PRIME II RECEIVABLES CORPORATION
Transferor
FDS NATIONAL BANK
Servicer
and
THE CHASE MANHATTAN BANK
Trustee
on behalf of the Series 1999-1 Certificateholders
____________________________
SERIES 1999-1 VARIABLE FUNDING SUPPLEMENT
Dated as of July 6, 1999
to
POOLING AND SERVICING AGREEMENT
Dated as of January 22, 1997
____________________________
Class A Variable Funding Certificates, Series 1999-1
Class B Variable Funding Certificates, Series 1999-1
PRIME CREDIT CARD MASTER TRUST II
TABLE OF CONTENTS
SECTION 1. Designation 1
SECTION 2. Definitions 1
SECTION 3. Reassignment and Certain Transfer Terms 19
SECTION 4. Delivery and Payment for the Series 1999-1
Certificates 19
SECTION 5. Depositary; Form of Delivery of Series
1999-1 Certificates. 19
SECTION 6. Addition and Removal of Accounts 20
SECTION 7. Article IV of Agreement 21
Section 4.4 Rights of Certificateholders 21
Section 4.5 Collections and Allocation 21
Section 4.6 Application of Funds on Deposit
in the Collection Account for
the Series 1999-1 Certificates 21
Section 4.7 Coverage of Required Amounts
for the Series 1999-1
Certificates 32
Section 4.8 Investor Charge-Offs 34
Section 4.9 Reserve Account 35
Section 4.10 Excess Purchase Account 36
Section 4.11 Principal and Interest Funding
Accounts 37
Section 4.12 Proceeds Account 39
SECTION 8. Article V of the Agreement 40
Section 5.1 Distributions 40
Section 5.2 Monthly Certificateholders'
Statement. 40
Section 5.3 Annual Certificateholders' Tax
Statement 42
SECTION 9. Article VI of Agreement 42
Section 6.15 VFC Additional Invested Amounts 42
Section 6.16 Extension. 44
Section 6.17 Transfers of Class C Certificates;
Legends 45
Section 6.18 Transfers of Variable Funding
Certificates; Legends. 47
SECTION 10. Series 1999-1 Pay Out Events 48
SECTION 11. Successor Servicer and Delegation 51
SECTION 12. Successor Trustee 52
SECTION 13. Notices to Administrative Agent 52
SECTION 14. Charge Account Agreements and Credit
and Collection Policies 52
SECTION 15. Minimum Denominations 53
SECTION 16. Cash Equivalents 53
SECTION 17. Automatic Additional Accounts 53
SECTION 18. Series 1999-1 Termination 54
SECTION 19. Actions by Administrative Agent 54
SECTION 20. Periodic Finance Charges and Other Fees 54
SECTION 21. Rating Agency Condition 54
SECTION 22. Distribution Account 54
SECTION 24. Ratification of Agreement 54
SECTION 25. Counterparts 54
SECTION 26. GOVERNING LAW 55
SECTION 27. The Trustee. 55
SECTION 28. Instructions in Writing. 55
LIST OF EXHIBITS
EXHIBIT A-1 Form of Class A Certificate
EXHIBIT A-2 Form of Class B Certificate
EXHIBIT A-3 Form of Class C Certificate
EXHIBIT B Form of Extension Notice
EXHIBIT C Form of Investor Certificate Election Notice
EXHIBIT D Form of Investment Letter
EXHIBIT E Form of Servicer Report
SERIES 1999-1 VARIABLE FUNDING SUPPLEMENT, dated as of
July 6, 1999 (this "Variable Funding Supplement") by and among
PRIME II RECEIVABLES CORPORATION, a corporation organized and
existing under the laws of the State of Delaware, as Transferor
(the "Transferor"), FDS NATIONAL BANK, a national banking
association organized and existing under the federal laws of the
United States, as Servicer (the "Servicer"), and THE CHASE
MANHATTAN BANK, a banking corporation organized and existing under
the laws of State of New York, as trustee (together with its
successors in trust thereunder as provided in the Agreement
referred to below, the "Trustee") under the Pooling and Servicing
Agreement dated as of January 22, 1997 (the "Agreement") among the
Transferor, the Servicer and the Trustee.
Section 6.9 of the Agreement provides, among other
things, that the Transferor and the Trustee may at any time and
from time to time enter into a supplement to the Agreement for the
purpose of authorizing the issuance by the Trustee to the
Transferor, for execution and redelivery to the Trustee for
authentication, one or more Series of Certificates.
Pursuant to this Variable Funding Supplement, the
Transferor and the Trustee shall create a new Series of Investor
Certificates and shall specify the Principal Terms thereof.
SECTION 1 Designation. There is hereby created a Series
of Investor Certificates to be issued pursuant to the Agreement
and this Variable Funding Supplement to be known generally as the
"Series 1999-1 Variable Funding Certificates." The Series 1999-1
Variable Funding Certificates shall be issued in two Classes,
which shall be designated generally as the Class A Variable
Funding Certificates, Series 1999-1 (the "Class A Variable Funding
Certificates"), and the Class B Variable Funding Certificates,
Series 1999-1 (the "Class B Variable Funding Certificates"). In
addition, there is also hereby created a third Class of interest
in the Trust which shall be deemed to be an "Investor Certificate"
for all purposes under the Agreement and this Variable Funding
Supplement, except as expressly provided herein, and which shall
be known as the Class C Certificates, Series 1999-1 (the "Class C
Certificates"). The Series 1999-1 Variable Funding Certificates
and the Class C Certificates are collectively referred to
sometimes in this Variable Funding Supplement as the "Series 1999-
1 Certificates". Series 1999-1 shall be included with Series 1997-
1 as a member of Group I. The Class C Certificates shall be
Transferor Retained Certificates so long as and to the extent held
of record by the Transferor.
SECTION 2 Definitions. In the event that any term or
provision contained herein shall conflict with or be inconsistent
with any provision contained in the Agreement, the terms and
provisions of this Variable Funding Supplement shall govern. All
Article, Section or subsection references herein shall mean
Article, Section or subsections of the Agreement, as amended or
supplemented by this Variable Funding Supplement except as
otherwise provided herein. All capitalized terms not otherwise
defined herein are defined in the Agreement. Each capitalized
term defined herein shall relate only to the Series 1999-1
Certificates and no other Series of Certificates issued by the
Trust.
"Administrative Agent" shall mean PNC Bank, National
Association, or any successor designated as the Administrative
Agent in the Class A Certificate Purchase Agreement and the Class
B Certificate Purchase Agreement.
"Amortization Period" shall mean the period commencing on the
Amortization Period Commencement Date and ending on the earlier to
occur of (i) the date of termination of the Trust pursuant to
Section 12.1 of the Agreement or (ii) the Series 1999-1
Termination Date.
"Amortization Period Commencement Date" shall mean, initially,
with respect to the Investor Certificates, the earlier of the
first day of the August 2002 Monthly Period and the Pay Out
Commencement Date, and, with respect to an Extension, the earlier
of the date specified as such in the Extension Notice and the Pay
Out Commencement Date.
"Assignee" shall have the meaning specified in subsection
6.17(a) of the Agreement.
"Annual Portfolio Turnover Rate" shall mean with respect to
any Business Day during a Monthly Period, the aggregate of
Receivables arising under Accounts from sales of goods and
services or cash advances, excluding any portion thereof
representing Periodic Finance Charges, Late Fees, annual
membership fees or other fees and similar charges during each of
the twelve Monthly Periods ending on the last day of the second
preceding Monthly Period divided by the average of the aggregate
Outstanding Balances of Receivables as of the last day of each
such Monthly Period.
"Available Reserve Amount" shall mean, for any Business Day,
the lesser of (i) the amount on deposit in the Reserve Account on
such Business Day (after giving effect to any deposit to, or
withdrawal from, the Reserve Account to be made with respect to
such Business Day), and (ii) the Required Reserve Amount as of
such Business Day.
"Base Rate" shall mean, with respect to the Investor
Certificates, the sum of (i) the weighted average of the
annualized Class A Certificate Rate, the annualized Class B
Certificate Rate and the annualized Class C Certificate Rate and
(ii) the Series Servicing Fee Percentage per annum.
"Carryover Discount Amount" shall mean, for Series 1999-1 for
any Business Day, the excess, if any, of (i) the sum of (A) the
product of the Discount Allocation Percentage and the Discount
Amount and (B) the Carryover Discount Amount for Series 1999-1 for
the preceding Business Day over (ii) the amount of Principal
Collections added to Total Finance Charge Collections for such
Series on such preceding Business Day.
"Class A Additional Payments" shall mean amounts payable
pursuant to Section 2.4 or 2.5 of the Class A Certificate Purchase
Agreement in an aggregate amount not exceeding, for any Business
Day, the product of (i) a fraction, the numerator of which is the
actual number of days from and including the preceding Business
Day to but excluding such Business Day and the denominator of
which is 360, (ii) 0.25% and (iii) the Class A Invested Amount for
such Business Day.
.
"Class A Agent" shall mean PNC Bank, National Association, or
any successor at the time designated as the Agent for the Class A
Certificateholders under the Class A Certificate Purchase
Agreement.
"Class A Carrying Cost Daily Factor" shall mean, on any
Business Day, the Class A Carrying Costs for such Business Day
divided by the Class A Investor Principal Balance for such
Business Day.
"Class A Carrying Costs" shall mean, for any Business Day, the
sum of the accrued Yield since the preceding Business Day on the
outstanding principal amount of the Class A Certificates. It is
understood and agreed that, with respect to any Fixed Period and
any portion of the Class A Investor Principal Balance for which
Yield is calculated based on the Commercial Paper Rate (i) the
Servicer shall make daily allocations of Class A Interest based on
the Commercial Paper Rate applicable to the immediately preceding
Fixed Period (or, in the case of any Fixed Period for which no
portion of the Class A Investor Principal Balance accrued Yield at
the Commercial Paper Rate during the immediately preceding Fixed
Period, the estimate provided by the Class A Agent pursuant to the
last sentence of the definition of Yield in the Class A
Certificate Purchase Agreement), and (ii) on the last day of each
Fixed Period the Servicer, based on the actual Commercial Paper
Rate for such Fixed Period, will adjust the amount of Class A
Interest deposited into the Interest Funding Account during the
related Fixed Period to reflect any difference between the
Commercial Paper Rate used to make daily allocations of Class A
Interest during such Fixed Period and the actual Commercial Paper
Rate for such Fixed Period.
"Class A Certificate Purchase Agreement" shall mean the Class
A Certificate Purchase Agreement, dated as of July 6, 1999, among
the Transferor, the Servicer, the purchasers of Class A
Certificates named therein and PNC Bank, National Association, as
the Class A Agent and the Administrative Agent, as amended from
time to time.
"Class A Certificate Rate" shall mean, with respect to the
Class A Certificates, the Class A Carrying Cost Daily Factor.
"Class A Certificateholder" shall mean any Person in whose
name a Class A Certificate is registered in the Certificate
Register.
"Class A Certificateholders' Interest" shall mean the portion
of the Series 1999-1 Certificateholders' Interest evidenced by the
Class A Certificates.
"Class A Certificates" shall mean any of the Certificates
executed by the Transferor and authenticated by or on behalf of
the Trustee, substantially in the form of Exhibit A-l hereto.
"Class A Daily Principal Amount" shall have the meaning
specified in subsection 4.6(e)(i) of the Agreement.
"Class A Default and Dilution Amount" shall mean, for any
Monthly Period, an amount equal to the summation of the products
of (i) the Class A Floating Allocation Percentage and (ii) the
Default and Dilution Amount, as determined for each Business Day
in that Monthly Period.
"Class A Floating Allocation Percentage" shall mean, with
respect to any Business Day, the percentage equivalent of a
fraction, the numerator of which is the Class A Invested Amount
for such Business Day and the denominator of which is the sum of
the amount of Principal Receivables in the Trust and the amount on
deposit in the Excess Funding Account as of the end of the
preceding Business Day.
"Class A Initial Invested Amount" shall mean the aggregate
initial principal amount of the Class A Certificates on the
Issuance Date.
"Class A Interest" shall mean with respect to any Business Day
an amount equal to the product of the Class A Certificate Rate and
the Class A Investor Principal Balance as of the close of business
on such Business Day.
"Class A Invested Amount" shall mean, when used with respect
to any Business Day, an amount equal to (a) the Class A Initial
Invested Amount, plus (b) the aggregate principal amount of any
VFC Additional Class A Invested Amounts purchased by the Class A
Certificateholders through the end of the preceding Business Day
pursuant to Section 6.15 of the Agreement, minus (c) the aggregate
amount of principal payments made to the Class A
Certificateholders prior to such Business Day and minus (d) the
excess, if any, of the aggregate amount of unreimbursed Class A
Investor Charge-Offs for all Distribution Dates preceding such
date over Class A Investor Charge-Offs reimbursed pursuant to
subsection 4.8(c) of the Agreement prior to such Business Day.
"Class A Investor Charge-Off" shall have the meaning specified
in subsection 4.8(c) of the Agreement.
"Class A Investor Percentage" shall mean, for any Business
Day, the Class A Invested Amount as a percentage of the Invested
Amount on such Business Day.
"Class A Investor Principal Balance" shall have the meaning
assigned to such term in the Class A Certificate Purchase
Agreement.
"Class A Program Fee" shall mean the fees or other amounts
payable pursuant to subsection 2.3(a) of the Class A Certificate
Purchase Agreement, to the extent not included in Class A Carrying
Costs.
"Class A Required Amount" shall mean the amount, if any, by
which (x) the sum of the amounts described in subsections
4.6(a)(i), (v), (vi) or (viii) of the Agreement during the
Revolving Period or subsections 4.6(b)(i), (v), (vi) or (viii) or
4.6(c)(i), (v), (vi) or (viii) of the Agreement during the
Amortization Period, as applicable, plus the Class A Investor
Percentage of the amount described in subsection 4.6(a)(iv) of the
Agreement during the Revolving Period, or subsection 4.6(b)(iv) or
4.6(c)(iv) of the Agreement during the Amortization Period, as
applicable, exceeds (y) the Total Finance Charge Collections
available for application thereto pursuant to subsections 4.6(a),
(b) or (c) of the Agreement, as applicable, on any Business Day.
"Class A Supplemental Payments" shall mean, on any Business
Day, the sum of all unpaid amounts owed to the Administrative
Agent, the Class A Agent or any Class A Purchaser (as defined in
the Class A Certificate Purchase Agreement) pursuant to the Class
A Certificate Purchase Agreement which have arisen prior to such
Business Day (including, without limitation, amounts payable
pursuant to Section 2.4 or 2.5 of the Class A Purchase Agreement
on any Business Day in excess of the maximum amount of Class A
Additional Payments for such Business Day), other than Class A
Interest, Class A Additional Payments and the unpaid principal
amount of the Class A Certificates.
"Class A/B Default and Dilution Amount" shall mean, for any
Monthly Period, an amount equal to the summation of the products
of (i) the sum of the Class A Floating Allocation Percentage and
the Class B Floating Allocation Percentage and (ii) the Default
and Dilution Amount, as determined for each Business Day in that
Monthly Period.
"Class B Additional Payments" shall mean amounts payable
pursuant to Section 2.4 or 2.5 of the Class B Certificate Purchase
Agreement in an aggregate amount not exceeding, for any Business
Day, the product of (i) a fraction, the numerator of which is the
actual number of days from and including the preceding Business
Day to but excluding such Business Day and the denominator of
which is 360, (ii) 0.25% and (iii) the Class B Invested Amount for
such Business Day.
"Class B Agent" shall mean PNC Bank, National Association, or
any successor at the time designated as the Agent for the Class B
Certificateholders under the Class B Certificate Purchase
Agreement.
"Class B Carrying Cost Daily Factor" shall mean, on any
Business Day, the Class B Carrying Costs for such Business Day
divided by the Class B Investor Principal Balance for such
Business Day.
"Class B Carrying Costs" shall mean, for any Business Day, the
sum of the accrued Yield since the preceding Business Day on the
outstanding principal amount of the Class B Certificates. It is
understood and agreed that, with respect to any Fixed Period and
any portion of the Class B Investor Principal Balance for which
Yield is calculated based on the Commercial Paper Rate (i) the
Servicer shall make daily allocations of Class B Interest based on
the Commercial Paper Rate applicable to the immediately preceding
Fixed Period (or, in the case of any Fixed Period for which no
portion of the Class B Investor Principal Balance accrued Yield at
the Commercial Paper Rate during the immediately preceding Fixed
Period, the estimate provided by the Class B Agent pursuant to the
last sentence of the definition of Yield in the Class B
Certificate Purchase Agreement), and (ii) on the last day of each
Fixed Period the Servicer, based on the actual Commercial Paper
Rate for such Fixed Period, will adjust the amount of Class B
Interest deposited into the Interest Funding Account during the
related Fixed Period to reflect any difference between the
Commercial Paper Rate used to make daily allocations of Class B
Interest during such Fixed Period and the actual Commercial Paper
Rate for such Fixed Period.
"Class B Certificate Purchase Agreement" shall mean the Class
B Certificate Purchase Agreement, dated as of July 6, 1999, among
the Transferor, the Servicer, the purchasers of Class B
Certificates named therein and PNC Bank, National Association, as
the Class B Agent and the Administrative Agent, as amended from
time to time.
"Class B Certificate Rate" shall mean the Class B Carrying
Cost Daily Factor.
"Class B Certificateholder" shall mean any Person in whose
name a Class B Certificate is registered in the Certificate
Register.
"Class B Certificateholders' Interest" shall mean the portion
of the Series 1999-1 Certificateholders' Interest evidenced by the
Class B Certificates.
"Class B Certificates" shall mean any of the Certificates
executed by the Transferor and authenticated by or on behalf of
the Trustee, substantially in the form of Exhibit A-2 hereto
"Class B Daily Principal Amount" shall have the meaning
specified in subsection 4.6(e)(ii) of the Agreement.
"Class B Fixed/Floating Allocation Percentage" shall mean,
with respect to any Business Day, the percentage equivalent of a
fraction the numerator of which is equal to the Class B Invested
Amount for the day immediately following the last day of the
Revolving Period and the denominator of which is equal to the
greater of (x) the sum of the aggregate amount of Principal
Receivables in the Trust and the amount on deposit in the Excess
Funding Account as of the end of the preceding Business Day and
(y) the sum of the numerators used to calculate the allocation
percentages with respect to Principal Receivables of all Series
outstanding on such Business Day.
"Class B Floating Allocation Percentage" shall mean, with
respect to any Business Day, the percentage equivalent of a
fraction, the numerator of which is the Class B Invested Amount
for such Business Day and the denominator of which is the sum of
the total amount of Principal Receivables in the Trust and the
amount on deposit in the Excess Funding Account as of the end of
the preceding Business Day.
"Class B Initial Invested Amount" shall mean the aggregate
initial principal amount of the Class B Certificates on the
Issuance Date.
"Class B Interest" shall mean, with respect to any Business
Day, an amount equal to the product of the Class B Certificate
Rate and the Class B Investor Principal Balance as of the close of
business on such Business Day.
"Class B Invested Amount" shall mean, when used with respect
to any Business Day, an amount (which shall not be less than zero)
equal to (a) the Class B Initial Invested Amount, plus (b) the
aggregate principal amount of any VFC Additional Class B Invested
Amounts purchased by the Class B Certificateholders through the
end of the preceding Business Day pursuant to Section 6.15 of the
Agreement, minus (c) the aggregate amount of principal payments
made to Class B Certificateholders prior to such Business Day,
minus (d) without duplication, the aggregate amount of (i) Class B
Investor Charge-Offs, (ii) Reallocated Principal Collections for
all prior Business Days (excluding Reallocated Principal
Collections on account of which the Class C Invested Amount has
been reduced to zero) and (iii) reductions to the Class B Invested
Amount made pursuant to the last sentence of subsection 4.7(c)
and plus (e) the aggregate amount allocated to the Class B
Certificates and available on all prior Business Days in
accordance with subsection 4.8(b) of the Agreement, for the
purpose of reimbursing amounts deducted pursuant to the foregoing
clause (d).
"Class B Investor Charge-Off" shall have the meaning specified
in subsection 4.8(b) of the Agreement.
"Class B Investor Percentage" shall mean, for any Business
Day, the Class B Invested Amount as a percentage of the Invested
Amount on such Business Day.
"Class B Investor Principal Balance" shall have the meaning
assigned to such term in the Class B Certificate Purchase
Agreement.
"Class B Principal Payment Commencement Date" shall mean,
following an Amortization Period Commencement Date, the earlier of
(a) the Business Day on which the Class A Invested Amount is paid
in full or, if there are no Principal Collections allocable to the
Series 1999-1 Certificates remaining after payments have been made
to the Class A Certificates on such Business Day, the Business Day
following the Business Day on which the Class A Invested Amount is
paid in full and (b) the Distribution Date following a sale or
repurchase of the Receivables as set forth in Section 2.4(d), 9.2,
10.2, 12.1 or 12.2 of the Agreement or Section 3 of this Variable
Funding Supplement.
"Class B Program Fee" shall mean the fees payable pursuant to
subsection 2.3(a) of the Class B Certificate Purchase Agreement,
to the extent not included in Class B Carrying Costs.
"Class B Required Amount" shall mean the amount, if any, by
which (x) the sum of the amounts described in subsections
4.6(a)(ii), (v), (vii) or (ix) of the Agreement during the
Revolving Period or subsections 4.6(b)(ii), (v), (vii) or (ix) or
4.6(c)(ii), (v), (vii) or (ix) of the Agreement during the
Amortization Period, as applicable, plus the Class B Investor
Percentage of the amount described in subsection 4.6(a)(iv) of the
Agreement during the Revolving Period, or subsection 4.6(b)(iv) or
4.6(c)(iv) of the Agreement during the Amortization Period, as
applicable, exceeds (y) the Total Finance Charge Collections
available for application thereto pursuant to subsections 4.6(a),
(b) or (c) of the Agreement, as applicable, on any Business Day.
"Class B Supplemental Payments" shall mean, on any Business
Day, the sum of all unpaid amounts owed to the Administrative
Agent, the Class B Agent or any Class B Purchaser (as defined in
the Class B Purchase Agreement) pursuant to the Class B
Certificate Purchase Agreement which have arisen prior to such
Business Day (including, without limitation, amounts payable
pursuant to Section 2.4 or 2.5 of the Class B Purchase Agreement
on any Business Day in excess of the maximum amount of Class B
Additional Payments for such Business Day), other than Class B
Interest, Class B Additional Payments and the unpaid principal
amount of the Class B Certificates.
"Class C Additional Interest" shall have the meaning specified
in subsection 6.17(c) of the Agreement.
"Class C Certificate Rate" shall mean 0% per annum; provided,
however, that such rate may be increased pursuant to the terms of
a supplemental agreement entered into in accordance with
subsection 6.17(c) of the Agreement.
"Class C Certificateholder" shall mean any Person in whose
name a Class C Certificate is registered in the Certificate
Register.
"Class C Certificateholders' Interest" shall mean the portion
of the Series 1999-1 Certificateholders' Interest evidenced by the
Class C Certificates.
"Class C Certificates" shall mean any of the Certificates
executed by the transferor and authenticated by or on behalf of
the Trustee, substantially in the form of Exhibit A-3 hereto.
"Class C Daily Principal Amount" shall have the meaning
specified in subsection 4.6(e)(iii) of the Agreement.
"Class C Fixed/Floating Allocation Percentage" shall mean,
with respect to any Business Day, the percentage equivalent of a
fraction the numerator of which is equal to the Class C Invested
Amount for the day immediately following the last day of the
Revolving Period and the denominator of which is equal to the
greater of (x) the sum of the aggregate amount of Principal
Receivables in the Trust and the amount on deposit in the Excess
Funding Account as of the end of the preceding Business Day and
(y) the sum of the numerators used to calculate the allocation
percentages with respect to Principal Receivables of all Series
outstanding on such Business Day.
"Class C Floating Allocation Percentage" shall mean, with
respect to any Business Day, the percentage equivalent of a
fraction, the numerator of which is the Class C Invested Amount
for such Business Day and the denominator of which is the sum of
the total amount of Principal Receivables in the Trust and the
amount on deposit in the Excess Funding Account as of the end of
the preceding Business Day.
"Class C Initial Invested Amount" shall mean the aggregate
initial principal amount of the Class C Certificates on the
Issuance Date.
"Class C Interest" shall have the meaning specified in
subsection 6.17(c) of the Agreement.
"Class C Interest Shortfall" shall have the meaning specified
in subsection 6.17(c) of the Agreement.
"Class C Invested Amount" shall mean, when used with respect
to any Business Day, an amount (which shall not be less than zero)
equal to (a) the Class C Initial Invested Amount, plus (b) the
aggregate principal amount of any VFC Additional Class C Invested
Amounts purchased by the Class C Certificateholders through the
end of the preceding Business Day pursuant to Section 6.15 of the
Agreement, minus (c) the aggregate amount of principal payments
made to Class C Certificateholders prior to such Business Day,
minus (d) without duplication, the aggregate amount of (i) Class C
Investor Charge-Offs, (ii) Reallocated Principal Collections for
all prior Business Days (excluding Reallocated Principal
Collections applied at any time when the Class C Invested Amount
has been reduced to zero) and (iii) reductions to the Class C
Invested Amount made pursuant to the last sentence of subsection
4.7(c) and plus (e) the aggregate amount allocated to the Class C
Certificates and available on all prior Business Days in
accordance with subsection 4.9(b) of the Agreement, for the
purpose of reimbursing amounts deducted pursuant to the foregoing
clause (d).
"Class C Investor Charge-Off" shall have the meaning specified
in subsection 4.8(a) of the Agreement.
"Class C Investor Percentage" shall mean, for any Business
Day, the Class C Invested Amount as a percentage of the Invested
Amount on such Business Day.
"Class C Principal Payment Commencement Date" shall mean,
following an Amortization Period Commencement Date, the earlier of
(a) the Business Day on which the Class A Invested Amount and the
Class B Invested Amount are paid in full or, if there are no
Principal Collections allocable to the Series 1999-1 Variable
Funding Certificates remaining after payments have been made to
the Class A Certificates and the Class B Certificates on such
Business Day, the Business Day following the Business Day on which
the Class A Invested Amount and the Class B Invested Amount are
paid in full and (b) the Distribution Date following a sale or
repurchase of the Receivables as set forth in Section 2.4(d), 9.2,
10.2, 12.1 or 12.2 of the Agreement or Section 3 of this Variable
Funding Supplement.
"Closing Date" shall mean July 6, 1999.
"Commercial Paper Rate" shall, as the context requires, have
the meaning assigned to such term in the (i) Class A Certificate
Purchase Agreement, when used with respect to the Class A
Certificates, or (ii) Class B Certificate Purchase Agreement, when
used with respect to the Class B Certificates.
"Default and Dilution Amount" shall mean, on any Business Day,
an amount equal to the sum of the Default Amounts and Uncovered
Dilution Amounts for all Business Days in the then current Monthly
Period up to and including that Business Day.
"Discount Allocation Percentage" shall mean with respect to
Series 1999-1 and any Business Day the percentage equivalent of a
fraction the numerator of which is the Series 1999-1 Discount
Factor and the denominator of which is the Discount Factor on such
Business Day.
"Discount Amount" shall mean for any Business Day the Discount
Factor multiplied by the Outstanding Balance of Receivables
transferred to the Trust on such Business Day.
"Discount Factor" shall mean for any Business Day an amount
equal to the sum of each Series Discount Factor for all Series
then outstanding on such Business Day.
"Discount Trigger Event" shall mean for any Business Day (i)
the Discount Factor for the second preceding Monthly Period being
in excess of zero, (ii) the Transferor having elected, by not less
than 30 days' prior written notice to the Servicer, the Trustee,
the Rating Agencies and the Administrative Agent, to commence
discounting of purchases of Receivables, and (iii) the Rating
Agencies and the Administrative Agent on behalf of the Class A
Certificateholders and Class B Certificateholders having consented
in writing (a copy of which is delivered to the Trustee) to such
discounting of purchases of Receivables on or prior to such
Business Day and having not revoked such consent in writing (a
copy of which is to be delivered to the Trustee).
"Distribution Date" shall mean the 15th day of each month or,
if such 15th day is not a Business Day, the next succeeding
Business Day, and the Scheduled Series 1999-1 Termination Date,
commencing August 16, 1999.
"Election Date" shall have the meaning specified in subsection
6.16(a) of the Agreement.
"Election Notice" shall have the meaning specified in
subsection 6.16(a) of the Agreement.
"Enhancement" shall mean with respect to the Class A
Certificates, the subordination of the Class B Invested Amount and
the Class C Invested Amount and the Reserve Account and, with
respect to the Class B Certificates, the subordination of the
Class C Invested Amount and the Reserve Account; provided, however
that neither the Holders of the Class B Certificates nor the
Holders of the Class C Certificates nor any provider of amounts on
deposit in the Reserve Account shall be an "Enhancement Provider"
for the purposes of the Agreement or this Supplement.
"Enhancement Percentage" shall mean, 0.0% for each Business
Day from the Closing Date to and excluding the Determination Date
which occurs during the July 1999 Monthly Period, and thereafter
for each Business Day during the period commencing on a
Determination Date to but excluding the next following
Determination Date (an "Enhancement Percentage Determination
Period"), the greater of (i) the sum of the Excess Spread
Enhancement Cap Percentage for the Monthly Period immediately
preceding such Enhancement Percentage Determination Period and the
Payment Rate Enhancement Cap Percentage for such Monthly Period
and (ii) the Enhancement Percentage for the preceding Enhancement
Percentage Determination Period minus 1.0%; provided that so long
as no Reserve Account Increase Notice shall have been delivered,
the Enhancement Percentage shall not exceed 4.0%, and provided
further that if a Reserve Account Increase Notice shall have been
delivered, the Enhancement Percentage shall at all times
thereafter equal 100%.
"Excess Finance Charge Collections" shall mean, with respect
to any Business Day, as the context requires, either (x) the
amount described in subsection 4.6(a)(xvi) of the Agreement during
the Revolving Period or subsection 4.6(b)(xii) or 4.6(c)(xvi) of
the Agreement, as applicable, during the Amortization Period
allocated to the Series 1999-1 Certificates but available to cover
shortfalls in amounts paid from Finance Charge Collections for
other Series, if any, or (y) the aggregate amount of Total Finance
Charge Collections allocable to other Series in excess of the
amounts necessary to make required payments with respect to such
Series, if any, and available to cover shortfalls with respect to
the Series 1999-1 Certificates.
"Excess Purchase Account" shall have the meaning specified in
subsection 4.10(a) of the Agreement.
"Excess Spread Percentage" shall mean, for a Monthly Period,
(a) the lesser of (i) the aggregate Total Finance Charge
Collections deposited in the Collection Account on each Business
Day during such Monthly Period and (ii) the sum for each Business
Day during such Monthly Period of the product of the Floating
Allocation Percentage for Series 1999-1 and the amount of Finance
Charge Collections for such Business Day, minus (b) the sum for
each Business Day during such Monthly Period of the product of the
Floating Allocation Percentage for Series 1999-1 and the amount of
Finance Charge Collections for such Business Day described in
clause (e) of the definition of the term "Finance Charge
Collections" in Section 1.1 of the Agreement, minus (c) the
aggregate amounts withdrawn from the Collection Account during
such Monthly Period pursuant to subsections 4.6(a)(i) through
(vii), (x), (xi) or (xv), 4.6(b)(i) through (vii) or (x) or
4.6(c)(i) through (vii), (x), (xi) or (xv) of the Agreement, as
applicable, during such Monthly Period, expressed as an annualized
percentage of the average daily Invested Amount during such
Monthly Period.
"Excess Spread Enhancement Cap Percentage" shall mean, for any
Monthly Period, if the average of the Excess Spread Percentages
for such Monthly Period and the two preceding Monthly Periods (or
(i) in the case of the July 1999 Monthly Period, for such Monthly
Period, and (ii) in the case of the August 1999 Monthly Period,
for such Monthly Period and the July 1999 Monthly Period) is
greater than the percentage (if any) set forth in the left-hand
column below and less than or equal to the percentage (if any) set
forth in the middle column below, the percentage set forth
opposite such percentages in the right-hand column below:
Three-Month Average
Excess Spread Percentage Excess Spread
> =< Enhancement Cap Percentage
5.00% -- 0.00%
4.00% 5.00% 1.00%
3.00% 4.00% 2.00%
2.00% 3.00% 3.00%
-- 2.00% 4.00%
provided, that following any date on which the Excess Spread
Enhancement Cap Percentage for a Monthly Period shall have
increased from the percentage applicable to the prior Monthly
Period, such increased Excess Spread Enhancement Cap Percentage
shall not thereafter be reduced until the Monthly Period for which
both (i) the average of the Excess Spread Percentages for such
Monthly Period and the two preceding Monthly Periods (or, if less,
the number of Monthly Periods which have been completed following
the July 1999 Monthly Period) and (ii) the average of the Excess
Spread Percentages for such Monthly Period and the five preceding
Monthly Periods (or, if less, the number of Monthly Periods which
have been completed following the July 1999 Monthly Period) would,
based on the percentages (if any) set forth in the left-hand and
middle columns above, have resulted in a lower Excess Spread
Enhancement Cap Percentage in the right-hand column above, and the
amount of any reduction for a Monthly Period shall not exceed
1.00%.
"Extension" shall mean the procedure by which all or a portion
of the Investor Certificateholders consent to the extension of the
Revolving Period to the new Amortization Period Commencement Date
set forth in the Extension Notice, pursuant to Section 6.16 of the
Agreement.
"Extension Date" shall mean the last day of the June 2002
Monthly Period or if an Extension has already occurred, the date
of the next Extension Date set forth in the Extension Notice
relating to the Extension then in effect (or, if any such date is
not a Business Day, the next preceding Business Day).
"Extension Notice" shall have the meaning specified in
subsection 6.16(a) of the Agreement.
"Extension Opinion" shall have the meaning specified in
subsection 6.16(a) of the Agreement.
"Extension Tax Opinion" shall have the meaning specified in
subsection 6.16(a) of the Agreement.
"Fixed/Floating Allocation Percentage" shall mean for any
Business Day the percentage equivalent of a fraction, the
numerator of which is the Invested Amount for the day immediately
following the last day of the Revolving Period and the denominator
of which is the greater of (a) the sum of the aggregate amount of
Principal Receivables in the Trust and the amount on deposit in
the Excess Funding Account as of the end of the preceding Business
Day and (b) the sum of the numerators used to calculate the
allocation percentages with respect to Principal Receivables of
all Series outstanding on such Business Day.
"Fixed Period" shall, as the context requires, have the
meaning assigned to such term in the (i) Class A Certificate
Purchase Agreement, when used with respect to the Class A
Certificates, or (ii) Class B Certificate Purchase Agreement, when
used with respect to the Class B Certificates.
"Floating Allocation Percentage" shall mean for any Business
Day the sum of the applicable Class A Floating Allocation
Percentage, Class B Floating Allocation Percentage and the Class C
Floating Allocation Percentage for such Business Day.
"Initial Invested Amount" shall mean the aggregate initial
principal amount of the Series 1999-1 Certificates on the Issuance
Date.
"Interchange Collections" shall mean, with respect to Series
1999-1 on any Business Day, the product of the Floating Allocation
Percentage for Series 1999-1 and the amount of Interchange for
such Business Day.
"Interest Funding Account" shall have the meaning specified in
subsection 4.11(a) of the Agreement.
"Invested Amount" shall mean, when used with respect to any
Business Day, an amount equal to the sum of (a) the Class A
Invested Amount as of such date, (b) the Class B Invested Amount
as of such date and (c) the Class C Invested Amount as of such
date.
"Investor Certificates" shall mean the Class A Certificates,
the Class B Certificates and the Class C Certificates.
"Investor Charge-Offs" shall mean the sum of Class A Investor
Charge-Offs, Class B Investor Charge-Offs and the Class C Investor
Charge-Offs.
"Investor Default Amount" shall mean, with respect to each
Business Day, an amount equal to the product of the aggregate
Default Amount for all Defaulted Accounts on such Business Day and
the Floating Allocation Percentage applicable for such Business
Day.
"Investor Percentage" shall mean for any Business Day, (a)
with respect to (i) Receivables in Defaulted Accounts or any
Uncovered Dilution Amount at any time, (ii) Finance Charge
Collections so long as no Pay Out Event has occurred with respect
to the Series 1999-1 or any other Series, and (iii) Principal
Collections during the Revolving Period, the Floating Allocation
Percentage and (b) with respect to (i) Finance Charge Collections
if a Pay Out Event has occurred with respect to the Series 1999-1
or any other Series and (ii) Principal Collections during the
Amortization Period, the Fixed/Floating Allocation Percentage.
"Investor Servicing Fee" shall mean for any Business Day, an
amount equal to the product of (i) a fraction, the numerator of
which is the actual number of days from and including the
preceding Business Day to but excluding such Business Day and the
denominator of which is the actual number of days in the year,
(ii) the Series Servicing Fee Percentage and (iii) the Invested
Amount for such Business Day.
"Investor Uncovered Dilution Amount" shall mean, with respect
to each Business Day, an amount equal to the product of the
Uncovered Dilution Amount for such Business Day and the Floating
Allocation Percentage applicable for such Business Day.
"Issuance Date" shall mean the initial date on which the
Investor Certificates are issued.
"Maximum Facility Amount" shall mean for any Business Day, the
sum of (i) the aggregate Commitments, as defined in the Class A
Certificate Purchase Agreement, plus (ii) the aggregate
Commitments, as defined in the Class B Certificate Purchase
Agreement on such Business Day.
"Minimum Transferor Percentage" shall mean 2.0%.
"Monthly Period" shall have the meaning specified in the
Agreement, except that the first Monthly Period with respect to
the Series 1999-1 Certificates shall begin on and include the
Closing Date and shall end on and include July 31, 1999.
"Net Finance Charge Portfolio Yield" shall mean, for Series
1999-1 with respect to any Monthly Period, the annualized
percentage equivalent of a fraction, the numerator of which is the
amount of Finance Charge Collections allocable to Series 1999-1
for such Monthly Period, calculated on a cash basis after
subtracting the Investor Default Amount applicable to Series 1999-
1 for such Monthly Period, and the denominator of which is the
average daily Invested Amount of Series 1999-1 during such Monthly
Period.
"Net Principal Collections" shall mean, for Series 1999-1 on
any Business Day, the sum of (i) the product, during the Revolving
Period, of the Floating Allocation Percentage for Series 1999-1
and, during the Amortization Period, of the Fixed/Floating
Allocation Percentage for Series 1999-1 and the amount of
Principal Collections on such Business Day minus on and after the
occurrence of and during the continuance of a Discount Trigger
Event (ii) the lesser of (a) the sum of (x) the product of the
Discount Allocation Percentage for Series 1999-1 and the Discount
Amount for such Business Day and (y) the Carryover Discount Amount
for Series 1999-1 for such Business Day and (b) the amount
determined in clause (i).
"Pay Out Commencement Date" shall mean the date on which a
Trust Pay Out Event is deemed to occur pursuant to Section 9.1 of
the Agreement or a Series 1999-1 Pay Out Event is deemed to occur
pursuant to Section 10 of this Variable Funding Supplement.
"Payment Rate Enhancement Cap Percentage" shall mean, for any
Monthly Period, if the average of the Payment Rate Percentages for
such Monthly Period and the two preceding Monthly Periods (or (i)
in the case of the July 1999 Monthly Period, for such Monthly
Period, and (ii) in the case of the August 1999 Monthly Period,
for such Monthly Period and the July 1999 Monthly Period) is
greater than the percentage (if any) set forth in the left-hand
column below and less than or equal to the percentage (if any) set
forth in the middle column below, the percentage set forth
opposite such percentages in the right-hand column below:
Three-Month Average
Payment Rate Percentage Payment Rate
=> < Enhancement Cap Percentage
30.00% -- 0.00%
25.00% 30.00% 1.00%
-- 25.00% 2.00%
provided, that following any date on which the Payment Rate
Enhancement Cap Percentage for a Monthly Period shall have
increased from the percentage applicable to the prior Monthly
Period, such increased Payment Rate Enhancement Cap Percentage
shall not thereafter be reduced until the Monthly Period for which
both (i) the average of the Payment Rate Percentages for such
Monthly Period and the two preceding Monthly Periods (or, if less,
the number of Monthly Periods which have been completed following
the July 1999 Monthly Period) and (ii) the average of the Payment
Rate Percentages for such Monthly Period and the five preceding
Monthly Periods (or, if less, the number of Monthly Periods which
have been completed following the July 1999 Monthly Period) would,
based on the percentages (if any) set forth in the left-hand and
middle columns above, have resulted in a lower Payment Rate
Enhancement Cap Percentage in the right-hand column above, and the
amount of any reduction for a Monthly Period shall not exceed
1.00%.
"Payment Rate Percentage" shall mean, for a Monthly Period,
the aggregate Net Principal Collections deposited into the
Collection Account during such Monthly Period, expressed as a
percentage of (i) during the Revolving Period, the Floating
Allocation Percentage for Series 1999-1 times the Principal
Receivables on the first day of such Monthly Period, and (ii)
during the Amortization Period, the Fixed/Floating Allocation
Percentage for Series 1999-1 times the Principal Receivables on
the first day of such Monthly Period.
"Portfolio Yield" shall mean for the Series 1999-1
Certificates, with respect to any Monthly Period, the annualized
percentage equivalent of a fraction, the numerator of which is an
amount equal to the aggregate Total Finance Charge Collections
allocated to the Series 1999-1 Certificates for such Monthly
Period, calculated on a cash basis, minus the aggregate Investor
Default Amounts for each Business Day during such Monthly Period,
and the denominator of which is the average daily Invested Amount
during such Monthly Period.
"Principal Account" shall have the meaning specified in
subsection 4.11(a) of the Agreement.
"Principal Shortfalls" shall mean, as the context requires,
either (a) the amounts specified as such in the Supplement for any
other Series or (b) with respect to the Series 1999-1
Certificates, the amount specified as such in subsection 4.6(f) of
the Agreement.
"Proceeds Account" shall have the meaning specified in Section
4.12 of the Agreement.
"Rating Agency" shall mean each of Moody's and Standard &
Poor's.
"Rating Agency Condition" shall mean, with respect to any
action or series of related actions or proposed transaction or
series or related proposed transactions, that each Rating Agency
shall have notified the Administrative Agent in writing that such
action or series of related actions or proposed transaction or
series or related proposed transactions will not result in a
reduction or withdrawal of the rating of any commercial paper
notes or other short-term or intermediate term obligation issued
by any Structured Purchaser (as defined in either the Class A
Purchase Agreement or the Class B Purchase Agreement) or in a
reduction in any informal long-term rating assigned by such Rating
Agency to the Class A Certificates or the Class B Certificates.
"Reallocated Principal Collections" shall have the meaning
specified in subsection 4.7(c) of the Agreement.
"Required Class B Invested Amount" shall mean, (a) for any
Business Day during the Revolving Period, an amount equal to 12.5%
of the Class A Invested Amount on such Business Day or (b) for any
Business Day if, on or prior to such Business Day, there have been
any reductions in the Class B Invested Amount pursuant to clause
(d) of the definition of such term or if the Amortization Period
shall have commenced, an amount equal to the Required Class B
Invested Amount on the Business Day immediately preceding such
reduction or commencement; provided that from and after the Class
B Principal Payment Commencement Date, the Required Class B
Invested Amount shall equal $0.
"Required Class C Invested Amount" shall mean, (a) for any
Business Day during the Revolving Period, an amount equal to the
greater of (i) 10% of the Invested Amount on such Business Day or
(ii) 5% of the Maximum Facility Amount on such Business Day, or
(b) for any Business Day if, on or prior to such Business Day,
there have been any reductions in the Class C Invested Amount
pursuant to clause (d) of the definition of such term or if the
Amortization Period shall have commenced, an amount equal to the
Required Class C Invested Amount on the Business Day immediately
preceding such reduction or commencement; provided that from and
after the Class C Principal Payment Commencement Date, the
Required Class C Invested Amount shall equal $0.
"Required Reserve Amount" shall mean, with respect to any
Business Day, the product of (i) the Enhancement Percentage for
such Business Day, times (ii) during the Revolving Period, the
Invested Amount on such Business Day or, during the Amortization
Period, the Invested Amount on the last day of the Revolving
Period, provided that during the Amortization Period, the Required
Reserve Amount on any Business Day shall not exceed the Invested
Amount on such Business Day.
"Reserve Account" shall have the meaning specified in
subsection 4.9(a) of the Agreement.
"Reserve Account Increase Notice" shall mean a written notice
delivered by the Administrative Agent to the Servicer pursuant to
the Class A Certificate Purchase Agreement at the instruction of
the Class A Certificateholders or pursuant to the Class B
Certificate Purchase Agreement at the instruction of the Class B
Certificateholders stating that a Termination Event shall have
occurred thereunder and directing that the Enhancement Percentage
be increased to 100%.
"Revolving Period" shall mean (a) the period from and
including the Closing Date to, but not including, the Amortization
Period Commencement Date, or (b) with respect to an Extension, the
period beginning on the Extension Date and ending on the date
specified in the Extension Notice.
"Scheduled Series 1999-1 Termination Date" shall mean July 31,
2004 unless a different date shall be set forth in an Extension
Notice.
"Series 1999-1" shall mean the Series of the Prime Credit Card
Master Trust II represented by the Series 1999-1 Certificates.
"Series 1999-1 Certificateholder" shall mean the Holder of any
Series 1999-1 Certificate.
"Series 1999-1 Certificateholders' Interest" shall have the
meaning specified in Section 4.4 of the Agreement.
"Series 1999-1 Certificates" shall have the meaning specified
in Section 1 of this Variable Funding Supplement.
"Series 1999-1 Discount Factor" shall mean with respect to
Series 1999-1 for any Business Day, the amount for Series 1999-1,
if any, calculated as of the second preceding Monthly Period, by
which either (x) (a) the product of (i) the Base Rate plus one-
half of one percent minus the Net Finance Charge Portfolio Yield
divided by the Annual Portfolio Turnover Rate and (ii) the
Floating Allocation Percentage exceeds (b) zero or, (y) solely at
the option of the Transferor, the amount by which (a) the product
of (i) the Base Rate plus one percent minus the Net Finance Charge
Portfolio Yield divided by the Annual Portfolio Turnover Rate and
(ii) the Floating Allocation Percentage exceeds (b) zero;
provided, however that the Series Discount Factor shall not exceed
4.00%.
"Series 1999-1 Pay Out Event" shall have the meaning specified
in Section 10 of this Variable Funding Supplement.
"Series 1999-1 Shortfall" shall mean the amount, if any, by
which (x) the sum of the amounts described in subsections
4.6(a)(i) through (xv) of the Agreement during the Revolving
Period or subsections 4.6(b)(i) through (xi) or 4.6(c)(i) through
(xv) of the Agreement during the Amortization Period, as
applicable, exceeds (y) the Total Finance Charge Collections
available for application thereto pursuant to subsections 4.6(a),
(b) or (c) of the Agreement, as applicable, on any Business Day.
"Series 1999-1 Termination Date" shall mean the earlier to
occur of (i) the day after the Distribution Date on which the
Series 1999-1 Certificates are paid in full including any
Supplemental Payments, or (ii) the Scheduled Series 1999-1
Termination Date.
"Series 1999-1 Variable Funding Certificates" shall have the
meaning specified in Section 1 of this Variable Funding
Supplement.
"Series Default and Dilution Amount" shall mean: (a) for any
Monthly Period, an amount equal to the summation of the products
of (i) the Floating Allocation Percentage and (ii) the Default and
Dilution Amount, as determined for each Business Day in that
Monthly Period; and (b) for any Business Day in a Monthly Period,
an amount equal to the summation of the products of (i) the
Floating Allocation Percentage and (ii) the Default and Dilution
Amount, as determined for each Business Day in that Monthly Period
up to and including the subject Business Day.
"Series Servicing Fee Percentage" shall mean 2.00%.
"Shared Principal Collections" shall mean, as the context
requires, either (a) the amount allocated to the Series 1999-1
Certificates which, in accordance with subsections 4.6(e)(iii) and
4.6(f) of the Agreement, may be applied to Principal Shortfalls
with respect to other outstanding Series or (b) the amounts
allocated to the investor certificates of other Series which the
applicable Supplements for such Series specify are to be treated
as "Shared Principal Collections" and which may be applied to
cover Principal Shortfalls with respect to the Series 1999-1
Certificates.
"Targeted Holder" shall mean (i) each holder of a right to
receive interest, principal or any other amount with respect to
any Class C Certificate or any other certificates or other
interest in the Trust, excluding any certificates or other
interest in the Trust (including, if applicable, the Class A
Variable Funding Certificates and the Class B Variable Funding
Certificates) with respect to which an opinion is rendered that
such certificates or other such interests will be treated as debt
for federal income tax purposes, and (iii) any holder of a right
to receive any amount in respect of the Transferor Interest;
provided, that any Person holding more than one interest each of
which would cause such Person to be a Targeted Holder shall be
treated as a single Targeted Holder.
"Termination Event" shall mean the occurrence of any event or
condition constituting a "Termination Event" in the Class A
Certificate Purchase Agreement or the Class B Certificate Purchase
Agreement.
"Termination Payment Date" shall mean the earlier of the first
Distribution Date following the liquidation or sale of the
Receivables as a result of an insolvency or bankruptcy event and
the occurrence of the Scheduled Series 1999-1 Termination Date.
"Total Finance Charge Collections" shall mean, with respect to
Series 1999-1 on any Business Day, the sum of (i) the product of
the applicable Investor Percentage for Series 1999-1 and the
amount of Finance Charge Collections for such Business Day, plus
(ii) on and after the occurrence of and during the continuance of
a Discount Trigger Event the lesser of (a) the sum of (x) the
product of the Discount Allocation Percentage for Series 1999-1
and the Discount Amount for such Business Day and (y) the
Carryover Discount Amount for Series 1999-1 for such Business Day
and (b) the product of the applicable Investor Percentage for the
Series 1999-1 and the amount of Principal Collections for such
Business Day, plus (iii) available cash investment earnings for
such Business Day on amounts on deposit in the Reserve Account to
the extent such earnings are to be treated as Total Finance Charge
Collections in accordance with subsection 4.9(b), plus (iv)
available cash investment earnings for such Business Day on
amounts on deposit in the Interest Funding Account, the Principal
Account, the Proceeds Account or the Excess Purchase Account.
"Transfer" shall have the meaning specified in subsection
6.17(a) of the Agreement.
"VFC Additional Class A Invested Amount" shall have the
meaning specified in subsection 6.15(a) of the Agreement.
"VFC Additional Class B Invested Amount" shall have the
meaning specified in subsection 6.15(a) of the Agreement.
"VFC Additional Class C Invested Amount" shall have the
meaning specified in subsection 6.15(a) of the Agreement.
"VFC Additional Invested Amount" shall have the meaning
specified in subsection 6.15(a) of the Agreement.
"VFC Principal Collections" shall mean amounts specified as
such in subsections 4.6(a)(v), 4.6(a)(vi), 4.6(a)(vii), 4.6(a)(x)
and 4.6(d) of the Agreement.
"Yield" shall, as the context requires, have the meaning
assigned to such term in the (i) Class A Certificate Purchase
Agreement, when used with respect to the Class A Certificates, or
(ii) Class B Certificate Purchase Agreement, when used with
respect to the Class B Certificates.
SECTION 3 Reassignment and Certain Transfer Terms.
(a) The Series 1999-1 Certificates shall be subject to
termination by the Transferor, at its option in accordance with
the terms specified in subsection 12.2(a) of the Agreement on any
Distribution Date on which the Invested Amount shall be less than
10% of the highest Invested Amount since the Closing Date. The
deposit required in connection with any such termination and final
distribution shall be equal to the Invested Amount plus (i) all
accrued and unpaid interest on the Series 1999-1 Certificates,
(ii) all accrued and unpaid Class A Program Fees, (iii) all unpaid
Class A Additional Payments and Class A Supplemental Payments,
(iv) all accrued and unpaid Class B Program Fees, and (v) all
unpaid Class B Additional Payments and Class B Supplemental
Payments, through the day prior to the Distribution Date on which
the repurchase occurs.
(b) In no event shall the Class C Certificates or any
interest therein be transferred, sold, exchanged, pledged,
participated or otherwise assigned, in whole or in part, unless
the Transferor shall have consented in writing to such transfer
and unless (l) the Rating Agency Condition shall have been
satisfied, and (2) the Trustee shall have received an Opinion of
Counsel, which shall not be at the expense of the Trustee, that
such transfer does not (i) adversely affect the conclusions
reached in any of the federal income tax opinions dated the
applicable Closing Date issued in connection with the original
issuance of any Series of Investor Certificates or (ii) result in
a taxable event to the holders of any such Series.
(c) Each Series 1999-1 Certificateholder, by accepting
and holding a Series 1999-1 Certificate or interest therein, will
be deemed to have represented and warranted that it is not (i) an
employee benefit plan (as defined in Section 3(3) of ERISA) that
is subject to the provisions of Title I of ERISA, (ii) a plan
described in Section 4975(e)(1) of the Code, or (iii) an entity
whose underlying assets include plan assets by reason of a plan's
investment in the entity.
SECTION 4 Delivery and Payment for the Series 1999-1
Certificates. The Transferor shall execute and deliver the Series
1999-1 Certificates to the Trustee for authentication in
accordance with Section 6.1 of the Agreement. The Trustee shall
deliver the Series 1999-1 Certificates when authenticated in
accordance with Section 6.2 of the Agreement.
SECTION 5 Depositary; Form of Delivery of Series 1999-1
Certificates. The Class A Certificates, the Class B Certificates
and the Class C Certificates shall be delivered as Definitive
Certificates as provided in Section 6.12 of the Agreement.
SECTION 6 Addition and Removal of Accounts.
(a) Paragraph (b) of the definition of "Automatic
Additional Account" in Section 1.1 of the Agreement shall read in
its entirety as follows and shall be applicable only to the Series
1999-1 Certificates:
"(b) any other consumer revolving credit card
account, Receivables from which each Rating Agency
permits to be added automatically to the Trust;
provided:
(i) the Rating Agency Condition shall have
been satisfied with respect to the inclusion of
such accounts as Automatic Additional Accounts
pursuant to this paragraph (b); and
(ii) the Administrative Agent on behalf of the
Class A Certificateholders and Class B
Certificateholders shall have consented in writing
to including as Automatic Additional Accounts any
Accounts the receivables of which have been
purchased (but the accounts of which have not been
originated) by the Originator or any VISAr or
MasterCardr revolving credit card accounts which
have not been originated by the Originator in
accordance with the Credit and Collection Policy
substantially as in effect on the Closing Date
(subject to changes therein which would not
materially and adversely affect the interests of
the Series 1999-1 Certificateholders) with respect
to the retail operating subsidiaries of Federated
as at the Closing Date."
(b) Subsection (viii) of Section 2.6(e) of the
Agreement shall read in its entirety as follows and
shall be applicable only to the Series 1999-1
Certificates:
"(viii) the Administrative Agent on behalf of the
Class A Certificateholders and Class B
Certificateholders shall have consented in writing to
including as Automatic Additional Accounts any Accounts
the receivables of which have been purchased (but the
accounts of which have not been originated) by the
Originator or any VISAr or MasterCardr revolving credit
card accounts which have not been originated by the
Originator in accordance with the Credit and Collection
Policy substantially as in effect on the Closing Date
(subject to changes therein which would not materially
and adversely affect the interests of the Series 1999-1
Certificateholders) with respect to the retail
operating subsidiaries of Federated as at the Closing
Date."
(c) Section 2.7(d) shall read in its entirety as
follows and shall be applicable only to the Series 1999-
1 Certificates:
"Notwithstanding the foregoing, the Transferor will be
permitted to designate Removed Accounts in connection
with the sale by Federated or any Affiliate of Federated
of all or substantially all of the capital stock or
assets of any retail subsidiary of Federated if (A) the
conditions in clauses (i), (iii) and (iv) of subsection
2.7(b) have been met and the Transferor shall have
delivered to the Trustee and the Administrative Agent an
Officer's Certificate confirming the compliance with
such conditions and (B) the Administrative Agent on
behalf of the Class A Certificateholders and the Class B
Certificateholders has consented in writing to such
sale."
SECTION 7 Article IV of Agreement. Sections 4.1, 4.2
and 4.3 of the Agreement shall be read in their entirety as
provided in the Agreement. Article IV of the Agreement (except
for Sections 4.1, 4.2 and 4.3 thereof) shall read in its entirety
as follows and shall be applicable only to the Series 1999-1
Certificates:
ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS AND
ALLOCATION AND APPLICATION OF COLLECTIONS
Section 4.4 Rights of Certificateholders. The
Series 1999-1 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 Series
1999-1 Certificates at the times and in the amounts
specified in this Agreement, (a) the Floating
Allocation Percentage and Fixed/Floating Allocation
Percentage (as applicable from time to time) of
Collections received with respect to the
Receivables and (b) funds on deposit in the
Collection Account and the Excess Funding Account
(for such Series, the "Series 1999-1
Certificateholders' Interest"). The Class B
Invested Amount and the Class C Invested Amount
shall be subordinate to the Class A Certificates,
and the Class C Invested Amount shall be
subordinated to the Class B Certificates. From and
after the Amortization Period Commencement Date,
the Class B Certificates will not have the right to
receive payments of principal until the Class A
Invested Amount has been paid in full, and the
Class C Certificates will not have the right to
receive payments of principal until the Class A
Invested Amount and the Class B Invested Amount
have been paid in full. The Exchangeable
Transferor Certificate shall not represent any
interest in the Collection Account or the Excess
Funding Account, except as specifically provided in
this Article IV.
Section 4.5 Collections and Allocation. The
Servicer will apply or will instruct the Trustee to
apply all funds on deposit in the Collection
Account or the Excess Funding Account that are
allocable to the Series 1999-1 Certificates as
described in this Article IV. On each Business
Day, the Servicer shall determine whether a Pay Out
Event is deemed to have occurred with respect to
the Series 1999-1 Certificates, and the Servicer
shall allocate Collections in accordance with the
Daily Report with respect to such Business Day in
accordance with the terms of Section 4.6 of the
Agreement.
Section 4.6 Application of Funds on Deposit in
the Collection Account for the Series 1999-1
Certificates. (a) On each Business Day with
respect to the Revolving Period, the Servicer shall
instruct the Trustee in writing to withdraw and the
Trustee, acting in accordance with such
instructions, shall withdraw, to the extent of
Total Finance Charge Collections, the amounts
required to be withdrawn from the Collection
Account pursuant to subsections 4.6(a)(i) through
4.6(a)(xvi) of the Agreement.
(i) Class A Interest and Program Fees.
On each Business Day, the Trustee, acting in
accordance with instructions from the Servicer,
shall withdraw from the Collection Account and
deposit into the Interest Funding Account, to the
extent of Total Finance Charge Collections for such
Business Day, an amount equal to sum of the Class A
Interest and the Class A Program Fees accrued since
the preceding Business Day plus any Class A
Interest or Class A Program Fees accrued with
respect to any prior Business Day but not
previously deposited into the Interest Funding
Account, including, without limitation, any amounts
described in the last sentence of the definition of
Class A Carrying Costs.
(ii) Class B Interest and Program Fees.
On each Business Day, the Trustee, acting in
accordance with instructions from the Servicer,
shall withdraw from the Collection Account and
deposit into the Interest Funding Account, to the
extent of Total Finance Charge Collections for such
Business Day (after giving effect to the
withdrawals pursuant to subsection 4.6(a)(i) of the
Agreement), an amount equal to the sum of the Class
B Interest and the Class B Program Fees accrued
since the preceding Business Day plus any Class B
Interest or Class B Program Fees accrued with
respect to any prior Business Day but not
previously deposited into the Interest Funding
Account, including, without limitation, any amounts
described in the last sentence of the definition of
Class B Carrying Costs.
(iii) Investor Servicing Fee Payable
from Interchange. On each Business Day, the
Trustee, acting in accordance with instructions
from the Servicer, shall withdraw from the
Collection Account and distribute to the Servicer,
to the extent of the lesser of (A) Total Finance
Charge Collections for such Business Day (after
giving effect to the withdrawals pursuant to
subsection 4.6(a)(i) and (ii) of the Agreement) and
(B) Interchange Collections for such Business Day,
the Investor Servicing Fee accrued since the
preceding Business Day plus any Investor Servicing
Fee due with respect to any prior Business Day but
not distributed to the Servicer.
(iv) Investor Servicing Fee. On each
Business Day, if FDSNB or any Affiliate of FDSNB is
not the Servicer, the Trustee, acting in accordance
with instructions from the Servicer, shall withdraw
from the Collection Account and distribute to the
Servicer, to the extent of Total Finance Charge
Collections for such Business Day (after giving
effect to the withdrawals pursuant to subsection
4.6(a)(i) through (iii) of the Agreement), the
Investor Servicing Fee accrued since the preceding
Business Day plus any Investor Servicing Fee due
with respect to any prior Business Day but not
distributed to the Servicer, to the extent not
withdrawn on such Business Day pursuant to
subsection 4.6(a)(iii) of the Agreement.
(v) Investor Default Amount and
Uncovered Dilution Amount. On each Business Day,
the Trustee, acting in accordance with instructions
from the Servicer, shall withdraw from the
Collection Account, to the extent of Total Finance
Charge Collections for such Business Day (after
giving effect to the withdrawals pursuant to
subsections 4.6(a)(i) through (iv) of the
Agreement), an amount equal to the sum of (A) the
aggregate Investor Default Amount for such Business
Day, plus (B) the unpaid Investor Default Amount
for any previous Business Day, plus (C) the
Investor Uncovered Dilution Amount for such
Business Day, plus (D) the unpaid Investor
Uncovered Dilution Amount for any previous Business
Day, such amount to be treated as VFC Principal
Collections during the Revolving Period.
(vi) Reimbursement of Class A Investor
Charge-Offs. On each Business Day, the Trustee,
acting in accordance with instructions from the
Servicer, shall withdraw from the Collection
Account, to the extent of Total Finance Charge
Collections for such Business Day (after giving
effect to the withdrawals pursuant to subsections
4.6(a)(i) through (v) of the Agreement), an amount
equal to the unreimbursed Class A Investor Charge-
Offs, such amount to be treated as VFC Principal
Collections during the Revolving Period.
(vii) Reimbursement of Class B
Reductions. On each Business Day, the Trustee,
acting in accordance with instructions from the
Servicer, shall withdraw from the Collection
Account, to the extent of Total Finance Charge
Collections for such Business Day (after giving
effect to the withdrawals pursuant to subsections
4.6(a)(i) through (vi) of the Agreement), an amount
equal to the unreimbursed Class B Investor Charge-
Offs and other reductions to the Class B Invested
Amount pursuant to clause (d) of the definition
thereof, such amount to be treated as VFC Principal
Collections during the Revolving Period.
(viii) Class A Additional Payments. On
each Business Day, the Trustee, acting in
accordance with instructions from the Servicer,
shall withdraw from the Collection Account and pay
to the Class A Certificateholders, to the extent of
Total Finance Charge Collections for such Business
Day (after giving effect to the withdrawals
pursuant to subsection 4.6(a)(i) through (vii) of
the Agreement), the portion of the Class A
Additional Payments accrued since the preceding
Business Day plus any Class A Additional Payments
due with respect to any prior Business Day but not
distributed to the Class A Certificateholders, with
interest thereon as provided in the Class A
Certificate Purchase Agreement.
(ix) Class B Additional Payments. On
each Business Day, the Trustee, acting in
accordance with instructions from the Servicer,
shall withdraw from the Collection Account and pay
to the Class B Certificateholders, to the extent of
Total Finance Charge Collections for such Business
Day (after giving effect to the withdrawals
pursuant to subsection 4.6(a)(i) through (viii) of
the Agreement), the portion of the Class B
Additional Payments accrued since the preceding
Business Day plus any Class B Additional Payments
with respect to any prior Business Day but not
distributed to the Class B Certificateholders, with
interest thereon as provided in the Class B
Certificate Purchase Agreement.
(x) Reimbursement of Class C Reductions.
On each Business Day, the Trustee, acting in
accordance with instructions from the Servicer,
shall withdraw from the Collection Account, to the
extent of Total Finance Charge Collections for such
Business Day after giving effect to the withdrawals
pursuant to subsections 4.6(a)(i) through (ix) of
the Agreement), an amount equal to the unreimbursed
Class C Investor Charge-Offs and other reductions
to the Class C Invested Amount pursuant to clause
(d) of the definition thereof, such amount to be
treated as VFC Principal Collections during the
Revolving Period.
(xi) Class C Interest. On each Business
Day, the Trustee, acting in accordance with
instructions from the Servicer, shall withdraw from
the Collection Account and pay to the Class C
Certificateholders to the extent of Total Finance
Charge Collections for such Business Day (after
giving effect to the withdrawals pursuant to
subsections 4.6(a)(i) through (x) of the
Agreement), an amount equal to (x) the amount of
interest which has accrued with respect to the
outstanding aggregate principal amount of the Class
C Certificates at the Class C Certificate Rate but
which has not been paid to the Class C
Certificateholders plus (y) additional interest at
the Class C Certificate Rate for interest that has
accrued on interest that was due pursuant to this
subsection but was not previously paid to the Class
C Certificateholders.
(xii) Required Reserve Amount. On each
Business Day, the Trustee, acting in accordance
with instructions from the Servicer, shall withdraw
from the Collection Account and deposit into the
Reserve Account, to the extent of Total Finance
Charge Collections for such Business Day (after
giving effect to the withdrawals pursuant to
subsections 4.6(a)(i) through (xi) of the
Agreement), an amount equal to the excess, if any,
of the Required Reserve Amount (determined after
all deposits, withdrawals, reductions, payments and
adjustments to be made with respect to such date)
over the Available Reserve Amount (without giving
effect to any deposit made on such Business Day
under Section 4.6).
(xiii) Class A Supplemental Payments. On
each Business Day, the Trustee, acting in
accordance with instructions from the Servicer,
shall withdraw from the Collection Account and pay
to the Class A Agent, to the extent of Total
Finance Charge Collections for such Business Day
(after giving effect to the withdrawals pursuant to
subsections 4.6(a)(i) through (xii) of the
Agreement), an amount equal to the sum of all
unpaid Class A Supplemental Payments.
(xiv) Class B Supplemental Payments. On
each Business Day, the Trustee, acting in
accordance with instructions from the Servicer,
shall withdraw from the Collection Account and pay
to the Class B Agent, to the extent of Total
Finance Charge Collections for such Business Day
(after giving effect to the withdrawals pursuant to
subsections 4.6(a)(i) through (xiii) of the
Agreement), an amount equal to the sum of all
unpaid Class B Supplemental Payments.
(xv) FDSNB Servicing Fee. On each
Business Day, if FDSNB or any Affiliate of FDSNB is
the Servicer, the Trustee, acting in accordance
with instructions from the Servicer, shall withdraw
from the Collection Account and distribute to the
Servicer, to the extent of Total Finance Charge
Collections for such Business Day (after giving
effect to the withdrawals pursuant to subsections
4.6(a)(i) through (xiv) of the Agreement) the
Investor Servicing Fee accrued since the preceding
Business Day plus any Investor Servicing Fee due
with respect to any prior Business Day but not
distributed to the Servicer, to the extent not
withdrawn on such Business Day pursuant to
subsection 4.6(a)(iii) of the Agreement.
(xvi) Excess Finance Charge Collections.
Any amounts remaining in the Collection Account to
the extent of the Total Finance Charge Collections
for such Business Day (after giving effect to the
withdrawals pursuant to subsections 4.6(a)(i)
through (xv) of the Agreement) shall be treated as
Excess Finance Charge Collections allocable to
other Series in Group I, and the Servicer shall
direct the Trustee in writing on each Business Day
to withdraw and the Trustee, acting in accordance
with such instructions, shall withdraw such amounts
from the Collection Account and first make such
amounts available as Excess Finance Charge
Collections to pay to Certificateholders of other
Series in Group I to the extent of shortfalls, if
any, in amounts payable to such certificateholders
from Finance Charge Collections allocated to such
other Series, then pay any unpaid commercially
reasonable costs and expenses of a Successor
Servicer, if any, and then pay any remaining Excess
Finance Charge Collections to the Transferor.
(b) On each Business Day prior to the last
Business Day of any Monthly Period with respect to
the Amortization Period, the Servicer shall
instruct the Trustee in writing to withdraw and the
Trustee, acting in accordance with such
instructions, shall withdraw, to the extent of
Total Finance Charge Collections, the amounts
required to be withdrawn from the Collection
Account pursuant to subsections 4.6(b)(i) through
4.6(b)(xii) of the Agreement.
(i) Class A Interest and Program Fees.
On each Business Day, the Trustee, acting in
accordance with instructions from the Servicer,
shall withdraw from the Collection Account and
deposit into the Interest Funding Account, to the
extent of Total Finance Charge Collections for such
Business Day, an amount equal to the sum of the
Class A Interest and the Class A Program Fees
accrued since the preceding Business Day plus any
Class A Interest or Class A Program Fees accrued
with respect to any prior Business Day but not
previously deposited into the Interest Funding
Account, including, without limitation, any amounts
described in the last sentence of the definition of
Class A Carrying Costs.
(ii) Class B Interest and Program Fees.
On each Business Day, the Trustee, acting in
accordance with instructions from the Servicer,
shall withdraw from the Collection Account and
deposit into the Interest Funding Account, to the
extent of Total Finance Charge Collections for such
Business Day (after giving effect to the
withdrawals pursuant to subsection 4.6(b)(i) of the
Agreement), an amount equal to the sum of the Class
B Interest and the Class B Program Fees accrued
since the preceding Business Day plus any Class B
Interest or Class B Program Fees accrued with
respect to any prior Business Day but not
previously deposited into the Interest Funding
Account, including, without limitation, any amounts
described in the last sentence of the definition of
Class B Carrying Costs.
(iii) Investor Servicing Fee Payable
from Interchange. On each Business Day, the
Trustee, acting in accordance with instructions
from the Servicer, shall withdraw from the
Collection Account and distribute to the Servicer,
to the extent of the lesser of (A) Total Finance
Charge Collections for such Business Day (after
giving effect to the withdrawals pursuant to
subsection 4.6(b)(i) and (ii) of the Agreement) and
(B) Interchange Collections for such Business Day,
the Investor Servicing Fee accrued since the
preceding Business Day plus any Investor Servicing
Fee due with respect to any prior Business Day but
not distributed to the Servicer.
(iv) Investor Servicing Fee. On each
Business Day, if FDSNB or any Affiliate of FDSNB is
not the Servicer, the Trustee, acting in accordance
with instructions from the Servicer, shall withdraw
from the Collection Account and distribute to the
Servicer, to the extent of Total Finance Charge
Collections for such Business Day (after giving
effect to the withdrawals pursuant to subsection
4.6(b)(i) through (iii) of the Agreement), the
Investor Servicing Fee accrued since the preceding
Business Day plus any Investor Servicing Fee due
with respect to any prior Business Day but not
distributed to the Servicer, to the extent not
withdrawn on such Business Day pursuant to
subsection 4.6(a)(iii) of the Agreement.
(v) Investor Default Amount and
Uncovered Dilution Amount. On each Business Day,
the Trustee, acting in accordance with instructions
from the Servicer, shall withdraw from the
Collection Account, to the extent of Total Finance
Charge Collections for such Business Day (after
giving effect to the withdrawals pursuant to
subsections 4.6(b)(i) through (iv) of the
Agreement), an amount equal to the sum of (A) the
aggregate Investor Default Amount for such Business
Day, plus (B) the unpaid Investor Default Amount
for any previous Business Day, plus (C) the
Investor Uncovered Dilution Amount for such
Business Day, plus (D) the unpaid Investor
Uncovered Dilution Amount for any previous Business
Day, such amount to be deposited into the Principal
Account or paid pursuant to subsection 4.6(e) to
the applicable Class or Classes of
Certificateholders on such Business Day.
(vi) Reimbursement of Class A Investor
Charge-Offs. On each Business Day, the Trustee,
acting in accordance with instructions from the
Servicer, shall withdraw from the Collection
Account, to the extent of Total Finance Charge
Collections for such Business Day (after giving
effect to the withdrawals pursuant to subsections
4.6(b)(i) through (v) of the Agreement), an amount
equal to the unreimbursed Class A Investor Charge-
Offs, such amount to be deposited into the
Principal Account or paid pursuant to subsection
4.6(e) to the applicable Class or Classes of
Certificateholders on such Business Day.
(vii) Reimbursement of Class B
Reductions. On each Business Day, the Trustee,
acting in accordance with instructions from the
Servicer, shall withdraw from the Collection
Account, to the extent of Total Finance Charge
Collections for such Business Day (after giving
effect to the withdrawals pursuant to subsections
4.6(b)(i) through (vi) of the Agreement), an amount
equal to the unreimbursed Class B Investor Charge-
Offs and other reductions to the Class B Invested
Amount pursuant to clause (d) of the definition
thereof , such amount to be deposited into the
Principal Account or paid pursuant to subsection
4.6(e) to the applicable Class or Classes of
Certificateholders on such Business Day.
(viii) Class A Additional Payments. On
each Business Day, the Trustee, acting in
accordance with instructions from the Servicer,
shall withdraw from the Collection Account and pay
to the Class A Certificateholders, to the extent of
Total Finance Charge Collections for such Business
Day (after giving effect to the withdrawals
pursuant to subsection 4.6(b)(i) through (vii) of
the Agreement), the portion of the Class A
Additional Payments accrued since the preceding
Business Day plus any Class A Additional Payments
due with respect to any prior Business Day but not
distributed to the Class A Certificateholders, with
interest thereon as provided in the Class A
Certificate Purchase Agreement.
(ix) Class B Additional Payments. On
each Business Day, the Trustee, acting in
accordance with instructions from the Servicer,
shall withdraw from the Collection Account and pay
to the Class B Certificateholders, to the extent of
Total Finance Charge Collections for such Business
Day (after giving effect to the withdrawals
pursuant to subsection 4.6(b)(i) through (viii) of
the Agreement), the portion of the Class B
Additional Payments accrued since the preceding
Business Day plus any Class B Additional Payments
due with respect to any prior Business Day but not
distributed to the Class B Certificateholders, with
interest thereon as provided in the Class B
Certificate Purchase Agreement.
(x) Reimbursement of Class C Reductions.
On each Business Day, the Trustee, acting in
accordance with instructions from the Servicer,
shall withdraw from the Collection Account, to the
extent of Total Finance Charge Collections for such
Business Day after giving effect to the withdrawals
pursuant to subsections 4.6(b)(i) through (ix) of
the Agreement), an amount equal to the unreimbursed
Class C Investor Charge-Offs and other reductions
to the Class C Invested Amount pursuant to clause
(d) of the definition thereof, such amount to be
deposited into the Principal Account or paid
pursuant to subsection 4.6(e) to the applicable
Class or Classes of Certificateholders on such
Business Day.
(xi) Required Reserve Amount. On each
Business Day, the Trustee, acting in accordance
with instructions from the Servicer, shall withdraw
from the Collection Account and deposit into the
Reserve Account, to the extent of Total Finance
Charge Collections for such Business Day (after
giving effect to the withdrawals pursuant to
subsections 4.6(b)(i) through (x) of the
Agreement), an amount equal to the excess, if any,
of the Required Reserve Amount (determined after
all deposits, withdrawals, reductions, payments and
adjustments to be made with respect to such date)
over the Available Reserve Amount (without giving
effect to any deposit made on such Business Day
under Section 4.6).
(xii) Excess Finance Charge Collections.
The Trustee, acting in accordance with instructions
from the Servicer, shall deposit any amounts
remaining in the Collection Account to the extent
of the Total Finance Charge Collections for such
Business Day (after giving effect to the
withdrawals pursuant to subsections 4.6(b)(i)
through (xi) of the Agreement) into the Collection
Account and shall add such funds to the Total
Finance Charge Collections on each subsequent
Business Day in such Monthly Period until the last
Business Day of the related Monthly Period.
(c) On the last Business Day of each Monthly
Period with respect to the Amortization Period, the
Servicer shall instruct the Trustee in writing to
withdraw and the Trustee, acting in accordance with
such instructions, shall withdraw, to the extent of
Total Finance Charge Collections, the amounts
required to be withdrawn from the Collection
Account pursuant to subsections 4.6(c)(i) through
4.6(c)(xvi) of the Agreement.
(i) Class A Interest and Program Fees.
On each Business Day, the Trustee, acting in
accordance with instructions from the Servicer,
shall withdraw from the Collection Account and
deposit into the Interest Funding Account, to the
extent of Total Finance Charge Collections for such
Business Day, an amount equal to the sum of the
Class A Interest and Class A Program Fees accrued
since the preceding Business Day plus any Class A
Interest or Class A Program Fees accrued with
respect to any prior Business Day but not
previously deposited into the Interest Funding
Account, including, without limitation, any amounts
described in the last sentence of the definition of
Class A Carrying Costs.
(ii) Class B Interest and Program Fees.
On each Business Day, the Trustee, acting in
accordance with instructions from the Servicer,
shall withdraw from the Collection Account and
deposit into the Interest Funding Account, to the
extent of Total Finance Charge Collections for such
Business Day (after giving effect to the
withdrawals pursuant to subsection 4.6(c)(i) of the
Agreement), an amount equal to the sum of the Class
B Interest and the Class B Program Fees accrued
since the preceding Business Day plus any Class B
Interest or the Class B Program Fees accrued with
respect to any prior Business Day but not
previously deposited into the Interest Funding
Account, including, without limitation, any amounts
described in the last sentence of the definition of
Class B Carrying Costs.
(iii) Investor Servicing Fee Payable
from Interchange. On each Business Day, the
Trustee, acting in accordance with instructions
from the Servicer, shall withdraw from the
Collection Account and distribute to the Servicer,
to the extent of the lesser of (A) Total Finance
Charge Collections for such Business Day (after
giving effect to the withdrawals pursuant to
subsection 4.6(c)(i) and (ii) of the Agreement) and
(B) Interchange Collections for such Business Day,
the Investor Servicing Fee accrued since the
preceding Business Day plus any Investor Servicing
Fee due with respect to any prior Business Day but
not distributed to the Servicer.
(iv) Investor Servicing Fee. On each
Business Day, if FDSNB or any Affiliate of FDSNB is
not the Servicer, the Trustee, acting in accordance
with instructions from the Servicer, shall withdraw
from the Collection Account and distribute to the
Servicer, to the extent of Total Finance Charge
Collections for such Business Day (after giving
effect to the withdrawals pursuant to subsection
4.6(c)(i) through (iii) of the Agreement), the
Investor Servicing Fee accrued since the preceding
Business Day plus any Investor Servicing Fee due
with respect to any prior Business Day but not
distributed to the Servicer, to the extent not
withdrawn on such Business Day pursuant to
subsection 4.6(c)(iii) of the Agreement.
(v) Investor Default Amount and
Uncovered Dilution Amount. On each Business Day,
the Trustee, acting in accordance with instructions
from the Servicer, shall withdraw from the
Collection Account, to the extent of Total Finance
Charge Collections for such Business Day (after
giving effect to the withdrawals pursuant to
subsections 4.6(c)(i) through (iv) of the
Agreement), an amount equal to the sum of (A) the
aggregate Investor Default Amount for such Business
Day, plus (B) the unpaid Investor Default Amount
for any previous Business Day, plus (C) the
Investor Uncovered Dilution Amount for such
Business Day, plus (D) the unpaid Investor
Uncovered Dilution Amount for any previous Business
Day, such amount to be deposited into the Principal
Account or paid pursuant to subsection 4.6(e) to
the applicable Class or Classes of
Certificateholders on such Business Day.
(vi) Reimbursement of Class A Investor
Charge-Offs. On each Business Day, the Trustee,
acting in accordance with instructions from the
Servicer, shall withdraw from the Collection
Account, to the extent of Total Finance Charge
Collections for such Business Day (after giving
effect to the withdrawals pursuant to subsections
4.6(c)(i) through (v) of the Agreement), an amount
equal to the unreimbursed Class A Investor Charge-
Offs, such amount to be deposited into the
Principal Account or paid pursuant to subsection
4.6(e) to the applicable Class or Classes of
Certificateholders on such Business Day.
(vii) Reimbursement of Class B
Reductions. On each Business Day, the Trustee,
acting in accordance with instructions from the
Servicer, shall withdraw from the Collection
Account, to the extent of Total Finance Charge
Collections for such Business Day (after giving
effect to the withdrawals pursuant to subsections
4.6(c)(i) through (vi) of the Agreement), an amount
equal to the unreimbursed Class B Investor Charge-
Offs and other reductions to the Class B Invested
Amount pursuant to clause (d) of the definition
thereof, such amount to be deposited into the
Principal Account or paid pursuant to subsection
4.6(e) to the applicable Class or Classes of
Certificateholders on such Business Day.
(viii) Class A Additional Payments. On
each Business Day, the Trustee, acting in
accordance with instructions from the Servicer,
shall withdraw from the Collection Account and pay
to the Class A Certificateholders, to the extent of
Total Finance Charge Collections for such Business
Day (after giving effect to the withdrawals
pursuant to subsection 4.6(c)(i) through (vii) of
the Agreement), the portion of the Class A
Additional Payments accrued since the preceding
Business Day plus any Class A Additional Payments
due with respect to any prior Business Day but not
distributed to the Class A Certificateholders, with
interest thereon as provided in the Class A
Certificate Purchase Agreement.
(ix) Class B Additional Payments. On
each Business Day, the Trustee, acting in
accordance with instructions from the Servicer,
shall withdraw from the Collection Account and pay
to the Class B Certificateholders, to the extent of
Total Finance Charge Collections for such Business
Day (after giving effect to the withdrawals
pursuant to subsection 4.6(c)(i) through (viii) of
the Agreement), the portion of the Class B
Additional Payments accrued since the preceding
Business Day plus any Class B Additional Payments
due with respect to any prior Business Day but not
distributed to the Class B Certificateholders, with
interest thereon as provided in the Class B
Certificate Purchase Agreement.
(x) Reimbursement of Class C Reductions.
On each Business Day, the Trustee, acting in
accordance with instructions from the Servicer,
shall withdraw from the Collection Account, to the
extent of Total Finance Charge Collections for such
Business Day after giving effect to the withdrawals
pursuant to subsections 4.6(c)(i) through (ix) of
the Agreement), an amount equal to the unreimbursed
Class C Investor Charge-Offs and other reductions
to the Class C Invested Amount pursuant to clause
(d) of the definition thereof, such amount to be
deposited into the Principal Account or paid
pursuant to subsection 4.6(e) to the applicable
Class or Classes of Certificateholders on such
Business Day.
(xi) Class C Interest. On each Business
Day, the Trustee, acting in accordance with
instructions from the Servicer, shall withdraw from
the Collection Account and pay to the Class C
Certificateholders to the extent of Total Finance
Charge Collections for such Business Day (after
giving effect to the withdrawals pursuant to
subsections 4.6(c)(i) through (x) of the
Agreement), an amount equal to (x) the amount of
interest which has accrued with respect to the
outstanding aggregate principal amount of the Class
C Certificates at the Class C Certificate Rate but
which has not been paid to the Class C
Certificateholders plus (y) additional interest at
the Class C Certificate Rate for interest that has
accrued on interest that was due pursuant to this
subsection but was not previously paid to the Class
C Certificateholders.
(xii) Required Reserve Amount. On each
Business Day, the Trustee, acting in accordance
with instructions from the Servicer, shall withdraw
from the Collection Account and deposit into the
Reserve Account, to the extent of Total Finance
Charge Collections for such Business Day (after
giving effect to the withdrawals pursuant to
subsections 4.6(c)(i) through (xi) of the
Agreement), an amount equal to excess, if any, of
the Required Reserve Amount (determined after all
deposits, withdrawals, reductions, payments and
adjustments to be made with respect to such date)
over the Available Reserve Amount (without giving
effect to any deposit made on such Business Day
under Section 4.6).
(xiii) Class A Supplemental Payments. On
each Business Day, the Trustee, acting in
accordance with instructions from the Servicer,
shall withdraw from the Collection Account and pay
to the Class A Agent, to the extent of Total
Finance Charge Collections for such Business Day
(after giving effect to the withdrawals pursuant to
subsections 4.6(c)(i) through (xii) of the
Agreement), an amount equal to the sum of all
unpaid Class A Supplemental Payments.
(xiv) Class B Supplemental Payments. On
each Business Day, the Trustee, acting in
accordance with instructions from the Servicer,
shall withdraw from the Collection Account and pay
to the Class B Agent, to the extent of Total
Finance Charge Collections for such Business Day
(after giving effect to the withdrawals pursuant to
subsections 4.6(c)(i) through (xiii) of the
Agreement), an amount equal to the sum of all
unpaid Class B Supplemental Payments.
(xv) FDSNB Servicing Fee. On each
Business Day, if FDSNB or any Affiliate of FDSNB is
the Servicer, the Trustee, acting in accordance
with instructions from the Servicer, shall withdraw
from the Collection Account and distribute to the
Servicer, to the extent of Total Finance Charge
Collections for such Business Day (after giving
effect to the withdrawals pursuant to subsections
4.6(c)(i) through (xiv) of the Agreement) the
Investor Servicing Fee accrued since the preceding
Business Day plus any Investor Servicing Fee due
with respect to any prior Business Day but not
distributed to the Servicer, to the extent not
withdrawn on such Business Day pursuant to
subsection 4.6(c)(iii) of the Agreement.
(xvi) Excess Finance Charge Collections.
Any amounts remaining in the Collection Account to
the extent of Total Finance Charge Collections for
such Business Day (after giving effect to the
withdrawals pursuant to subsections 4.6(c)(i)
through (xv) of the Agreement), shall be treated as
Excess Finance Charge Collections allocable to
other Series in Group I, and the Servicer shall
direct the Trustee in writing on such Business Day
to withdraw such amounts from the Collection
Account and to first make such amounts available as
Excess Finance Charge Collections to pay to
Certificateholders of other Series in Group I to
the extent of shortfalls, if any, in amounts
payable to such certificateholders from Finance
Charge Collections allocated to such other Series,
then to pay any unpaid commercially reasonable
costs and expenses of a Successor Servicer, if any,
and then pay any remaining Excess Finance Charge
Collections to the Transferor.
(d) For each Business Day (i) the funds on
deposit in the Collection Account in an amount not
to exceed, during the Revolving Period, the sum of
the Class B Floating Allocation Percentage and the
Class C Floating Allocation Percentage or, during
the Amortization Period, the sum of the Class B
Fixed/Floating Allocation Percentage and the Class
C Fixed/Floating Allocation Percentage of Net
Principal Collections with respect to such Business
Day shall be applied by the Servicer or by the
Trustee acting in accordance with the instructions
of the Servicer as Reallocated Principal
Collections to the extent necessary to pay first
the Class A Required Amount and then the Class B
Required Amount on such Business Day as described
in subsection 4.7(c) of the Agreement and (ii) the
remainder of the Net Principal Collections shall be
treated as VFC Principal Collections and applied as
provided in subsection 4.6(f) of the Agreement.
(e) For each Business Day on and after the
Amortization Period Commencement Date, the funds on
deposit in the Collection Account will be
distributed by the Trustee acting in accordance
with the instructions of the Servicer in the
following priority:
(i) an amount equal to the sum of (A)
Net Principal Collections for such Business Day
(minus the amount of Reallocated Principal
Collections with respect to such Business Day which
is required to fund a deficiency pursuant to
subsection 4.7(c) of the Agreement for such
Business Day, if any), (B) any amount on deposit in
the Excess Funding Account allocated to the
Investor Certificates on such Business Day, and (C)
the aggregate amounts, if any, allocated on such
Business Day pursuant to subsections 4.6(b)(v),
(vi), (vii) or (x) or 4.6(c)(v), (vi), (vii) or (x)
(such sum, the "Class A Daily Principal Amount"),
plus the amount of Shared Principal Collections
allocated to the Series 1999-1 Certificates in
accordance with Sections 4.3(e) and 4.6(f) of the
Agreement, will be deposited into the Principal
Account until the amount on deposit therein equals
the Class A Invested Amount;
(ii) on and after the Class B Principal
Payment Commencement Date, an amount equal to the
sum of (A) Net Principal Collections for such
Business Day (minus the amount of Reallocated
Principal Collections with respect to such Business
Day which is required to fund a deficiency with
respect to the Class B Certificates pursuant to
subsection 4.7(c) of the Agreement for such
Business Day), (B) any amount on deposit in the
Excess Funding Account allocated to the Investor
Certificates on such Business Day, and (C) the
amount, if any, allocated to pursuant to
subsections 4.6(b)(v), (vii) or (x) or 4.6(c)(v),
(vii) or (x) of the Agreement with respect to such
Business Day, minus, in the case of each of clauses
(A), (B) and (C) above, the amount thereof paid to
the Class A Certificateholders pursuant to
subsection 4.6(e)(i) of the Agreement (such sum,
after such reduction, the "Class B Daily Principal
Amount"), will be deposited into the Principal
Account until the amount on deposit therein equals
the Class B Invested Amount;
(iii) on and after the Class C Principal
Payment Commencement Date, an amount equal to (A)
Net Principal Collections for such Business Day,
(B) any amount on deposit in the Excess Funding
Account allocated to the Class C Certificates on
such Business Day, and (C) the amount, if any,
allocated to pursuant to subsections 4.6(b)(v) or
(x) or 4.6(c)(v) or (x) of the Agreement with
respect to such Business Day, minus, in the case of
each of clauses (A), (B) and (C) above, the amount
thereof paid to the Class A Certificateholders
pursuant to subsection 4.6(e)(i) of the Agreement
or to the Class B Certificateholders pursuant to
subsection 4.6(e)(ii) of the Agreement (such sum,
after such reduction, the "Class C Daily Principal
Amount") will be paid to the Holders of the Class C
Certificates; and
(iv) an amount equal to the balance of
any such remaining funds on deposit in the
Collection Account on such Business Day allocated
to the Series 1999-1 Certificates shall be treated
as Shared Principal Collections and applied as
provided in subsection 4.3(e) of the Agreement.
(f) VFC Principal Collections, to the extent
permitted by the Class A Certificate Purchase
Agreement and the Class B Certificate Purchase
Agreement, as applicable, shall be applied by the
Servicer or by the Trustee acting in accordance
with the instructions of the Servicer on each
Business Day with respect to the Revolving Period
first, at the option of the Transferor and in an
amount to be determined by the Transferor, to make
payments of principal to (i) the Class A
Certificateholders, (ii) if after giving effect to
such payment, both (A) no Series 1999-1 Pay Out
Event shall have occurred and be continuing and (B)
the Class B Invested Amount shall not be less than
the Required Class B Invested Amount, to the Class
A Certificateholders and the Class B
Certificateholders pro rata based on the Invested
Amount of each such Class on such Business Day, or
(iii) if after giving effect to such payment, both
(A) no Series 1999-1 Pay Out Event shall have
occurred and be continuing, (B) the Class B
Invested Amount shall not be less than the Required
Class B Invested Amount, and (C) the Class C
Invested Amount shall not be less than the Required
Class C Invested Amount, to the Class A
Certificateholders, the Class B Certificateholders
and the Class C Certificateholders pro rata based
on the Invested Amount of each such Class on such
Business Day and, then the remaining VFC Principal
Collections shall be treated as Shared Principal
Collections available to make payments with respect
to other Series pursuant to subsection 4.3(e) of
the Agreement. On any Business Day Shared
Principal Collections allocated to the Series 1999-
1 Certificates for such Business Day may be applied
by the Servicer or by the Trustee acting in
accordance with the instructions of the Servicer,
at the option of the Transferor and in an amount
(such amount to be deemed the "Principal Shortfall"
with respect to the Series 1999-1 Certificates) to
be determined by the Transferor, to make payments
of principal to (i) the Class A Certificateholders,
(ii) if after giving effect to such payment, both
(A) no Series 1999-1 Pay Out Event shall have
occurred and be continuing and (B) the Class B
Invested Amount shall not be less than the Required
Class B Invested Amount, to the Class A
Certificateholders and the Class B
Certificateholders pro rata based on the Invested
Amount of each such Class on such Business Day, or
(iii) if after giving effect to such payment, both
(A) no Series 1999-1 Pay Out Event shall have
occurred and be continuing, (B) the Class B
Invested Amount shall not be less than the Required
Class B Invested Amount, and (C) the Class C
Invested Amount shall not be less than the Required
Class C Invested Amount, to the Class A
Certificateholders, the Class B Certificateholders
and the Class C Certificateholders pro rata based
on the Invested Amount of each such Class on such
Business Day. Amounts of principal to be paid to
the Class A Certificateholders or the Class B
Certificateholders pursuant to this subsection
4.6(f) shall be deposited into the Principal
Account.
(g) At the option of the Transferor on any
Business Day, all or any portion of Principal
Collections otherwise to be paid to the Transferor
as Holder of the Exchangeable Transferor
Certificate pursuant to subsection 4.3(b) of the
Agreement on such Business Day or of Shared
Principal Collections otherwise to be paid to the
Transferor pursuant to subsection 4.3(e) of the
Agreement on such Business Day may be deposited
into the Reserve Account.
Section 4.7 Coverage of Required Amounts for the
Series 1999-1 Certificates. (a) To the extent that
any amounts are on deposit in the Excess Funding
Account on any Business Day, the Servicer shall
apply Finance Charge Collections that would
otherwise be allocable to the Transferor in an
amount equal to the excess of (x) the product of
(a) the Base Rate and (b) the product of (i) the
amount on deposit in the Excess Funding Account and
(ii) the number of days elapsed since the previous
Business Day divided by the actual number of days
in such year over (y) the aggregate amount of all
earnings since the previous Business Day available
from the Cash Equivalents in which funds on deposit
in the Excess Funding Account are invested, such
amount to be applied during the Revolving Period in
the manner specified in subsections 4.6(a)(i)
through (ix) and (xii) through (xv) of the
Agreement or during the Amortization Period in the
manner specified in subsections 4.6(b)(i) through
(ix) and (xi) of the Agreement or subsections
4.6(c)(i) through (ix) and (vii) through (xv), as
applicable, of the Agreement. After giving effect
to such application, on each Business Day, the
Servicer shall determine the Class A Required
Amount, the Class B Required Amount and the Series
1999-1 Shortfall, if any. In the event that the
Class A Required Amount, the Class B Required
Amount or the Series 1999-1 Shortfall for a
Business Day is greater than zero, the Servicer
shall reflect such positive amount on the Daily
Report for such Business Day.
(b) To the extent of any Series 1999-1
Shortfall, the Servicer shall apply any Excess
Finance Charge Collections allocable to the Series
1999-1 Certificates in an amount equal to such
Series 1999-1 Shortfall in the manner specified in
subsections 4.6(a)(i) through (xv) of the Agreement
during the Revolving Period or in the manner
specified in subsections 4.6(b)(i) through (xi) or
4.6(c)(i) through (xv) of the Agreement, as
applicable, during the Amortization Period. Excess
Finance Charge Collections allocated to the Series
1999-1 Certificates for any Business Day shall mean
an amount equal to the product of (x) Excess
Finance Charge Collections available from all other
Series in Group I for such Business Day and (y) a
fraction, the numerator of which is the Series 1999-
1 Shortfall for such Business Day and the
denominator of which is the aggregate amount of
shortfalls in required amounts or other amounts to
be paid from Finance Charge Collections for all
Series in Group I for such Business Day. If there
is any Class A Required Amount for a Business Day
after such application of Excess Finance Charge
Collections, the amount thereof, up to the
Available Reserve Amount, shall be withdrawn by the
Trustee acting in accordance with the instructions
of the Servicer on such Business Day from the
Reserve Account and shall be applied during the
Revolving Period in the manner specified in
subsections 4.6(a)(i), (v), (vi) or (viii) of the
Agreement, or during the Amortization Period in the
manner described in subsections 4.6(b)(i), (v),
(vi) or (viii) of the Agreement or subsections
4.6(c)(i), (v), (vi) or (viii) of the Agreement, as
applicable. If there is any Class B Required
Amount for a Business Day after such application of
Excess Finance Charge Collections, the amount
thereof, up to the Available Reserve Amount (after
giving effect to any withdrawals in respect of the
Class A Required Amount), shall be withdrawn by the
Trustee acting in accordance with the instructions
of the Servicer on such Business Day from the
Reserve Account and shall be applied during the
Revolving Period in the manner specified in
subsections 4.6(a)(ii), (v), (vii) or (ix) of the
Agreement, or during the Amortization Period in the
manner described in subsections 4.6(b)(ii), (v),
(vi) or (ix) or 4.6(c)(ii), (v), (vii) or (ix) of
the Agreement, as applicable.
(c) In the event that the sum of the Class A
Required Amount and the Class B Required Amount for
a Business Day exceeds the sum of the Available
Reserve Amount and the amount of the Excess Finance
Charge Collections allocated thereto on such
Business Day, a portion of the Net Principal
Collections allocable to the Class C Certificates
in an amount equal to the lesser of such excess and
product of (i) (x) during the Revolving Period, the
sum of the Class B Floating Allocation Percentage
and the Class C Floating Allocation Percentage or
(y) during the Amortization Period, the sum of the
Class B Fixed/Floating Allocation Percentage and
Class C Fixed/Floating Allocation Percentage and
(ii) the amount of Net Principal Collections in the
Collection Account with respect to such Business
Day shall be allocated by the Servicer first to the
Class A Certificates and then to the Class B
Certificates and applied (any such amount so
applied, "Reallocated Principal Collections") on
such Business Day in accordance with the provisions
during the Revolving Period of subsections
4.6(a)(i), (ii) or (iv) through (ix) of the
Agreement and during the Amortization Period, in
accordance with the provisions of subsections
4.6(b)(i), (ii) or (iv) through (ix) of the
Agreement or 4.6(c)(i), (ii) or (iv) through (ix)
of the Agreement, as applicable; provided, however,
that (A) with respect to amounts applied pursuant
to subsections 4.6(a)(iv), (b)(iv) and (c)(iv),
such amounts shall be applied only to the extent of
the sum of the Class A Floating Allocation
Percentage and the Class B Floating Allocation
Percentage of the shortfall arising pursuant to
such subsections and (y) the amount so applied with
respect to the Class B Required Amount on any
Business Day shall not exceed the applicable Class
C Floating Allocation Percentage or Class C
Fixed/Floating Allocation Percentage, as
applicable, of the Net Principal Collections in the
Collection Account with respect to such Business
Day, minus any Reallocated Principal Collections
applied to cover the Class A Required Amount on
that Business Day. In the event that the sum of
the Class A Required Amount and the Class B
Required Amount exceeds such Available Reserve
Amount and the amount of such Excess Finance Charge
Collections and of such Net Principal Collections
applied pursuant to this subsection 4.7(c), the
Class C Invested Amount shall be reduced but only
to the extent that the Class C Invested Amount
shall be reduced to zero by an amount not to exceed
the Series Default and Dilution Amount for that
Business Day; and then the Class B Invested Amount
and, if applicable, the Class A Invested Amount
shall be reduced as provided in subsections 4.8(b)
or 4.8(c) of the Agreement.
Section 4.8 Investor Charge-Offs. (a) If, on
any Determination Date with respect to a
Distribution Date on or prior to the Class C
Principal Payment Commencement Date, the Series
Default and Dilution Amount for the preceding
Monthly Period exceeded the aggregate amount of
Finance Charge Collections applied to the payment
thereof pursuant to subsection 4.6(a)(v) of the
Agreement during the Revolving Period or subsection
4.6(b)(v) or 4.6(c)(v) of the Agreement, as
applicable, during the Amortization Period and the
Available Reserve Amount and the amount of Excess
Finance Charge Collections and Reallocated
Principal Collections allocated thereto pursuant to
subsection 4.7(b) of the Agreement, the Class C
Invested Amount will be reduced (without
duplication of any reduction pursuant to the last
sentence of subsection 4.7(b)) by the amount by
which the Series Default and Dilution Amount for
the preceding monthly period exceeds the amount
applied with respect thereto during such preceding
Monthly Period (a "Class C Investor Charge-Off").
To the extent that on any subsequent Business Day
VFC Additional Amounts are purchased pursuant to
Section 6.15, the Holder of the Class C
Certificates shall first deposit into the Excess
Funding Account an amount equal to any Class C
Investor Charge-Offs on such Business Day and then
shall purchase any other Class C Invested Amount
pursuant to Section 6.15. To the extent that on
any subsequent Business Day there is a remaining
positive balance of Total Finance Charge
Collections on deposit in the Collection Account
after giving effect during the Revolving Period to
subsections 4.6(a)(i) through (ix) of the Agreement
or during the Amortization Period to subsections
4.6(b)(i) through (ix) or subsections 4.6(c)(i)
through (ix) of the Agreement, as applicable, the
Servicer will apply such excess Finance Charge
Collections as provided in subsection 4.6(a)(x) of
the Agreement during the Revolving Period or
subsection 4.6(b)(x) or 4.6(c)(x) of the Agreement,
as applicable, during the Amortization Period to
reimburse the aggregate amount of Class C Investor
Charge-Offs and other reductions to the Class C
Invested Amount pursuant to clause (d) of the
definition thereof not previously reimbursed, up to
the amount so available.
(b) In the event that any reduction of the
Class C Invested Amount pursuant to subsection
4.8(a) of the Agreement 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 will be reduced by the
lesser of (i) the amount by which the Class C
Invested Amount would have been reduced below zero
and (ii) the Class A/B Default and Dilution Amount
for the preceding Monthly Period (a "Class B
Investor Charge-Off"). To the extent that on any
subsequent Business Day there is a positive balance
of Total Finance Charge Collections on deposit in
the Collection Account after giving effect to
subsections 4.6(a)(i) through (vi) of the Agreement
during the Revolving Period or subsections
4.6(b)(i) through (vi) or 4.6(c)(i) through (vi) of
the Agreement, as applicable, during the
Amortization Period, the Servicer will apply such
excess Finance Charge Collections as provided in
subsection 4.6(a)(vii) of the Agreement during the
Revolving Period or subsection 4.6(b)(vii) or
4.6(c)(vii) of the Agreement, as applicable, during
the Amortization Period to reimburse the aggregate
amount of Class B Investor Charge-Offs and other
reductions to the Class B Invested Amount pursuant
to clause (d) of the definition thereof not
previously reimbursed, up to the amount so
available.
(c) In the event that any such reduction of the
Class B Invested Amount pursuant to subsection
4.8(b) of the Agreement 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
lesser of (i) the amount by which the Class B
Invested Amount would have been reduced below zero
and (ii) the Class A Default and Dilution Amount
for the preceding Monthly Period (a "Class A
Investor Charge-Off"). To the extent that on any
subsequent Business Day there is a positive balance
of Total Finance Charge Collections on deposit in
the Collection Account after giving effect to
subsections 4.6(a)(i) through (v) of the Agreement
during the Revolving Period or subsections
4.6(b)(i) through (v) or 4.6(c)(i) through (v) of
the Agreement, as applicable, during the
Amortization Period, the Servicer will apply such
excess Finance Charge Collections as provided in
subsection 4.6(a)(vi) of the Agreement during the
Revolving Period or subsection 4.6(b)(vi) or
4.6(c)(vi) of the Agreement, as applicable, during
the Amortization Period to reimburse the aggregate
amount of Class A Investor Charge-Offs not
previously reimbursed, up to the amount so
available.
Section 4.9 Reserve Account. (a) The Servicer
shall establish and maintain with an Eligible
Institution, which may be the Trustee, in the name
of the Trustee, on behalf of the Trust, a
segregated trust account (the "Reserve Account")
bearing a designation clearly indicating that the
funds deposited therein are held for the benefit of
the Holders of Series 1999-1 Variable Funding
Certificates. The Trustee shall, on behalf of the
Holders of Series 1999-1 Variable Funding
Certificates, possess all right, title and interest
in all funds on deposit from time to time in the
Reserve Account and in all proceeds thereof. The
Reserve Account shall be under the sole dominion
and control of the Trustee for the benefit of the
Holders of Series 1999-1 Variable Funding
Certificates. If at any time an Eligible
Institution holding the Reserve Account ceases to
be an Eligible Institution, the Transferor shall
notify the Trustee, and the Trustee upon being
notified (or the Servicer on its behalf) shall
within 10 Business Days establish a new Reserve
Account meeting the conditions specified above, and
shall transfer any cash or any investments to such
new Reserve Account. The Trustee, at the direction
of the Servicer, shall make deposits to and
withdrawals from the Reserve Account in the amounts
and at the times set forth in Sections 4.6, 4.7 and
4.9 of the Agreement. All withdrawals from the
Reserve Account shall be made in the priority set
forth below.
(b) No deposit into the Reserve Account shall
be required on the Closing Date. Funds on deposit
in the Reserve Account from time to time shall be
invested and/or reinvested at the direction of the
Servicer by the Trustee in Cash Equivalents that
will mature so that such funds will be available
for withdrawal on the following Transfer Date. The
Trustee shall not be liable for any investment loss
or other charge resulting therefrom. No Cash
Equivalent shall be disposed of prior to its
maturity unless the Servicer so directs and either
(i) such disposal will not result in a loss of all
or part of the principal portion of such Cash
Equivalent or (ii) prior to the maturity of such
Cash Equivalent, a default occurs in the payment of
principal, interest or any other amount with
respect to such Cash Equivalent. The Trustee shall
maintain for the benefit of the Holders of Series
1999-1 Variable Funding Certificates possession of
the negotiable instruments or securities, if any,
evidencing such Cash Equivalents. All cash
interest and earnings (net of losses and investment
expenses) received on each Business Day on funds on
deposit in the Reserve Account shall be retained
therein to the extent that the Available Reserve
Amount is less than the Required Reserve Amount on
such Business Day, and such retained amounts shall
be considered to be available and on deposit in the
Reserve Account until withdrawn therefrom. All
cash interest and earnings (net of losses and
investment expenses) received on each Business Day
on funds on deposit in the Reserve Account in
excess of the amount, if any, required to be
retained in the Reserve Account on such Business
Day shall be treated as a component of Total
Finance Charge Collections and, for purposes of
determining the availability of funds or the
balances in the Reserve Account for any other
reason under this Variable Funding Supplement, all
such investment earnings on such funds shall be
deemed not to be available or on deposit in the
Reserve Account. If on any Business Day the amount
on deposit in the Reserve Account exceeds the
Required Reserve Amount, the amount of such excess
shall be treated as a component of Total Finance
Charge Collections.
Section 4.10 Excess Purchase Account. (a)
The Servicer shall establish and maintain with an
Eligible Institution, which may be the Trustee, in
the name of the Trustee, on behalf of the Trust, a
segregated trust account (the "Excess Purchase
Account") bearing a designation clearly indicating
that the funds deposited therein are held for the
benefit of the Holders of Series 1999-1 Variable
Funding Certificates. The Trustee, on behalf of
the Holders of the Series 1999-1 Variable Funding
Certificates, shall possess all right, title and
interest in all funds on deposit from time to time
in the Excess Purchase Account and in all proceeds
thereof. The Excess Purchase Account shall be under
the sole dominion and control of the Trustee for
the benefit of the Holders of Series 1999-1
Variable Funding Certificates. If at any time an
Eligible Institution holding the Excess Purchase
Account ceases to be an Eligible Institution, the
Transferor shall notify the Trustee, and the
Trustee upon being notified (or the Servicer on its
behalf) shall within 10 Business Days establish a
new Excess Purchase Account meeting the conditions
specified above, and shall transfer any cash or any
investments to such new Excess Purchase Account.
The Trustee, at the direction of the Servicer,
shall make deposits to the Excess Purchase Account
in the amounts and at the times set forth in
Section 6.15 of the Agreement.
(b) Funds on deposit in the Excess Purchase
Account from time to time shall be invested and/or
reinvested at the direction of the Servicer by the
Trustee in Cash Equivalents that will mature so
that such funds will be available for withdrawal
not later than the following Transfer Date. The
Trustee shall not be liable for any investment loss
or other charge resulting therefrom. No Cash
Equivalent shall be disposed of prior to its
maturity unless the Servicer so directs and either
(i) such disposal will not result in a loss of all
or part of the principal portion of such Cash
Equivalent or (ii) prior to the maturity of such
Cash Equivalent, a default occurs in the payment of
principal, interest or any other amount with
respect to such Cash Equivalent. The Trustee shall
maintain for the benefit of the Holders of Series
1999-1 Variable Funding Certificates possession of
the negotiable instruments or securities, if any,
evidencing such Cash Equivalents. All cash
interest and earnings (net of losses and investment
expenses) received on each Business Day on funds on
deposit in the Excess Purchase Account shall be
treated as a component of Total Finance Charge
Collections. For purposes of determining the
availability of funds or the balances in the Excess
Purchase Account for any other reason under this
Variable Funding Supplement, all investment
earnings on such funds shall be deemed not to be
available or on deposit.
(c) If on any Business Day prior to the
Amortization Period Commencement Date the greater
of (i) the sum of (A) the aggregate Invested Amount
of each Series then outstanding as of such day
including the Series 1999-1 Variable Funding
Certificates minus amounts on deposit in the
principal funding account for any Series and (B)
the Minimum Transferor Amount as of such day or
(ii) the Minimum Aggregate Principal Receivables
exceeds an amount equal to (a) the aggregate amount
of Principal Receivables and amounts on deposit in
the Excess Funding Account (other than investment
earnings thereon), plus (b) the amount on deposit
in the Excess Purchase Account, the amount of such
excess shall be withdrawn by the Trustee in
accordance with the instructions of the Servicer
from the Excess Purchase Account and paid to the
Transferor in respect of VFC Additional Invested
Amounts theretofore purchased hereunder. On the
Amortization Period Commencement Date, the amount
on deposit in the Excess Purchase Account or, if
less, the sum of the Class A Invested Amount and
the Class B Invested Amount shall be withdrawn by
the Trustee at the direction of the Servicer and
deposited into the Principal Account.
Section 4.11 Principal and Interest Funding
Accounts. (a) The Servicer shall establish and
maintain with an Eligible Institution approved by
the Class A Agent and the Class B Agent, which may
be the Trustee, in the name of the Trustee, on
behalf of the Trust, segregated trust accounts (the
"Principal Account" and the "Interest Funding
Account", respectively), each bearing a designation
clearly indicating that the funds deposited therein
are held for the benefit of the Holders of Series
1999-1 Variable Funding Certificates. The Trustee
shall, on behalf of the Holders of the Series 1999-
1 Variable Funding Certificates, possess all right,
title and interest in all funds on deposit from
time to time in the Principal Account and the
Interest Funding Account and in all proceeds
thereof. The Principal Account and the Interest
Funding Account shall each be under the sole
dominion and control of the Trustee for the benefit
of the Holders of Series 1999-1 Variable Funding
Certificates. If at any time an Eligible
Institution holding the Principal Account or the
Interest Funding Account ceases to be an Eligible
Institution, the Transferor shall notify the
Trustee and the Administrative Agent, and the
Trustee upon being notified (or the Servicer on its
behalf ) shall within ten Business Days establish a
new Principal Account or Interest Funding Account,
as the case may be, meeting the conditions
specified above, and shall transfer any cash or any
investments to such new Principal Account or
Interest Funding Account. The Trustee, at the
direction of the Servicer, shall make deposits to
the Principal Account in the amounts and at the
times set forth in Section 4.6 or 4.10 of the
Agreement and shall make deposits to the Interest
Funding Account in the amounts and at the times set
forth in Section 4.6 of the Agreement. Amounts
deposited into the Principal Account or Interest
Funding Account shall not reduce the Invested
Amount.
(b) Funds on deposit in the Principal Account
and the Interest Funding Account in respect of the
Class A Variable Funding Certificates from time to
time shall be invested and/or reinvested at the
direction of the Class A Agent by the Trustee in
Cash Equivalents that will mature so that such
funds will be available for withdrawal on the
Business Day preceding the respective dates on
which the related payments are required to be made
under the Class A Certificate Purchase Agreement.
The Trustee shall not be liable for any investment
loss or other charge resulting therefrom. No Cash
Equivalent shall be disposed of prior to its
maturity unless the Class A Agent so directs and
either (i) such disposal will not result in a loss
of all or part of the principal portion of such
Cash Equivalent or (ii) prior to the maturity of
such Cash Equivalent, a default occurs in the
payment of principal, interest or any other amount
with respect to such Cash Equivalent. The Trustee
shall maintain for the benefit of the Holders of
Class A Certificates possession of the negotiable
instruments or securities, if any, evidencing such
Cash Equivalents. Funds on deposit in the
Principal Account and the Interest Funding Account
in respect of the Class B Variable Funding
Certificates from time to time shall be invested
and/or reinvested at the direction of the Class B
Agent by the Trustee in Cash Equivalents that will
mature so that such funds will be available for
withdrawal on the Business Day preceding the
respective dates on which the related payments are
required to be made under the Class B Certificate
Purchase Agreement. No Cash Equivalent shall be
disposed of prior to its maturity unless the Class
B Agent so directs and either (i) such disposal
will not result in a loss of all or part of the
principal portion of such Cash Equivalent or (ii)
prior to the maturity of such Cash Equivalent, a
default occurs in the payment of principal,
interest or any other amount with respect to such
Cash Equivalent. The Trustee shall maintain for
the benefit of the Holders of Class B Certificates
possession of the negotiable instruments or
securities, if any, evidencing such Cash
Equivalents.
(c) All cash interest and earnings (net of
losses and investment expenses) received on each
Business Day on funds on deposit in the Principal
Account or the Interest Funding Account shall be
treated as a component of Total Finance Charge
Collections. For purposes of determining the
availability of funds or the balances in the
Principal Account or the Interest Funding Account
for any other reason under this Variable Funding
Supplement, all investment earnings on such funds
shall be deemed not to be available or on deposit.
(d) Amounts on deposit in the Principal
Account shall be withdrawn by the Trustee acting at
the direction of the Class A Agent on each
Distribution Date for any portion of the Class A
Investor Principal Balance or on any other date on
which a payment in respect of principal of the
Class A Certificates is due as contemplated by the
Class A Certificate Purchase Agreement, to pay to
Class A Certificateholders such portion of the
Class A Investor Principal Balance. Amounts on
deposit in the Interest Funding Account shall be
withdrawn by the Trustee acting at the direction of
the Class A Agent on each Distribution Date for any
portion of the Class A Investor Principal Balance
or on any other date on which a payment in respect
of fees or interest on the Class A Certificates is
due as contemplated by the Class A Certificate
Purchase Agreement, to pay to Class A
Certificateholders accrued and unpaid interest on
such portion of the Class A Investor Principal
Balance and to pay accrued and unpaid Class A
Program Fees. Amounts on deposit in the Principal
Account shall be withdrawn by the Trustee acting at
the direction of the Class B Agent on each
Distribution Date for any portion of the Class B
Investor Principal Balance or on any other date on
which a payment in respect of principal of the
Class B Certificates is due as contemplated by the
Class B Certificate Purchase Agreement, to pay to
Class B Certificateholders such portion of the
Class B Investor Principal Balance. Amounts on
deposit in the Interest Funding Account shall be
withdrawn by the Trustee acting at the direction of
the Class B Agent on each Distribution Date for any
portion of the Class B Investor Principal Balance
or on any other date on which a payment in respect
of fees or interest on the Class B Certificates is
due as contemplated by the Class B Certificate
Purchase Agreement, to pay to Class B
Certificateholders accrued and unpaid interest on
such portion of the Class B Investor Principal
Balance and to pay accrued and unpaid Class B
Program Fees.
(e) If (i) on any Business Day the amount on
deposit in the Interest Funding Account is less
than the amount of accrued interest owing on the
Class A Certificates and the Class B Certificates
on such Business Day, and (ii) any amount of Class
A Interest and/or Class B Interest owed as a result
of any adjustment described in the last sentence of
Class A Carrying Cost or Class B Carrying Costs has
not been deposited into the Interest Funding
Account on or prior to such Business Day, the
Transferor shall deposit into the Interest Funding
Account on such Business Day an amount equal to the
lesser of (a) the shortfall described in clause
(i) next above, and (ii) the amount of Excess
Finance Charge Collections distributed to the
Transferor pursuant to Sections 4.6(a)(xvi),
4.6(b)(xii) or 4.6(c)(xvi), as the case may be,
since the immediately preceding Business Day on
which an adjustment described in clause (ii) next
above occurred.
(f) If (i) on any Business Day the amount on
deposit in the Interest Funding Account is greater
than the amount of accrued interest owing on the
Class A Certificates and the Class B Certificates
on such Business Day, and (ii) such surplus
resulted from the Commercial Paper Rate used to
make daily allocations during the immediately
preceding Fixed Period, pursuant to the last
sentence of Class A Carrying Costs and Class B
Carrying Costs, as the case may be, being greater
than the actual Commercial Paper Rate applicable to
such Fixed Period, the Servicer will apply such
surplus (to the extent that such surplus has not
previously been applied pursuant to this Section
4.11(f)) to the amounts required to be deposited
into the Interest Funding Account on such Business
Day in respect of Class A Interest and Class B
Interest pursuant to Sections 4.6(a)(i) and
(a)(ii), 4.6(b)(i) and (b)(ii) or 4.6(c)(i) and
(ii), as applicable.
Section 4.12 Proceeds Account. The
Servicer shall establish and maintain with an
Eligible Institution, which may be the Trustee, in
the name of the Trustee, on behalf of the Trust, a
segregated trust account (the "Proceeds Account")
bearing a designation clearly indicating that the
funds deposited therein are held for the benefit of
the Holders of Series 1999-1 Variable Funding
Certificates. The Trustee shall, on behalf of the
Holders of Series 1999-1 Variable Funding
Certificates, possess all right, title and interest
in all funds on deposit from time to time in the
Proceeds Account and in all proceeds thereof. The
Proceeds Account shall be under the sole dominion
and control of the Trustee for the benefit of the
Holders of Series 1999-1 Variable Funding
Certificates. If at any time an Eligible
Institution holding the Proceeds Account ceases to
be an Eligible Institution, the Transferor shall
notify the Trustee, and the Trustee upon being
notified (or the Servicer on its behalf) shall
within 10 Business Days establish a new Proceeds
Account meeting the conditions specified above, and
shall transfer any cash or any investments to such
new Proceeds Account. The Trustee, at the
direction of the Servicer, shall make deposits to
and withdrawals from the Proceeds Account in the
amounts and at the times set forth in Section 6.15
of the Agreement. Funds on deposit in the Proceeds
Account from time to time shall be held uninvested.
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 Series 1999-1 Certificates:
ARTICLE V
DISTRIBUTIONS AND REPORTS TO INVESTOR
CERTIFICATEHOLDERS
Section 5.1 Distributions. (a) On each
Business Day, the Paying Agent shall distribute to
the Class A Certificateholders the amount, if any,
specified in subsection 4.11(d) of the Agreement to
be paid to the Class A Certificateholders on such
Business Day; provided, however, that the final
payment in retirement of the Class A Certificates
will be made only upon presentation and surrender
of the Class A Certificates at the office or
offices specified in the notice of such final
distribution delivered by the Trustee pursuant to
Section 12.3 of the Agreement.
(b) On each Business Day, the Paying Agent
shall distribute to the Class B Certificateholders
the amount, if any, specified in subsection 4.11(d)
of the Agreement to be paid to the Class B
Certificateholders on such Business Day; provided,
however, that the final payment in retirement of
the Class B Certificate will be made only upon
presentation and surrender of the Class B
Certificates at the office or offices specified in
the notice of such final distribution delivered by
the Trustee pursuant to Section 12.3 of the
Agreement.
(c) On each Business Day, the Paying Agent
shall distribute (in accordance with the Daily
Report delivered by the Servicer to the Trustee
pursuant to subsection 3.4(b) of the Agreement) to
each Class C Certificateholder of record (other
than as provided in subsection 2.4(d) or in Section
12.3 of the Agreement respecting a final
distribution) such Certificateholder's pro rata
share (based on the aggregate Undivided Interests
represented by Class C Certificates held by such
Certificateholder) of such amounts on deposit in
the Collection Account as are payable to the Class
C Certificateholders pursuant to Section 4.6 of the
Agreement; provided, however, that the final
payment in retirement of the Class C Certificate
will be made only upon presentation and surrender
of the Class C Certificates at the office or
offices specified in the notice of such final
distribution delivered by the Trustee pursuant to
Section 12.3 of the Agreement.
Section 5.2 Monthly Certificateholders'
Statement. As soon as practicable, but no later
than each Determination Date following the end of
each Monthly Period with respect to items (i)
through (vii) below, and no later than 30 days
following the end of each Monthly Period with
respect to the remaining items listed below, the
Servicer shall forward to the Trustee, the
Administrative Agent and the Rating Agencies a
statement, substantially in the form of Exhibit E
to this Variable Funding Supplement, including the
following information:
(i) the amount of Net Principal
Collections received in the Collection Account
during the related Monthly Period and allocated in
respect of each Class of Series 1999-1
Certificates;
(ii) the amount of Total Finance Charge
Collections processed during the related Monthly
Period and allocated in respect of each Class of
Series 1999-1 Certificates;
(iii) the aggregate amount of Principal
Receivables, the Invested Amount, the Class A
Invested Amount, the Class B Invested Amount, the
Class C Invested Amount, the Transferor Amount,
the Floating Allocation Percentage and, during the
Amortization Period, the Fixed/Floating Allocation
Percentage with respect to the Principal
Receivables in the Trust as of the end of the day
on the last day of the Monthly Period preceding
such Distribution Date;
(iv) the aggregate outstanding balance
of Accounts which are 30, 60, 90, 120, 150 and 180
days or more delinquent as of the end of each
billing cycle during the preceding Monthly Period
for such account;
(v) the aggregate Investor Default
Amount for the related Monthly Period;
(vi) the aggregate Investor Uncovered
Dilution Amount for the related Monthly Period;
(vii) the aggregate amount of (A) Class
A Investor Charge-Offs, (B) Class B Investor
Charge-Offs and other reductions to the Class B
Invested Amount pursuant to clause (d) of the
definition thereof and (C) Class C Investor Charge-
Offs and other reductions to the Class C Invested
Amount pursuant to clause (d) of the definition
thereof for the related Monthly Period and
reimbursements thereof;
(viii) the aggregate amount of the
Monthly Servicing Fee for the related Monthly
Period;
(ix) the Excess Spread Percentage, the
Excess Spread Enhancement Cap Percentage, the
Payment Rate Percentage, the Payment Rate
Enhancement Cap Percentage and the Enhancement
Percentage for the related Monthly Period;
(x) the Available Reserve Account Amount
on the last day of Monthly Period immediately
preceding the related Monthly Period, the
aggregate deposits in the Reserve Account during
the related Monthly Period, the aggregate
disbursements from the Reserve Account during such
Monthly Period, and the Available Reserve Account
Amount and the Required Reserve Account Amount on
the last day of such Monthly Period; and
(xi) the Portfolio Yield and the average
of the daily Base Rates for the related Monthly
Period.
Section 5.3 Annual Certificateholders' Tax
Statement. On or before January 31 of each
calendar year, beginning with calendar year 1998,
the Trustee shall distribute to each Person who at
any time during the preceding calendar year was a
Series 1999-1 Certificateholder, a statement
prepared by the Servicer containing information
regarding the amounts distributed to such Person
and the principal and interest portion thereof,
aggregated for such calendar year or the applicable
portion thereof during which such Person was a
Series 1999-1 Certificateholder, together with such
other customary information (consistent with the
treatment of the Certificates as debt) as the
Servicer deems necessary or desirable to enable the
Series 1999-1 Certificateholders to prepare their
tax returns.
SECTION 9 Article VI of Agreement. The Opinion of
Counsel referred to in part (b) of the seventh sentence of Section
6.9 of the Agreement shall mean, with respect to the Series 1999-1
Certificates, an Opinion of Counsel to the effect that the Class A
Certificates and the Class B Certificates will not represent
interests in an association taxable as a corporation or a publicly
traded partnership for federal income tax purposes. Except as
provided in the preceding sentence, sections 6.1 through 6.14 of
the Agreement shall be read in their entirety as provided in the
Agreement. Article VI (except for Sections 6.1 through 6.14
thereof) shall read in its entirety as follows and shall be
applicable only to the Series 1999-1 Certificates:
Section 6.15 VFC Additional Invested
Amounts. (a) The Holders of the Class A
Certificates, the Holders of the Class B
Certificates and the Holders of the Class C
Certificates agree, by acceptance of the Class A
Certificates, the Class B Certificates or the Class
C Certificates, respectively, that the Transferor
may from time to time prior to the Amortization
Period Commencement Date for the Variable Funding
Certificates require that such Certificateholders
acquire as of any Business Day additional undivided
interests in the Trust in specified amounts (such
amounts, respectively, the "VFC Additional Class A
Invested Amount," the "VFC Additional Class B
Invested Amount," and the "VFC Additional Class C
Invested Amount" and, collectively, the "VFC
Additional Invested Amounts") not to exceed, after
giving effect thereto, an amount equal to (i) the
aggregate amount of Principal Receivables and
amounts on deposit in the Excess Funding Account
(other than investment earnings thereon), (ii) plus
the amount on deposit in the Excess Purchase
Account, minus (iii) the greater of (A) the sum of
(x) the aggregate Invested Amount of each Series
then outstanding as of such day including all
Variable Funding Certificates minus amounts on
deposit in the principal funding account for any
Series and (y) the Minimum Transferor Amount as of
such day or (B) the Minimum Aggregate Principal
Receivables.
(b) The obligation of any Holder of Class A
Certificates to acquire any VFC Additional Class A
Invested Amount shall be subject to the
satisfaction of any applicable conditions provided
in the Class A Certificate Purchase Agreement and
subject to the further conditions that, after
giving effect to such acquisition and to any
concurrent acquisitions of VFC Additional Invested
Amounts, (i) the Class B Invested Amount shall be
equal to or greater than the Required Class B
Invested Amount and the Class C Invested Amount
shall be equal to or greater than the Required
Class C Invested Amount and (ii) the sum of the
Available Reserve Amount plus the excess, if any,
of the Class C Invested Amount over 10% of the
Invested Amount shall be equal to or greater than
the Required Reserve Amount. The obligation of any
Holder of Class B Certificates to acquire any VFC
Additional Class B Invested Amount shall be subject
to the satisfaction of any applicable conditions
provided in the Class B Certificate Purchase
Agreement and subject to the further conditions
that, after giving effect to such acquisition and
to any concurrent acquisitions of VFC Additional
Invested Amounts, (i) the Class C Invested Amount
shall be equal to or greater than the Required
Class C Invested Amount and (ii) the sum of the
Available Reserve Amount plus the excess, if any,
of the Class C Invested Amount over 10% of the
Invested Amount shall be equal to or greater than
the Required Reserve Amount.
(c) If the Holders of the Class A Certificates
acquire such additional interest, then in
consideration of such Holder's payments of the VFC
Additional Class A Invested Amount, the Servicer
shall note such VFC Additional Class A Invested
Amount on the related Daily Report and direct the
Trustee in writing to pay to the Transferor such
VFC Additional Invested Amounts, and the Invested
Amount of the Class A Variable Funding Certificates
will be equal to the Invested Amount of the Class A
Certificates stated in such Daily Report. If the
Holders of the Class B Certificates acquire such
additional interest, then in consideration of such
Holder's payments of the VFC Additional Class B
Invested Amount, the Servicer shall note such VFC
Additional Class B Invested Amount on the related
Daily Report and direct the Trustee to pay to the
Transferor such VFC Additional Invested Amounts,
and the Invested Amount of the Class B Certificates
will be equal to the Invested Amount of the Class B
Certificates stated in such Daily Report. If the
Holders of the Class C Certificates acquire such
additional interest, then in consideration of such
Holder's payments of the VFC Additional Class C
Invested Amount, the Servicer shall appropriately
note such VFC Additional Class C Invested Amount on
the related Daily Report and direct the Trustee in
writing to pay to the Transferor such VFC
Additional Invested Amounts, and the Invested
Amount of the Class C Certificates will be equal to
the Invested Amount of the Class C Certificates
stated in such Daily Report.
(d) The proceeds of the purchase on any
Business Day of VFC Additional Invested Amounts
received by the Trustee shall be deposited upon
receipt into the Proceeds Account. To the extent
that on any purchase date and after giving effect
to the purchase of VFC Additional Invested Amounts
pursuant to this Section 6.15, (a) the greater of
(i) the sum of (A) the aggregate Invested Amount of
each Series then outstanding as of such day
including the Variable Funding Certificates minus
amounts on deposit in the principal funding account
for any Series and (B) the Minimum Transferor
Amount as of such day or (ii) the Minimum Aggregate
Principal Receivables exceeds (b) an amount equal
to the aggregate amount of Principal Receivables
and amounts on deposit in the Excess Funding
Account (other than investment earnings thereon),
the Servicer shall instruct the Trustee, and the
Trustee, upon such instruction from the Servicer,
shall withdraw a portion of the purchase price for
such VFC Additional Invested Amounts equal to such
excess from the Proceeds Account and deposit such
portion into the Excess Purchase Account. The
Trustee shall withdraw any remaining Proceeds of
such purchase price from the Proceeds Account and
transfer such amounts to the Transferor in
accordance with the instructions of the Servicer.
(e) In the event that the proceeds of a
purchase of any VFC Additional Class A Invested
Amounts required to be made on a Business Day
pursuant to the Class A Certificate Purchase
Agreement shall not have been received in the
Proceeds Account by 1:00 p.m., New York City time,
on such Business Day, the Servicer shall notify the
Class A Agent and the Transferor by not later than
1:30 p.m., New York City time, on such Business
Day. In the event that the proceeds of a purchase
of any VFC Additional Class B Invested Amounts
required to be made on a Business Day pursuant to
the Class B Certificate Purchase Agreement shall
not have been received in the Proceeds Account by
1:00 p.m., New York City time, on such Business
Day, the Servicer shall notify the Class B Agent
and the Transferor by not later than 1:30 p.m., New
York City time, on such Business Day.
Section 6.16 Extension. (a) If a Pay Out
Event has not occurred or has occurred but has been
remedied on or before the 30th Business Day
preceding the Extension Date, the Transferor, in
its sole discretion, may deliver to the Trustee on
or before such date a notice substantially in the
form of Exhibit B (the "Extension Notice") to this
Variable Funding Supplement. The Trustee shall
mail a copy of the Extension Notice and all
documents annexed thereto to the Investor
Certificateholders of record on the date of receipt
thereof. The Transferor shall state in the
Extension Notice that it intends to extend the
Revolving Period until the later Amortization
Period Commencement Date set forth in the Extension
Notice. The Extension Notice shall also set forth
the next Extension Date. The following documents
shall be annexed to the Extension Notice: (i) a
form of the Opinion of Counsel addressed to the
Transferor and the Trustee to the effect that
despite the Extension the Transferor will not be
treated as an association taxable as a corporation
(the "Extension Tax Opinion"); (ii) a form of the
Opinion of Counsel addressed to the Transferor and
the Trustee (the "Extension Opinion") to the effect
that (A) the Transferor has the corporate power and
authority to effect the Extension, (B) the
Extension has been duly authorized by the
Transferor, and (C) all conditions precedent to the
Extension required by this Section 6.16 have been
fulfilled; and (iii) a form of Investor
Certificateholder Election Notice substantially in
the form of Exhibit C (the "Election Notice") to
this Variable Funding Supplement. In addition, the
Extension Notice shall state that any Investor
Certificateholder electing to approve the Extension
must do so on or before the Election Date (as
defined below) by returning the annexed Election
Notice properly executed to the Trustee in the
manner described below. The Extension Notice shall
also state that an Investor Certificateholder may
withdraw any such election in whole or in part on
or before the Election Date, and the Transferor, in
its sole discretion, may, prior to the Election
Date, withdraw its election to extend the Revolving
Period. Any Holder that elects to approve an
Extension hereunder shall deliver a duly executed
Election Notice to the Trustee at the address
designated in the Extension Notice on or before
3:00 p.m., New York City time, on or before the
fifth Business Day preceding the Extension Date
(such Business Day constituting the "Election
Date").
(b) No Extension shall occur until prior
satisfaction of the following conditions at the
close of business on the Election Date: (i) no Pay
Out Event shall have occurred and be continuing,
(ii) there shall have been delivered to the Trustee
(A) the Extension Tax Opinion and the Extension
Opinion, each addressed to the Transferor and the
Trustee and (B) written confirmation from each
Rating Agency rating the Class A Certificates or
the Class B Certificates or providing informal
ratings on such Series 1999-1 Variable Funding
Certificates for the benefit of a Class A
Certificateholder or Class B Certificateholder that
the Extension will not cause such Rating Agency to
lower its then current rating or informal rating or
withdraw its ratings or informal ratings of such
Investor Certificates, (iii) each holder of Class A
Certificates and each holder of Class B
Certificates shall have elected to approve the
Extension by returning to the Trustee on or before
the Election Date the executed Election Notice
annexed to the Extension Notice delivered to such
Class A Certificateholders and Class B
Certificateholders pursuant to subsection 6.16(a)
of the Agreement, (iv) if provided for by the
Transferor, in its sole discretion, in the
Extension Notice, the holders of a specified
minimum amount of outstanding Class C Certificates
shall have elected to approve of the Extension by
returning to the Trustee on or before the Election
Date the executed form of Election Notice annexed
to the Extension Notice delivered to such Class C
Certificateholders pursuant to subsection 6.16(a)
of the Agreement and (v) the Transferor shall have
delivered to the Trustee an Officer's Certificate
and an Opinion of Counsel, each to the effect that
all conditions precedent in this subparagraph (b)
have been satisfied. If, by the close of business
on the Election Date, all of the conditions stated
in this subsection 6.16(b) of the Agreement have
not been satisfied and all such documents delivered
to the Trustee pursuant to this subsection 6.16(b)
of the Agreement are not in form satisfactory to
it, or if the Transferor has notified the Trustee,
prior to the Election Date, that the Transferor has
exercised its right to withdraw its election of an
Extension, no Extension shall occur.
(c) The execution by the required number of
Investor Certificateholders of the applicable
Election Notice and return thereof to the Trustee
by the required date and time, the continued
election by the Transferor to extend the Revolving
Period at the Election Date, and the compliance
with all of the provisions of this Section 6.16,
shall evidence an extension or renewal of the
obligations represented by the Investor
Certificates delivered in exchange therefor, and
not a novation or extinguishment of such
obligations or a substitution with respect thereto.
(d) To the extent required by applicable laws
and regulations, as evidenced by an Opinion of
Counsel delivered by the Transferor to the Trustee,
the provisions of this Section 6.16 shall or may be
modified to comply with all applicable laws and
regulations in effect at the time of a prepared
Extension.
Section 6.17 Transfers of Class C
Certificates; Legends. (a) No Class C Certificate
or any interest therein may be sold (including in
the initial offering), conveyed, assigned,
hypothecated, pledged, participated or otherwise
transferred (each such act or event, a "Transfer"),
except in accordance with this Section 6.17. Any
Transfer of a Class C Certificate otherwise
permitted by this Section 6.17 will be permitted
only if it consists of a pro rata percentage
interest in all payments made with respect to such
Holder's beneficial interest in the Class C
Certificates. No Transfer of a Class C Certificate
or any interest therein to any Person (each, an
"Assignee") may occur, unless the Assignee shall
have executed and delivered to the Trustee an
investment letter substantially in the form of
Exhibit D hereto and the Transferor shall have
granted its prior written consent thereto. Such
consent shall not be granted if the Transferor
determines in its sole and absolute discretion that
such Transfer would create a risk that the Trust
would be classified for federal or any applicable
state tax purposes as an association or publicly
traded partnership taxable as a corporation;
provided, that any attempted Transfer that would
cause the number of Targeted Holders to exceed
ninety-nine shall be void; and provided, further,
that the number of Targeted Holders for the Trust
as a result of Transfers of Class C Certificates
shall not be more than ten or such other number as
may be consented to by the Transferor, which
consent may be withheld in its sole and absolute
discretion. The Transferor agrees to monitor the
number of Targeted Holders and to deny its consent
to any transfer of any interest in the Trust with
respect to which no opinion has been rendered that
such certificate (or other interest in the Trust)
will be treated as debt for federal income tax
purposes if such transfer could cause the number of
Targeted Holders to exceed ninety-nine.
(b) Each initial purchaser of a Class C
Certificate or any interest therein and any
Assignee thereof shall further certify to the
Transferor, the Servicer and the Trustee that it
has neither acquired nor will it sell, trade or
transfer any interest in a Class C Certificate or
cause an interest in a Class C Certificate to be
marketed on or through an "established securities
market" within the meaning of Section 7704(b)(1) of
the Code and any proposed, temporary or final
treasury regulation thereunder, including, without
limitation, an over-the-counter-market or an
interdealer quotation system that regularly
disseminates firm buy or sell quotations. In
addition, each initial purchaser of a Class C
Certificate or any interest therein and any
Assignee shall certify, prior to any delivery or
Transfer to it of a Class C Certificate, that it is
not and, for so long as it holds any interest in a
Class C Certificate, will not become a partnership,
Subchapter S corporation or grantor trust for U.S.
federal income tax purposes. If an initial
purchaser of an interest in a Class C Certificate
or an Assignee cannot make the certification
described in the preceding sentence, the Transferor
may, in its sole discretion, prohibit a Transfer to
such entity; provided, however, that if the
Transferor agrees to permit such a Transfer, the
Transferor or the Servicer may require additional
certifications in order to prevent the Trust from
being treated as a publicly traded partnership.
Each initial purchaser of an interest in a Class C
Certificate and each Assignee acknowledges that any
Opinion of Counsel furnished to the Transferor or
the Trustee to the effect that the Trust will not
be treated as a publicly traded partnership taxable
as a corporation will be dependent in part on the
accuracy of the certifications described in this
subsection 6.17(b).
(c) Subject to the provisions of subsections
6.17(a) and 6.17(b) above, the Transferor may at
any time, without the consent of the Investor
Certificateholders, (i) sell or transfer all or a
portion of the Class C Certificates and (ii) in
connection with any such sale or transfer, enter
into a supplemental agreement with the Trustee
pursuant to which the Transferor may amend the
Class C Certificate Rate, set forth the amount of
monthly interest due Class C Certificateholders
(the "Class C Interest"), provide for the payment
of additional amounts (the "Class C Additional
Interest") with respect to any shortfall (the
"Class C Interest Shortfall") in payments of such
Class C Interest and provide for such other
provisions with respect to the Class C Certificates
as may be specified in such supplemental agreement,
provided that in each such case (A) the Transferor
shall have given notice to the Trustee, the
Servicer, the Administrative Agent and the Rating
Agencies of such proposed sale or transfer of the
Class C Certificates and such supplemental
agreement at least five Business Days prior to the
consummation of such sale or transfer and the
execution of such proposed supplemental agreement;
(B) the Rating Agency Condition shall have been
satisfied; (C) no Trust Pay Out Event or Series
1999-1 Pay Out Event shall have occurred prior to
the consummation of such proposed sale or transfer
of Class C Certificates or the execution of such
supplemental agreement; (D) the Transferor shall
have delivered an Officer's Certificate, dated the
date of the consummation of such sale or transfer
and the effectiveness of such supplemental
agreement, to the effect that, in the reasonable
belief of the Transferor, such action will not,
based on the facts known to such officer at the
time of such certification, cause a Pay Out Event
to occur with respect to any Series, (E) the
Transferor will have delivered an Opinion of
Counsel, dated the date of such certificate with
respect to such action to the effect that such
action will not adversely affect the Federal or
Applicable Tax State income tax characterization of
any outstanding Series of Investor Certificates or
the taxability of the Trust under Federal or
Applicable Tax State income tax laws, and (F)
either (x) the Available Reserve Amount on the most
recent Determination Date (after giving effect to
all payments and allocations on such Determination
Date) shall have been equal to or greater than the
Required Reserve Amount on such Determination Date,
each recalculated on a pro forma basis as though
the Class C Certificates had borne interest at the
amended Class C Interest Rate throughout each of
the three Monthly Periods preceding such
Determination Date or (y) the Administrative Agent
shall have consented to such supplemental agreement
and the terms and conditions set forth therein;
provided, further, as a condition to the sale or
transfer of all or a portion of the Class C
Certificates the transferee shall be required to
agree not to institute against, or join any other
Person in instituting against, or join any other
Person instituting against, the Trust or the
Transferor any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceeding,
or other proceeding under any federal or state
bankruptcy or similar law, for one year and one day
after all Investor Certificates are paid in full.
(d) Transfers of Class C Certificates shall
also be subject to the provisions of subsection
3(c) of this Variable Funding Supplement.
Section 6.18 Transfers of Variable Funding
Certificates; Legends. (a) The provisions of this
Section 6.18 shall apply to the Class A
Certificates and the Class B Certificates unless,
with respect to such Class, the Transferor and the
Trustee shall have received an Opinion of Counsel
to the effect that such Class will be treated as
indebtedness for federal income tax purposes.
(b) Subject to subsection 6.18(a), no Transfer
of a Class A Certificate or Class B Certificate or
any interest therein (including in the initial
offering) may occur, except in accordance with this
Section 6.18. Any Transfer of a Class A
Certificate or Class B Certificate otherwise
permitted by this Section 6.18 will be permitted
only if it consists of a pro rata percentage
interest in all payments made with respect to such
Holder's beneficial interest in the Class A
Certificates or Class B Certificates, as the case
may be. No Transfer of a Class A Certificate or a
Class B Certificate or any interest therein to any
Assignee shall be permitted, unless such Assignee
shall have executed and delivered to the Trustee an
investment letter substantially in the form of
Exhibit A to the Class A Certificate Purchase
Agreement or to the Class B Certificate Purchase
Agreement, as applicable, and, except in the case
of a Transfer to a Support Bank (as defined in such
respective agreements), unless the Transferor shall
have granted its prior written consent thereto.
Such consent shall not be granted if the Transferor
reasonably determines that such Transfer would
create a risk that the Trust would be classified
for federal or any applicable state tax purposes as
an association or publicly traded partnership
taxable as a corporation; provided, that any
attempted Transfer that would cause the number of
Targeted Holders to exceed ninety-nine shall be
void; and provided, further, that the number of
Targeted Holders for the Trust as a result of
Transfers of Class A Certificates and Class B
Certificates shall not in the aggregate be more
than 20 or such other number as may be consented to
by the Transferor, which consent may be withheld in
its sole and absolute discretion. The Transferor
shall not withhold its consent to a Transfer unless
(i) the determination referred to in the preceding
sentence has been made with respect to such
Transfer, (ii) one of the two provisos to the
preceding sentence is applicable to such Transfer,
(iii) the Transferor has the right to withhold its
consent to such Transfer pursuant to the Class A
Certificate Purchase Agreement or the Class B
Certificate Purchase Agreement, as applicable, or
(iv) the Transferor has the right to prohibit such
Transfer pursuant to subsection 6.18(c).
(c) Each initial purchaser of a Class A
Certificate or a Class B Certificate, as
applicable, or any interest therein and any
Assignee thereof shall further certify to the
Transferor, the Servicer and the Trustee that it
has neither acquired nor will it sell, trade or
transfer any interest in a Class A Certificate or
Class B Certificate, as applicable, or cause an
interest in a Class A Certificate or Class B
Certificate, as applicable, to be marketed on or
through an "established securities market" within
the meaning of Section 7704(b)(1) of the Code and
any proposed, temporary or final treasury
regulation thereunder, including, without
limitation, an over-the-counter-market or an
interdealer quotation system that regularly
disseminates firm buy or sell quotations. In
addition, each initial purchaser of a Class A
Certificate or a Class B Certificate, as
applicable, or any interest therein and any
Assignee shall certify, prior to any delivery or
Transfer to it of a Class A Certificate or Class B
Certificate, as applicable, that it is not and, for
so long as it holds any interest in a Class A
Certificate or Class B Certificate, as applicable,
will not become a partnership, Subchapter S
corporation or grantor trust for U.S. federal
income tax purposes. If an initial purchaser of an
interest in a Class A Certificate or Class B
Certificate or an Assignee cannot make the
certification described in the preceding sentence,
the Transferor may, in its sole discretion, by
written notice to the Trustee permit a Transfer to
such entity; provided, however, that if the
Transferor agrees to permit such a Transfer, the
Transferor, the Servicer or the Trustee may require
additional certifications in order to prevent the
Trust from being treated as a publicly traded
partnership. Each initial purchaser of an interest
in a Class A Certificate or a Class B Certificate
and each Assignee acknowledges that the Opinion of
Counsel to the effect that the Trust will not be
treated as a publicly traded partnership taxable as
a corporation is dependent in part on the accuracy
of the certifications described in this subsection
6.18(c).
(d) Transfers of Class A Certificates or Class
B Certificates shall also be subject to the
provisions of subsection 3(c) of this Variable
Funding Supplement.
SECTION 10 Series 1999-1 Pay Out Events. The Pay
Out Events which can cause the commencement of the Amortization
Period with respect to the Series 1999-1 Variable Funding
Certificates include the Trust Pay Out Events described in Section
9.1 of the Agreement and the Series 1999-1 Pay Out Events
described in the following sentence. If any one of the following
events shall occur with respect to the Series 1999-1 Certificates:
(a) failure on the part of the Transferor (i) to make
any payment or deposit required by the terms of (A) the
Agreement or (B) this Variable Funding Supplement, on or
before the date occurring five days after the date such
payment or deposit is required to be made herein or (ii)
duly to observe or perform in any material respect any
covenants or agreements of the Transferor set forth in
the Agreement or this Variable Funding Supplement, which
failure has a material adverse effect on the Series 1999-
1 Variable Funding Certificateholders and which
continues unremedied for a period of 60 days after the
date on which written notice of such failure, requiring
the same to be remedied, shall have been given to the
Transferor by the Trustee, or to the Transferor and the
Trustee by the Holders of Class A Certificates
evidencing Undivided Interests aggregating more than 50%
of the Class A Invested Amount or of Class B
Certificates evidencing Undivided Interests aggregating
more than 50% of the Class B Invested Amount, and
continues to affect materially and adversely the
interests of the Series 1999-1 Variable Funding
Certificateholders for such period;
(b) any representation or warranty made by the
Transferor in the Agreement or this Series 1999-1
Variable Funding Supplement, or any information
contained in a computer file or microfiche list required
to be delivered by the Transferor pursuant to Section
2.1 or 2.6 of the Agreement, (i) shall prove to have
been incorrect in any material respect when made or when
delivered, which continues to be incorrect in any
material respect for a period of 60 days after the date
on which written notice of such failure, requiring the
same to be remedied, shall have been given to the
Transferor by the Trustee, or to the Transferor and the
Trustee by the Holders of Class A Certificates
evidencing Undivided Interests aggregating more than 50%
of the Class A Invested Amount or of Class B
Certificates evidencing Undivided Interests aggregating
more than 50% of the Class B Invested Amount, and (ii)
as a result of which the interests of the Series 1999-1
Variable Funding Certificateholders are materially and
adversely affected and continue to be materially and
adversely affected for such period; provided, however,
that a Series 1999-1 Pay Out Event pursuant to this
subsection 10(b) shall not be deemed to have occurred
hereunder if the Transferor has accepted reassignment of
the related Receivable, or all of such Receivables, if
applicable, during such period in accordance with the
provisions of the Agreement;
(c) the average Portfolio Yield for any three
consecutive Monthly Periods is reduced to a rate which
is less than the average of the daily Base Rates for
such period;
(d) (i) the Transferor Amount shall be less than the
Minimum Transferor Amount or (ii) the sum of the amount
of Principal Receivables in the Trust and the amount on
deposit in the Excess Funding Account shall be less than
the Minimum Aggregate Principal Receivables, in each
case for 15 consecutive days;
(e) any Servicer Default shall occur which would have
a material adverse effect on the Series 1999-1 Variable
Funding Certificateholders;
(f) failure on the part of the Servicer to deliver the
Daily Report or Settlement Statement to the Trustee
when due, which failure continues for a period of five
Business Days after the date on which written notice of
such failure, requiring the same to be remedied, shall
have been given by the Trustee to the Servicer;
(g) the Trustee shall have received notice from the
Administrative Agent that a Termination Event has
occurred under the Class A Certificate Purchase
Agreement or the Class B Certificate Purchase Agreement
and stating that such occurrence constitutes a Series
1999-1 Pay Out Event;
(h) failure on the part of the Servicer duly to observe
or perform in any respect any covenants or agreements of
the Servicer set forth in the Agreement (other than
those set forth in subsection 10.1(a) or 10.1(f)
thereof), which has a material adverse effect on the
Series 1999-1 Variable Funding Certificateholders and
which continues unremedied for a period of 30 days after
the date on which written notice of such failure,
requiring the same to be remedied, has been given to the
Servicer by the Trustee, or to the Servicer and the
Trustee by the Holders of Class A Certificates
evidencing Undivided Interests aggregating more than 50%
of the Class A Invested Amount or of Class B
Certificates evidencing Undivided Interests aggregating
more than 50% of the Class B Invested Amount, materially
adversely affected thereby and continues to materially
adversely affect such Series 1999-1 Variable Funding
Certificateholders for such period; or the Servicer
shall delegate its duties under the Agreement, except as
permitted by Section 8.7 thereof; or any representation,
warranty or certification made by the Servicer in the
Agreement or in any certificate delivered pursuant to
the Agreement shall prove to have been incorrect when
made, which has a material adverse effect on the Series
1999-1 Variable Funding Certificateholders and which
continues to be incorrect in any material respect for a
period of 45 days after the date on which written notice
of such failure, requiring the same to be remedied,
shall have been given to the Servicer by the Trustee, or
to the Servicer and the Trustee by the Holders of Class
A Certificates evidencing Undivided Interests
aggregating more than 50% of the Class A Invested Amount
or of Class B Certificates evidencing Undivided
Interests aggregating more than 50% of the Class B
Invested Amount, materially adversely affected thereby
and continues to materially adversely affect such Series
1999-1 Variable Funding Certificateholders for such
period;
(i) failure on the part of the Originator (i) to make
any payment or deposit required by the terms of the
Receivables Purchase Agreement on or before the date
occurring five days after the date such payment or
deposit is required to be made therein or (ii) duly to
observe or perform in any material respect any covenants
or agreements of the Originator set forth in the
Receivables Purchase Agreement, which failure has a
material adverse effect on the Series 1999-1 Variable
Funding Certificateholders and which continues
unremedied for a period of 60 days after the date on
which written notice of such failure, requiring the same
to be remedied, shall have been given to the Originator
by the Trustee, or to the Originator and the Trustee by
the Holders of Class A Certificates evidencing Undivided
Interests aggregating more than 50% of the Class A
Invested Amount or of Class B Certificates evidencing
Undivided Interests aggregating more than 50% of the
Class B Invested Amount, and continues to affect
materially and adversely the interests of the Series
1999-1 Variable Funding Certificateholders for such
period;
(j) any representation or warranty made by the
Originator in the Receivables Purchase Agreement, or any
information contained in a transmittal list required to
be delivered by the Originator pursuant to Section 2.02
thereof, (i) shall prove to have been incorrect in any
material respect when made or when delivered, which
continues to be incorrect in any material respect for a
period of 60 days after the date on which written notice
of such failure, requiring the same to be remedied,
shall have been given to the Originator by the Trustee,
or to the Originator and the Trustee by the Holders of
Class A Certificates evidencing Undivided Interests
aggregating more than 50% of the Class A Invested Amount
or of Class B Certificates evidencing Undivided
Interests aggregating more than 50% of the Class B
Invested Amount, and (ii) as a result of which the
interests of the Series 1999-1 Variable Funding
Certificateholders are materially and adversely affected
and continue to be materially and adversely affected for
such period; provided, however, that a Series 1999-1 Pay
Out Event pursuant to this subsection 10(k) shall not be
deemed to have occurred hereunder if the Originator has
accepted reassignment of the related Receivable, or all
of such Receivables, if applicable, during such period
in accordance with the provisions of the Receivables
Purchase Agreement;
(k) Federated shall cease to own directly or indirectly
100% of the issued and outstanding capital stock of each
of the Transferor and the Originator;
(l) the Originator shall not be in compliance with all
minimum ratios of total capital (and core capital) to
risk-weighted-assets required by the governmental
authorities regulating the Originator in accordance with
the implementation by such authorities of the Basle
Accord and such noncompliance shall have continued for a
period of 30 days; or
(m) the sum of (i) Transferor's tangible net worth
(determined in accordance with generally accepted
accounting principles) plus (ii) to the extent excluded
in determining such tangible net worth, the outstanding
principal amount of, and all accrued and unpaid interest
on, the subordinated promissory note from the Transferor
to FCHC referred to in subsection 2.5(l) of the
Agreement, at any time shall be less than $20,000,000,
and such condition shall continue for a period of 30
days;
then, in the case of any event described in subparagraph
(a), (b), (e), (f), (h), (i), (j), (k), (l) or (m) after
the applicable grace period, if any, set forth in such
subparagraphs, either the Trustee or the Holders of
Class A Certificates evidencing Undivided Interests
aggregating more than 50% of the Class A Invested Amount
or of Class B Certificates evidencing Undivided
Interests aggregating more than 50% of the Class B
Invested Amount, by notice then given in writing to the
Transferor and the Servicer (and to the Trustee if given
by the Certificateholders) may declare that a pay out
event (a "Series 1999-1 Pay Out Event") has occurred as
of the date of such notice, and in the case of any event
described in subparagraph (c), (d), (g) or (h), a
Series 1999-1 Pay Out Event shall occur without any
notice or other action on the part of the Trustee or the
Series 1999-1 Variable Funding Certificateholders
immediately upon the occurrence of such event. The
Servicer shall provide prompt written notice to the
Rating Agencies of the occurrence of any Pay Out Event
following the Servicer's obtaining actual knowledge of
such event.
SECTION 11 Successor Servicer and Delegation. (a)
Section 10.2 of the Agreement shall read in its entirety as
provided in the Agreement and, in addition, the following sentence
should be inserted in the fifteenth line of Section 10.2(a)
between the phrase "acceptable to the Trustee." and "If such
Successor Servicer is" and shall be applicable only with respect
to the Series 1999-1 Certificates: "Any Successor Servicer must
either (A) be approved by the Class A Agent and the Class B Agent,
which approvals shall not be unreasonably withheld, or (B) be a
Person which (i) has a net worth of at least $50,000,000, (ii) has
serviced at least $2,000,000,000 of credit or charge card
receivables at any one time outstanding during the previous 12
months and (iii) has a senior long-term debt rating, as determined
by at least one nationally recognized statistical rating
organization, of at least `BBB' or its equivalent, provided, that
if such Successor Servicer has no long term debt or such debt is
not rated by a nationally recognized statistical rating
organization, the long term debt rating of its parent must be at
least `BBB' or its equivalent."
(b) The Servicer shall not delegate any significant
duties as servicer under the Agreement pursuant to Section 8.7
thereof to any Person other than an Affiliate of FDSNB except in
accordance with such Section and with the prior consent of the
Administrative Agent acting at the direction of Holders of Class A
Certificates evidencing Undivided Interests aggregating more than
50% of the Class A Invested Amount or of Class B Certificates
evidencing Undivided Interests aggregating more than 50% of the
Class B Invested Amount, which direction shall not be unreasonably
withheld.
(c) The Trustee covenants and agrees that, so long as
any portion of the Class A Investor Principal Balance or the Class
B Investor Principal Balance shall remain outstanding or any
monetary obligation arising hereunder or under the Class A
Certificate Purchase Agreement or the Class B Certificate Purchase
Agreement to the Class A Agent, the Class B Agent or any purchaser
thereunder shall remain unpaid, unless Holders of Class A
Certificates evidencing Undivided Interests aggregating more than
50% of the Class A Invested Amount and of Class B Certificates
evidencing Undivided Interests aggregating more than 50% of the
Class B Invested Amount, shall otherwise consent in writing, it
shall, for the benefit of the Class A Certificateholders, the
Class A Agent, the Class B Certificateholders and the Class B
Agent, and so long as the Class B Certificate Purchase Agreement
or the Class B Certificate Purchase Agreement, as the case may be,
shall be in effect, use reasonable efforts to consult with the
Class A Agent and the Class B Agent prior to any appointment of
any Successor Servicer pursuant to Section 10.2 of the Agreement;
provided that the consent of the Class A Certificateholders or the
Class B Certificateholders to the appointment of a Successor
Servicer shall only be required if otherwise required under the
terms of the Agreement.
SECTION 12 Successor Trustee. Section 11.6 of the
Agreement shall read in its entirety as provided in the Agreement
and, in addition, the following sentence shall be added to the end
of subsection 11.6(c) of the Agreement and shall be applicable
only to the Series 1999-1 Certificates: "Any successor trustee
appointed pursuant to this Section 11.6 shall be subject to the
written consent of the Administrative Agent (which consent shall
not be unreasonably withheld)."
SECTION 13 Notices to Administrative Agent. A copy
of each notice, demand, direction, report, Officer's Certificate
or other certificate, election and opinion required to be sent or
delivered pursuant to Section or subsection 1.2(d), 2.3, 2.4(b),
2.4(d), 2.5(f), 2.6(d), 2.6(e), 2.7, 3.5, 3.6, 6.3(b), 6.9, 6.14,
7.2, 8.2, 8.7, 9.2, 10.1, 10.2, 10.3, 10.4, 11.6, 11.9, 11.15,
12.1, 12.2 or 13.2 of the Agreement shall also be sent or
delivered and, in the case of opinions, shall be addressed to the
Administrative Agent. The Trustee shall also promptly furnish to
the Administrative Agent a copy of any notice delivered to it by
any Holder of Investor Certificates (other than notices which
relate solely to a Series of Investor Certificates other than the
Series 1999-1 Certificates or in connection with transfers of
Certificates).
The Transferor shall give prompt notice to the Administrative
Agent (if not otherwise provided for in the Agreement or this
Variable Funding Supplement) of any deposit made pursuant to
subsection 2.4(c) or 3.8(a) of the Agreement, any change in Charge
Account Agreements or the Credit and Collection Policy pursuant to
subsection Section 2.5(c) of the Agreement or Section 14 of this
Variable Funding Supplement that constitutes a change to the
Charge Account Agreements, any transfer pursuant to subsection
2.5(f) of the Agreement and any circumstance contemplated by
subsection 3.1(c) of the Agreement. The Servicer shall give
prompt notice to the Administrative Agent of any change in the
depositary holding the Collection Account pursuant to subsection
4.2(a) of the Agreement, and the Trustee shall give prompt notice
to the Administrative Agent of the appointment or change of any
Paying Agent pursuant to Section 6.6 of the Agreement and any
merger, conversion or consolidation of the Trustee as contemplated
by Section 11.9 of the Agreement.
SECTION 14 Charge Account Agreements and Credit and
Collection Policies. Section 2.5(c) of the Agreement shall read in
its entirety as set forth below and as so amended and restated
shall be applicable only with respect to the Series 1999-1
Certificates: "The Transferor shall comply with and perform its
obligations and shall cause the Originator to comply with and
perform their obligations under the Charge Account Agreements
relating to the Accounts and the Credit and Collection Policy
except insofar as any failure to comply or perform would not
materially and adversely affect the rights of the Trust or the
Certificateholders hereunder or under the Certificates. The
Transferor may change the terms and provisions of the Charge
Account Agreements or the Credit and Collection Policy in any
respect (including, without limitation, the reduction of the
required minimum monthly payment, the calculation of the amount,
or the timing, of charge offs and the periodic finance charges and
other fees to be assessed thereon) only if such change (i) would
not, in the reasonable belief of the Transferor, cause,
immediately or with the passage of time, a Series 1999-1 Pay Out
Event to occur, (ii) (A) if it owns a comparable segment of charge
card accounts, such change is made applicable to the comparable
segment of the revolving credit card accounts owned by the
Transferor, if any, which have characteristics the same as, or
substantially similar to, the Accounts that are the subject of
such change and (B) if it does not own such a comparable segment,
it will not make any such change with the intent to materially
benefit the Transferor or the Originator over the Investor
Certificateholders, except as otherwise restricted by an
endorsement, sponsorship, or other agreement between the
Transferor and an unrelated third party or by the terms of the
Charge Account Agreements, and (iii) if the Servicer is servicing
charge card accounts owned by an unrelated third party, such
change would not result in the Servicer's applying a materially
higher standard of care to the servicing of such accounts than it
applies under this Agreement. Notwithstanding the Credit and
Collection Policy, in the event that (i) a Servicer Default shall
have occurred, or (ii) any event or circumstance described in
subsection 9.1(a) of the Agreement shall have occurred with
respect to Federated, the Servicer shall promptly take all steps
necessary to cause the availability of In-Store Payments to cease
and shall indemnify and hold the Trust harmless from any loss
resulting from any further In-Store Payments which for any reason
are not available for application as Collections as provided in
the Agreement."
SECTION 15 Minimum Denominations. The Series 1999-1
Certificates shall initially be issued in the principal amounts of
$124,800,000 Class A Variable Funding Certificates, $15,600,000
Class B Variable Funding Certificates and $15,600,000 Class C
Certificates. There shall be no minimum denomination for the
Series 1999-1 Certificates and the principal amount thereof shall
equal on any day the principal amount thereof reflected on the
then most recently issued Daily Report.
SECTION 16 Cash Equivalents. No investment of any
amounts on deposit in any account established pursuant to this
Series 1999-1 Variable Funding Supplement which is not otherwise a
Cash Equivalent (i) issued by an investment company described in
subclause (x) of clause (c) of the definition of Cash Equivalents
or (ii) described in clause (d) or (e) of the definition of Cash
Equivalent shall constitute a Cash Equivalent without the written
approval of the Administrative Agent.
SECTION 17 Automatic Additional Accounts. The
Transferor shall not elect to terminate or suspend the inclusion
of Automatic Additional Accounts without the prior written consent
of the Administrative Agent acting on behalf of the Holders of
Series 1999-1 Variable Funding Certificates as provided in Section
19 of this Variable Funding Supplement.
SECTION 18 Series 1999-1 Termination. The right of
the Series 1999-1 Certificateholders to receive payments from the
Trust will terminate on the first Business Day following the
Series 1999-1 Termination Date.
SECTION 19 Actions by Administrative Agent. The
Administrative Agent shall have no obligation hereunder to grant
any consent or approval, to give any direction or to take any
discretionary action unless and until it has been directed to do
so by the Class A Certificateholders as provided in the Class A
Certificate Purchase Agreement or by the Class B
Certificateholders as provided in the Class B Certificate Purchase
Agreement.
SECTION 20 Periodic Finance Charges and Other Fees.
The Transferor hereby agrees that, except as otherwise required by
any Requirement of Law, or as is deemed by the Transferor to be
necessary in order for the Transferor to maintain its credit card
business, based upon a good faith assessment by the Transferor, in
its sole discretion, of the nature of the competition in the
credit card business, it shall not at any time reduce the Periodic
Finance Charges assessed on any Receivable or other fees on any
Account if, as a result of such reduction, the Transferor's
reasonable expectation of the Portfolio Yield as of such date
would be less than the Base Rate.
SECTION 21 Rating Agency Condition. Any requirement
set forth in the Agreement that, with respect to any action or
series of related actions or proposed transaction or series or
related proposed transactions, each Rating Agency shall have
determined or notified the Trustee, the Transferor or the Servicer
that such action or series of related actions or proposed
transaction or series or related proposed transactions will not
result in a reduction or withdrawal of the rating of any Series of
Investor Certificates (or any similar requirement), shall mean
with respect to the Series 1999-1, that the Rating Agency
Condition has been satisfied with respect to such action or series
of related actions or proposed transaction or series or related
proposed transactions.
SECTION 22 Distribution Account. There shall be no
Distribution Account for Series 1999-1.
SECTION 23 Certificate Purchase Agreements. The
Trustee hereby acknowledges receipt of copies of the Class A
Certificate Purchase Agreement and the Class B Certificate
Purchase Agreement and agrees to be bound by the provisions of
subsection 9.12 (b) and Sections 9.14 and 9.15 of each such
agreement applicable to it. The Servicer hereby agrees to provide
the Trustee with a copy of any amendment or other modification to
either such agreement.
SECTION 24 Ratification of Agreement. As
supplemented by this Variable Funding Supplement, the Agreement is
in all respects ratified and confirmed and the Agreement as so
supplemented by this Variable Funding Supplement shall be read,
taken, and construed as one and the same instrument.
SECTION 25 Counterparts. This Variable Funding
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 26 GOVERNING LAW. THIS VARIABLE FUNDING
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 HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.
SECTION 27 The Trustee. The Trustee shall not be
responsible in any manner whatsoever for or in respect of (a) the
sufficiency of this Variable Funding Supplement or for or in
respect of the Preliminary Statement contained herein, all of
which recitals are made solely by the Transferor, or (b)
determining, calculating or verifying any of the amounts,
percentages, collections, distributions or other computations set
forth in this Variable Funding Supplement.
SECTION 28 Instructions in Writing. All
instructions given by the Servicer to the Trustee pursuant to this
Variable Funding Supplement shall be in writing, and may be
included in a Daily Report or Settlement Statement.
IN WITNESS WHEREOF, the Transferor, the Servicer and the Trustee
have caused this Series 1999-1 Variable Funding Supplement to be
duly executed by their respective officers as of the day and year
first above written.
PRIME II RECEIVABLES CORPORATION
Transferor
By:/s/ Susan P. Storer
Name: Susan P. Storer
Title: President
FDS NATIONAL BANK
Servicer
By:/s/ Susan R. Robinson
Name: Susan R. Robinson
Title: Treasurer
THE CHASE MANHATTAN BANK
Trustee
By:/s/ Jennifer Cupo
Name: Jennifer Cupo
Title: Vice President
Exhibit A-1
[FORM OF CLASS A VARIABLE FUNDING CERTIFICATE]
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), IN RELIANCE UPON
EXEMPTIONS PROVIDED BY THE SECURITIES ACT. NO RESALE OR OTHER
TRANSFER OF THIS CERTIFICATE MAY BE MADE EXCEPT (A) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (B) IN
A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND APPLICABLE STATE SECURITIES OR "BLUE SKY" LAWS.
NEITHER THE TRANSFEROR NOR THE TRUSTEE IS OBLIGATED TO REGISTER
THE CERTIFICATES UNDER THE SECURITIES ACT OR ANY OTHER SECURITIES
OR "BLUE SKY" LAW.
EACH HOLDER OF THIS CERTIFICATE OR AN INTEREST THEREIN, BY
ACCEPTING AND HOLDING THIS CERTIFICATE, IS DEEMED TO HAVE
REPRESENTED AND WARRANTED THAT IT IS NOT (I) AN EMPLOYEE BENEFIT
PLAN AS DEFINED IN SECTION 3(3) OF ERISA) THAT IS SUBJECT TO THE
PROVISIONS OF TITLE I OF ERISA, (II) A PLAN DESCRIBED IN SECTION
4975(E)(l) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, OR
(III) ANY ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY
REASON OF A PLAN'S INVESTMENT IN THE ENTITY.
No. ___% Percentage Interest
PRIME CREDIT CARD MASTER TRUST II
CLASS A VARIABLE FUNDING CERTIFICATE,
SERIES 1999-1
Evidencing an undivided interest in a trust, the corpus of
which consists of receivables generated from time to time in the
ordinary course of business from a portfolio of consumer revolving
credit card accounts generated or to be generated by FDS National
Bank ("FDSNB") and other assets and interests constituting the
Trust under the Pooling and Servicing Agreement described below.
(Not an interest in or a recourse obligation of Prime II
Receivables Corporation, FDSNB or any affiliate of either of
them.)
This certifies that ____________________________ (the
"Certificateholder") is the registered owner of a fractional
undivided interest in the Prime Credit Card Master Trust II (the
"Trust") issued pursuant to the Pooling and Servicing Agreement,
dated as of January 22, 1997 (the "Pooling and Servicing
Agreement," such term to include any amendment or Supplement
thereto) by and among Prime II Receivables Corporation, as
Transferor (the "Transferor"), FDSNB, as Servicer (the
"Servicer"), and The Chase Manhattan Bank, as Trustee (the
"Trustee"), and the Series 1999-1 Variable Funding Supplement,
dated as of July 6, 1999 (the "Supplement"), among the Transferor,
the Servicer and the Trustee. The corpus of the Trust consists of
all of the Transferor's right, title and interest in, to and under
the Trust Property. The Certificateholder is entitled to payments
from time to time as provided in the Pooling and Servicing
Agreement.
The holder of this Certificate on any Business Day is
entitled to payment in an amount equal to its pro rata share (as
provided in the Pooling and Servicing Agreement) of (a) the Class
A Initial Invested Amount plus (b) an amount equal to the
aggregate principal amount of any VFC Additional Class A Invested
Amount purchased by the Class A Certificateholders through the end
of the preceding Business Day pursuant to Section 6.15 of the
Pooling and Servicing Agreement minus (c) the aggregate amount of
principal payments made to the Class A Certificateholders prior to
such Business Day.
This Certificate does not purport to summarize the Pooling
and Servicing Agreement and reference is made to the Pooling and
Servicing Agreement for information with respect to the interests,
rights, benefits, obligations, proceeds, and duties evidenced
hereby and the rights, duties and obligations of the Trustee. A
copy of the Pooling and Servicing Agreement may be requested from
the Trustee by writing to the Trustee at 450 West 33rd Street, New
York, New York 10001, Attention: Corporate Trustee Administration
Department. To the extent not defined herein, the capitalized
terms used herein have the meanings ascribed to them in the
Pooling and Servicing Agreement. This Certificate is one of a
series of Certificates entitled "Prime Credit Card Master Trust II
Class A Variable Funding Certificates, Series 1999-1" (the "Class
A Variable Funding Certificates"), each of which represents a
fractional undivided interest in the Trust, and is issued under
and is subject to the terms, provisions and conditions of the
Pooling and Servicing Agreement, to which Pooling and Servicing
Agreement, as amended from time to time, the Certificateholder by
virtue of the acceptance hereof assents and by which the
Certificateholder is bound.
The Series 1999-1 Certificates are issued in three classes,
the Class A Variable Funding Certificates (of which this
certificate is one), the Class B Variable Funding Certificates,
which are subordinated to the Class A Variable Funding
Certificates in certain rights of payment as described in the
Agreement and the Class C Certificates, which are subordinated to
the Class A Variable Funding Certificates and Class B Variable
Funding Certificates in certain rights of payment as described in
the Agreement.
A portion of the aggregate Receivables in the Trust as
determined pursuant to the Pooling and Servicing Agreement will be
treated as Finance Charge Receivables. Such amount may be
adjusted from time to time pursuant to the Supplement. The
remainder of such Receivables will be treated as Principal
Receivables.
Each holder of a Class A Variable Funding Certificate (a
"Class A Certificateholder") or any interest therein by acceptance
of its Certificate or any interest therein, agrees to treat the
Class A Variable Funding Certificates for purposes of federal,
state and local income or franchise taxes and any other tax
imposed on or measured by income, as indebtedness of the
Transferor to the extent permitted by law.
The Trust's assets are allocated in part to the holders of
the Investor Certificates (the "Investor Certificateholders") with
the remainder allocated to holders of other Series of Certificates
issued by the Trust, if any, and to the Transferor. In addition
to the Investor Certificates, an Exchangeable Transferor
Certificate will be issued pursuant to the Pooling and Servicing
Agreement and will represent the Transferor's Interest in the
Trust. The Exchangeable Transferor Certificate will represent the
interest in the Receivables not represented by the Investor
Certificates or any other Series of Certificates. The
Exchangeable Transferor Certificate may be exchanged by the
Transferor pursuant to the Pooling and Servicing Agreement for one
or more Series of Certificates and a reissued Exchangeable
Transferor Certificate upon the conditions set forth in the
Pooling and Servicing Agreement. In addition, to the extent
permitted for any Series of Certificates by the related
Supplement, the Certificateholders of such Series may tender their
Certificates and the Transferor may tender the Exchangeable
Transferor Certificate in exchange for one or more Series of
Certificates and a reissued Exchangeable Transferor Certificate.
The aggregate interest in the Trust represented by the
Investor Certificates at any time shall not exceed an amount equal
to the Invested Amount at such time. The Initial Invested Amount
is $_____________. The aggregate interest in the Trust
represented by the Class A Variable Funding Certificates at any
time shall not exceed an amount equal to the Class A Invested
Amount at such time. The Class A Initial Invested Amount is
$___________.
Interest will accrue on the unpaid principal amount of the
Class A Variable Funding Certificates at a per annum rate equal to
the Class A Certificate Rate and will be calculated on each
Business Day based on the product of the Class A Certificate Rate
and the outstanding principal balance of the Class A Variable
Funding Certificates on such Business Day.
If on any Determination Date the Series Default and Dilution
Amount for the preceding Monthly Period exceeded the aggregate
amount of Finance Charge Collections applied to the payment
thereof and the Available Reserve Amount, and the amount of Excess
Finance Charge Collections and Reallocated Principal Collections
allocated thereto, then a portion of the Class C Invested Amount
will be reduced by an amount equal to such deficiency (but not in
excess of the Series Default and Dilution Amount for such Monthly
Period) to avoid a charge-off with respect to the Class A Variable
Funding Certificates or Class B Variable Funding Certificates. If
the Class C Invested Amount is reduced to zero, then a portion of
the Class B Invested Amount will be reduced by an amount by which
the Class C Invested Amount would have been reduced below zero
(but not in excess of the Class A/B Default and Dilution Amount
for such Monthly Period). If the Class B Invested Amount is
reduced to zero, then a portion of the Class A Invested Amount
will be reduced by an amount by which the Class B Invested Amount
would have been reduced below zero (but not in excess of Class A
Default Amount for such Monthly Period).
The Servicer, is entitled to receive as servicing
compensation a servicing fee in an amount equal to, with respect
to each Series, the product of (i) a fraction, the numerator of
which is the actual number of days in the measuring period
specified in the applicable Series Supplement and the denominator
of which is the actual number of days in the year, (ii) the
applicable Series Servicing Fee Percentage and (iii) the Invested
Amount as of the end of the date of determination for such payment
as specified in the applicable Series Supplement. The share of
the Servicing Fee allocable to the Investor Certificates for any
Business Day is equal to the product of (i) a fraction, the
numerator of which is the actual number of days from and including
the preceding Business Day to but excluding such Business Day and
the denominator of which is the actual number of days in the year,
(ii) 2.0% per annum and (iii) the Adjusted Invested Amount as of
the end of the preceding Business Day (the "Servicing Fee"). The
Servicing Fee will be paid in the manner set forth in the Pooling
and Servicing Agreement. The remainder of the servicing
compensation will be allocable to the Transferor Amount and the
Certificateholders of all other Series, and the Trustee and the
Investor Certificateholders will not have any obligation to pay
such portion of the servicing compensation.
As described in the Pooling and Servicing Agreement,
Principal Collections with respect to any Business Day will be
allocated on the basis of the aggregate Investor Percentage of all
Series and the Transferor Percentage with respect to the Principal
Collections.
Subject to the Pooling and Servicing Agreement and the
Supplement, payments of principal are limited to the unpaid Class
A Invested Amount of the Class A Variable Funding Certificates,
which may be less than the unpaid balance of the Class A Variable
Funding Certificates pursuant to the terms of the Pooling and
Servicing Agreement and the Supplement. All principal of and
interest on the Class A Variable Funding Certificates is due and
payable no later than July 31, 2004, unless a different date shall
be set forth in an Extension Notice (the "Series Termination
Date"). After the Series Termination Date, neither the Trust nor
the Transferor will have any further obligation to distribute
principal or interest on the Class A Variable Funding
Certificates. In the event that the Class A Invested Amount is
greater than zero on the Series Termination Date, the Trustee will
sell or cause to be sold, to the extent necessary, an amount of
Principal Receivables and the related Finance Charge Receivables
(or, in some cases, interests therein) up to 110% of the Class A
Invested Amount, the Class B Invested Amount and the Class C
Invested Amount at the close of business on such date (but not
more than the total amount of Receivables allocable to the
Investor Certificates determined pursuant to the Pooling and
Servicing Agreement), and shall pay the proceeds to the Class A
Certificateholders pro rata in final payment of the Class A
Variable Funding Certificates, then to the Class B Variable
Funding Certificateholders pro rata in final payment of the Class
B Variable Funding Certificates and then to the Class C
Certificateholders pro rata in final payment of the Class C
Certificates.
The transfer of this Certificate shall be registered in the
Certificate Register upon surrender of this Certificate for
registration of transfer at any office or agency maintained by the
Transfer Agent and Registrar accompanied by a written instrument
of transfer in a form satisfactory to the Trustee and the Transfer
Agent and Registrar duly executed by the Certificateholder or such
Certificateholder's attorney-in-fact duly authorized in writing,
and thereupon one or more new Class A Variable Funding
Certificates of authorized denominations and for the same
aggregate fractional Undivided Interests will be issued to the
designated transferee or transferees.
As provided in the Pooling and Servicing Agreement and
certain limitations therein and herein set forth, Class A Variable
Funding Certificates are exchangeable for new Class A Variable
Funding Certificates evidencing like aggregate fractional
undivided interests, as requested by the Class A Certificateholder
surrendering such Class A Variable Funding Certificates. No
service charge may be imposed for any such exchange but the
Transfer Agent and Registrar may require payment of a sum
sufficient to cover any tax or other governmental charge that may
be imposed in connection therewith.
The Trustee, the Paying Agent and the Transfer Agent and
Registrar, and any agent of any of them, may treat the person in
whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Trustee, the Paying Agent and the
Transfer Agent and Registrar, nor any agent of any of them or of
any such agent shall be affected by notice to the contrary except
in certain circumstances described in the Pooling and Servicing
Agreement.
The Pooling and Servicing Agreement and the Supplement may be
amended from time to time by the Servicer, the Transferor and the
Trustee, without the consent of any of the Class A
Certificateholders, to cure any ambiguity, to revise any exhibits
or schedules (other than Schedule 1) of the Pooling and Servicing
Agreement, to correct or supplement any provisions therein which
may be inconsistent with any other provisions therein or to add
any other provisions with respect to matters or questions raised
under the Pooling and Servicing Agreement or the Supplement which
shall not be inconsistent with the provisions of the Pooling and
Servicing Agreement or the Supplement; provided, however, that
such action shall not, as evidenced by an Opinion of Counsel,
adversely affect in any material respect the interests of any of
the Investor Certificateholders. Additionally, the Pooling and
Servicing Agreement and the Supplement may be amended from time to
time by the Servicer, the Transferor and the Trustee, without the
consent of any of the Class A Certificateholders, to add to or
change any of the provisions of the Pooling and Servicing
Agreement (i) to provide that Bearer Certificates may be
registrable as to principal, to change or eliminate any
restrictions on the payment of principal of (or premium, if any)
or any interest on Bearer Certificates to comply with the Bearer
Rules, to permit Bearer Certificates to be issued in exchange for
Registered Certificates (if then permitted by the Bearer Rules),
to permit Bearer Certificates to be issued in exchange for Bearer
Certificates of other authorized denominations or to permit the
issuance of Certificates in uncertificated form or (ii) to
restrict or eliminate in any way the Transferor's right to
designate Removed Accounts and to remove from the Trust all of the
Trust's right, title and interest in, to and under the Receivables
in such Removed Accounts pursuant to Section 2 of the Pooling and
Servicing Agreement. The Trustee may, but shall not be obligated
to, enter into any such amendment which affects the Trustee's
rights, duties or immunities under the Pooling and Servicing
Agreement or otherwise.
The Pooling and Servicing Agreement (and any schedule or
exhibit thereto) and the Supplement (and any schedule or exhibit
thereto) may also be amended from time to time by the Servicer,
the Transferor and the Trustee, without the consent of any of the
Class A Certificateholders, for the purpose of adding any
provisions to or changing in any manner or eliminating any of the
provisions of the Pooling and Servicing Agreement or the
Supplement, or of modifying in any manner the rights of the
Holders of the Class A Variable Funding Certificates; provided
that (i) the Servicer shall have provided an Officer's Certificate
to the Trustee to the effect that such amendment will not
materially and adversely affect the interests of the
Certificateholders, (ii) such amendment shall not, as evidenced by
an Opinion of Counsel, cause the Trust to be characterized for
U.S. federal income tax purposes as an association taxable as a
corporation or otherwise have any material adverse impact on the
U.S. federal income taxation of the Class A Variable Funding
Certificates or the Class A Certificateholders and (iii) the
Servicer shall have provided at least ten Business Days prior
written notice to each Rating Agency of such amendment and shall
have received written confirmation from each Rating Agency to the
effect that the then current rating of any Series or any Class of
any Series will not be reduced or withdrawn as a result of such
amendment; provided, further, that such amendment shall not reduce
in any manner the amount of, or delay the timing of, distributions
which are required to be made on any Class A Variable Funding
Certificate without the consent of the related Class A
Certificateholder, change the definition of or the manner of
calculating the interest of any Investor Certificateholder of such
Series without the consent of the related Investor
Certificateholder or reduce the percentage pursuant to the next
succeeding paragraph required to consent to any such amendment, in
each case without the consent of all such Class A
Certificateholders.
The Pooling and Servicing Agreement and the Supplement may
also be amended from time to time by the Servicer, the Transferor
and the Trustee with the consent of the Holders of Investor
Certificates evidencing Undivided Interests aggregating not less
than 66-2/3% of the Invested Amount of each and every Series
adversely affected, for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of the
Pooling and Servicing Agreement or of modifying in any manner the
rights of the Investor Certificateholders of any Series then
issued and outstanding; provided, however, that no such amendment
shall (i) reduce in any manner the amount of, or delay the timing
of, distributions which are required to be made on any Investor
Certificate of any Series without the consent of the related
Investor Certificateholders; (ii) change the definition of or the
manner of calculating the interest of any Investor
Certificateholder of any Series without the consent of the related
Investor Certificateholder or (iii) reduce the aforesaid
percentage required to consent to any such amendment, in each case
without the consent of all such Investor Certificateholders;
provided, further, that for the purposes of the Officer's
Certificate referred to in clause (i) above, any action taken in
order to enable the Trust or a portion thereof to elect to qualify
as a FASIT (or comparable tax entity for the securitization of
financial assets) in accordance with the Internal Revenue Code of
1986, as amended, shall be deemed not to materially and adversely
affect the interest of the Certificateholders.
THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
Unless the certificate of authentication hereon has been
executed by or on behalf of the Trustee, by manual signature, this
Certificate shall not be entitled to any benefit under the Pooling
and Servicing Agreement, or be valid for any purpose.
IN WITNESS WHEREOF, the Transferor has caused this
Certificate to be duly executed under its official seal.
PRIME II RECEIVABLES CORPORATION
By:_________________________________
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This is one of the Class A Variable Funding Certificates
referred to in the within-mentioned Pooling and Servicing
Agreement.
THE CHASE MANHATTAN BANK,
as Trustee
By:_____________________________
Authorized Signatory
Exhibit A-2
[FORM OF CLASS B VARIABLE FUNDING CERTIFICATE]
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), IN RELIANCE UPON
EXEMPTIONS PROVIDED BY THE SECURITIES ACT. NO RESALE OR OTHER
TRANSFER OF THIS CERTIFICATE MAY BE MADE EXCEPT (A) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (B) IN
A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND APPLICABLE STATE SECURITIES OR "BLUE SKY" LAWS.
NEITHER THE TRANSFEROR NOR THE TRUSTEE IS OBLIGATED TO REGISTER
THE CERTIFICATES UNDER THE SECURITIES ACT OR ANY OTHER SECURITIES
OR "BLUE SKY" LAW.
EACH HOLDER OF THIS CERTIFICATE OR AN INTEREST THEREIN, BY
ACCEPTING AND HOLDING THIS CERTIFICATE, IS DEEMED TO HAVE
REPRESENTED AND WARRANTED THAT IT IS NOT (I) AN EMPLOYEE BENEFIT
PLAN AS DEFINED IN SECTION 3(3) OF ERISA) THAT IS SUBJECT TO THE
PROVISIONS OF TITLE I OF ERISA, (II) A PLAN DESCRIBED IN SECTION
4975(E)(l) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, OR
(III) ANY ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY
REASON OF A PLAN'S INVESTMENT IN THE ENTITY.
No. ___% Percentage Interest
PRIME CREDIT CARD MASTER TRUST II
CLASS B VARIABLE FUNDING CERTIFICATE,
SERIES 1999-1
Evidencing an undivided interest in a trust, the corpus of
which consists of receivables generated from time to time in the
ordinary course of business from a portfolio of consumer revolving
credit card accounts generated or to be generated by FDS National
Bank ("FDSNB") and other assets and interests constituting the
Trust under the Pooling and Servicing Agreement described below.
(Not an interest in or a recourse obligation of Prime II
Receivables Corporation, FDSNB or any affiliate of either of
them.)
This certifies that ____________________________ (the
"Certificateholder") is the registered owner of a fractional
undivided interest in the Prime Credit Card Master Trust II (the
"Trust") issued pursuant to the Pooling and Servicing Agreement,
dated as of January 22, 1997 (the "Pooling and Servicing
Agreement," such term to include any amendment or Supplement
thereto) by and among Prime II Receivables Corporation, as
Transferor (the "Transferor"), FDSNB, as Servicer (the
"Servicer"), and The Chase Manhattan Bank, as Trustee (the
"Trustee"), and the Series 1999-1 Variable Funding Supplement,
dated as of July 6, 1999 (the "Supplement"), among the Transferor,
the Servicer and the Trustee. The corpus of the Trust consists of
all of the Transferor's right, title and interest in, to and under
the Trust Property. The Certificateholder is entitled to payments
from time to time as provided in the Pooling and Servicing
Agreement.
The holder of this Certificate on any Business Day is
entitled to payment in an amount equal to its pro rata share (as
provided in the Pooling and Servicing Agreement) of (a) the Class
B Initial Invested Amount plus (b) an amount equal to the
aggregate principal amount of any VFC Additional Class B Invested
Amount purchased by the Class B Certificateholders through the end
of the preceding Business Day pursuant to Section 6.15 of the
Pooling and Servicing Agreement minus (c) the aggregate amount of
principal payments made to the Class B Certificateholders prior to
such Business Day.
This Certificate does not purport to summarize the Pooling
and Servicing Agreement and reference is made to the Pooling and
Servicing Agreement for information with respect to the interests,
rights, benefits, obligations, proceeds, and duties evidenced
hereby and the rights, duties and obligations of the Trustee. A
copy of the Pooling and Servicing Agreement may be requested from
the Trustee by writing to the Trustee at 450 West 33rd Street, New
York, New York 10001, Attention: Corporate Trustee Administration
Department. To the extent not defined herein, the capitalized
terms used herein have the meanings ascribed to them in the
Pooling and Servicing Agreement. This Certificate is one of a
series of Certificates entitled "Prime Credit Card Master Trust II
Class B Variable Funding Certificates, Series 1999-1" (the "Class
B Variable Funding Certificates"), each of which represents a
fractional undivided interest in the Trust, and is issued under
and is subject to the terms, provisions and conditions of the
Pooling and Servicing Agreement, to which Pooling and Servicing
Agreement, as amended from time to time, the Certificateholder by
virtue of the acceptance hereof assents and by which the
Certificateholder is bound.
The Series 1999-1 Certificates are issued in three classes,
the Class A Variable Funding Certificates, the Class B Variable
Funding Certificates (of which this certificate is one), which are
subordinated to the Class A Variable Funding Certificates in
certain rights of payment as described in the Agreement and the
Class C Certificates, which are subordinated to the Class A
Variable Funding Certificates and Class B Variable Funding
Certificates in certain rights of payment as described in the
Agreement.
A portion of the aggregate Receivables in the Trust as
determined pursuant to the Pooling and Servicing Agreement will be
treated as Finance Charge Receivables. Such amount may be
adjusted from time to time pursuant to the Supplement. The
remainder of such Receivables will be treated as Principal
Receivables.
Each holder of a Class B Variable Funding Certificate (a
"Class B Certificateholder") or any interest therein by acceptance
of its Certificate or any interest therein, agrees to treat the
Class B Variable Funding Certificates for purposes of federal,
state and local income or franchise taxes and any other tax
imposed on or measured by income, as indebtedness of the
Transferor to the extent permitted by law.
The Trust's assets are allocated in part to the holders of
the Investor Certificates (the "Investor Certificateholders") with
the remainder allocated to holders of other Series of Certificates
issued by the Trust, if any, and to the Transferor. In addition
to the Investor Certificates, an Exchangeable Transferor
Certificate will be issued pursuant to the Pooling and Servicing
Agreement and will represent the Transferor's Interest in the
Trust. The Exchangeable Transferor Certificate will represent the
interest in the Receivables not represented by the Investor
Certificates or any other Series of Certificates. The
Exchangeable Transferor Certificate may be exchanged by the
Transferor pursuant to the Pooling and Servicing Agreement for one
or more Series of Certificates and a reissued Exchangeable
Transferor Certificate upon the conditions set forth in the
Pooling and Servicing Agreement. In addition, to the extent
permitted for any Series of Certificates by the related
Supplement, the Certificateholders of such Series may tender their
Certificates and the Transferor may tender the Exchangeable
Transferor Certificate in exchange for one or more Series of
Certificates and a reissued Exchangeable Transferor Certificate.
The aggregate interest in the Trust represented by the
Investor Certificates at any time shall not exceed an amount equal
to the Invested Amount at such time. The Initial Invested Amount
is $___________. The aggregate interest in the Trust represented
by the Class B Variable Funding Certificates at any time shall not
exceed an amount equal to the Class B Invested Amount at such
time. The Class B Initial Invested Amount is $___________.
Interest will accrue on the unpaid principal amount of the
Class B Variable Funding Certificates at a per annum rate equal to
the Class B Certificate Rate and will be calculated on each
Business Day based on the product of the Class B Certificate Rate
and the outstanding principal balance of the Class B Variable
Funding Certificates on such Business Day.
If on any Determination Date the Series Default and Dilution
Amount for the preceding Monthly Period exceeded the aggregate
amount of Finance Charge Collections applied to the payment
thereof and the Available Reserve Amount, and the amount of Excess
Finance Charge Collections and Reallocated Principal Collections
allocated thereto, then a portion of the Class C Invested Amount
will be reduced by an amount equal to such deficiency (but not in
excess of the Series Default and Dilution Amount for such Monthly
Period) to avoid a charge-off with respect to the Class A Variable
Funding Certificates or Class B Variable Funding Certificates. If
the Class C Invested Amount is reduced to zero, then a portion of
the Class B Invested Amount will be reduced by an amount by which
the Class C Invested Amount would have been reduced below zero
(but not in excess of the Class A/B Default and Dilution Amount
for such Monthly Period). If the Class B Invested Amount is
reduced to zero, then a portion of the Class A Invested Amount
will be reduced by an amount by which the Class B Invested Amount
would have been reduced below zero (but not in excess of the Class
A Default and Dilution Amount for such Monthly Period).
The Servicer, is entitled to receive as servicing
compensation a servicing fee in an amount equal to, with respect
to each Series, the product of (i) a fraction, the numerator of
which is the actual number of days in the measuring period
specified in the applicable Series Supplement and the denominator
of which is the actual number of days in the year, (ii) the
applicable Series Servicing Fee Percentage and (iii) the Invested
Amount as of the end of the date of determination for such payment
as specified in the applicable Series Supplement. The share of
the Servicing Fee allocable to the Investor Certificates for any
Business Day is equal to the product of (i) a fraction, the
numerator of which is the actual number of days from and including
the preceding Business Day to but excluding such Business Day and
the denominator of which is the actual number of days in a year,
(ii) 2.0% per annum and (iii) the Adjusted Invested Amount as of
the end of the preceding Business Day (the "Servicing Fee"). The
Servicing Fee will be paid in the manner set forth in the Pooling
and Servicing Agreement. The remainder of the servicing
compensation will be allocable to the Transferor Amount and the
Certificateholders of all other Series, and the Trustee and the
Investor Certificateholders will not have any obligation to pay
such portion of the servicing compensation.
As described in the Pooling and Servicing Agreement,
Principal Collections with respect to any Business Day will be
allocated on the basis of the aggregate Investor Percentage of all
Series and the Transferor Percentage with respect to the Principal
Collections.
Subject to the Pooling and Servicing Agreement and the
Supplement, payments of principal are limited to the unpaid Class
B Invested Amount of the Class B Variable Funding Certificates,
which may be less than the unpaid balance of the Class B Variable
Funding Certificates pursuant to the terms of the Pooling and
Servicing Agreement and the Supplement. All principal of and
interest on the Class B Variable Funding Certificates is due and
payable no later than July 31, 2004, unless a different date shall
be set forth in an Extension Notice (the "Series Termination
Date"). After the Series Termination Date, neither the Trust nor
the Transferor will have any further obligation to distribute
principal or interest on the Class B Variable Funding
Certificates. In the event that the Class B Invested Amount is
greater than zero on the Series Termination Date, the Trustee will
sell or cause to be sold, to the extent necessary, an amount of
Principal Receivables and the related Finance Charge Receivables
(or, in some cases, interests therein) up to 110% of the Class A
Invested Amount, the Class B Invested Amount and the Class C
Invested Amount at the close of business on such date (but not
more than the total amount of Receivables allocable to the
Investor Certificates determined pursuant to the Pooling and
Servicing Agreement), and shall pay the proceeds to the Class A
Certificateholders pro rata in final payment of the Class A
Variable Funding Certificates, then to the Class B Variable
Funding Certificateholders pro rata in final payment of the Class
B Variable Funding Certificates and then to the Class C
Certificateholders pro rata in final payment of the Class C
Certificates.
The transfer of this Certificate shall be registered in the
Certificate Register upon surrender of this Certificate for
registration of transfer at any office or agency maintained by the
Transfer Agent and Registrar accompanied by a written instrument
of transfer in a form satisfactory to the Trustee and the Transfer
Agent and Registrar duly executed by the Certificateholder or such
Certificateholder's attorney-in-fact duly authorized in writing,
and thereupon one or more new Class B Variable Funding
Certificates of authorized denominations and for the same
aggregate fractional Undivided Interests will be issued to the
designated transferee or transferees.
As provided in the Pooling and Servicing Agreement and
certain limitations therein and herein set forth, Class B Variable
Funding Certificates are exchangeable for new Class B Variable
Funding Certificates evidencing like aggregate fractional
undivided interests, as requested by the Class B Certificateholder
surrendering such Class B Variable Funding Certificates. No
service charge may be imposed for any such exchange but the
Transfer Agent and Registrar may require payment of a sum
sufficient to cover any tax or other governmental charge that may
be imposed in connection therewith.
The Trustee, the Paying Agent and the Transfer Agent and
Registrar, and any agent of any of them, may treat the person in
whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Trustee, the Paying Agent and the
Transfer Agent and Registrar, nor any agent of any of them or of
any such agent shall be affected by notice to the contrary except
in certain circumstances described in the Pooling and Servicing
Agreement.
The Pooling and Servicing Agreement and the Supplement may be
amended from time to time by the Servicer, the Transferor and the
Trustee, without the consent of any of the Class B
Certificateholders, to cure any ambiguity, to revise any exhibits
or schedules (other than Schedule 1) of the Pooling and Servicing
Agreement, to correct or supplement any provisions therein which
may be inconsistent with any other provisions therein or to add
any other provisions with respect to matters or questions raised
under the Pooling and Servicing Agreement or the Supplement which
shall not be inconsistent with the provisions of the Pooling and
Servicing Agreement or the Supplement; provided, however, that
such action shall not, as evidenced by an Opinion of Counsel,
adversely affect in any material respect the interests of any of
the Investor Certificateholders. Additionally, the Pooling and
Servicing Agreement and the Supplement may be amended from time to
time by the Servicer, the Transferor and the Trustee, without the
consent of any of the Class B Certificateholders, to add to or
change any of the provisions of the Pooling and Servicing
Agreement (i) to provide that Bearer Certificates may be
registrable as to principal, to change or eliminate any
restrictions on the payment of principal of (or premium, if any)
or any interest on Bearer Certificates to comply with the Bearer
Rules, to permit Bearer Certificates to be issued in exchange for
Registered Certificates (if then permitted by the Bearer Rules),
to permit Bearer Certificates to be issued in exchange for Bearer
Certificates of other authorized denominations or to permit the
issuance of Certificates in uncertificated form or (ii) to
restrict or eliminate in any way the Transferor's right to
designate Removed Accounts and to remove from the Trust all of the
Trust's right, title and interest in, to and under the Receivables
in such Removed Accounts pursuant to Section 2 of the Pooling and
Servicing Agreement. The Trustee may, but shall not be obligated
to, enter into any such amendment which affects the Trustee's
rights, duties or immunities under the Pooling and Servicing
Agreement or otherwise.
The Pooling and Servicing Agreement (and any schedule or
exhibit thereto) and the Supplement (and any schedule or exhibit
thereto) may also be amended from time to time by the Servicer,
the Transferor and the Trustee, without the consent of any of the
Class B Certificateholders, for the purpose of adding any
provisions to or changing in any manner or eliminating any of the
provisions of the Pooling and Servicing Agreement or the
Supplement, or of modifying in any manner the rights of the
Holders of the Class B Variable Funding Certificates; provided
that (i) the Servicer shall have provided an Officer's Certificate
to the Trustee to the effect that such amendment will not
materially and adversely affect the interests of the
Certificateholders, (ii) such amendment shall not, as evidenced by
an Opinion of Counsel, cause the Trust to be characterized for
U.S. federal income tax purposes as an association taxable as a
corporation or otherwise have any material adverse impact on the
U.S. federal income taxation of the Class B Variable Funding
Certificates or the Class B Certificateholders and (iii) the
Servicer shall have provided at least ten Business Days prior
written notice to each Rating Agency of such amendment and shall
have received written confirmation from each Rating Agency to the
effect that the then current rating of any Series or any Class of
any Series will not be reduced or withdrawn as a result of such
amendment; provided, further, that such amendment shall not reduce
in any manner the amount of, or delay the timing of, distributions
which are required to be made on any Class B Variable Funding
Certificate without the consent of the related Class B
Certificateholder, change the definition of or the manner of
calculating the interest of any Investor Certificateholder of such
Series without the consent of the related Investor
Certificateholder or reduce the percentage pursuant to the next
succeeding paragraph required to consent to any such amendment, in
each case without the consent of all such Class B
Certificateholders.
The Pooling and Servicing Agreement and the Supplement may
also be amended from time to time by the Servicer, the Transferor
and the Trustee with the consent of the Holders of Investor
Certificates evidencing Undivided Interests aggregating not less
than 66-2/3% of the Invested Amount of each and every Series
adversely affected, for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of the
Pooling and Servicing Agreement or of modifying in any manner the
rights of the Investor Certificateholders of any Series then
issued and outstanding; provided, however, that no such amendment
shall (i) reduce in any manner the amount of, or delay the timing
of, distributions which are required to be made on any Investor
Certificate of any Series without the consent of the related
Investor Certificateholders; (ii) change the definition of or the
manner of calculating the interest of any Investor
Certificateholder of any Series without the consent of the related
Investor Certificateholder or (iii) reduce the aforesaid
percentage required to consent to any such amendment, in each case
without the consent of all such Investor Certificateholders;
provided, further, that for the purposes of the Officer's
Certificate referred to in clause (i) above, any action taken in
order to enable the Trust or a portion thereof to elect to qualify
as a FASIT (or comparable tax entity for the securitization of
financial assets) in accordance with the Internal Revenue Code of
1986, as amended, shall be deemed not to materially and adversely
affect the interest of the Certificateholders.
THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
Unless the certificate of authentication hereon has been
executed by or on behalf of the Trustee, by manual signature, this
Certificate shall not be entitled to any benefit under the Pooling
and Servicing Agreement, or be valid for any purpose.
IN WITNESS WHEREOF, the Transferor has caused this
Certificate to be duly executed under its official seal.
PRIME II RECEIVABLES CORPORATION
By:_________________________________
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This is one of the Class B Variable Funding Certificates
referred to in the within-mentioned Pooling and Servicing
Agreement.
THE CHASE MANHATTAN BANK,
as Trustee
By:_____________________________
Authorized Signatory
Exhibit A-3
[FORM OF CLASS C CERTIFICATE]
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), IN RELIANCE UPON
EXEMPTIONS PROVIDED BY THE SECURITIES ACT. NO RESALE OR OTHER
TRANSFER OF THIS CERTIFICATE MAY BE MADE EXCEPT (A) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (B) IN
A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND APPLICABLE STATE SECURITIES OR "BLUE SKY" LAWS.
NEITHER THE TRANSFEROR NOR THE TRUSTEE IS OBLIGATED TO REGISTER
THE CERTIFICATES UNDER THE SECURITIES ACT OR ANY OTHER SECURITIES
OR "BLUE SKY" LAW.
EACH HOLDER OF THIS CERTIFICATE OR AN INTEREST THEREIN, BY
ACCEPTING AND HOLDING THIS CERTIFICATE, IS DEEMED TO HAVE
REPRESENTED AND WARRANTED THAT IT IS NOT (I) AN EMPLOYEE BENEFIT
PLAN AS DEFINED IN SECTION 3(3) OF ERISA) THAT IS SUBJECT TO THE
PROVISIONS OF TITLE I OF ERISA, (II) A PLAN DESCRIBED IN SECTION
4975(E)(l) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, OR
(III) ANY ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY
REASON OF A PLAN'S INVESTMENT IN THE ENTITY.
No. ___% Percentage Interest
PRIME CREDIT CARD MASTER TRUST II
CLASS C CERTIFICATE,
SERIES 1999-1
Evidencing an undivided interest in a trust, the corpus of
which consists of receivables generated from time to time in the
ordinary course of business from a portfolio of consumer revolving
credit card accounts generated or to be generated by FDS National
Bank ("FDSNB") and other assets and interests constituting the
Trust under the Pooling and Servicing Agreement described below.
(Not an interest in or a recourse obligation of Prime II
Receivables Corporation, FDSNB or any affiliate of either of
them.)
This certifies that ____________________________ (the
"Certificateholder") is the registered owner of a fractional
undivided interest in the Prime Credit Card Master Trust II (the
"Trust") issued pursuant to the Pooling and Servicing Agreement,
dated as of January 22, 1997 (the "Pooling and Servicing
Agreement," such term to include any amendment or Supplement
thereto) by and among Prime II Receivables Corporation, as
Transferor (the "Transferor"), FDSNB, as Servicer (the
"Servicer"), and The Chase Manhattan Bank, as Trustee (the
"Trustee"), and the Series 1999-1 Variable Funding Supplement,
dated as of July 6, 1999 (the "Supplement"), among the Transferor,
the Servicer and the Trustee. The corpus of the Trust consists of
all of the Transferor's right, title and interest in, to and under
the Trust Property. The Certificateholder is entitled to payments
from time to time as provided in the Pooling and Servicing
Agreement.
The holder of this Certificate on any Business Day is
entitled to payment in an amount equal to its pro rata share (as
provided in the Pooling and Servicing Agreement) of (a) the Class
C Initial Invested Amount plus (b) an amount equal to the
aggregate principal amount of any VFC Additional Class C Invested
Amount purchased by the Class C Certificateholders through the end
of the preceding Business Day pursuant to Section 6.15 of the
Pooling and Servicing Agreement minus (c) the aggregate amount of
principal payments to the Class C Certificateholders prior to such
Business Day.
This Certificate does not purport to summarize the Pooling
and Servicing Agreement and reference is made to the Pooling and
Servicing Agreement for information with respect to the interests,
rights, benefits, obligations, proceeds, and duties evidenced
hereby and the rights, duties and obligations of the Trustee. A
copy of the Pooling and Servicing Agreement may be requested from
the Trustee by writing to the Trustee at 450 West 33rd Street, New
York, New York 10001, Attention: Corporate Trustee Administration
Department. To the extent not defined herein, the capitalized
terms used herein have the meanings ascribed to them in the
Pooling and Servicing Agreement. This Certificate is one of a
series of Certificates entitled "Prime Credit Card Master Trust II
Class C Certificates, Series 1999-1" (the "Class C Certificates"),
each of which represents a fractional undivided interest in the
Trust, and is issued under and is subject to the terms, provisions
and conditions of the Pooling and Servicing Agreement, to which
Pooling and Servicing Agreement, as amended from time to time, the
Certificateholder by virtue of the acceptance hereof assents and
by which the Certificateholder is bound.
The Series 1999-1 Certificates are issued in three classes,
the Class A Variable Funding Certificates, the Class B Variable
Funding Certificates, which are subordinated to the Class A
Variable Funding Certificates in certain rights of payment as
described in the Agreement and the Class C Certificates (of which
this certificate is one), which are subordinated to the Class A
Variable Funding Certificates and Class B Variable Funding
Certificates in certain rights of payment as described in the
Agreement.
A portion of the aggregate Receivables in the Trust as
determined pursuant to the Pooling and Servicing Agreement will be
treated as Finance Charge Receivables. Such amount may be
adjusted from time to time pursuant to the Supplement. The
remainder of such Receivables will be treated as Principal
Receivables.
Each holder of a Class C Certificate (a "Class C
Certificateholder") or any interest therein by acceptance of its
Certificate or any interest therein, agrees to treat the Class C
Certificates for purposes of federal, state and local income or
franchise taxes and any other tax imposed on or measured by
income, as indebtedness of the Transferor to the extent permitted
by law.
The Trust's assets are allocated in part to the holders of
the Investor Certificates (the "Investor Certificateholders") with
the remainder allocated to holders of other Series of Certificates
issued by the Trust, if any, and to the Transferor. In addition
to the Investor Certificates, an Exchangeable Transferor
Certificate will be issued pursuant to the Pooling and Servicing
Agreement and will represent the Transferor's Interest in the
Trust. The Exchangeable Transferor Certificate will represent the
interest in the Receivables not represented by the Investor
Certificates or any other Series of Certificates. The
Exchangeable Transferor Certificate may be exchanged by the
Transferor pursuant to the Pooling and Servicing Agreement for one
or more Series of Certificates and a reissued Exchangeable
Transferor Certificate upon the conditions set forth in the
Pooling and Servicing Agreement. In addition, to the extent
permitted for any Series of Certificates by the related
Supplement, the Certificateholders of such Series may tender their
Certificates and the Transferor may tender the Exchangeable
Transferor Certificate in exchange for one or more Series of
Certificates and a reissued Exchangeable Transferor Certificate.
The aggregate interest in the Trust represented by the
Investor Certificates at any time shall not exceed an amount equal
to the Invested Amount at such time. The Initial Invested Amount
is $___________. The aggregate interest in the Trust represented
by the Class C Certificates at any time shall not exceed an amount
equal to the Class C Invested Amount at such time. The Class C
Initial Invested Amount is $__________.
Interest will accrue on the unpaid principal amount of the
Class C Certificates at a per annum rate equal to the Class C
Certificate Rate and will be calculated on each Business Day based
on the product of the Class C Certificate Rate and the outstanding
principal balance of the Class C Certificates on such Business
Day.
If on any Determination Date the Series Default and Dilution
Amount for the preceding Monthly Period exceeded the aggregate
amount of Finance Charge Collections applied to the payment
thereof and the Available Reserve Amount, and the amount of Excess
Finance Charge Collections and Reallocated Principal Collections
allocated thereto, then a portion of the Class C Invested Amount
will be reduced by an amount equal to such deficiency (but not in
excess of the Series Default and Dilution Amount for such Monthly
Period) to avoid a charge-off with respect to the Class A Variable
Funding Certificates or Class B Variable Funding Certificates. If
the Class C Invested Amount is reduced to zero, then a portion of
the Class B Invested Amount will be reduced by an amount by which
the Class C Invested Amount would have been reduced below zero
(but not in excess of the Class A/B Default and Dilution Amount
for such Monthly Period). If the Class B Invested Amount is
reduced to zero, then a portion of the Class A Invested Amount
will be reduced by an amount by which the Class B Invested Amount
would have been reduced below zero (but not in excess of the Class
A Default and Dilution Amount for such Monthly Period).
The Servicer, is entitled to receive as servicing
compensation a servicing fee in an amount equal to, with respect
to each Series, the product of (i) a fraction, the numerator of
which is the actual number of days in the measuring period
specified in the applicable Series Supplement and the denominator
of which is the actual number of days in the year, (ii) the
applicable Series Servicing Fee Percentage and (iii) the Adjusted
Invested Amount as of the end of the date of determination for
such payment as specified in the applicable Series Supplement.
The share of the Servicing Fee allocable to the Investor
Certificates for any Business Day is equal to the product of (i) a
fraction, the numerator of which is the actual number of days from
and including the preceding Business Day to but excluding such
Business Day and the denominator of which is the actual number of
days in a year, (ii) 2.0% per annum and (iii) the Invested Amount
as of the end of the preceding Business Day (the "Servicing Fee").
The Servicing Fee will be paid in the manner set forth in the
Pooling and Servicing Agreement. The remainder of the servicing
compensation will be allocable to the Transferor Amount and the
Certificateholders of all other Series, and the Trustee and the
Investor Certificateholders will not have any obligation to pay
such portion of the servicing compensation.
As described in the Pooling and Servicing Agreement,
Principal Collections with respect to any Business Day will be
allocated on the basis of the aggregate Investor Percentage of all
Series and the Transferor Percentage with respect to the Principal
Collections.
Subject to the Pooling and Servicing Agreement and the
Supplement, payments of principal are limited to the unpaid Class
C Invested Amount of the Class C Certificates, which may be less
than the unpaid balance of the Class C Certificates pursuant to
the terms of the Pooling and Servicing Agreement and the
Supplement. All principal of and interest on the Class C
Certificates is due and payable no later than July 31, 2004,
unless a different date shall be set forth in an Extension Notice
(the "Series Termination Date"). After the Series Termination
Date, neither the Trust nor the Transferor will have any further
obligation to distribute principal or interest on the Class C
Certificates. In the event that the Class C Invested Amount is
greater than zero on the Series Termination Date, the Trustee will
sell or cause to be sold, to the extent necessary, an amount of
Principal Receivables and the related Finance Charge Receivables
(or, in some cases, interests therein) up to 110% of the Class A
Invested Amount, the Class B Invested Amount and the Class C
Invested Amount at the close of business on such date (but not
more than the total amount of Receivables allocable to the
Investor Certificates determined pursuant to the Pooling and
Servicing Agreement), and shall pay the proceeds to the Class A
Certificateholders pro rata in final payment of the Class A
Variable Funding Certificates, then to the Class B Variable
Funding Certificateholders pro rata in final payment of the Class
B Variable Funding Certificates and then to the Class C
Certificateholders pro rata in final payment of the Class C
Certificates.
The transfer of this Certificate shall be registered in the
Certificate Register upon surrender of this Certificate for
registration of transfer at any office or agency maintained by the
Transfer Agent and Registrar accompanied by a written instrument
of transfer in a form satisfactory to the Trustee and the Transfer
Agent and Registrar duly executed by the Certificateholder or such
Certificateholder's attorney-in-fact duly authorized in writing,
and thereupon one or more new Class C Certificates of authorized
denominations and for the same aggregate fractional Undivided
Interests will be issued to the designated transferee or
transferees.
As provided in the Pooling and Servicing Agreement and
certain limitations therein and herein set forth, Class C
Certificates are exchangeable for new Class C Certificates
evidencing like aggregate fractional undivided interests, as
requested by the Class C Certificateholder surrendering such Class
C Certificates. No service charge may be imposed for any such
exchange but the Transfer Agent and Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection therewith.
The Trustee, the Paying Agent and the Transfer Agent and
Registrar, and any agent of any of them, may treat the person in
whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Trustee, the Paying Agent and the
Transfer Agent and Registrar, nor any agent of any of them or of
any such agent shall be affected by notice to the contrary except
in certain circumstances described in the Pooling and Servicing
Agreement.
The Pooling and Servicing Agreement and the Supplement may be
amended from time to time by the Servicer, the Transferor and the
Trustee, without the consent of any of the Class C
Certificateholders, to cure any ambiguity, to revise any exhibits
or schedules (other than Schedule 1) of the Pooling and Servicing
Agreement, to correct or supplement any provisions therein which
may be inconsistent with any other provisions therein or to add
any other provisions with respect to matters or questions raised
under the Pooling and Servicing Agreement or the Supplement which
shall not be inconsistent with the provisions of the Pooling and
Servicing Agreement or the Supplement; provided, however, that
such action shall not, as evidenced by an Opinion of Counsel,
adversely affect in any material respect the interests of any of
the Investor Certificateholders. Additionally, the Pooling and
Servicing Agreement and the Supplement may be amended from time to
time by the Servicer, the Transferor and the Trustee, without the
consent of any of the Class C Certificateholders, to add to or
change any of the provisions of the Pooling and Servicing
Agreement (i) to provide that Bearer Certificates may be
registrable as to principal, to change or eliminate any
restrictions on the payment of principal of (or premium, if any)
or any interest on Bearer Certificates to comply with the Bearer
Rules, to permit Bearer Certificates to be issued in exchange for
Registered Certificates (if then permitted by the Bearer Rules),
to permit Bearer Certificates to be issued in exchange for Bearer
Certificates of other authorized denominations or to permit the
issuance of Certificates in uncertificated form or (ii) to
restrict or eliminate in any way the Transferor's right to
designate Removed Accounts and to remove from the Trust all of the
Trust's right, title and interest in, to and under the Receivables
in such Removed Accounts pursuant to Section 2 of the Pooling and
Servicing Agreement. The Trustee may, but shall not be obligated
to, enter into any such amendment which affects the Trustee's
rights, duties or immunities under the Pooling and Servicing
Agreement or otherwise.
The Pooling and Servicing Agreement (and any schedule or
exhibit thereto) and the Supplement (and any schedule or exhibit
thereto) may also be amended from time to time by the Servicer,
the Transferor and the Trustee, without the consent of any of the
Class C Certificateholders, for the purpose of adding any
provisions to or changing in any manner or eliminating any of the
provisions of the Pooling and Servicing Agreement or the
Supplement, or of modifying in any manner the rights of the
Holders of the Class C Certificates; provided that (i) the
Servicer shall have provided an Officer's Certificate to the
Trustee to the effect that such amendment will not materially and
adversely affect the interests of the Certificateholders, (ii)
such amendment shall not, as evidenced by an Opinion of Counsel,
cause the Trust to be characterized for U.S. federal income tax
purposes as an association taxable as a corporation or otherwise
have any material adverse impact on the U.S. federal income
taxation of the Class C Certificates or the Class C
Certificateholders and (iii) the Servicer shall have provided at
least ten Business Days prior written notice to each Rating Agency
of such amendment and shall have received written confirmation
from each Rating Agency to the effect that the then current rating
of any Series or any Class of any Series will not be reduced or
withdrawn as a result of such amendment; provided, further, that
such amendment shall not reduce in any manner the amount of, or
delay the timing of, distributions which are required to be made
on any Class C Certificate without the consent of the related
Class C Certificateholder, change the definition of or the manner
of calculating the interest of any Investor Certificateholder of
such Series without the consent of the related Investor
Certificateholder or reduce the percentage pursuant to the next
succeeding paragraph required to consent to any such amendment, in
each case without the consent of all such Class C
Certificateholders.
The Pooling and Servicing Agreement and the Supplement may
also be amended from time to time by the Servicer, the Transferor
and the Trustee with the consent of the Holders of Investor
Certificates evidencing Undivided Interests aggregating not less
than 66-2/3% of the Invested Amount of each and every Series
adversely affected, for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of the
Pooling and Servicing Agreement or of modifying in any manner the
rights of the Investor Certificateholders of any Series then
issued and outstanding; provided, however, that no such amendment
shall (i) reduce in any manner the amount of, or delay the timing
of, distributions which are required to be made on any Investor
Certificate of any Series without the consent of the related
Investor Certificateholders; (ii) change the definition of or the
manner of calculating the interest of any Investor
Certificateholder of any Series without the consent of the related
Investor Certificateholder or (iii) reduce the aforesaid
percentage required to consent to any such amendment, in each case
without the consent of all such Investor Certificateholders;
provided, further, that for the purposes of the Officer's
Certificate referred to in clause (i) above, any action taken in
order to enable the Trust or a portion thereof to elect to qualify
as a FASIT (or comparable tax entity for the securitization of
financial assets) in accordance with the Internal Revenue Code of
1986, as amended, shall be deemed not to materially and adversely
affect the interest of the Certificateholders.
THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
Unless the certificate of authentication hereon has been
executed by or on behalf of the Trustee, by manual signature, this
Certificate shall not be entitled to any benefit under the Pooling
and Servicing Agreement, or be valid for any purpose.
IN WITNESS WHEREOF, the Transferor has caused this
Certificate to be duly executed under its official seal.
PRIME II RECEIVABLES CORPORATION
By:_________________________________
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This is one of the Class C Certificates referred to in the
within-mentioned Pooling and Servicing Agreement.
THE CHASE MANHATTAN BANK,
as Trustee
By:_____________________________
Authorized Signatory
EXHIBIT B
FORM OF EXTENSION NOTICE
PRIME CREDIT CARD MASTER TRUST II, SERIES 1999-1
The undersigned, a duly authorized representative of Prime II
Receivables Corporation, a Delaware corporation the "Transferor"),
as Transferor pursuant to the Pooling and Servicing Agreement
dated as of January 22, 1997 (the "Pooling and Servicing
Agreement"), by and between the Transferor, as transferor, FDS
National Bank, as Servicer (the "Servicer"), and The Chase
Manhattan Bank, as trustee (the "Trustee"), as supplemented by the
Series 1999-1 Supplement, dated July 6, 1999 (the "Series 1999-1
Supplement"), by and between the Transferor, the Servicer and the
Trustee, (the Pooling and Servicing Agreement, as supplemented by
the Series 1999-1 Supplement, or as the Pooling and Servicing
Agreement may from time to time be amended, supplemented, or
modified, the "Agreement"), does hereby notify the Trustee (or any
successor Trustee) and the Investor Certificateholders:
A. Capitalized terms used but not defined in this
Certificate shall have the respective meanings set forth in the
Agreement. References herein to certain sections and subsections
are references to the respective sections and subsections of the
Agreement.
B. The undersigned is a Treasurer, Vice President or more
senior officer of the Transferor who is duly authorized to execute
and deliver this Certificate on behalf of the Transferor.
C. This Certificate is being delivered pursuant to Section
6.16(a) of the Agreement.
D. The Transferor is the Transferor under the Agreement.
E. No Pay Out Event has occurred that has not been remedied
pursuant to the provisions of the Agreement.
F. The Certificate is being delivered to the Trustee on or
before the date specified in subsection 6.16(a) for such delivery.
G. NOTIFICATION OF EXTENSION.
Pursuant to subsection 6.16(a) and in respect of [ , ]
(the "Current Extension Date"), the Transferor hereby notifies the
Trustee and the Investor Certificateholders of the Transferor's
intention to extend the Revolving Period in respect of Series 1999-
1 on the Current Extension Date pursuant to the provisions of
Section 6.16, until the date set forth below (such extension, the
"Extension").
H. REQUIREMENTS TO COMPLETE EXTENSION
(1) Annexed hereto is an election notice (an "Election
Notice") to be returned by any Investor Certificateholder electing
to approve the Extension. No Extension shall occur unless
Investor Certificateholders holding at least the aggregate
principal amount of Class A Certificates and Class B Certificates
set forth below, respectively, shall return properly executed
Election Notices approving the Extension by the Election Date (as
defined below). Any Investor Certificateholder electing to
approve the Extension must deliver a properly executed Election
Notice at the office of the Trustee,
[address] on or before 3:00 p.m., [New York City] time, on [
, ] (the "Election Date"). Any Investor Certificateholder may
withdraw any Election Notice delivered by it to the Trustee by
notifying the Trustee in writing at the address set forth in the
previous sentence on or prior to the Election Date.
(2) The minimum principal amount of Class A Certificates
that must approve of the Extension before such Extension may occur
shall equal $ .
(3) The minimum principal amount of Class B Certificates
that must approve of the Extension before such Extension may occur
shall equal $ .
(4) THE EXTENSION SHALL NOT OCCUR UNTIL PRIOR SATISFACTION
OF CERTAIN CONDITIONS PRECEDENT BY THE CLOSE OF BUSINESS ON THE
ELECTION DATE, INCLUDING THE APPROVAL OF SUCH EXTENSION BY THE
INVESTOR CERTIFICATEHOLDERS HOLDING THE REQUIRED AGGREGATE
PRINCIPAL AMOUNT OF CLASS A AND CLASS B CERTIFICATES, THAT NO PAY
OUT EVENT SHALL HAVE OCCURRED AND BE CONTINUING, AND THAT CERTAIN
LEGAL OPINIONS AND RATING AGENCY CONFIRMATIONS SHALL HAVE BEEN
DELIVERED TO THE TRANSFEROR AND THE TRUSTEE PURSUANT TO SECTION
6.16(b). THE TRANSFEROR MAY IN ITS SOLE DISCRETION WITHDRAW THIS
EXTENSION NOTICE AT ANY TIME ON OR PRIOR TO THE ELECTION DATE BY
DELIVERING NOTICE OF SUCH WITHDRAWAL IN WRITING TO THE TRUSTEE.
IF ANY SUCH NOTICE OF WITHDRAWAL SHALL BE SO DELIVERED, NO
EXTENSION SHALL OCCUR.
I. NEW PROVISIONS TO BECOME EFFECTIVE ON THE EXTENSION
DATE.
(1) The new Amortization Period Commencement Date shall be
the earlier of (a) [ (b) the Pay Out Commencement Date.
(2) The new Extension Date shall be [ ,
].
[(3) The new Scheduled Series 1999-1 Termination Date shall
be [ , ].]
[(4) The following are additional provisions that will apply
to the Investor Certificates on and after the Extension Date:
INSERT PROVISIONS]
J. Annexed hereto are the following:
(1) the form of Extension Tax Opinion.
(2) the form of Extension Opinion.
(3) the Election Notice.
IN WITNESS WHEREOF, the undersigned has duly executed this
certificate this [ ] day of [ , ].
PRIME II RECEIVABLES CORPORATION
By:_______________________________
Name:
Title:
EXHIBIT C
FORM OF INVESTOR CERTIFICATEHOLDER ELECTION NOTICE
The Chase Manhattan Bank
450 West 33rd Street
New York, New York 10001
Attention: Corporate Trustee Administration Department
Re: Prime Credit Card Master Trust II:
Election Notice to Extend Series 1999-1
Ladies and Gentlemen:
The undersigned hereby elects to approve the extension of the
Revolving Period for Series 1999-1 until the Amortization Period
Commencement Date set forth in the Extension Notice dated [
, ] (the "Extension Notice") and delivered to the
undersigned pursuant Section 6.16(a) of the Pooling and Servicing
Agreement, dated as of January 22, 1997 including the Series 1999-
1 Supplement thereto, each by and among Prime II Receivables
Corporation, as transferor, FDS National Bank, as Servicer, and
The Chase Manhattan Bank, as trustee (the "Pooling and Servicing
Agreement"). The undersigned hereby acknowledges that commencing
on the Current Extension Date (as defined in the Extension
Notice), the terms and provisions of the Pooling and Servicing
Agreement shall be modified as set forth in the Extension Notice.
IN WITNESS WHEREOF, the undersigned registered owner(s) has [have]
executed this Election Notice as of the date set forth below.
Dated:
Name(s): _______________________
Address: _______________________
(Please Print)
Signature(s): _____________________
EXHIBIT D
FORM OF INVESTMENT LETTER
(Class C Certificates, Series 1999-1)
[Date]
Re: Prime Credit Card Master Trust II
Class C Certificates, Series 1999-1
Ladies and Gentlemen:
This letter (the "Investment Letter") is delivered by the
undersigned (the "Purchaser") pursuant to Section 6.17 of the
Series 1999-1 Variable Funding Supplement, dated as of July 6,
1999 (the "Supplement"), among Prime II Receivables Corporation,
as Transferor (the "Transferor"), FDS National Bank, as Servicer
(the "Servicer"), and The Chase Manhattan Bank, as Trustee (the
"Trustee"), which supplements the Pooling and Servicing Agreement,
dated as of January 22, 1997, among the Transferor, the Servicer
and the Trustee, in connection with the Purchaser's acquisition of
Class C Certificates or an interest therein. Capitalized terms
used herein without definition shall have the meanings set forth
in the Supplement. The Purchaser represents to and agrees with
the Transferor and the Trustee as follows:
(a) The Purchaser has such knowledge and experience in
financial and business matters as to be capable of evaluating the
merits and risks of its investment in the Series C Certificates
and is able to bear the economic risk of such investment. The
Purchaser has independently and based on such documents and
information as it has deemed appropriate, made is own appraisal of
and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Trust,
the Transferor and the Servicer and made its own decision to
purchase its interest in the Series C Certificates, and will,
independently and based on such documents and information as it
shall deem appropriate at the time, continue to make its own
analysis, appraisals and decisions in taking or not taking action
under the Supplement, and to make such investigation as it deems
necessary to inform itself as to the business, operations,
property, financial and other condition and creditworthiness of
the Trust, the Transferor and the Servicer.
(b) The Purchaser is an "accredited investor", as defined in
Rule 501, promulgated by the Securities and Exchange Commission
(the "Commission") under the Securities Act of 1933, as amended
(the "Securities Act"), or is a sophisticated institutional
investor. The Purchaser understands that the offering and sale of
the Series C Certificates has not been and will not be registered
under the Securities Act and has not and will not be registered or
qualified under any applicable "Blue Sky" law, and that the
offering and sale of the Series C Certificates has not been
reviewed by, passed on or submitted to any federal or state agency
or commission, securities exchange or other regulatory body.
(c) The Purchaser is acquiring an interest in Series C
Certificates without a view to any distribution, resale or other
transfer thereof except, with respect to any Series C Certificates
or any interest or participation therein, as contemplated in the
following sentence. The Purchaser will not resell or otherwise
transfer any interest or participation in the Series C
Certificates, except in accordance with Section 6.17 of the
Supplement and (i) in a transaction exempt from the registration
requirements of the Securities Act of 1933, as amended, and
applicable state securities or "blue sky" laws; (ii) to the
Transferor or any affiliate of the Transferor; or (iii) to a
person who the Purchaser reasonably believes is a qualified
institutional buyer (within the meaning thereof in Rule 144A under
the Securities Act) that is aware that the resale or other
transfer is being made in reliance upon Rule 144A. In connection
therewith, the Purchaser hereby agrees that it will not resell or
otherwise transfer the Series C Certificates or any interest
therein unless the purchaser thereof provides to the addressee
hereof a letter substantially in the form hereof.
(d) The Purchaser hereby certifies to the Transferor, the
Servicer and the Trustee that it has neither acquired nor will it
sell, trade or transfer any interest in a Class C Certificate or
cause an interest in a Class C Certificate to be marketed on or
through an "established securities market" within the meaning of
Section 7704(b)(1) of the Code and any proposed, temporary or
final treasury regulation thereunder, including, without
limitation, an over-the-counter market or an interdealer quotation
system that regularly disseminates firm buy or sell quotations.
The Purchaser hereby further certifies that it is not and, for so
long as it holds any interest in a Class C Certificate, will not
become a partnership, Subchapter S corporation or grantor trust
for U.S. federal income tax purposes. The Purchaser acknowledges
that the Opinion of Counsel to the effect that the Trust will not
be treated as a publicly traded partnership taxable as a
corporation is dependent in part on the accuracy of the
certifications described in this paragraph.
(e) Pursuant to subsection 6.17(c) of the Supplement, the
Purchaser hereby agrees not to institute against, or join any
other Person in instituting against, or join any other Person in
instituting against, the Trust or the Transferor any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceeding,
or other proceeding under any federal or state bankruptcy or
similar law, for one year and one day after all Investor
Certificates are paid in full.
(f) This Investment Letter has been duly executed and
delivered and constitutes the legal, valid and binding obligation
of the Purchaser, enforceable against the Purchaser in accordance
with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws
or equitable principles affecting the enforcement of creditors'
rights generally and general principles of equity.