of 60 days after the date on which written
notice of such failure, requiring the same to be remedied, shall have been
given to Transferor by Trustee, or to Transferor and Trustee by Investor
Holders representing more than 50% of the Invested Amount of this Series
1999-A, and (ii) as a result of which the interests of the Series 1999-A
Holders are materially and adversely affected (which determination shall be
made without reference to whether any funds are available under the Class C
Invested Amount or the Cash Collateral Account) and continue to be
materially and adversely affected for such period; provided that a Series
1999-A Early Amortization Event pursuant to this Section 9(b) shall not be
deemed to have occurred hereunder if Transferor has accepted reassignment
of the related Receivable, or all of such Receivables, if applicable,
during such period in accordance with the provisions of the Agreement;
(c) the average Portfolio Yield for any three consecutive Monthly
Periods is reduced to a rate which is less than the average Base Rate for
such period;
(d) Transferor shall fail to convey Receivables arising under
Additional Accounts, or Participations, to the Trust, as required by
Section 2.8(b); provided that such failure shall not give rise to an Early
Amortization Event if, prior to the date on which such conveyance was
required to be completed, Transferor causes a reduction in the invested
amount of any Variable Interest to occur, so that, after giving effect to
that reduction (i) the Transferor Amount is not less than the Minimum
Transferor Amount (including the Additional Minimum Transferor Amount, if
any) and (ii) the sum of the aggregate amount of Principal Receivables plus
amounts on deposit in the Excess Funding Account is not less than the
Required Principal Balance; it being understood that the occurrence of an
Early Amortization Event as provided in this Section shall constitute the
sole remedy respecting any such failure to convey Receivables available to
the Investor Holders (or Trustee on behalf of the Investor Holders);
54
(e) any Servicer Default shall occur which would have a material
adverse effect on the Series 1999-A Holders (which determination shall be
made without reference to whether any funds are available under the Class C
Invested Amount or the Cash Collateral Account);
(f) the Class A Invested Amount shall not be paid in full on the
Class A Scheduled Payment Date or the Class B Invested Amount shall not be
paid in full on the Class B Scheduled Payment Date; or
(g) any Swap Counterparty shall fail to pay any Net Swap Receipt
within five days of the day on which payment is due or any Interest Rate
Swap Agreement is terminated, and Servicer fails within 30 days of such
event to obtain for the Trust a substitute Interest Rate Swap Agreement or
other substitute arrangement as to which the Rating Agency Condition is
satisfied; or
(h) Xxxxx'x, Standard & Poor's or, if rated by Fitch, Fitch
withdraws the short-term rating of any Swap Counterparty or reduces such
rating below P-1, A-1+ or F-1+, as applicable, and Servicer fails within 30
days of such event to obtain for the Trust a substitute Interest Rate Swap
Agreement or other substitute arrangement as to which the Rating Agency
Condition is satisfied.
then, in the case of any event described in Section 9(a), (b) or (e)
hereof, after the applicable grace period set forth in such Sections,
either Trustee or Investor Holders representing more than 50% of the
Invested Amount of this Series 1999-A by notice then given in writing to
Transferor and Servicer (and to Trustee if given by the Holders) may
declare that an early amortization event (a "Series 1999-A Early
Amortization Event") has occurred as of the date of such notice, and in the
case of any event described in Section 9(c), (d), (f), (g) or (h) hereof, a
Series 1999-A Early Amortization Event shall occur without any notice or
other action on the part of Trustee or the Investor Holders immediately
upon the occurrence of such event.
SECTION 10. Series 1999-A Termination. The right of the Investor
Holders to receive payments from the Trust will terminate on the first
Business Day following the Series 1999-A Termination Date.
SECTION 11. Counterparts. This Series Supplement may be executed
in any number of counterparts, each of which so executed shall be deemed to
be an original, but all of such counterparts shall together constitute but
one and the same instrument.
SECTION 12. Governing Law. THIS SERIES SUPPLEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS,
AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
55
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.
SECTION 13. Additional Provisions. The Additional Minimum
Transferor Amount is hereby specified as an additional amount to be
considered part of the Minimum Transferor Amount pursuant to clause (b) of
the definition of Minimum Transferor Amount.
SECTION 14. No Petition. Transferor, Servicer and Trustee, by
entering into this Series Supplement and each Holder, by accepting a Series
1999-A Certificate hereby covenant and agree that they will not at any time
institute against the Trust, or join in any institution against the Trust
of, any bankruptcy proceedings under any United States Federal or state
bankruptcy or similar law in connection with any obligations relating to
the Investor Holders, the Agreement or this Series Supplement provided,
however that nothing herein shall prohibit the Trustee from filing proofs
of claim or otherwise participating in any such proceedings instituted by
any other person.
SECTION 15. Amendments. This Series Supplement may be amended
pursuant to Section 13.1 of the Agreement. This Series Supplement may also
be amended by Transferor without the consent of Servicer, Trustee or any
Investor Holder if Transferor provides Trustee with: (i) an Opinion of
Counsel to the effect that such amendment or modification would (A) reduce
the risk that the Trust would be treated as taxable as a publicly traded
partnership pursuant to Internal Revenue Code section 7704 or (B) permit
the Trust or a relevant portion thereof to be treated as a "financial asset
securitization investment trust" and (C) in either case, (1) would not
cause the Trust to be classified, for Federal income tax purposes, as an
association (or publicly traded partnership) taxable as a corporation and
(2) would not cause or constitute an event in which gain or loss would be
recognized by any Investor Holder; and (ii) a certificate that such
amendment or modification would not materially and adversely affect any
Investor Holder; provided that no such amendment shall be deemed effective
without Trustee's consent, if Trustee's rights, duties and obligations
hereunder are thereby modified. Prior to the execution of any such
amendment (other than an amendment pursuant to Section 13.1(a) of the
Agreement), Trustee shall furnish notification of the substance of such
amendment to each Rating Agency.
56
IN WITNESS WHEREOF, Transferor, Servicer and Trustee have caused
this Series 1999-A Supplement to be duly executed by their respective
officers as of the day and year first above written.
WORLD FINANCIAL NETWORK
NATIONAL BANK,
Transferor and Servicer
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxx, CCM
Title: Vice President, Treasurer
XXXXXX TRUST AND SAVINGS BANK,
not in its individual capacity, but solely
as Trustee
By: /s/ E. Xxx Xxxxxxxxx
--------------------------------
Name: E. Xxx Xxxxxxxxx
Title: Vice-President
57
EXHIBIT A-1
FORM OF CERTIFICATE
CLASS A
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation
("DTC"), to World Financial Network National Bank or its agent for
registration of transfer, exchange or payment, and any certificate issued
is registered in the name of Cede & Co. or in such other name as requested
by an authorized representative of DTC (and any payment is made to Cede &
Co. or to such other entity as is requested by an authorized representative
of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY
OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede
& Co., has an interest herein.
No. ___ $_______
CUSIP No._____
WORLD FINANCIAL NETWORK CREDIT CARD MASTER TRUST
CLASS A FLOATING RATE
ASSET-BACKED CERTIFICATE, SERIES 1999-A
Evidencing an Undivided Interest in a trust, the corpus of which consists
of a Portfolio of credit card receivables generated or acquired by World
Financial Network National Bank and other assets and interests constituting
the Trust under the Pooling and Servicing Agreement described below.
(Not an interest in or obligation of
World Financial Network National Bank
or any Affiliate thereof.)
This certifies that Cede & Co. (the "Class A Holder") is the
registered owner of a fractional undivided interest in a trust (the
"Trust"), the corpus of which consists of (i) a Portfolio of all
receivables (the "Receivables") existing in the open-end credit card
accounts identified under the Agreement from time to time (the "Accounts"),
(ii) all Receivables generated under the Accounts from time to time
thereafter, (iii) funds collected or to be collected from accountholders in
respect of the Receivables, (iv) all funds which are from time to time on
deposit in the Collection Account, Excess Funding Account and in the Series
A-1
Accounts, (v) the benefits of any Enhancements, if any, with respect to one
or more Series of Investor Certificates and (vi) the other assets and
interests constituting the Trust pursuant to a Pooling and Servicing
Agreement dated as of January 17, 1996 and amended and restated as of
September 17, 1999, as supplemented by the Series 1999-A Supplement dated
as of September 17, 1999 (collectively, the "Agreement"), between World
Financial Network National Bank, as Transferor ("Transferor") and Servicer
("Servicer"), and Xxxxxx Trust and Savings Bank (successor to The Bank of
New York), as Trustee ("Trustee").
The Series 1999-A Certificates are issued in two classes, the
Class A Certificates (of which this certificate is one) and the Class B
Certificates, which are subordinated to the Class A Certificates in certain
rights of payment as described in the Agreement. The Trust has also issued
a third Class of uncertificated interests in the Trust, the Class C
Interests, which are subordinated to the Class A Certificates and the Class
B Certificates.
Transferor has structured the Agreement and the Series 1999-A
Certificates with the intention that the Series 1999-A Certificates will
qualify under applicable tax law as indebtedness, and each of Transferor,
the Holder of the Transferor Certificate, Servicer and each Series 1999-A
Holder (or Series 1999-A Certificate Owner) by acceptance of its Series
1999-A Certificate (or in the case of a Series 1999-A Certificate Owner, by
virtue of such Series 1999-A Certificate Owner's acquisition of a
beneficial interest therein), agrees to treat and to take no action
inconsistent with the treatment of the Series 1999-A Certificates (or any
beneficial interest therein) as indebtedness for purposes of federal,
state, local and foreign income or franchise taxes and any other tax
imposed on or measured by income, value of intangible property or net
worth. Each Series 1999-A Holder agrees that it will cause any Series
1999-A Certificate Owner acquiring an interest in a Series 1999-A
Certificate through it to comply with the Agreement as to treatment of the
Series 1999-A Certificates as indebtedness for certain tax purposes.
To the extent not defined herein, capitalized terms used herein
have the respective meanings assigned to them in the Agreement. This Class
A Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement, as amended from time to
time, the Class A Holder by virtue of the acceptance hereof assents and by
which the Class A Holder is bound.
This Class A Certificate represents an interest in only World
Financial Network Credit Card Master Trust. This Class A Certificate does
not represent an obligation of, or an interest in, Transferor or Servicer,
and the Series 1999-A Certificates, the Class C Interest and the Accounts
or Receivables are not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other governmental agency. This Series 1999-A
Certificate is limited in right of payment to certain collections
respecting the Receivables, all as more specifically set forth hereinabove
and in the Agreement.
A-2
Unless the certificate of authentication hereon has been executed
by or on behalf of Trustee, by manual or facsimile signature, this Class A
Certificate shall not be entitled to any benefit under the Agreement, or be
valid for any purpose.
A-3
IN WITNESS WHEREOF, World Financial Network National Bank
has caused this Class A Certificate to be duly executed under its official
seal.
By:______________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
DATED: September 17, 1999
This is one of the Class A Floating Rate Asset-Backed
Certificates, Series 1999-A referred to in the within-mentioned Agreement.
XXXXXX TRUST AND SAVINGS BANK
not in its individual capacity, but solely as Trustee
By:_________________________________________
Authorized Signatory
EXHIBIT A-2
FORM OF CERTIFICATE
-------------------
CLASS B
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER THE
SECURITIES OR BLUE SKY LAWS OF ANY STATE IN THE UNITED STATES OR ANY
FOREIGN SECURITIES LAWS. BY ITS ACCEPTANCE OF THIS CERTIFICATE THE HOLDER
OF THIS CERTIFICATE IS DEEMED TO REPRESENT TO WORLD FINANCIAL NETWORK
NATIONAL BANK ("WFN") AND THE TRUSTEE THAT IT IS (I) A "QUALIFIED
INSTITUTIONAL BUYER" WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES
ACT (A "QIB") AND IS ACQUIRING SUCH CERTIFICATE FOR ITS OWN ACCOUNT (AND
NOT FOR THE ACCOUNT OF OTHERS) OR AS A FIDUCIARY OR AGENT FOR OTHERS (WHICH
OTHERS ALSO ARE QIBS) TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING
MADE IN RELIANCE ON RULE 144A OR (II) IS ACQUIRING SUCH CERTIFICATE OUTSIDE
THE UNITED STATES IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT,
(III) IS OTHERWISE ACQUIRING SUCH CERTIFICATE IN THE UNITED STATES PURSUANT
TO ANOTHER EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT AND IN SUCH
CASE (A) HAS CERTIFIED TO THE TRUSTEE AND WFN IN WRITING THE FACTS
SURROUNDING SUCH TRANSFER, IN FORM AND SUBSTANCE SATISFACTORY TO THE
TRUSTEE AND WFN AND (B) HAS DELIVERED A WRITTEN OPINION OF COUNSEL
SATISFACTORY TO THE TRUSTEE AND WFN TO THE EFFECT THAT ITS ACQUISITION WILL
NOT VIOLATE THE SECURITIES ACT, OR (IV) IS WFN.
NO SALE, PLEDGE OR OTHER TRANSFER OF THIS CERTIFICATE MAY BE MADE BY ANY
PERSON UNLESS EITHER (I) SUCH SALE, PLEDGE OR OTHER TRANSFER IS MADE TO
WFN, (II) SO LONG AS THIS CERTIFICATE IS ELIGIBLE FOR RESALE PURSUANT TO
RULE 144A UNDER THE SECURITIES ACT, SUCH SALE, PLEDGE OR OTHER TRANSFER IS
MADE TO A PERSON WHOM THE TRANSFEROR REASONABLY BELIEVES AFTER DUE INQUIRY
IS A QIB ACTING FOR ITS OWN ACCOUNT (AND NOT FOR THE ACCOUNT OF OTHERS) OR
AS A FIDUCIARY OR AGENT FOR OTHERS (WHICH OTHERS ALSO ARE QIBS) TO WHOM
NOTICE IS GIVEN THAT THE SALE, PLEDGE OR TRANSFER IS BEING MADE IN RELIANCE
ON RULE 144A, (III) SUCH SALE, PLEDGE OR OTHER TRANSFER IS MADE OUTSIDE THE
UNITED STATES IN
A-2-1
COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT OR (IV) SUCH SALE,
PLEDGE OR OTHER TRANSFER IS MADE IN THE UNITED STATES PURSUANT TO ANOTHER
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT AND IN SUCH CASE, (A)
THE TRUSTEE WILL REQUIRE THAT BOTH THE PROSPECTIVE TRANSFEROR AND THE
PROSPECTIVE TRANSFEREE CERTIFY TO THE TRUSTEE AND WFN IN WRITING THE FACTS
SURROUNDING SUCH TRANSFER, WHICH CERTIFICATION WILL BE IN FORM AND
SUBSTANCE SATISFACTORY TO THE TRUSTEE AND WFN AND (B) THE TRUSTEE WILL
REQUIRE A WRITTEN OPINION OF COUNSEL (WHICH WILL NOT BE AT THE EXPENSE OF
WFN OR THE TRUSTEE) SATISFACTORY TO WFN AND THE TRUSTEE TO THE EFFECT THAT
SUCH TRANSFER WILL NOT VIOLATE THE SECURITIES ACT.
THIS CERTIFICATE MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFER TO
ANY PERSON UNLESS SUCH PERSON REPRESENTS, WARRANTS, AND COVENANTS THAT IT
IS EITHER (I) NOT AN "EMPLOYEE BENEFIT PLAN" WITHIN THE MEANING OF SECTION
3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
(WHETHER OR NOT SUBJECT TO ERISA AND INCLUDING, WITHOUT LIMITATION, FOREIGN
OR GOVERNMENT PLANS), A "PLAN", DESCRIBED IN SECTION 4975(E)(1) OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR ANY ENTITY WHOSE
UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF ANY SUCH PLAN'S
INVESTMENT IN SUCH ENTITY (EACH, A "PLAN"), OR (II) AN INSURANCE COMPANY
USING THE ASSETS OF ITS GENERAL ACCOUNT THAT REPRESENTS AND WARRANTS THAT
AT THE TIME OF ACQUISITION AND THROUGHOUT ITS HOLDING OF THE CERTIFICATE IT
IS NOT A SERVICE PROVIDER TO THE TRUST OR AN AFFILIATE OF THE FOREGOING,
AND WOULD NOT OTHERWISE BE EXCLUDED UNDER 29 C.F.R. 2510.3.101(F)(1), AND
EACH OF THE ACCOUNTS TO WHICH SUCH CERTIFICATE IS ALLOCATED IS AN INSURANCE
COMPANY GENERAL ACCOUNT (1) THAT IS ELIGIBLE FOR AND MEETS THE REQUIREMENTS
OF DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION 95-60 AND (2)
OF WHICH LESS THAN 25% OF THE ASSETS ARE (OR REPRESENT) ASSETS OF A BENEFIT
PLAN. BY ACCEPTING AND HOLDING THIS CERTIFICATE, THE HOLDER HEREOF AND THE
CERTIFICATE OWNER SHALL EACH BE DEEMED TO HAVE REPRESENTED AND WARRANTED
THAT IT MEETS THE FOREGOING REQUIREMENTS.
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation
("DTC"), to World Financial Network National Bank 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
A-2-2
name as requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.
No. ___ $________
CUSIP No.________
WORLD FINANCIAL NETWORK CREDIT CARD MASTER TRUST
CLASS B FLOATING RATE
ASSET-BACKED CERTIFICATE, SERIES 1999-A
Evidencing an Undivided Interest in a trust, the corpus of which consists
of a Portfolio of credit card receivables generated or acquired by World
Financial Network National Bank and other assets and interests constituting
the Trust under the Pooling and Servicing Agreement described below.
(Not an interest in or obligation of
World Financial Network National Bank
or any Affiliate thereof.)
This certifies that Cede & Co. (the "Class B Holder") is the
registered owner of a fractional undivided interest in a trust (the
"Trust"), the corpus of which consists of (i) a Portfolio of all
receivables (the "Receivables") existing in the open-end credit card
accounts identified under the Agreement from time to time (the "Accounts"),
(ii) all Receivables generated under the Accounts from time to time
thereafter, (iii) funds collected or to be collected from accountholders in
respect of the Receivables, (iv) all funds which are from time to time on
deposit in the Collection Account, Excess Funding Account and in the Series
Accounts, (v) the benefits of any Enhancements, if any, with respect to one
or more Series of Investor Certificates and (vi) the other assets and
interests constituting the Trust pursuant to a Pooling and Servicing
Agreement dated as of January 17, 1996 and amended and restated as of
September 17, 1999, as supplemented by the Series 1999-A Supplement dated
as of September 17, 1999 (collectively, the "Agreement"), between World
Financial Network National Bank, as Transferor ("Transferor") and Servicer
("Servicer"), and Xxxxxx Trust and Savings Bank (successor to The Bank of
New York), as Trustee ("Trustee").
The Series 1999-A Certificates are issued in two classes, the
Class A Certificates and the Class B Certificates (of which this
certificate is one), which are subordinated to the Class A Certificates in
certain rights of payment as described in the Agreement. The Trust
A-2-3
has also issued a third Class of uncertificated interests in the Trust, the
Class C Interests, which are subordinated to the Class A Certificates and
the Class B Certificates.
Transferor has structured the Agreement and the Series 1999-A
Certificates with the intention that the Series 1999-A Certificates will
qualify under applicable tax law as indebtedness, and each of Transferor,
the Holder of the Transferor Certificate, Servicer and each Series 1999-A
Holder (or Series 1999-A Certificate Owner) by acceptance of its Series
1999-A Certificate (or in the case of a Series 1999-A Certificate Owner, by
virtue of such Series 1999-A Certificate Owner's acquisition of a
beneficial interest therein), agrees to treat and to take no action
inconsistent with the treatment of the Series 1999-A Certificates (or any
beneficial interest therein) as indebtedness for purposes of federal,
state, local and foreign income or franchise taxes and any other tax
imposed on or measured by income, value of intangible property or net
worth. Each Series 1999-A Holder agrees that it will cause any Series
1999-A Certificate Owner acquiring an interest in a Series 1999-A
Certificate through it to comply with the Agreement as to treatment of the
Series 1999-A Certificates as indebtedness for certain tax purposes.
To the extent not defined herein, capitalized terms used herein
have the respective meanings assigned to them in the Agreement. This Class
B Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement, as amended from time to
time, the Class B Holder by virtue of the acceptance hereof assents and by
which the Class B Holder is bound.
This Class B Certificate represents an interest in only World
Financial Network Credit Card Master Trust. This Class B Certificate does
not represent an obligation of, or an interest in, Transferor or Servicer,
and the Series 1999-A Certificates, the Class C Interest and the Accounts
or Receivables are not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other governmental agency. This Series 1999-A
Certificate is limited in right of payment to certain collections
respecting the Receivables, all as more specifically set forth hereinabove
and in the Agreement.
Unless the certificate of authentication hereon has been executed
by or on behalf of Trustee, by manual or facsimile signature, this Class B
Certificate shall not be entitled to any benefit under the Agreement, or be
valid for any purpose.
A-2-4
IN WITNESS WHEREOF, World Financial Network National Bank
has caused this Class B Certificate to be duly executed under its official
seal.
By:___________________________
Authorized Officer
A-2-5
CERTIFICATE OF AUTHENTICATION
------------------------------
DATED: September 17, 1999
This is one of the Class B Floating Rate Asset-Backed
Certificates, Series 1999-A referred to in the within-mentioned Agreement.
XXXXXX TRUST AND SAVINGS BANK,
not in its individual capacity, but solely as
Trustee
By:___________________________________
Authorized Signatory
1
EXHIBIT B
FORM OF MONTHLY PAYMENT INSTRUCTIONS AND
NOTIFICATION TO TRUSTEE
WORLD FINANCIAL NETWORK NATIONAL BANK
WORLD FINANCIAL NETWORK CREDIT CARD MASTER TRUST
SERIES 1999-A
MONTHLY PERIOD ENDING ______________, ____
B-1
EXHIBIT C
FORM OF MONTHLY Series 1999-A
HOLDERS' STATEMENT
SERIES 1999-A
WORLD FINANCIAL NETWORK NATIONAL BANK
----------------------------------------
WORLD FINANCIAL NETWORK CREDIT CARD MASTER TRUST
----------------------------------------
C-1
EXHIBIT D
FORM OF CERTIFICATE TO BE GIVEN BY CERTIFICATE OWNER
[Euroclear [Cedel, societe anonyme
Address:_________________ Address:_______________
Contact:_________________] Contact:_______________]
Re: Class B Floating Rate Asset Backed Certificates, Series
1999-A issued pursuant to the Pooling and Servicing
Agreement dated as of January 17, 1996, as supplemented by
the Series 1999-A Supplement dated as of September__,
1999, between World Financial Network National Bank, and
Xxxxxx Trust and Savings Bank, as Trustee, (the "Class B
Certificates").
This is to certify that as of the date hereof, and except as set
forth below, the beneficial interest in the Class B Certificates held by
you for our account is owned by persons that are not U.S. persons (as
defined in Rule 901 under the Securities Act of 1933, as amended).
The undersigned undertakes to advise you promptly by tested telex
on or prior to the date on which you intend to submit your certification
relating to the Class B Certificates held by you in which the undersigned
has acquired, or intends to acquire, a beneficial interest in accordance
with your operating procedures if any applicable statement herein is not
correct on such date. In the absence of any such notification, it may be
assumed that this certification applies as of such date.
[This certification excepts beneficial interests in and does not
relate to U.S. $_________ principal amount of the Class B Certificates
appearing in your books as being held for our account but that we have sold
or as to which we are not yet able to certify.]
We understand that this certification is required in connection
with certain securities laws in the United States of America. If
administrative or legal proceedings are commenced or threatened in
connection with which this certification is or would be relevant, we
irrevocably authorize you to produce this certification or a copy thereof
to any interested party in such proceedings.
Dated: ___________________,*
By:_______________________,
Account Holder
* Certification must be dated on or after the 15th day before the date of
the Euroclear or Cedel certificate to which this certification relates.
D-1
EXHIBIT E
FORM OF CERTIFICATE TO BE GIVEN BY EUROCLEAR OR CEDEL
[Xxxxxx Trust and Savings Bank, as Trustee and Transfer Agent and Registrar]
Re: Class B Floating Rate Asset Backed Certificates, Series
1999-A issued pursuant to the Pooling and Servicing
Agreement dated as of January 17, 1996, as supplemented by
the Series 1999-A Supplement dated as of September__,
1999, between World Financial Network National Bank, and
Xxxxxx Trust and Savings Bank, as Trustee, (the "Class B
Certificates").
This is to certify that, based solely on certifications we have
received in writing, by tested telex or by electronic transmission from
member organizations appearing in our records as persons being entitled to
a portion of the principal amount set forth below (our "Member
Organizations") as of the date hereof, $__________ principal amount of the
Class B Certificates is owned by persons (a) that are not U.S. persons (as
defined in Rule 901 under the Securities Act of 1933, as amended (the
"Securities Act")) or (b) who purchased their Class B Certificates (or
interests therein) in a transaction or transactions that did not require
registration under the Securities Act.
We further certify (a) that we are not making available herewith
for exchange any portion of the related Regulation S Temporary Book-Entry
Certificate (as defined in the Series 1996-A Supplement referred to above)
excepted in such certifications and (b) that as of the date hereof we have
not received any notification from any of our Member Organizations to the
effect that the statements made by them with respect to any portion of the
part submitted herewith for exchange are no longer true and cannot be
relied upon as of the date hereof.
E-1
We understand that this certification is required in connection
with certain securities laws of the United States of America. If
administrative or legal proceedings are commenced or threatened in
connection with which this certification is or would be relevant, we
irrevocably authorize you to produce this certification or a copy hereof to
any interested party in such proceedings.
Date: _________________ Yours faithfully,
By:____________________________________
[Xxxxxx Guaranty Trust Company of New
York, Brussels Office, as Operator of the
Euroclear Clearance System] [Cedel,
societe anonyme]
E-2
EXHIBIT F
FORM OF CERTIFICATE TO BE GIVEN BY TRANSFEREE
OF BENEFICIAL INTEREST IN A REGULATION S TEMPORARY
BOOK-ENTRY CERTIFICATE
[Euroclear [Cedel, societe anonyme
Address:_________________ Address:___________________
Contact:_________________] Contact:___________________]
Re: Class B Floating Rate Asset Backed Certificates,
Series 1999-A issued pursuant to the Pooling and
Servicing Agreement dated as of January 17,
1996, as supplemented by the Series 1999-A
Supplement dated as of September__, 1999,
between World Financial Network National Bank,
and Xxxxxx Trust and Savings Bank, as Trustee,
(the "Class B Certificates").
This is to certify that (i) as of the date hereof, and except as
set forth below, for purposes of acquiring a beneficial interest in the
Class B Certificates, the undersigned certifies that it is not a U.S.
person (as defined in Rule 901 under the Securities Act of 1933, as
amended) and (ii) that the undersigned is either (A) not an "employee
benefit plan" within the meaning of Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended (whether or not subject to ERISA
and including foreign and governmental plans), any plan, trust or account
(including an individual retirement plan) described in Section 4975(e)(1)
of the Internal Revenue Code of 1986, as amended, or any collective
investment fund, insurance company separate or general account or other
entity deemed to hold plan assets of the foregoing by reason of any such
plan's investment in such entity (collectively, "Benefit Plans") or (B) is
an insurance company general account that represents and warrants that at
the time of acquisition and throughout its holding of the certificate it is
not a service provider to the trust or an affiliate of the foregoing, and
would not otherwise be excluded under 29 C.F.R. 2510.3.101(f)(1), and each
of the accounts to which such certificate is allocated is an insurance
company general account (1) that is eligible for and meets the requirements
of Department of Labor Prohibited Transaction Class Exemption 95-60 and (2)
of which less than 25% of the assets are (or represent) assets of a Benefit
Plan. .
The undersigned undertakes to advise you promptly by tested telex
on or prior to the date on which you intend to submit your certification
F-1
relating to the Class B Certificates held by you in which the undersigned
intends to acquire a beneficial interest in accordance with your operating
procedures if any applicable statement herein is not correct on such date.
In the absence of any such notification, it may be assumed that this
certification applies as of such date.
We understand that this certification is required in connection
with certain securities law and other laws in the United States of America.
If administrative or legal proceedings are commenced or threatened in
connection with which this certification is or would be relevant, we
irrevocably authorize you to produce this certification or a copy thereof
to any interested party in such proceedings.
Dated: ___________________,
By:_____________________________
F-2
EXHIBIT G
FORM OF TRANSFER CERTIFICATE FOR EXCHANGE OR
TRANSFER FROM 144A BOOK-ENTRY CERTIFICATE TO
REGULATION S BOOK-ENTRY CERTIFICATE
[Xxxxxx Trust and Savings Bank, as Trustee and Transfer Agent and Registrar]
Re: Class B Floating Rate Asset Backed Certificates, Series
1996-A issued pursuant to the Pooling and Servicing
Agreement, as supplemented by the Series 1996-A Supplement
(as so supplemented the "Agreement"), each dated as of
April 1, 1996, between First Omni Bank, N.A., and Xxxxxx
Trust and Savings Bank, as Trustee, (the "Class B
Certificates").
Capitalized terms used but not defined herein shall have the
meanings given to them in the Agreement.
This letter relates to U.S. $___________ principal amount of
Certificates that are held as a beneficial interest in the 144A Book-Entry
Certificate (CUSIP No. _______) with the Depository in the name of [insert
name of transferor] (the "Transferor"). The Transferor has requested an
exchange or transfer of the beneficial interest for an interest in the
Regulation S Book-Entry Certificate (CUSIP No. _______) to be held with
[the Euroclear Operator] [CEDEL] through the Depository.
In connection with the request and in receipt of the Class B
Certificates, the Transferor does hereby certify that the exchange or
transfer has been effected in accordance with the transfer restrictions set
forth in the Agreement and the Class B Certificates and:
(a) pursuant to and in accordance with Regulation S under
the Securities Act of 1933, as amended (the "Securities Act"), and
accordingly the Transferor does hereby certify that:
(i) the offer of the Class B Certificates was not
made to a person in the United States of America,
[(ii) at the time the buy order was originated,
the transferee was outside the United States of America or
the Transferor and any person acting on its behalf
reasonably believed that the transferee was outside the
United States of America,
(ii) the transaction was executed in, on or
through the facilities of a designated offshore securities
market and neither the
G-1
Transferor nor any person acting on its behalf knows that
the transaction was pre-arranged with a buyer in the
United States of America,]*
(iii) no directed selling efforts have been made
in contravention of the requirements of Rule 903(b) or
904(b) of Regulation S, as applicable,
(iv) the transaction is not part of a plan or
scheme to evade the registration requirements of the
Securities Act, and
(b) with respect to transfers made in reliance on Rule 144
under the Securities Act, the Transferor does hereby certify that
the Class B Certificates are being transferred in a transaction
permitted by Rule 144 under the Securities Act.
(c) the Transferor certifies that it is either (A) not an
"employee benefit plan" within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended (whether or not subject
to ERISA and including foreign and governmental plans), any plan, trust or
account (including an individual retirement plan) described in Section
4975(e)(1) of the Internal Revenue Code of 1986, as amended, or any
collective investment fund, insurance company separate or general account
or other entity deemed to hold plan assets of the foregoing by reason of
any such plan's investment in such entity (collectively, "Benefit Plans")
or (B) is an insurance company general account that represents and warrants
that at the time of acquisition and throughout its holding of the
certificate it is not a service provider to the trust or an affiliate of
the foregoing, and would not otherwise be excluded under 29 C.F.R.
2510.3.101(f)(1), and each of the accounts to which such certificate is
allocated is an insurance company general account (1) that is eligible for
and meets the requirements of Department of Labor Prohibited Transaction
Class Exemption 95-60 and (2) of which less than 25% of the assets are (or
represent) assets of a Benefit Plan.
G-2
This certification and the statements contained herein are made
for your benefit and the benefit of the issuer and the [placement agent].
[Insert name of Transferor]
Dated: By:________________________
Title:_____________________
* Insert one of these two provisions, which come from the definition of
"offshore transactions" in Regulation S.
G-3
EXHIBIT H
FORM OF PLACEMENT AGENT EXCHANGE INSTRUCTIONS
Depository Trust Company
00 Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Class B Floating Rate Asset Backed Certificates, Series
1999-A issued pursuant to the Pooling and Servicing
Agreement dated as of January 17, 1996, as supplemented by
the Series 1999-A Supplement dated as of September__,
1999, between World Financial Network National Bank, and
Xxxxxx Trust and Savings Bank, as Trustee, (the "Class B
Certificates").
Pursuant to Section 6 of the Series 1999-A Supplement to the
Agreement, _______________________ (the "Placement Agent") hereby requests
that $____________ aggregate principal amount of the Class B Certificates
held by you for our account and represented by the Regulation S Temporary
Book-Entry Certificate (CUSIP No. _______) (as defined in the Agreement) be
exchanged for an equal principal amount represented by the 144A Book-Entry
Certificate (CUSIP No. _______) (as defined in the Agreement) to be held by
you for our account.
Dated:_____________________________
[placement agent]
By:________________________
Title:_____________________
H-1
