Exhibit 4.3
SUBJECT TO COMPLETION, DATED _________, 199_
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED __________ ___, 199_
$
FIRST NBC CREDIT CARD MASTER TRUST
$ Class A [Floating Rate] [__%] Asset
Backed Certificates, Series 199_-_
$ Class B [Floating Rate] [__%] Asset
Backed Certificates, Series 199_-_
First National Bank of Commerce
Transferor and Servicer
Each Class A [Floating Rate] [__%] Asset Backed Certificate, Series
199_-___ (collectively, the "Class A Certificates") and each Class B
[Floating Rate] [__%] Asset Backed Certificate, Series 199_-___
(collectively, the "Class B Certificates" and, together with the Class
A Certificates, the "Certificates") will represent the right to
receive certain payments from the First NBC Credit Card Master Trust
(the "Trust"), created pursuant to a Pooling and Servicing Agreement
between First National Bank of Commerce ("First NBC" or the "Bank"),
as transferor and servicer, and ____________________, as trustee.
Certain capitalized terms used in this Prospectus Supplement are
defined elsewhere in this Prospectus Supplement and the accompanying
Prospectus. Please refer to the "Index of Defined Terms for
Prospectus Supplement" and the "Index of Defined Terms for Prospectus"
for a listing of the pages on which some of the terms are defined.
The property of the Trust includes receivables (the
"Receivables") generated from time to time in a portfolio of
MasterCard , VISA and private label revolving credit card accounts
(the "Accounts"), all monies due or to become due in payment of the
Receivables, all proceeds of the Receivables and proceeds of credit
insurance policies relating to the Receivables, all monies in certain
bank accounts of the Trust and certain other property as described
herein. In addition, the Collateral Interest will be issued in the
initial amount of $____________ and will be subordinated to the
Certificates as described herein. First NBC initially will own the
remaining undivided interest in the Trust not represented by the
Certificates, the Collateral Interest and other interests issued by
the Trust from time to time and will service the Receivables. First
NBC may from time to time offer other Series of certificates that
evidence undivided interests in certain assets of the Trust, which may
have terms significantly different from the Certificates.
(continued on next page)
There currently is no secondary market for the Certificates, and there
is no assurance that one will develop or, if one does, that it will
continue until the Certificates are paid in full. Potential investors
should consider, among other things, the information set forth in
"Risk Factors" commencing on page __ in the Prospectus.
THE CERTIFICATES REPRESENT INTERESTS IN THE TRUST ONLY AND DO NOT
REPRESENT INTERESTS IN OR OBLIGATIONS OF FIRST NBC OR ANY AFFILIATE
THEREOF. A CERTIFICATE IS NOT A DEPOSIT AND NEITHER THE CERTIFICATES
NOR THE UNDERLYING ACCOUNTS OR RECEIVABLES ARE INSURED OR GUARANTEED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL
AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION (THE "COMMISSION") OR ANY STATE
SECURITIES COMMISSION NOR HAS THE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS
SUPPLEMENT OR THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Price to Underwriting Proceeds to
Public(l) Discount Transferor(l)(2)
--------- ------------ ----------------
Per Class A Certificate........ % % %
Per Class B Certificate........ % % %
Total.......................... $ $ $
(1) Plus accrued interest, if any, at the Class A Rate or the
Class B Rate, as applicable, from ________________, 199____.
(2) Before deduction of expenses estimated to be $______________.
The Certificates are offered by the Underwriters and First NBC
when, as and if issued by the Trust and accepted by the Underwriters
and First NBC and subject to the Underwriters' right to reject orders
in whole or in part. It is expected that the Certificates will be
delivered in book-entry form on or about ___________________ ___,
199___, through the facilities of The Depository the Trust Company[,
Cedel Bank, societe anonyme, and the Euroclear System].
After the initial distribution of the Certificates by the
Underwriters and First NBC, the Prospectus and this Prospectus
Supplement may be used by First NBC or any of its affiliates, in
connection with market making transactions in the Certificates. First
NBC or any of its affiliates may act as principal or agent in such
transactions. Such transactions will be at prices related to
prevailing market prices at the time of sale.
Underwriters of the Class A Certificates
[ ] [ ]
Underwriters of the Class B Certificates
[ ] [ ]
The Date of this Prospectus Supplement is _______________ _____, 199_
Interest will accrue on the Class A Certificates from
_____________ ___, 199_ (the "Closing Date") through ______________
___, 199_ and from ______________ ___, 199_ through _____________ ___,
199_ and with respect to each Interest Period thereafter, at the rate
of _____% per annum [above the London interbank offered rate for
___-month United States dollar deposits ("LIBOR"), determined as
described herein, prevailing on the related LIBOR Determination Date
(as defined herein) with respect to such period] (the "Class A Rate").
Interest will accrue on the Class B Certificates from the Closing Date
through ____________ ___, 199_ and from ______________ ___, 199_
through ______________ ___, 199_ and with respect to each Interest
Period thereafter, at the rate of ____% per annum [above LIBOR
prevailing on the related LIBOR Determination Date with respect to
each such period] (the "Class B Rate"). [The initial LIBOR
Determination Date is ____________ ___, 199_.] Interest with respect
to the Certificates will be distributed on ______________ ___, 199_
and on the [15th] day of each month thereafter (or, if such [15th] day
is not a business day, the next succeeding business day) (each, a
"Distribution Date"). Principal on the Class A Certificates is
scheduled to be distributed on the _____________ Distribution Date
(the "Class A Scheduled Payment Date"), but may be paid earlier or
later under the circumstances described herein. Principal on the
Class B Certificates is scheduled to be distributed on the
_____________ Distribution Date (the "Class B Scheduled Payment
Date"), but may be paid earlier or later under the circumstances
described herein. See "Maturity Assumptions."
The Class B Certificates will be subordinated to the Class A
Certificates, and the Collateral Interest will be subordinated to the
Class A Certificates and the Class B Certificates, as described
herein.
[Application will be made to list the Certificates on the
Luxembourg Stock Exchange.]
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN
TRANSACTIONS THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE
OF THE CERTIFICATES, INCLUDING STABILIZING TRANSACTIONS AND SYNDICATE
COVERING TRANSACTIONS. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE
"UNDERWRITING."
The Certificates offered hereby constitute a separate Series of
certificates being offered by the Trust from time to time pursuant to
its Prospectus dated _______________ ___, 199__. This Prospectus
Supplement does not contain complete information about the offering of
the Certificates. Additional information is contained in the
Prospectus and purchasers are urged to read both this Prospectus
Supplement and the Prospectus in full. Sales of the Certificates may
not be consummated unless the purchaser has received both this
Prospectus Supplement and the Prospectus.
SUMMARY OF TERMS
The following is qualified in its entirety by reference to the
detailed information appearing elsewhere in this Prospectus Supplement
and the accompanying Prospectus. Certain capitalized terms used in
this summary are defined elsewhere in this Prospectus Supplement and
the accompanying Prospectus. A listing of the pages on which some of
the terms are defined is found in the "Index of Defined Terms for
Prospectus Supplement" and the "Index of Defined Terms for
Prospectus."
The Trust............... The First NBC Credit Card Master Trust (the "Trust").
Title of Securities..... $________ Class A [Floating Rate] [__%] Asset
Backed Certificates, Series 199_-_ (the
"Class A Certificates") and $________ Class B
[Floating Rate] [__%] Asset Backed
Certificates, Series 199_-_ (the "Class B
Certificates," and together with the Class A
Certificates, the "Certificates").
Class A Rate............ [____% per annum.] [For each Interest Period,
a rate per annum equal to ___-month LIBOR for
United States dollar deposits, plus ___%.]
Class B Rate............ [____% per annum.] [For each Interest Period,
a rate per annum equal to ___-month LIBOR for
United States dollar deposits, plus ___%.]
Distribution Dates...... The ___ day of each _________ (or, if any
such day is not a business day, the next
succeeding business day), commencing on
______________, 1997.
Class A Scheduled
Payment Date.......... The __________, 200_ Distribution Date.
Class B Scheduled
Payment Date.......... The __________, 200_ Distribution Date.
Closing Date............ _______________, 1997.
Credit Enhancement...... For the Class A Certificates, the
subordination of the Collateral Interest (in
an initial amount of $______________, ___% of
the initial Investor Interest) and the Class
B Certificates, as described herein. For the
Class B Certificates, the subordination of
the Collateral Interest, as described herein.
Class Structure......... The Class A and Class B Certificates differ
in terms of priorities and are expected to
differ in terms of ratings. The Class B
Certificates are subordinated to the Class A
Certificates to the extent described herein
in order to provide credit enhancement for
the Class A Certificates. The Collateral
Interest (which is not offered hereby) is
subordinated to both the Class A and the
Class B Certificates to the extent described
herein in order to provide credit
enhancement. (See "Description of
Certificates - Subordination" and "-
Application of Collections.") See "Risk
Factors - Effect of Subordination" in the
Prospectus for a discussion of the risks
associated with purchasing certificates of a
subordinated class. Also see "Class A
Certificate Rating" and "Class B Certificate
Rating" below in this Summary of Terms.
Certificate Interest and
Principal............... Each of the Certificates offered hereby
represents the right to receive certain
payments from the assets of the Trust. The
Trust's assets will be allocated among the
Class A Holders (the "Class A Investor
Interest"), the Class B Holders (the "Class B
Investor Interest"), the Collateral Interest
Holder (the "Collateral Interest," and
together with the Class A Investor Interest
and the Class B Investor Interest, the
"Investor Interest"), the interest of the
holders of other undivided interests in the
Trust issued pursuant to the Agreement and
applicable Series Supplements and the
Transferor (the "Transferor Interest"), as
described below. As used in this Prospectus
Supplement, the term "Holders" refers to
holders of the Certificates, the term "Class
A Holders" refers to holders of the Class A
Certificates, the term "Class B Holders"
refers to holders of the Class B
Certificates, the term "Collateral Interest
Holder" refers to the holder of the
Collateral Interest and the term "Agreement"
(unless the context requires otherwise)
refers to the Agreement as supplemented by
the Series 199_-_ Supplement pursuant to
which the Certificates are issued (the
"Series 199_-_ Supplement").
The Class A Certificates will represent the
right to receive from the assets of the Trust
allocated to the Class A Certificates funds
up to (but not in excess of) the amounts
required to make (a) payments of interest
accruing from the Closing Date through
_________ __, 199_, and from __________ __,
199_ through __________ __, 199_ and with
respect to each Interest Period thereafter,
at the Class A Rate and (b) payments of
principal on the Class A Scheduled Payment
Date or, under certain limited circumstances,
during the Rapid Amortization Period, to the
extent of the Class A Investor Interest,
which may be less than the unpaid principal
balance of the Class A Certificates in
certain circumstances described herein.
The Class B Certificates will represent the
right to receive, from the assets of the
Trust allocated to the Class B Certificates,
funds up to (but not in excess of) the
amounts required to make (a) payments of
interest accruing from the Closing Date
through _________ __, 199_ and from ________
__ 199_ through ___________ __, 199_ and with
respect to each Interest Period thereafter,
at the Class B Rate and (b) payments of
principal on the Class B Scheduled Payment
Date or, under certain limited circumstances,
during the Rapid Amortization Period, to the
extent of the Class B Investor Interest,
which may be less than the unpaid principal
balance of the Class B Certificates in
certain circumstances described herein. No
principal will be paid to the Class B Holders
until the Class A Investor Interest is paid
in full.
The aggregate principal amount of the Class A
Investor Interest and the Class B Investor
Interest will, except as otherwise provided
herein, remain fixed at $ _________and
$_________, respectively. The Class A
Investor Interest will decline in certain
circumstances if the Investor Default Amounts
allocated to the Class A Certificates exceed
funds allocable thereto as described herein
and the Class B Investor Interest and the
Collateral Interest are zero. The Class B
Investor Interest will decline in certain
circumstances as a result of (a) the
reallocation of collections of Principal
Receivables otherwise allocable to the Class
B Investor Interest to fund certain payments
in respect of the Class A Certificates and
(b) the allocation to the Class B Investor
Interest of certain Investor Default Amounts,
including such amounts otherwise allocable to
the Class A Investor Interest when the
Collateral Interest is zero. During the
Controlled Accumulation Period, for the sole
purpose of allocating collections of Finance
Charge Receivables, Net Default Amounts and
Net Recoveries with respect to each Monthly
Period, the Class A Investor Interest will be
further reduced by the amount on deposit in
the Principal Funding Account from time to
time (as so reduced, the "Class A Adjusted
Investor Interest" and together with the
Class B Investor Interest and the Collateral
Interest, the "Adjusted Investor Interest").
The Class A Certificates, the Class B
Certificates and the Collateral Interest will
each include the right to receive (but only
to the extent needed to make required
payments under the Agreement and subject to
any reallocation of such amounts as described
herein) varying percentages of collections of
Finance Charge Receivables (subject to
reallocation of Group Investor Finance Charge
Collections to other Series in Group I, as
described under "Description of the
Certificates - Reallocations Among
Certificates in Different Series within a
Reallocation Group" in the Prospectus),
Principal Receivables and will be allocated
varying percentages of Net Default Amounts
and Net Recoveries during each calendar month
(a "Monthly Period"). Collections of
Reallocated Finance Charge Receivables, Net
Default Amounts and Net Recoveries at all
times, and collections of Principal
Receivables during the Revolving Period, will
be allocated to the Investor Interest based
on the Floating Investor Percentage and will
be further allocated among the Class A
Investor Interest, the Class B Investor
Interest and the Collateral Interest based on
the Class A Floating Allocation, the Class B
Floating Allocation and the Collateral
Floating Allocation, respectively, applicable
during the related Monthly Period.
Collections of Principal Receivables during
the Controlled Accumulation Period and the
Rapid Amortization Period will be allocated
to the Investor Interest based on the Fixed
Investor Percentage and will be further
allocated among the Class A Investor
Interest, the Class B Investor Interest and
the Collateral Interest based on the Class A
Fixed Allocation, the Class B Fixed
Allocation and the Collateral Fixed
Allocation, respectively. See "Description
of the Certificates - Allocation Percentages"
and "- Pay Out Events" herein and
"Description of the Certificates - Pay Out
Events" in the Prospectus.
The final distribution of principal and
interest on the Certificates will be made no
later than the ______________ Distribution
Date in the manner provided in "Description
of the Certificates - Final Payment of
Principal; Termination" in the Prospectus.
Series 199_-_ will terminate on the earliest
to occur of (a) the Distribution Date on
which the Investor Interest is paid in full,
(b) the ______________ Distribution Date or
(c) the Trust Termination Date (such earliest
to occur, the "Series 199_-_ Termination
Date"). After the Series 199_-_ Termination
Date, no further principal or interest
payments will be made on the Certificates
(except as described in "Description of the
Certificates - Final Payment of Principal;
Termination" in the Prospectus).
[Other Series........... The Certificates will be the _____________
Series of investor certificates issued by the
Trust, all of which will be outstanding on
the Closing Date. See "Annex I - Other
Series" for a summary of the principal terms
of the __________ outstanding Series of
investor certificates. Additional Series are
expected to be issued from time to time by
the Trust. See "The Pooling and Servicing
Agreement Generally - New Issuances" and "-
Reallocations Among Certificates of Different
Series within a Reallocation Group" in the
Prospectus and "Maturity Considerations"
herein.]
Receivables............. The Receivables arise in Accounts in the Bank
Portfolio that satisfy the eligibility
criteria set forth in the Agreement as of the
Cut-Off Date. The Receivables consist of
Principal Receivables and Finance Charge
Receivables. In addition, certain amounts of
Interchange attributed to cardholder charges
for goods and services in the Accounts will
be allocated to the Certificates and treated
as Finance Charge Receivables. See "First
NBC's Credit Card Activities - Interchange"
in the Prospectus.
The aggregate amount of Receivables in the
Accounts as of the beginning of the day on
the Cut-Off Date was $__________, comprised
of $___________ of Principal Receivables and
$__________ of Finance Charge Receivables.
The amount of Finance Charge Receivables will
not affect the amount of the Investor
Interest represented by the Certificates and
the Collateral Interest or the amount of the
Transferor Interest, all of which are
determined on the basis of the amount of
Principal Receivables in the Trust. The
aggregate amount of Principal Receivables in
the Trust evidenced by the Certificates and
the Collateral Interest will never exceed the
amount of the Investor Interest regardless of
the total amount of Principal Receivables in
the Trust at any time.
Denominations........... Beneficial interests in the Certificates will
be offered for purchase in denominations of
$1,000 and integral multiples thereof.
Registration of
Certificates............ The Certificates initially will be
represented by Certificates registered in the
name of Cede, as the nominee of DTC. No
Certificate Owner will be entitled to receive
a Definitive Certificate, except under the
limited circumstances described herein.
Holders may elect to hold their Certificates
through DTC (in the United States) or Cedel
or Euroclear (in Europe). Transfers will be
made in accordance with the rules and
operating procedures described herein. See
"Description of the Certificates - Definitive
Certificates" in the Prospectus.
Servicing Fee........... The Servicer will receive a monthly fee as
servicing compensation from the Trust on each
Transfer Date. The Servicing Fee Rate for the
Certificates will be ___% (the "Servicing Fee
Rate"). On each Transfer Date, Servicer
Interchange with respect to the related
Monthly Period that is on deposit in the
Finance Charge Account will be withdrawn from
the Finance Charge Account and paid to the
Servicer in respect of the Monthly Investor
Servicing Fee. In addition, the Class A
Servicing Fee, the Class B Servicing Fee and
the Collateral Interest Servicing Fee will be
paid on each Transfer Date as described under
"Description of the Certificates Servicing
Compensation and Payment of Expenses." See
also "Description of the Certificates -
Servicing Compensation and Payment of
Expenses" in the Prospectus.
Revolving Period........ The "Revolving Period" for the Certificates
means the period from and including the
Closing Date to, but not including, the
commencement of the earlier of (a) the
Controlled Accumulation Period and (b) the
Rapid Amortization Period. During the
Revolving Period, Available Investor
Principal Collections otherwise allocable to
the Investor Interest will, subject to
certain limitations and unless a reduction in
the Required Collateral Interest has
occurred, be treated as Shared Principal
Collections and allocated to the holders of
certificates of other Principal Sharing
Series issued and outstanding or, subject to
certain limitations, paid to the holder of
the Transferor Certificate or deposited into
the Excess Funding Account. See "Description
of the Certificates - Principal Payments."
See "Description of the Certificates - Pay
Out Events" for a discussion of the events
which might lead to the termination of the
Revolving Period prior to the commencement of
the Controlled Accumulation Period.
Controlled Accumulation
Period.................. Unless a Pay Out Event occurs, the controlled
accumulation period for the Certificates (the
"Controlled Accumulation Period") is
scheduled to begin at the close of business
on ____________ __, _____. Subject to the
conditions set forth under "Description of
the Certificates - Postponement of Controlled
Accumulation Period," the day on which the
Revolving Period ends and the Controlled
Accumulation Period begins may be delayed to
not later than the close of business on
__________ ____. The Controlled Accumulation
Period will end on the earliest of (i) the
commencement of the Rapid Amortization
Period, (ii) payment of the Investor Interest
in full and (iii) the Series 199_-_
Termination Date. During the Controlled
Accumulation Period, prior to the payment of
the Class A Investor Interest in full,
amounts equal to the least of (a) Available
Investor Principal Collections for the
related Monthly Period, (b) the sum of the
Controlled Accumulation Amount for such
Monthly Period and any portion of the
Controlled Accumulation Amount for any prior
Monthly Period that has not yet been
deposited (such sum, the "Controlled Deposit
Amount" for such Monthly Period) and (c) the
Class A Adjusted Investor Interest on such
Transfer Date will be deposited monthly in a
trust account established by the Servicer
(the "Principal Funding Account") on each
Transfer Date beginning with the Transfer
Date in the month following the month in
which the Controlled Accumulation Period
begins until the Principal Funding Account
Balance is equal to the Class A Investor
Interest. On each Transfer Date during the
Controlled Accumulation Period beginning with
the Transfer Date after the one on which the
Class A Investor Interest has been provided
for, an amount equal to the lesser of (a)
Available Investor Principal Collections for
the related Monthly Period (less any amount
allocated to the Class A Investor Interest as
described in the prior sentence) and (b) the
Class B Investor Interest on such Transfer
Date will be deposited into the Distribution
Account for distribution to the Class B
Holders until the Class B Investor Interest
has been paid in full. If, for any Monthly
Period, the Available Investor Principal
Collections for such Monthly Period exceed
the sum of the Class A Monthly Principal and
the Class B Monthly Principal for the related
Transfer Date, the amount of such excess will
be first paid to the Collateral Interest
Holder to the extent that the Collateral
Interest exceeds the Required Collateral
Interest and then will be treated as Shared
Principal Collections and allocated to the
holders of certificates of other Principal
Sharing Series or, subject to certain
limitations, paid to the holder of the
Transferor Certificate or deposited into the
Excess Funding Account. See "Description of
the Certificates - Application of
Collections." Also see "Prospectus Summary -
Controlled Accumulation Period" in the
Prospectus for a general description of the
purpose of this feature and its effect on
Certificateholders.
Unless a Pay Out Event occurs, prior to the
payment of the Class A Investor Interest in
full, all funds on deposit in the Principal
Funding Account will be invested at the
direction of the Servicer by the Trustee in
certain Permitted Investments. Investment
earnings (net of investment losses and
expenses) on funds on deposit in the
Principal Funding Account (the "Principal
Funding Investment Proceeds") during the
Controlled Accumulation Period will be used
to pay interest on the Class A Certificates
in an amount up to, for each Transfer Date,
the product of (a) [a fraction, the numerator
of which is the actual number of days in the
related Interest Period and the denominator
of which is 360] [one-twelfth], (b) the Class
A Rate in effect with respect to the related
Interest Period and (c) the Principal Funding
Account Balance as of the Record Date
preceding such Transfer Date (the "Class A
Covered Amount"). If, for any Transfer Date,
the Principal Funding Investment Proceeds are
less than the Class A Covered Amount, the
amount of such deficiency (the "Class A
Principal Funding Investment Shortfall")
shall be paid, to the extent available, from
the Reserve Account and, if necessary, from
Excess Spread and Reallocated Principal
Collections.
Funds on deposit in the Principal Funding
Account will be available to pay the Class A
Holders in respect of the Class A Investor
Interest on the Class A Scheduled Payment
Date. If the aggregate principal amount of
deposits made to the Principal Funding
Account is insufficient to pay the Class A
Investor Interest in full on the Class A
Scheduled Payment Date, the Rapid
Amortization Period will commence. Although
it is anticipated that during the Controlled
Accumulation Period prior to the payment of
the Class A Investor Interest in full, funds
will be deposited in the Principal Funding
Account in an amount equal to the applicable
Controlled Deposit Amount on each Transfer
Date and that scheduled principal will be
available for distribution to the Class A
Holders on the Class A Scheduled Payment
Date, no assurance can be given in that
regard. See "Maturity Assumptions" in the
Prospectus and herein.
On the Class B Scheduled Payment Date,
provided that the Class A Investor Interest
is paid in full on the Class A Scheduled
Payment Date and the Rapid Amortization
Period has not commenced, Available Investor
Principal Collections will be used to pay the
Class B Holders in respect of the Class B
Investor Interest as described herein. If
the Available Investor Principal Collections
are insufficient to pay the Class B Investor
Interest in full on the Class B Scheduled
Payment Date, the Rapid Amortization Period
will commence. Although it is anticipated
that scheduled principal will be available
for distribution to the Class B Holders on
the Class B Scheduled Payment Date, no
assurance can be given in that regard. See
"Maturity Assumptions" in the Prospectus and
"Maturity Assumptions" herein.
If a Pay Out Event occurs during the
Controlled Accumulation Period, the Rapid
Amortization Period will commence, and any
amounts on deposit in the Principal Funding
Account will be paid to the Class A Holders
on the Distribution Date in the month
following the commencement of the Rapid
Amortization Period.
Other Series offered by the Trust may or may
not have amortization or accumulation periods
like the Controlled Accumulation Period for
the Certificates, and such periods may have
different lengths and begin on different
dates than such Controlled Accumulation
Period. Thus, certain Series may be in their
revolving periods while others are in periods
during which collections of Principal
Receivables are distributed to or held for
the benefit of certificateholders of such
other Series. In addition, other Series may
allocate Principal Receivables based upon
different investor percentages. See
"Description of the Certificates - Exchanges"
in the Prospectus for a discussion of the
potential terms of any other Series.
Rapid Amortization
Period................ During the period from the day on which a Pay
Out Event has occurred and ending on the
earlier of (a) the payment of the Investor
Interest in full, (b) the Series 199_-_
Termination Date and (c) the Trust
Termination Date (the "Rapid Amortization
Period"), Available Investor Principal
Collections will be distributed monthly on
each Distribution Date to the Class A Holders
and, following payment of the Class A
Investor Interest in full, to the Class B
Holders and, following payment of the Class B
Investor Interest in full, to the Collateral
Interest Holder beginning with the
Distribution Date in the month following the
commencement of the Rapid Amortization
Period. See "Description of the Certificates
- Pay Out Events" for a discussion of the
events which might lead to the commencement
of the Rapid Amortization Period and
"Prospectus Summary - Rapid Amortization
Period" in the Prospectus for a general
discussion of the purpose and effect on
Certificateholders of this feature.
Subordination of the Class B
Certificates and the
Collateral Interest..... The Class B Certificates and the Collateral
Interest will be subordinated, as described
herein, to the extent necessary to fund
certain payments with respect to the Class A
Certificates as described herein. In
addition, the Collateral Interest will be
subordinated to the extent necessary to fund
certain payments with respect to the Class B
Certificates. If the Class B Investor
Interest and the Collateral Interest are
reduced to zero, the Class A Holders will
bear directly the credit and other risks
associated with their interest in the Trust.
If the Collateral Interest is reduced to
zero, the Class B Holders will bear directly
the credit and other risks associated with
their interest in the Trust. To the extent
the Class B Investor Interest is reduced, the
percentage of collections of Finance Charge
Receivables allocable to the Class B Holders
in subsequent Monthly Periods will be
reduced. Such reductions of the Class B
Investor Interest will thereafter be
reimbursed and the Class B Investor Interest
increased on each Transfer Date by the
amount, if any, of Excess Spread for such
Transfer Date available for that purpose. To
the extent the amount of such reduction in
the Class B Investor Interest is not
reimbursed, the amount of principal and
interest distributable to the Class B Holders
will be reduced. See "Description of the
Certificates - Subordination."
Additional Amounts Available
to Holders ............. With respect to any Transfer Date, Excess
Spread will be applied to fund the Class A
Required Amount and the Class B Required
Amount, if any. The "Class A Required Amount"
means the amount, if any, by which the sum of
(a) the Class A Monthly Interest due on the
related Distribution Date and any overdue
Class A Monthly Interest and Class A
Additional Interest thereon, (b) the Class A
Servicing Fee for the related Monthly Period
and any overdue Class A Servicing Fee and (c)
the Class A Investor Default Amount, if any,
for the related Monthly Period exceeds the
Class A Available Funds for the related
Monthly Period. The "Class B Required Amount"
means the amount, if any, by which the sum of
(a) the amount, if any, by which the sum of
(i) Class B Monthly Interest due on the
related Distribution Date and any overdue
Class B Monthly Interest and Class B
Additional Interest thereon and (ii) the
Class B Servicing Fee for the related Monthly
Period and any overdue Class B Servicing Fee
exceeds the Class B Available Funds for the
related Monthly Period and (b) the Class B
Investor Default Amount, if any, for the
related Monthly Period. The "Required Amount"
for any Monthly Period means the sum of the
Class A Required Amount and the Class B
Required Amount for such Monthly Period.
"Excess Spread" for any Transfer Date will
equal the sum of (1) the excess of (A) Class
A Available Funds for the related Monthly
Period over (B) the sum of the amounts
referred to in clauses (a), (b) and (c) in
the definition of "Class A Required Amount"
above, (2) the excess of (A) Class B
Available Funds for the related Monthly
Period over (B) the sum of the amounts
referred to in clauses (a)(i) and (a)(ii) in
the definition of "Class B Required Amount"
above, (3) Collateral Available Funds for the
related Monthly Period not used under certain
circumstances to pay the Collateral Interest
Servicing Fee, as described herein and (4)
Excess Finance Charge Collections allocated
to the Investor Interest.
If, on any Transfer Date, Excess Spread is
less than the Class A Required Amount, then
Reallocated Principal Collections allocable
first to the Collateral Interest and then to
the Class B Investor Interest with respect to
the related Monthly Period will be used to
fund the remaining Class A Required Amount.
If Reallocated Principal Collections with
respect to such Monthly Period are
insufficient to fund the remaining Class A
Required Amount for the related Transfer
Date, then the Collateral Interest (after
giving effect to reductions for any
Collateral Charge-Offs and Reallocated
Principal Collections on such Transfer Date)
will be reduced by the amount of such
deficiency (but not by more than the Class A
Investor Default Amount for such Monthly
Period). In the event that such reduction
would cause the Collateral Interest to be a
negative number, the Collateral Interest will
be reduced to zero, and the Class B Investor
Interest (after giving effect to reductions
for any Class B Investor Charge-Offs and any
Reallocated Class B Principal Collections on
such Transfer Date) will be reduced by the
amount by which the Collateral Interest would
have been reduced below zero (but not by more
than the excess of the Class A Investor
Default Amount, if any, for such Monthly
Period over the amount of such reduction, if
any, of the Collateral Interest with respect
to such Monthly Period). In the event that
such reduction would cause the Class B
Investor Interest to be a negative number,
the Class B Investor Interest will be reduced
to zero and the Class A Investor Interest
will be reduced by the amount by which the
Class B Investor Interest would have been
reduced below zero (but not by more than the
excess, if any, of the Class A Investor
Default Amount for such Monthly Period over
such reductions in the Collateral Interest
and the Class B Investor Interest with
respect to such Monthly Period) (such
reduction, a "Class A Investor Charge-Off").
If the Collateral Interest and the Class B
Investor Interest are reduced to zero, the
Class A Holders will bear directly the credit
and other risks associated with their
undivided interest in the Trust. See
"Description of the Certificates -
Reallocation of Cash Flows" and "- Defaulted
Receivables; Investor Charge-Offs."
If, on any Transfer Date, Excess Spread not
required to pay the Class A Required Amount
and to reimburse Class A Investor Charge-Offs
is less than the Class B Required Amount,
then Reallocated Principal Collections
allocable to the Collateral Interest for the
related Monthly Period not required to pay
the Class A Required Amount will be allocated
to fund the remaining Class B Required
Amount. If such remaining Reallocated
Principal Collections allocable to the
Collateral Interest with respect to such
Monthly Period are insufficient to fund the
remaining Class B Required Amount for the
related Transfer Date, then the Collateral
Interest (after giving effect to reductions
for any Collateral Charge-Offs, Reallocated
Principal Collections and any adjustments
made thereto for the benefit of the Class A
Holders) will be reduced by the amount of
such deficiency (but not by more than the
Class B Investor Default Amount for such
Monthly Period). If such reduction would
cause the Collateral Interest to be a
negative number, the Collateral Interest will
be reduced to zero, and the Class B Investor
Interest will be reduced by the amount by
which the Collateral Interest would have been
reduced below zero (but not by more than the
excess, if any, of the Class B Investor
Default Amount for such Monthly Period over
such reduction in the Collateral Interest
with respect to such Monthly Period) (such
reduction, a "Class B Investor Charge-Off").
In the event of a reduction of the Class A
Investor Interest, the Class B Investor
Interest or the Collateral Interest, the
amount of principal and interest available to
fund payments with respect to the Class A
Certificates and the Class B Certificates
will be decreased. See "Description of the
Certificates - Reallocation of Cash Flows"
and "- Defaulted Receivables; Investor
Charge-Offs."
Required Collateral
Interest................ The "Required Collateral Interest" with
respect to any Transfer Date means (a)
initially, $___________ (the "Initial
Collateral Interest") and (b) on any Transfer
Date thereafter, an amount equal to __% of
the sum of the Class A Adjusted Investor
Interest and the Class B Investor Interest on
such Transfer Date, after taking into account
deposits into the Principal Funding Account
on such Transfer Date and payments to be made
on the related Distribution Date, and the
Collateral Interest on the prior Transfer
Date after any adjustments made on such
Transfer Date, but not less than $__________;
provided, however, (i) that if certain
reductions in the Collateral Interest occur
or if a Pay Out Event occurs, the Required
Collateral Interest for such Transfer Date
shall equal the Required Collateral Interest
for the Transfer Date immediately preceding
the occurrence of such reduction or Pay Out
Event; (ii) in no event shall the Required
Collateral Interest exceed the unpaid
principal amount of the Certificates as of
the last day of the Monthly Period preceding
such Transfer Date after taking into account
payments to be made on the related
Distribution Date; and (iii) the Required
Collateral Interest may be reduced at any
time to a lesser amount if the Rating Agency
Condition is satisfied. See "Description of
the Certificates - Required Collateral
Interest."
If on any Transfer Date, the Collateral
Interest is less than the Required Collateral
Interest, certain Excess Spread amounts, if
available, will be used to increase the
Collateral Interest to the extent of such
shortfall. If on any Transfer Date the
Collateral Interest equals or exceeds the
Required Collateral Interest, any such Excess
Spread amounts will first be deposited into
the Reserve Account as described herein and
second, to the extent available, be applied
in accordance with the Loan Agreement among
the Trustee, the Transferor, the Servicer and
the Collateral Interest Holder (the "Loan
Agreement") and will not be available to the
Holders.
Reallocated Investor
Finance Charge
Collections..............Series 199_-_ will be the first Series
issued by the Trust in a Group ("Group I")
constituting a Reallocation Group.
Collections of Finance Charge Receivables
allocable to the investor certificates of
each Series in Group I will be aggregated and
made available for certain required
distributions to all Series in Group I pro
rata based upon the relative amount of such
required distributions for each Series in
Group I as described under "Description of
the Certificates - Reallocations Among
Certificates of Different Series within a
Reallocation Group" in the Prospectus.
Consequently, any issuance of a new Series in
Group I may have the effect of reducing or
increasing the amount of collections of
Finance Charge Receivables allocable to the
Series 199_-_ Certificates. See "Risk
Factors - Issuance of New Series" in the
Prospectus. In addition, it has not been
determined whether any Series issued by the
Trust in the future will be included in Group
I.
Shared Excess Finance
Charge Collections...... Each Series in Group I, including Series
199_-_, will be an Excess Allocation Series.
See "Description of the Certificates - Shared
Excess Finance Charge Collections."
Paired Series........... Series 199_-_ may be paired with one or more
other Series (each a "Paired Series"). If a
Paired Series is issued with respect to
Series 199_-_, following the issuance of such
Paired Series, as the Adjusted Invested
Amount is reduced, the investor interest of
the Paired Series may increase by an equal
amount. This will have the effect of
increasing the investor interest of the
Paired Series by an amount that otherwise
would have increased the Transferor Interest.
If a Pay Out Event occurs with respect to any
such Paired Series prior to the payment in
full of the Certificates, the percentages
used to determine the share of collections of
Principal Receivables allocable to the
Certificates may be reduced, which may delay
the final payment of principal to the
Holders. See "Maturity Assumptions - Paired
Series," "Description of the Certificates -
Paired Series" and "Description of the
Certificates - Allocation Percentages"
herein.
Shared Principal
Collections............. Series 199_-_ is a Principal Sharing Series.
To the extent that collections of Principal
Receivables allocated to the Investor
Interest are not needed to make payments on
the Investor Interest or to be deposited in
the Principal Funding Account, such
collections ("Shared Principal Collections")
will be allocated to cover certain principal
payments due to or for the benefit of
certificateholders of other Principal Sharing
Series or, under certain circumstances, paid
to the Transferor or deposited into the
Excess Funding Account. Any such
reallocation or deposit will not result in a
reduction in the Investor Interest with
respect to Series 199_-_. In addition,
collections of Principal Receivables and
certain other amounts otherwise allocable to
other Principal Sharing Series, to the extent
such collections are not needed to make
payments to or deposits for the benefit of
the certificateholders of such other Series,
may be applied to cover principal payments
due to or for the benefit of the holders of
the Class A Certificates and the Class B
Certificates or the Collateral Interest
Holder. See "Description of the Certificates
- Shared Principal Collections." Also see
"Prospectus Summary - Shared Principal
Collections" in the Prospectus for a general
discussion of the purpose and effect on
Certificateholders of this feature.
Optional Repurchase..... The Investor Interest will be subject to
optional repurchase by the Transferor on any
Distribution Date on or after the
Distribution Date on which the Investor
Interest is reduced to an amount less than or
equal to $__________ (5% of the initial
Investor Interest), if certain conditions set
forth in the Agreement are met. The
repurchase price will be equal to the sum of
the Investor Interest and all accrued and
unpaid interest on the Certificates and the
Collateral Interest through the day preceding
the Distribution Date on which the repurchase
occurs. See "Description of the Certificates
- Final Payment of Principal; Termination" in
the Prospectus.
Defeasance.............. The Transferor may, at its option and subject
to the conditions specified in "Description
of the Certificates - Defeasance," be
discharged from its substantive obligations
in respect of the Certificates or in respect
of all Series issued by the Trust by
irrevocably depositing with the Trustee,
under the terms of an irrevocable trust
agreement, as trust funds in trust, any of
(i) dollars in an amount, (ii) Permitted
Investments, or (iii) a combination of the
two, in each case sufficient to pay and
discharge, and which will be applied by the
Trustee to pay and discharge, all remaining
scheduled interest and principal payments on
all outstanding Certificates or on all
outstanding certificates of all Series issued
by the Trust, as the case may be, on the
dates scheduled for such payments and all
amounts owing to the Collateral Interest
Holder, and if applicable, all other Credit
Enhancement Providers with respect to the
Trust. See "Description of the Certificates
- Defeasance."
The Trustee............. [ ]
Tax Status.............. Special Tax Counsel to the Transferor will
opine on the Closing Date that under existing
law the Certificates will be characterized as
debt for Federal income tax purposes and the
Trust will not be an association (or publicly
traded partnership) taxable as a corporation.
Under the Agreement, the Transferor, the
Servicer, the Holders and the Certificate
Owners will agree to treat the Certificates
as debt for Federal, state, local and foreign
income and franchise tax purposes. See "U.S.
Federal Income Tax Consequences" in the
Prospectus for additional information
concerning the application of Federal income
tax laws.
ERISA Considerations.... Subject to considerations described below,
the Class A Certificates are eligible for
purchase by employee benefit plan investors.
Under a regulation issued by the Department
of Labor, the Trust's assets would not be
deemed "plan assets" of an employee benefit
plan holding the Class A Certificates if
certain conditions are met, including that
the Class A Certificates must be held, upon
completion of the public offering made
hereby, by at least 100 investors who are
independent of the Transferor and of one
another. At or before the conclusion of the
offering, the Underwriters will notify the
Transferor and the Trustee as to whether or
not the Class A Certificates will be expected
to be held by at least 100 separately named
persons at the conclusion of the offering,
although no assurances can be made and no
monitoring or other measures will be taken to
assure that this condition has been
satisfied. The Transferor anticipates that
the other conditions of the regulation will
be met. If the Trust's assets were deemed to
be "plan assets" of an employee benefit plan
investor (e.g., if the 100 independent
investor criterion is not satisfied),
violations of the "prohibited transaction"
rules of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"),
could result and generate excise tax and
other liabilities under ERISA and section
4975 of the Internal Revenue Code of 1986, as
amended (the "Code"), unless a statutory,
regulatory or administrative exemption is
available. It is uncertain whether existing
exemptions from the "prohibited transaction"
rules of ERISA would apply to all
transactions involving the Trust's assets.
Accordingly, fiduciaries or other persons
contemplating purchasing the Certificates on
behalf or with "plan assets" of any employee
benefit plan should consult their counsel
before making a purchase. See "ERISA
Considerations" in the Prospectus.
The Underwriters currently do not expect that
the Class B Certificates will be held by at
least 100 such persons and, therefore, do not
expect that such Class B Certificates will
qualify as publicly-offered securities under
the regulation referred to in the preceding
paragraph. Accordingly, the Class B
Certificates may not be acquired with plan
assets of (a) any employee benefit plan that
is subject to ERISA, or (b) any plan or other
arrangement (including an individual
retirement account or Keogh plan) that is
subject to section 4975 of the Code. By its
acceptance of a Class B Certificate or an
interest therein, each Class B Holder and
Certificate Owner will be deemed to have
represented and warranted that it is not
subject to the foregoing limitation.
Class A Certificate
Rating.................. It is a condition to the issuance of the
Class A Certificates that they be rated in
the highest rating category by at least one
Rating Agency. The rating of the Class A
Certificates is based primarily on the value
of the Receivables and the terms of the Class
B Certificates and the benefits of the
Collateral Interest.
Class B Certificate
Rating.................. It is a condition to the issuance of the
Class B Certificates that they be rated in
one of the three highest rating categories by
at least one Rating Agency. The rating of the
Class B Certificates is based primarily on
the value of the Receivables and the benefits
of the Collateral Interest.
[Listing................ Application will be made to list the
Certificates on the Luxembourg Stock
Exchange.]
FIRST NBC'S CREDIT CARD PORTFOLIO
General
The Receivables to be conveyed to the Trust by First NBC pursuant
to the Agreement have been or will be generated from transactions made
by holders of selected VISA, MasterCard and private label credit card
accounts, including premium accounts and standard accounts, from the
Bank Portfolio. A description of the Bank's credit card business is
contained in the Prospectus under the heading "First NBC's Credit Card
Activities."
Billing and Payments
First NBC generates and mails to cardholders monthly statements
summarizing account activity and processes cardholder monthly payments
at the end of each Billing Cycle, generally within 3 business days
after the cycle date assigned to such account by the Servicer.
Currently, the Servicer has ten Billing Cycles within each calendar
month. The monthly billing statement reflects all purchases, cash
advances, administrative charges, if applicable (such as currency
conversion charges, late charges, and returned payment charges),
annual fees, if any, credit life insurance charges and finance charges
incurred by the account during the Billing Cycle or a prior Billing
Cycle and reported to the Servicer, all payments or credits applicable
to the account and the outstanding balance of the account as of the
cycle date, including the available credit thereunder.
Customers receive a 25-day grace period on purchases. Currently,
cardholders in the programs included in the Trust Portfolio must make
a monthly minimum payment at least equal to the greater of (i) 2.5% or
10% (depending upon the program) of the statement balance (excluding
any disputed amounts) plus past due amounts and (ii) a stated minimum
payment (generally $10) plus past due amounts.
The finance charges on purchases are assessed monthly and are
calculated by multiplying the account's average daily purchase balance
times the applicable annual periodic rate times the actual number of
days in the applicable Billing Cycle divided by 365. Finance
charges are calculated on purchases from the date of the purchase or the
first day of the Billing Cycle in which the purchase is posted to the
account, whichever is later. Monthly periodic finance charges are not
assessed on purchases if all balances shown in the billing statement
are paid by the due date, which is 25 days after the billing date.
Finance charges are calculated on cash advances (including balance
transfers) from the date of the transaction. Currently, First NBC
generally treats the date before posting as the transaction date for
cash advance checks.
The Trust Portfolio includes fixed rate and variable rate credit
card accounts. Generally, fixed annual percentage rates range from
5.9% to 21.0%, and variable rates range from prime plus 4.0% per annum
to prime plus 8.4% per annum. First NBC imposes no minimum finance
charge. Certain accounts in the Trust Portfolio may include a
structure by which a portion of finance charges, annual fees, cash
advance fees or purchase volume are rebated to agent banks or affinity
groups.
A portion of the accounts require payment of annual fees
(generally ranging from $5.00 to $40.00), although under various
marketing programs these fees may be waived or rebated. First NBC
also assesses late fees (generally $10.00 to $20.00), overlimit fees
(generally $10.00 to $15.00) and returned check charges (generally
$15.00). First NBC assesses a cash advance fee, generally 2.5% of the
cash advance amount, with a minimum fee of $2.50 and a maximum fee of
$20.00.
Payments in respect of the Accounts are processed by the FCSC (on
behalf of the Servicer) and are generally allocated at the end of the
applicable Billing Cycle to the outstanding balance of such Accounts
in the following order: (i) to fees assessed on the account, (ii) to
finance charges, and (iii) to the unpaid principal balance of
purchases.
Delinquency and Loss Experience
An account is contractually delinquent if the minimum payment is
not received by the due date indicated on the customer's statement.
An account may be restricted for subsequent activity until the
customer makes all past due payments. Account restrictions may be
instituted within a range of one to 40 days delinquency, based upon
the customer's internal "behavioral score" and credit bureau score.
Generally, once a customer is four payments delinquent, the account is
permanently closed.
Efforts to collect contractually delinquent credit card
receivables include statement messages, telephone calls and formal
collection letters. First NBC updates monthly an internal "behavioral
score", developed with Fair, Isaac and Company, Inc., for each
cardholder based upon payment and transaction history. Each
cardholder's credit bureau score, under a credit scoring model
developed with Fair, Isaac and Company, Inc., is also updated
quarterly. The behavioral score and the credit bureau score are used
to prioritize accounts for initial contact with the objective of
contacting the highest risk and balance accounts first.
Accounts are worked continually at each stage of delinquency.
Accounts are charged off at 179 days delinquent, except for bankruptcy
and deceased losses, which are charged off within 45 days of
notification. Charged off accounts are placed with collection
personnel at First NBC, outside collection agencies or outside
attorneys.
The following tables set forth the delinquency and loss
experience for each of the periods shown for the Bank Portfolio of
credit card accounts. The Bank Portfolio's delinquency and loss
experience is comprised of segments which may, when taken
individually, have delinquency and loss characteristics different from
those of the overall Bank Portfolio of credit card accounts. As of
the beginning of the day on ___________ __, 1997, the Receivables in
the Trust Portfolio represented approximatortfolio is only a portion
of the Bank Portfolio, actual delinquency and loss experience with
respect to the Receivables may be different from that set forth below
for the Bank Portfolio. There can be no assurance that the
delinquency and loss experience for the Receivables in the future will
be similar to the historical experience of the Bank Portfolio set
forth below.
Delinquency Experience Bank Portfolio(1)(2)
(Dollars in thousands)
as of December 31
--------------------------------------------------------------
1996 1995 1994 1993
------------------------ ------------------------ ----------------------- -----------------------
Percentage Percentage Percentage Percentage
of Total of Total of Total of Total
Receivables Receivables Receivables Receivables Receivables Receivables Receivables Receivables
Receivables
Outstanding(3) $ $ $ $
Receivables
Delinquent....
31 - 60 Days $ % $ % $ % $ %
61 - 90 Days % % % %
91-120 Days % % % %
121 Days Or
More......... ____ % ____ % ____ % ____ %
Total.. $ % $ % $ % $ %
==== ==== ==== ====
- ---------------------
(1) The above information is for First NBC's First Bankcard Division
only. Amounts have not been restated for acquisitions of
portfolios from the Corporation's acquired banks which were
accounted for as poolings-of-interests.
(2) The above information includes the private label portfolio guaranteed
by USAF Services ("USAF"). These balances are charged back to USAF
at 90 days past due. The balances in such accounts and the related
delinquencies at December 31, 1996, 1995, 1994 and 1993,
respectively, were: $______ outstanding, ____% delinquent;
$_________ outstanding, ____% delinquent; $_______ outstanding,
_____% delinquent; and $_________ outstanding, ____% delinquent.
(3) The Receivables Outstanding on the accounts consist of all
amounts due from cardholders as posted to the accounts as of the
end of the period shown.
Loss Experience(1)(2)
Bank Portfolio
(Dollars in Thousands)
Year Ended December 31
1996 1995 1994 1993
-------- -------- -------- --------
Percentage Percentage Percentage Percentage
of Total of Total of Total of Total
Receivables Receivables Receivables Receivables Receivables Receivables Receivables Receivables
Average Receivables
Outstanding(3)........ $ $ $ $
Gross Charge-Offs(4). $ % $ % $ % $ %
%
Recoveries........... % - % % - %
Net Charge-Offs....... $ % $ % $ % $ %
= = = =
______________________
(1) The above information is for First NBC's First BankCard Division
only. Amounts have not been restated for acquisitions of
portfolios from the Corporation's acquired banks which were
accounted for as poolings-of-interests.
(2) Interest and fees on charged off accounts are reversed from
finance charge revenues and fee income accounts, respectively,
and are not included in charge-offs.
(3) Average Receivables Outstanding is the average of the daily
receivable balance during the period indicated.
(4) Gross Charge-Offs are total principal charge-offs before
recoveries and do not include the amount of any reductions in
Average Receivables Outstanding due to fraud, returned goods,
customer disputes or other miscellaneous credit adjustments.
Interchange
The Transferor will be required, pursuant to the terms of the
Agreement, to transfer to the Trust a percentage of the Interchange
attributed to cardholder charges for goods and services in the
Accounts. For administrative convenience, the Transferor may exclude
from the calculation of Interchange certain interchange received from
merchants for whom First NBC acts as the MasterCard or VISA clearing
bank. Interchange arising under the Accounts will be allocated to the
Certificates on the basis of the percentage equivalent of the ratio of
(i) the Floating Investor Percentage of cardholder charges for goods
and services in the Accounts to (ii) the total amount of cardholder
charges for goods and services in the MasterCard and VISA credit card
accounts owned by First NBC, as reasonably estimated by the
Transferor. MasterCard and VISA may from time to time change the
amount of Interchange reimbursed to banks issuing their credit cards.
Interchange will be treated as collections of Finance Charge
Receivables for the purposes of determining the amount of Finance
Charge Receivables, allocating collections of Finance Charge
Receivables, making required monthly payments, and calculating the
Portfolio Yield. Under the circumstances described herein, Interchange
will be used to pay a portion of the Monthly Investor Servicing Fee
required to be paid on each Transfer Date. See "Description of the
Certificates - Servicing Compensation and Payment of Expenses" herein
and "First NBC's Credit Card Activities - Interchange" in the
Prospectus.
THE RECEIVABLES
The Receivables in the Trust Portfolio, as of the beginning of
the day on _________, 199_, included $______ of Principal Receivables
and $______ of Finance Charge Receivables. The Accounts had an average
Principal Receivable balance of $_______ and an average credit limit
of $_______. The percentage of the aggregate total Receivable balance
to the aggregate total credit limit was %. The average age of the
Accounts was approximately ___ months. As of the beginning of the day
on ___________ ____, 199_, Receivables arising in Acounts in agent
bank, affinity or military relationship programs made up approximately
__% in the aggregate of the total Receivables in the Trust Portfolio,
of which approximately __% arose in the single largest program of this
type. See "Risk Factors -- Affinity Programs" in the Prospectus. As
of such date, % of the Accounts were standard accounts and % were
premium accounts, and the aggregate Principal Receivable balances of
standard acounts and Premium accounts, as a percentage of the total
aggregate Principal Receivables, were % and %,
respectively. Because over % of the cardholders whose Accounts
are included in the Trust Portfolio had a billing address in Louisiana
and the surrounding states, the Trust Portfolio as a whole may be
adversely affected by material adverse legal, economic and social
changes in Louisiana and surrounding states. See "Risk Factors --
Effect of Social, Legal and Economic Factors on Credit Card Usage" in
the Prospectus. As of the beginning of the day on _________ ____,
199_, Receivables arising in accounts in First NBC's military programs
made up approximately __% in the aggregate of the total Receivables in
the Trust Portfolio. See "Risk Factors -- Effects of Applicable Law
- -- Limitations Imposed by Consumer Protection Laws" in the Prospectus.
The following tables summarize the Trust Portfolio by various
criteria as of the [beginning of the day on __________ __, 199_]
[dates indicated]. Because the future composition of the Trust
Portfolio may change over time, these tables are not necessarily
indicative of the composition of the Trust Portfolio at any subsequent
time.
Composition by Account Balance
the Trust Portfolio
Percentage
of Total Percentage of
Number of Number of Total
Account Balance Range Accounts Accounts Receivables Receivables
- --------------------- ---------- ---------- ----------- -------------
Credit Balance...........
No Balance...............
$.01 - $5,000.00.........
$5,000.01 - $10,000.00...
$10,000.01 - $15,000.00..
$15,000.01 - $20,000.00..
$20,000.01 - $25,000.00..
$25,000.01 or More.......
TOTAL.............. 100.0% 100.0%
===== =====
Composition by Credit Limit
the Trust Portfolio
Percentage
of Total Percentage of
Number of Number of Total
Credit Limit Range Accounts Accounts Receivables Receivables
- ------------------ --------- --------- ----------- ------------
Less than or equal to $5,000.00..
$5,000.01 - $10,000.00...........
$10,000.01 - $15,000.00..........
$15,000.01 - $20,000.00..........
$20,000.01 - $25,000.00..........
$25,000.01 or More...............
TOTAL...................... 100.0% 100.0%
===== =====
Composition by Period of Delinquency
the Trust Portfolio
Percentage
of Total Percentage of
Period of Delinquency Number of Number of Total
(Days Contractually Delinquent) Accounts Accounts Receivables Receivables
- ------------------------------- --------- ---------- ----------- ------------
Not Delinquent.................
Up to 30 Days..................
31 to 60 Days..................
61 to 90 Days..................
91 or More Days................
TOTAL.................... 100.0% 100.0%
===== =====
Composition by Account Age
the Trust Portfolio
Percentage
of Total Percentage of
Number of Number of Total
Account Balance Range Accounts Accounts Receivables Receivables
- --------------------- --------- ---------- ----------- -----------
Not More than 6 Months......
Over 6 Months to 12 Months..
Over 12 Months to 24 Months.
Over 24 Months to 36 Months.
Over 36 Months to 48 Months.
Over 48 Months to 60 Months.
Over 60 Months to 72 Months.
Over 72 Months..............
TOTAL................. 100.0% 100.0%
===== =====
Geographic Distribution of Accounts
the Trust Portfolio
Percentage
of Total
Number of Number of
State(1) Accounts Accounts Receivables Receivables
- ----- --------- --------- ----------- -----------
Alabama.................
Louisiana...............
[List other material
states]
- ------------------------
(1) No more than __% of the aggregate principal balance of the
Receivables as of the Cut-Off Date were represented by
Receivables owed by obligors located in any state other than
those listed in this table.
MATURITY ASSUMPTIONS
The Agreement provides that Class A Holders will not receive
payments of principal until the Class A Scheduled Payment Date, or
earlier in the event of a Pay Out Event which results in the
commencement of the Rapid Amortization Period. The Class B Holders
will not begin to receive payments of principal until the final
principal payment on the Class A Certificates has been made.
Controlled Accumulation Period. On each Transfer Date during the
Controlled Accumulation Period prior to the payment of the Class A
Investor Interest in full, an amount equal to, for each Monthly
Period, the least of (a) the Available Investor Principal Collections,
(b) the "Controlled Deposit Amount" for such Monthly Period (which
equals the sum of the Controlled Accumulation Amount for such Monthly
Period and any portion of the Controlled Accumulation Amount for any
prior Monthly Period that was not deposited in the Principal Funding
Account) and (c) the Class A Adjusted Investor Interest prior to any
deposits on such day, will be deposited in the Principal Funding
Account (the "Principal Funding Account") established by the Servicer
until the principal amount on deposit in the Principal Funding Account
(the "Principal Funding Account Balance") equals the Class A Investor
Interest. After the Class A Investor Interest has been paid in full,
Available Investor Principal Collections, to the extent required, will
be distributed to the Class B Holders on each Distribution Date until
the earlier of the date the Class B Investor Interest has been paid in
full and the Series 199_-_ Termination Date. After the Class A
Investor Interest and the Class B Investor Interest have each been
paid in full, Available Investor Principal Collections, to the extent
required, will be distributed to the Collateral Interest Holder on
each Transfer Date until the earlier of the date the Collateral
Interest has been paid in full and the Series 199_-_ Termination Date.
Amounts in the Principal Funding Account are expected to be available
to pay the Class A Investor Interest on the Class A Scheduled Payment
Date. After the payment of the Class A Investor Interest in full,
Available Investor Principal Collections are expected to be available
to pay the Class B Investor Interest on the Class B Scheduled Payment
Date. Although it is anticipated that collections of Principal
Receivables will be available on each Transfer Date during the
Controlled Accumulation Period to make a deposit of the applicable
Controlled Deposit Amount and that the Class A Investor Interest will
be paid to the Class A Holders on the Class A Scheduled Payment Date
and the Class B Investor Interest will be paid to the Class B Holders
on the Class B Scheduled Payment Date, respectively, no assurance can
be given in this regard. If the amount required to pay the Class A
Investor Interest or the Class B Investor Interest in full is not
available on the Class A Scheduled Payment Date or the Class B
Scheduled Payment Date, respectively, a Pay Out Event will occur and
the Rapid Amortization Period will commence.
Rapid Amortization Period. If a Pay Out Event occurs, the Rapid
Amortization Period will commence and any amount on deposit in the
Principal Funding Account will be paid to the Class A Holders on the
Distribution Date in the month following the commencement of the Rapid
Amortization Period. In addition, to the extent that the Class A
Investor Interest has not been paid in full, the Class A Holders will
be entitled to monthly payments of principal equal to the Available
Investor Principal Collections until the earlier of the date on which
the Class A Certificates have been paid in full and the Series 199_-_
Termination Date. After the Class A Certificates have been paid in
full and if the Series 199_-_ Termination Date has not occurred,
Available Investor Principal Collections will be paid to the Class B
Certificates on each Distribution Date until the earlier of the date
on which the Class B Certificates have been paid in full and the
Series 199_-_ Termination Date.
Pay Out Events. A Pay Out Event occurs, either automatically or
after specified notice, upon (a) the failure of the Transferor to make
certain payments or transfers of funds for the benefit of the Holders
within the time periods stated in the Agreement, (b) material breaches
of certain representations, warranties or covenants of the Transferor,
(c) certain insolvency events involving the Transferor, (d) a
reduction in the average of the Portfolio Yields for any three
consecutive Monthly Periods to a rate that is less than the average of
the Base Rates for such period, (e) the Trust becoming an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended, (f) the failure of the Transferor to convey Receivables
arising under Additional Accounts or Participations to the Trust when
required by the Agreement, (g) the occurrence of a Servicer Default
which would have a material adverse effect on the Holders, (h)
insufficient monies in the Distribution Account to pay the Class A
Investor Interest or the Class B Investor Interest in full on the
Class A Scheduled Payment Date or the Class B Scheduled Payment Date,
respectively, or (i) the Transferor becomes unable for any reason to
transfer Receivables to the Trust in accordance with the provisions of
the Agreement. See "Description of the Certificates - Pay Out
Events." The term "Base Rate" means, with respect to any Monthly
Period, the annualized percentage equivalent of a fraction, the
numerator of which is the sum of the Class A Monthly Interest, the
Class B Monthly Interest and the Collateral Monthly Interest, each for
the related Interest Period, and the Monthly Investor Servicing Fee
for such Monthly Period, and the denominator of which is the Investor
Interest as of the close of business on the last day of such Monthly
Period. The term "Portfolio Yield" means, with respect to any Monthly
Period, the annualized percentage equivalent of a fraction, the
numerator of which is the sum of Reallocated Investor Finance Charge
Collections, Principal Funding Investment Proceeds and amounts
withdrawn from the Reserve Account deposited into the Finance Charge
Account and allocable to the Certificates and the Collateral Interest
for such Monthly Period, calculated on a cash basis after subtracting
the Investor Default Amount for such Monthly Period, and the
denominator of which is the Investor Interest as of the close of
business on the last day of such Monthly Period.
Paired Series. The Transferor may cause the Trust to issue
another Series as a Paired Series with respect to Series 199_-_.
Although no assurance can be given as to whether such other Series
will be issued and, if issued, the specific terms thereof, the
outstanding principal amount of such Series may vary from time to time
whether or not a Pay Out Event occurs with respect to Series 199_-_,
and the interest rate with respect to certificates of such Series will
be established on the date of issuance of such Series and may be reset
periodically. Further, the Pay Out Events with respect to such other
Series may vary from the Pay Out Events with respect to Series 199_-_
and may include Pay Out Events which are unrelated to the status of
the Transferor, the Servicer or the Receivables, such as events
related to the continued availability and rating of certain providers
of Enhancement to such other Series. If a Pay Out Event does occur
with respect to any such Paired Series prior to the payment in full of
the Certificates, the final payment of principal to the Holders may be
delayed. In particular, the numerator of the Fixed Allocation
Percentage may be changed upon the occurrence of a Pay Out Event with
respect to a Paired Series resulting in a possible reduction of the
percentage of collections of Principal Receivables allocated to the
Holders and a possible delrs. See "Description of the Certificates -
Allocation Percentages" and "- Paired Series" herein.
Payment Rates. The following table sets forth the highest and
lowest cardholder monthly payment rates for the Bank Portfolio during
any month in the period shown and the average cardholder monthly
payment rates for all months during the periods shown, in each case
calculated as a percentage of total opening monthly account balances
during the periods shown. Payment rates shown in the table are based
on amounts which would be deemed payments of Principal Receivables and
Finance Charge Receivables with respect to the Accounts.
Cardholder Monthly Payment Rates
Bank Portfolio
Year Ended December 31
-----------------------------------------
1996 1995 1994 1993
---- ---- ---- ----
Lowest Month........... % % % %
Highest Month.......... % % % %
Monthly Average........ % % % %
Currently, cardholders must make a monthly minimum payment at
least equal to the greater of (i) [2.5% or 10% (depending upon the
program)] of the statement balance (excluding any disputed amounts)
plus past due amounts and (ii) a stated minimum payment (generally
$10) plus past due amounts. There can be no assurance that the
cardholder monthly payment rates in the future will be similar to the
historical experience set forth above. In addition, the amount of
collections of Receivables may vary from month to month due to
seasonal variations, general economic conditions and payment habits of
individual cardholders. There can be no assurance that collections of
Principal Receivables with respect to the Trust Portfolio will be
similar to the historical experience set forth above or that deposits
into the Principal Funding Account or the Distribution Account, as
applicable, will be made in accordance with the applicable Controlled
Accumulation Amount. If a Pay Out Event occurs, the average life of
the Certificates could be significantly reduced or increased.
Because there may be a slowdown in the payment rate below the
payment rates used to determine the Controlled Accumulation Amounts,
or a Pay Out Event may occur which would initiate the Rapid
Amortization Period, there can be no assurance that the actual number
of months elapsed from the date of issuance of the Class A
Certificates and the Class B Certificates to their respective final
Distribution Dates will equal the expected number of months. As
described under "Description of the Certificates-Postponement of
Controlled Accumulation Period," the Servicer may shorten the
Controlled Accumulation Period and, in such event, there can be no
assurance that there will be sufficient time to accumulate all amounts
necessary to pay the Class A Investor Interest and the Class B
Investor Interest on the Class A Scheduled Payment Date and the Class
B Scheduled Payment Date, respectively. See "Maturity Assumptions" and
"Risk Factors - Payments Other than at Expected Maturity" in the
Prospectus.
RECEIVABLE YIELD CONSIDERATIONS
The gross revenues from finance charges and fees billed to
accounts in the Bank Portfolio for each of the four calendar years
contained in the period ended December 31, 1996 are set forth in the
following table.
The historical yield figures in the following table are
calculated on an accrual basis. Collections of Receivables included
in the Trust will be on a cash basis and may not reflect the
historical yield experience in the table. During periods of
increasing delinquencies or periodic payment deferral programs,
accrual yields may exceed cash amounts accrued and billed to
cardholders. Conversely, cash yields may exceed accrual yields as
amounts collected in a current period may include amounts accrued
during prior periods. However, the Transferor believes that during
the four calendar years contained in the period ended December 31,
1996, the yield on an accrual basis closely approximated the yield on
a cash basis. The yield on both an accrual and a cash basis will be
affected by numerous factors, including the monthly periodic finance
charges on the Receivables, the amount of any annual membership fees
and other fees, changes in the delinquency rate on the Receivables and
the percentage of cardholders who pay their balances in full each
month and do not incur monthly periodic finance charges. See "Risk
Factors" in the Prospectus.
Bank Portfolio Yield(1)(2)
(Dollars in Thousands)
Year Ended December 31
-----------------------------------------
1996 1995 1994 1993
------- -------- ------- -------
Average Receivables Outstanding (3)... $ $ $ $
Total Finance Charges and Fees (3)(4). $ $ $ $
Total Finance Charges and Fees
as a percentage of Average
Receivables Outstanding.......... % % % %
(1) Amounts have not been restated for acquisitions of portfolios
from the Corporation's acquired banks which were accounted for as
poolings-of-interests.
(2) Interest and fees on charged off accounts are reversed from
finance charge revenues and fee income accounts, respectively,
and are not included in charge-offs.
(3) Fees include Annual Fees, Interchange, Cash Advance Fees, Late
Fees, Overlimit Fees and Other Fees as allocated to the Bank
Portfolio.
(4) Finance Charges and Fees are presented net of adjustments
pursuant to First NBC's normal servicing procedures, including
removal of incorrect or disputed monthly periodic finance
charges.
The revenue for the Bank Portfolio of credit card accounts shown
in the above table is comprised of monthly periodic finance charges,
credit card fees and Interchange. These revenues vary for each account
based on the type and volume of activity for each account. Because
the Trust Portfolio is only a portion of the Bank Portfolio, actual
yield with respect to Receivables may be different from that set forth
above for the Bank Portfolio. See "First NBC's Credit Card Portfolio"
herein and "First NBC Credit Card Activities" in the Prospectus.
FIRST NBC AND FIRST COMMERCE CORPORATION
First NBC is a national banking association and a wholly owned
subsidiary of First Commerce Corporation (the "Corporation"). The
Bank's main office is located at 210 Baronne Street, New Orleans,
Louisiana 70112, telephone (504) 623-1371. The Corporation is a
Louisiana corporation and a bank holding company under the Bank
Holding Company Act of 1956, as amended (the "BHC Act"), and maintains
its headquarters in New Orleans, Louisiana. As of December 31, 1996,
First NBC had assets of $5.9 billion and stockholder's equity of $374
million. As of December 31, 1996, the Corporation had assets of $9.2
billion and stockholders' equity of $724 million. The Corporation has
six wholly owned bank subsidiaries, each in Louisiana: the Bank, City
National Bank of Baton Rouge, Central Bank (Monroe), The First
National Bank of Lafayette, Rapides Bank & Trust Company in Alexandria
and The First National Bank of Lake Charles, which offer a full range
of banking and related financial services to commercial and consumer
customers, including numerous types of interest-bearing and
noninterest-bearing deposit accounts, commercial and consumer loans
(including credit card loans), credit card merchant services, trust
services, correspondent banking services and safe deposit facilities.
DESCRIPTION OF THE CERTIFICATES
The Certificates will be issued pursuant to the Agreement and the
Series 199_-__ Supplement. Pursuant to the Agreement, the Transferor
and the Trustee may execute further series supplements in order to
issue additional Series. The following summary of the Certificates
does not purport to be complete and is subject to, and is qualified in
its entirety by reference to, all of the provisions of the Agreement
and the Series 199_-__ Supplement. See "Description of the
Certificates" in the Prospectus for additional information concerning
the Certificates and the Agreement.
General
The Certificates will represent the right to receive certain
payments from the assets of the Trust, including the right to the
applicable allocation percentage of all cardholder payments on the
Receivables in the Trust. Each Class A Certificate represents the
right to receive payments of interest at the Class A Rate for the
related Interest Period funded from collections of Finance Charge
Receivables and payments of principal on the Class A Scheduled Payment
Date or, to the extent of the Class A Investor Interest, on each
Distribution Date during the Rapid Amortization Period, funded from
collections of Principal Receivables allocated to the Class A Investor
Interest and certain other available amounts. Each Class B
Certificate represents the right to receive payments of interest at
the applicable Class B Rate for the related Interest Period, and
payments of principal on the Class B Scheduled Payment Date or, to the
extent of the Class B Investor Interest, on each Distribution Date
during the Rapid Amortization Period after the Class A Certificates
have been paid in full, funded from collections of Finance Charge
Receivables and Principal Receivables, respectively, allocated to the
Class B Investor Interest and certain other available amounts. In
addition to representing the right to payment from collections of
Finance Charge Receivables and Principal Receivables, each Class A
Certificate also represents the right to receive payments from Excess
Spread, funds on deposit in the Principal Funding Account and the
Reserve Account and certain investment earnings thereon, Reallocated
Principal Collections and Shared Principal Collections and certain
other available amounts (including, under certain circumstances,
amounts on deposit in the Excess Funding Account). In addition to
representing the right to payment from collections of Finance Charge
Receivables and Principal Receivables, each Class B Certificate also
represents the right to receive payments from Excess Spread,
Reallocated Collateral Prins and Shared Principal Collections and
certain other available amounts (including, under certain
circumstances, amounts on deposit in the Excess Funding Account).
Payments of interest and principal will be made, to the extent of
funds available therefor, on each Distribution Date on which such
amounts are due to Holders in whose names the Certificates were
registered on the last business day of the calendar month preceding
such Distribution Date (each, a "Record Date").
[Application will be made to list the Certificates on the
Luxembourg Stock Exchange.]
The Class A Certificates and the Class B Certificates initially
will be represented by certificates registered in the name of Cede, as
nominee of DTC. Unless and until Definitive Certificates are issued,
all references herein to actions by Class A Holders and/or Class B
Holders shall refer to actions taken by DTC upon instructions from DTC
Participants and all references herein to distributions, notices,
reports and statements to Class A Holders and/or Class B Holders shall
refer to distributions, notices, reports and statements to DTC or
Cedel, as the registered holder of the Class A Certificates and the
Class B Certificates, as the case may be, for distribution to
Certificate Owners in accordance with DTC procedures. Holders may
hold their Certificates through DTC (in the United States) or Cedel or
Euroclear (in Europe) if they are participants of such systems, or
indirectly through organizations that are participants in such
systems. Cede, as nominee for DTC, will hold the global Certificates.
Cede and Euroclear will hold omnibus positions on behalf of the Cedel
Participants and the Euroclear Participants, respectively, through
customers' securities accounts in Cedel's and Euroclear's names on the
books of their respective Depositaries which in turn will hold such
positions in customers' securities accounts in the Depositaries' names
on the books of DTC. See "Description of the Certificates - General,"
"-Book-Entry Registration" and "- Definitive Certificates" in the
Prospectus.
Interest Payments
Interest will accrue on the Class A Certificates at the Class A
Rate and on the Class B Certificates at the Class B Rate from the
Closing Date. Interest will be distributed to Holders on ______ 15,
199_ and on each Distribution Date thereafter. Interest payments on
the Class A Certificates and the Class B Certificates on any
Distribution Date will be calculated on the outstanding principal
balance of the Class A Certificates and the outstanding principal
balance of the Class B Certificates, as applicable, as of the
preceding Record Date, except that interest for the first Distribution
Date will accrue at the applicable Certificate Rate on the initial
outstanding principal balance of the Class A Certificates and the
initial outstanding principal balance of the Class B Certificates, as
applicable, from the Closing Date. Interest due on the Certificates
but not paid on any Distribution Date will be payable on the next
succeeding Distribution Date together with additional interest on such
amount at the applicable Certificate Rate plus 2% per annum (such
amount with respect to the Class A Certificates, the "Class A
Additional Interest," and such amount with respect to the Class B
Certificates, the "Class B Additional Interest," and collectively, the
"Additional Interest"). Additional Interest shall accrue on the same
basis as interest on the Certificates, and shall accrue from the
Distribution Date on which such overdue interest first became due, to
but excluding the Distribution Date on which such Additional Interest
is paid. Interest payments on the Class A Certificates on any
Distribution Date will be paid from Class A Available Funds for the
related Monthly Period, and to the extent such Class A Available Funds
are insufficient to pay such interest, from Excess Spread and
Reallocated Principal Collections (to the extent available) for such
Monthly Period. Interest payments on the Class B Certificates on any
Distribution Date will be paid from Class B Available Funds for the
related Monthly Period, and to the extent such Class B Available Funds
are insufficient to pay such interest, from Excess Spread and
Reallocated Collateral Principal Collections (to the extent available)
remaining after certain other payments have been made with respect to
the Class A Certificates.
"Class A Available Funds" means, with respect to any Monthly
Period, an amount equal to the sum of (a) the Class A Floating
Allocation of Reallocated Investor Finance Charge Receivables
allocated to the Investor Interest with respect to such Monthly Period
(excluding the portion of collections of Finance Charge Receivables
attributable to Interchange that is allocable to Servicer
Interchange), (b) Principal Funding Investment Proceeds, if any, with
respect to the related Transfer Date (up to the Class A Covered Amount
for such Transfer Date) and (c) amounts, if any, to be withdrawn from
the Reserve Account which are required to be included in Class A
Available Funds pursuant to the Series 199_-__ Supplement with respect
to such Transfer Date. "Class B Available Funds" means, with respect
to any Monthly Period, an amount equal to the Class B Floating
Allocation of Reallocated Investor Finance Charge Receivables
allocated to the Investor Interest with respect to such Monthly Period
(excluding the portion of collections of Finance Charge Receivables
attributable to Interchange that is allocable to Servicer
Interchange).
The Class A Certificates will bear interest from the Closing Date
through ________ _, 199_, and from ________ _, 199_ through ________
_, 199_ and with respect to each Interest Period thereafter, at a rate
of ___% per annum [above LIBOR prevailing on the related LIBOR
Determination Date with respect to each such period] (the "Class A
Rate"). The Class B Certificates will bear interest from the Closing
Date through ________ _, 199_, and from ________ _, 199_ through
________ _, 199_ and with respect to each Interest Period thereafter,
at a rate of ___% per annum [above LIBOR prevailing on the related
LIBOR Determination Date with respect to each such period] (the "Class
B Rate").
[The Trustee will determine LIBOR on ________ _, 199_ for the
period from the Closing Date through ________ _, 199_, on ________ _,
199_, for the period from ________ _, 199_ through ________ _, 199_,
and for each Interest Period thereafter, on the second business day
prior to the Distribution Date on which such Interest Period commences
(each, a "LIBOR Determination Date"). For purposes of calculating
LIBOR, a business day is any business day on which dealings in
deposits in United States dollars are transacted in the London
interbank market.
"Interest Period" means, with respect to any Distribution Date,
the period from and including the previous Distribution Date through
the day preceding such Distribution Date, except the initial Interest
Period will be the period from and including the Closing Date through
the day preceding the initial Distribution Date.
"LIBOR" means, as of any LIBOR Determination Date, the rate for
deposits in United States dollars for a period equal to the relevant
Interest Period (commencing on the first day of such Interest Period)
which appears on Telerate Page 3750 (as defined below) as of 11:00
a.m., London Time, on such date. If such rate does not appear on
Telerate Page 3750, the rate for that day will be determined on the
basis of the rates at which deposits in United States dollars are
offered by the Reference Banks (as defined below) at approximately
11:00 a.m., London Time, on that day to prime banks in the London
interbank market for a period equal to the relevant Interest Period
(commencing on the first day of such Interest Period). The Servicer
will request the principal London office of each of the Reference
Banks to provide a quotation of its rate. If at least two such
quotations are provided, the rate for the day will be the arithmetic
mean of the quotations. If fewer than two quotations are provided as
requested, the rate for that day will be the arithmetic mean of the
rates quoted by major banks in New York City, selected by the
Servicer, at approximately 11:00 a.m., New York City time, on that day
for loans in United States dollars to leading international banks for
a period equal to the relevant Interest Period (commencing on the
first day of such Interest Period). If the banks selected by the
Servicer are not quoting rates as provided in the immediately
preceding sentence, LIBOR for such Interest Period will be LIBOR in
effect for the immediately preceding Interest Period.
"Reference Banks" means three major banks in the London
interbank market selected by the Servicer.
The Class A Rate and the Class B Rate applicable to the current
and immediately preceding Interest Period may be obtained by
telephoning the Trustee at its Corporate the Trust Office at (__)
____- ____.
Interest on the Certificates will be calculated on the basis of
[the actual number of days in the Interest Period] [twelve 30-day
months] and a 360-day year.
Principal Payments
On each Transfer Date relating to the Revolving Period (which
begins on the Closing Date and ends at the commencement of the
Controlled Accumulation Period or, if earlier, the Rapid Amortization
Period), unless a reduction in the Required Collateral Interest has
occurred, collections of Principal Receivables allocable to the
Investor Interest will, subject to certain limitations, including the
allocation of any Reallocated Principal Collections with respect to
the related Monthly Period to pay the Class A Required Amount and the
Class B Required Amount, be treated as Shared Principal Collections
or, under certain circumstances, deposited into the Excess Funding
Account.
On each Transfer Date relating to the Controlled Accumulation
Period, the Trustee will deposit in the Principal Funding Account an
amount equal to the least of (a) Available Investor Principal
Collections with respect to such Transfer Date, (b) the applicable
Controlled Deposit Amount and (c) the Class A Adjusted Investor
Interest prior to any deposits on such date. Amounts in the Principal
Funding Account will be paid to the Class A Holders on the Class A
Scheduled Payment Date. After the Class A Investor Interest has been
paid or provided for in full, on each Transfer Date during the
Controlled Accumulation Period, amounts equal to the lesser of (a)
Available Investor Principal Collections with respect to such Transfer
Date and (b) the Class B Investor Interest will be deposited in the
Distribution Account for distribution to the Class B Holders until the
Class B Investor Interest has been paid in full. Such amounts in the
Distribution Account will be paid to the Class B Holders on the Class
B Scheduled Payment Date. On each Transfer Date, if a reduction in
the Required Collateral Interest has occurred, a portion of
collections of Principal Receivables allocable to the Investor
Interest will be applied in accordance with the Loan Agreement to
reduce the Collateral Interest to the Required Collateral Interest.
During the Controlled Accumulation Period until the final principal
payment to the Class B Holders, the portion of Available Investor
Principal Collections not applied to Class A Monthly Principal, Class
B Monthly Principal or Collateral Monthly Principal on a Transfer Date
will generally be treated as Shared Principal Collections or, under
certain circumstances, deposited into the Excess Funding Account.
"Available Investor Principal Collections" means, with respect to
any Monthly Period, an amount equal to the sum of (a) (i) collections
of Principal Receivables received during such Monthly Period and
certain other amounts, in each case which are allocable to the
Investor Interest, minus (ii) the amount of Reallocated Principal
Collections with respect to such Monthly Period used to fund interest
on the Certificates or the Class A Servicing Fee or Class B Servicing
Fee, plus (b) any Shared Principal Collections with respect to other
Principal Sharing Series that are allocated to Series [199_-_].
On each Distribution Date commencing with the first Distribution
Date following the date the Rapid Amortization Period begins, the
Class A Holders will be entitled to receive Available Investor
Principal Collections for the related Monthly Period in an amount up
to the Class A Investor Interest until the earlier of the date the
Class A Certificates are paid in full and the Series 199_-__
Termination Date. After payment in full of the Class A Investor
Interest, the Class B Holders will be entitled to receive on each
Distribution Date during the Rapid Amortization Period Available
Investor Principal Collections until the earlier of the date the Class
B Certificates are paid in full and the Series 199_-__ Termination
Date. After payment in full of the Class B Investor Interest, the
Collateral Interest Holder will be entitled to receive on each
Transfer Date (other than the Transfer Date prior to the Series
199_-__ Termination Date) and on the Series 199_-_ Termination Date,
Available Investor Principal Collections until the earlier of the date
the Collateral Interest is paid in full and the Series 199_-__
Termination Date. See "- Pay Out Events" below for a discussion of
events which might lead to the commencement of the Rapid Amortization
Period.
Postponement of Controlled Accumulation Period
Upon written notice to the Trustee, the Transferor and each
Rating Agency, the Servicer may elect to postpone the commencement of
the Controlled Accumulation Period, and extend the length of the
Revolving Period, subject to certain conditions including those set
forth below. The Servicer may make such election only if the
Accumulation Period Length (determined as described below) is less
than _____ months. On each Determination Date on or after the
________ Determination Date, until the Controlled Accumulation Period
begins, the Servicer will determine the "Accumulation Period Length,"
which is a number of months such that the amount available for
distribution of principal on the Class A Certificates on the Class A
Scheduled Payment Date is expected to equal or exceed the Class A
Investor Interest, assuming (a) the expected monthly collections of
Principal Receivables expected to be distributable to the Holders of
all Series have a principal payment rate no greater than the lowest
monthly principal payment rate on the Receivables for the preceding
twelve months, (b) the amount of principal expected to be
distributable to Holders of all Series remains constant at the level
on such date of determination, (c) no Pay Out Event with respect to
any Series will subsequently occur and (d) no additional Series will
be subsequently issued. If the Accumulation Period Length is less
than ______ months, the Servicer may, at its option, postpone the
commencement of the Controlled Accumulation Period such that the
number of months included in the Controlled Accumulation Period will
be equal to or exceed the Accumulation Period Length. The effect of
the foregoing calculation is to permit the reduction of the length of
the Controlled Accumulation Period based on the investor interest of
certain other Series which are scheduled to be in their revolving
periods during the Controlled Accumulation Period and on increases in
the principal payment rate occurring after the Closing Date. The
length of the Controlled Accumulation Period will not be determined to
be less than one month.
Subordination
The Class B Certificates and the Collateral Interest will be
subordinated to the extent necessary to fund certain payments with
respect to the Class A Certificates. In addition, the Collateral
Interest will be subordinated to the extent necessary to fund certain
payments with respect to the Class B Certificates. Certain principal
payments otherwise allocable to the Class B Holders may be reallocated
to cover amounts in respect of the Class A Certificates and the Class
B Investor Interest may be reduced if the Collateral Interest is equal
to zero. Similarly, certain principal payments allocable to the
Collateral Interest may be reallocated to cover amounts in respect of
the Class A Certificates and the Class B Certificates and the
Collateral Interest may be reduced. To the extent the Class B Investor
Interest is reduced, the percentage of collections of Finance Charge
Receivables allocated to the Class B Certificates in subsequent
Monthly Periods will be reduced. Moreover, to the extent the amount
of such reduction in the Class B Investor Interest is not reimbursed,
the amount of principal and interest distributable to the Class B
Holders will be reduced. See "- Allocation Percentages," "-
Reallocation of Cash Flows" and "- Application of Collections - Excess
Spread."
Allocation Percentages
Pursuant to the Agreement, with respect to each Monthly Period
the Servicer will allocate among the Investor Interest, the investor
interest for all other Series issued and outstanding and the
Transferor Interest, all amounts collected on Finance Charge
Receivables, all amounts collected on Principal Receivables and all
Net Default Amounts and Net Recoveries with respect to such Monthly
Period.
Collections of Finance Charge Receivables, Net Default Amounts
and Net Recoveries at all times, and collections of Principal
Receivables during the Revolving Period, will be allocated to the
Investor Interest based on the Floating Investor Percentage.
Collections of Finance Charge Receivables that are so allocated will
then be reallocated among all Series in Group I as described in the
"Description of the Certificates - Reallocations Among Certificates of
Different Series within a Reallocation Group" in the Prospectus.
The "Floating Investor Percentage" means, with respect to any
Monthly Period, the percentage equivalent of a fraction, the numerator
of which is the Adjusted Investor Interest as of the close of business
on the last day of the preceding Monthly Period (or with respect to
the first Monthly Period, the initial Investor Interest) and the
denominator of which is the greater of (a) the Aggregate Principal
Receivables as of the close of business on the last day of the
preceding Monthly Period (or with respect to the first Monthly Period,
the Aggregate Principal Receivables as of the close of business on the
day immediately preceding the Closing Date) and (b) the sum of the
numerators used to calculate the Investor Percentages for allocations
with respect to Finance Charge Receivables, Net Default Amounts, Net
Recoveries or Principal Receivables, as applicable, for all
outstanding Series on such date of determination; provided, however,
that if one or more Reset Dates occur in a Monthly Period, the
Floating Investor Percentage for the portion of the Monthly Period
falling after each such Reset Date (the "subject Reset Date") and
prior to the earlier of the last day of the current Monthly Period and
any subsequent Reset Date shall be determined using a denominator
equal to the greater of the amounts specified in clause (a) and (b)
above determined as of the subject Reset Date.
The amounts so allocated (or reallocated) will be further
allocated between the Class A Holders, Class B Holders and the
Collateral Interest Holder based on the Class A Floating Allocation,
the Class B Floating Allocation and the Collateral Floating
Allocation, respectively. The "Class A Floating Allocation" means,
with respect to any Monthly Period, the percentage equivalent (which
percentage shall never exceed 100%) of a fraction, the numerator of
which is equal to the Class A Adjusted Investor Interest as of the
close of business on the last day of the preceding Monthly Period (or
with respect to the first Monthly Period, as of the Closing Date) and
the denominator of which is equal to the Adjusted Investor Interest as
of the close of business on such day. The "Class B Floating
Allocation" means, with respect to any Monthly Period, the percentage
equivalent (which percentage shall never exceed 100%) of a fraction,
the numerator of which is equal to the Class B Investor Interest as of
the close of business on the last day of the preceding Monthly Period
(or with respect to the first Monthly Period, as of the Closing Date)
and the denominator of which is equal to the Adjusted Investor
Interest as of the close of business on such day. The "Collateral
Floating Allocation" means, with respect to any Monthly Period, the
percentage equivalent (which percentage shall never exceed 100%) of a
fraction, the numerator of which is equal to the Collateral Interest
as of the close of business on the last day of the preceding Monthly
Period (or with respect to the first Monthly Period, as of the Closing
Date) and the denominator of which is equal to the Adjusted Investor
Interest as of the close of business on such day.
Collections of Principal Receivables during the Controlled
Accumulation Period and Rapid Amortization Period will be allocated to
the Investor Interest based on the Fixed Investor Percentage. The
"Fixed Investor Percentage" means, with respect to any Monthly Period,
the percentage equivalent of a fraction, the numerator of which is the
Investor Interest as of the close of business on the last day of the
Revolving Period and the denominator of which is the greater of (a)
the Aggregate Principal Receivables as of the close of business on the
last day of the prior Monthly Period (or with respect to the first
Monthly Period, the Aggregate Principal Receivables as of the close of
business on the day immediately preceding the Closing Date) and (b)
the sum of the numerators used to calculate the Investor Percentages
for allocations with respect to Principal Receivables for all
outstanding Series for such Monthly Period; provided, that (x) if
Series 199_-_ is paired with a Paired Series and a Pay Out Event
occurs with respect to such Paired Series during the Controlled
Accumulation Period, the Transferor may, by written notice delivered
to the Trustee and the Servicer, designate a different numerator
(provided that such numerator is not less than the Adjusted Investor
Interest (less the balance on deposit in the Principal Account) as of
the last day of the revolving period for such Paired Series); and (y)
if one or more Reset Dates occur in a Monthly Period, the Fixed
Investor Percentage for the portion of the Monthly Period falling
after each such Reset Date (the "subject Reset Date") and prior to the
earlier of the last day of the current Monthly Period and any
subsequent Reset Date shall be determined using a denominator equal to
the greater of the amounts specified in clause (a) and (b) above
determined as of the subject Reset Date.
The amounts so allocated will be further allocated between the
Class A Holders, the Class B Holders and the Collateral Interest
Holder based on the Class A Fixed Allocation, the Class B Fixed
Allocation and the Collateral Fixed Allocation, respectively. The
"Class A Fixed Allocation" means, with respect to any Monthly Period,
the percentage equivalent (which percentage shall never exceed 100%)
of a fraction, the numerator of which is equal to the Class A Investor
Interest as of the close of business on the last day of the Revolving
Period, and the denominator of which is equal to the numerator used in
determining the related Fixed Investor Percentage; provided, that if
Series 199_-_ is paired with a Paired Series and a Pay Out Event
occurs with respect to such Paired Series during the Controlled
Accumulation Period, the Transferor may, by written notice delivered
to the Trustee and the Servicer, designate a different numerator
(provided that such numerator is not less than the Class A Adjusted
Investor Interest (less the balance on deposit in the Principal
Account) as of the last day of the revolving period for such Paired
Series. The "Class B Fixed Allocation" means, with respect to any
Monthly Period, the percentage equivalent (which percentage shall
never exceed 100%) of a fraction, the numerator of which is equal to
the Collateral Interest as of the close of business on the last day of
the Revolving Period, and the denominator of which is equal to the
Investor Interest as of the close of business on the last day of the
Revolving Period. The "Collateral Fixed Allocation" means, with
respect to any Monthly Period, the percentage equivalent (which
percentage shall never exceed 100%) of a fraction, the numerator of
which is equal to the Collateral Interest as of the close of business
on the last day of the Revolving Period, and the denominator of which
is equal to the numerator used in determining the related Fixed
Investor Percentage; provided, that if Series 199_- is paired with a
Paired Series and a Pay Out Event occurs with respect to such Paired
Series during the Controlled Accumulation Period, the Transferor may,
by written notice delivered to the Trustee and the Servicer,
designated a different numerator (provided that such numerator is not
less than the Class B Investor Interest (less, if the Class A Fixed
Allocation is zero, the balance on deposit in the Principal Account
and the Principal Funding Account, in each case to the extent not
subtracted in reducing the Class A Fixed Allocation to zero) as of the
last day of the revolving period for such Paired Series.
"Class A Adjusted Investor Interest," for any date of
determination, means an amount equal to then current Class A Investor
Interest, minus the Principal Funding Account Balance (up to the Class
A Invested Amount) on such date.
"Class A Investor Interest" for any date means an amount equal
to (a) the aggregate initial principal amount of the Class A
Certificates, minus (b) the aggregate amount of principal payments
made to Class A Holders prior to such date, minus (c) the excess, if
any, of the aggregate amount of Class A Investor Charge-Offs for all
Transfer Dates preceding such date over the aggregate amount of any
reimbursements of Class A Investor Charge-Offs for all Transfer Dates
preceding such date; provided, however, that the Class A Investor
Interest may not be reduced below zero.
"Class B Investor Interest" for any date means an amount equal to
(a) the aggregate initial principal amount of the Class B
Certificates, minus (b) the aggregate amount of principal payments
made to Class B Holders prior to such date, minus (c) the aggregate
amount of Class B Investor Charge-Offs for all prior Transfer Dates,
minus (d) the aggregate amount of Reallocated Class B Principal
Collections for all prior Transfer Dates for which the Collateral
Interest has not been reduced, minus (e) an amount equal to the
aggregate amount by which the Class B Investor Interest has been
reduced to fund the Class A Investor Default Amount on all prior
Transfer Dates as described under "- Defaulted Receivables; Investor
Charge-Offs," plus (f) the aggregate amount of Excess Spread allocated
to the Certificates and available on all prior Transfer Dates for the
purpose of reimbursing amounts deducted pursuant to the foregoing
clauses (c), (d) and (e); provided, however, that the Class B Investor
Interest may not be reduced below zero.
"Collateral Interest" for any date means an amount equal to (a)
the Initial Collateral Interest, minus (b) the aggregate amount of
principal payments made to the Collateral Interest Holder prior to
such date, minus (c) the aggregate amount of Collateral Charge-Offs
for all prior Transfer Dates, minus (d) the aggregate amount of
Reallocated Principal Collections for all prior Transfer Dates, minus
(e) an amount equal to the aggregate amount by which the Collateral
Interest has been reduced to fund the Class A Investor Default Amount
and the Class B Investor Default Amount on all prior Transfer Dates as
described under "- Defaulted Receivables; Investor Charge-Offs," plus
(f) the aggregate amount of Excess Spread allocated to the
Certificates and available on all prior Transfer Dates for the purpose
of reimbursing amounts deducted pursuant to the foregoing clauses (c),
(d) and (e); provided, however, that the Collateral Interest may not
be reduced below zero.
"Reset Date" means each of (a) any date on which Receivables in
Additional Accounts are conveyed to the Trust, (b) any date on which
Accounts are removed from the Trust and on which, if any Series has
been paid in full, Principal Receivables in an aggregate amount
approximately equal to the initial investor interest of such Series
are removed from the Trust and (c) a date on which there is an
increase in the Investor Interest under any Variable Interest issued
by the Trust.
"Variable Interest" means either of (a) any certificate that is
designated as a variable funding certificate in the related Series
Supplement and (b) any Purchased Interest sold as permitted by an
Agreement.
Reallocation of Cash Flows
With respect to each Transfer Date, the Servicer will determine
the amount (the "Class A Required Amount"), if any, by which the sum
of (a) Class A Monthly Interest due on the related Distribution Date
and overdue Class A Monthly Interest and Class A Additional Interest
thereon, if any, (b) the Class A Servicing Fee for the related Monthly
Period and overdue Class A Servicing Fee, if any, and (c) the Class A
Investor Default Amount, if any, for the related Monthly Period
exceeds the Class A Available Funds for the related Monthly Period. If
the Class A Required Amount is greater than zero, Excess Spread
allocated to Series 199_-__ and available for such purpose will be
used to fund the Class A Required Amount with respect to such Transfer
Date. If such Excess Spread is insufficient to fund the Class A
Required Amount, first, Reallocated Collateral Principal Collections
and, then, Reallocated Class B Principal Collections will be used to
fund the remaining Class A Required Amount. If Reallocated Principal
Collections with respect to the related Monthly Period, together with
Excess Spread, are insufficient to fund the remaining Class A Required
Amount for such related Monthly Period, then the Collateral Interest
(after giving effect to reductions for any Collateral Charge-Offs and
Reallocated Principal Collections on such Transfer Date) will be
reduced by the amount of such excess (but not by more than the Class A
Investor Default Amount for such Monthly Period). In the event that
such reduction would cause the Collateral Interest to be a negative
number, the Collateral Interest will be reduced to zero, and the Class
B Investor Interest (after giving effect to reductions for any Class B
Investor Charge-Offs and any Reallocated Class B Principal Collections
for which the Collateral Interest was not reduced on such Transfer
Date) will be reduced by the amount by which the Collateral Interest
would have been reduced below zero (but not by more than the excess of
the Class A Investor Default Amount, if any, for such Monthly Period
over the amount of such reduction, if any, of the Collateral Interest
with respect to such Monthly Period). In the event that such
reduction would cause the Class B Investor Interest to be a negative
number, the Class B Investor Interest will be reduced to zero and the
Class A Investor Interest will be reduced by the amount by which the
Class B Investor Interest would have been reduced below zero (but not
by more than the excess, if any, of the Class A Investor Default
Amount for such Monthly Period over the amount of the reductions, if
any, of the Collateral Interest and the Class B Investor Interest with
respect to such Monthly Period). Any such reduction in the Class A
Investor Interest will have the effect of slowing or reducing the
return of principal and interest to the Class A Holders. In such
case, the Class A Holders will bear directly the credit and other
risks associated with their interests in the Trust. See "- Defaulted
Receivables; Investor Charge-Offs."
With respect to each Transfer Date, the Servicer will determine
the amount (the "Class B Required Amount"), which will be equal to the
sum of (a) the amount, if any, by which the sum of (i) Class B Monthly
Interest due on the related Distribution Date and overdue Class B
Monthly Interest and Class B Additional Interest thereon, if any, and
(ii) the Class B Servicing Fee for the related Monthly Period and
overdue Class B Servicing Fee, if any, exceeds the Class B Available
Funds for the related Monthly Period and (b) the Class B Investor
Default Amount, if any, for the related Monthly Period. If the Class
B Required Amount is greater than zero, Excess Spread allocated to
Series 199_-__ not required to pay the Class A Required Amount or
reimburse Class A Investor Charge-Offs will be used to fund the Class
B Required Amount with respect to such Transfer Date. If such Excess
Spread is insufficient to fund the Class B Required Amount,
Reallocated Collateral Principal Collections not required to fund the
Class A Required Amount for the related Monthly Period will be used to
fund the remaining Class B Required Amount. If such Reallocated
Collateral Principal Collections with respect to the related Monthly
Period are insufficient to fund the remaining Class B Required Amount,
then the Collateral Interest (after giving effect to reductions for
any Collateral Charge-Offs and Reallocated Principal Collections on
such Transfer Date and after any adjustments made thereto for the
benefit of the Class A Holders) will be reduced by the amount of such
deficiency (but not by more than the Class B Investor Default Amount
for such Monthly Period). In the event that such a reduction would
cause the Collateral Interest to be a negative number, the Collateral
Interest will be reduced to zero, and the Class B Investor Interest
will be reduced by the amount by which the Collateral Interest would
have been reduced below zero (but not by more than the excess of the
Class B Investor Default Amount for such Monthly Period over the
amount of such reduction of the Collateral Interest), and the Class B
Holders will bear directly the credit and other risks associated with
their interests in the Trust. See "- Defaulted Receivables; Investor
Charge-Offs."
Reductions of the Class A Investor Interest or Class B Investor
Interest described above will be reimbursed by, and the Class A
Investor Interest or Class B Investor Interest increased to the extent
of, Excess Spread available for such purposes on each Transfer Date.
See "- Application of Collections - Excess Spread." When such
reductions of the Class A Investor Interest and Class B Investor
Interest have been fully reimbursed, reductions of the Collateral
Interest shall be reimbursed until reimbursed in full in a similar
manner.
"Reallocated Class B Principal Collections" for any Monthly
Period means collections of Principal Receivables allocable to the
Class B Investor Interest for the related Monthly Period in an amount
not to exceed the amount applied to fund the Class A Required Amount,
if any; provided, however, that such amount will not exceed the Class
B Investor Interest after giving effect to any Class B Investor
Charge-Offs for the related Transfer Date.
"Reallocated Collateral Principal Collections" for any Monthly
Period means collections of Principal Receivables allocable to the
Collateral Interest for the related Monthly Period in an amount not to
exceed the amount applied to fund the Class A Required Amount and the
Class B Required Amount, if any; provided, however, that such amount
will not exceed the Collateral Interest after giving effect to any
Collateral Charge-Offs for the related Transfer Date.
"Reallocated Principal Collections" for any Monthly Period
means the sum of (a) the Reallocated Class B Principal Collections for
such Monthly Period, if any, and (b) the Reallocated Collateral
Principal Collections such Monthly Period, if any.
Application of Collections
Allocations. Except as otherwise provided below, the Servicer
will deposit into the Collection Account, no later than the second
business day following the date of processing, any payment collected
by the Servicer on the Receivables. On the same day as any such
deposit is made, the Servicer will make the deposits and payments to
the accounts and parties as indicated below; provided, however, that
for as long as First NBC remains the Servicer under the Agreement and
(a) (i) the Servicer provides to the Trustee a letter of credit or
other credit enhancement covering the risk of collection of the
Servicer acceptable to the Rating Agencies and (ii) the Rating Agency
Condition shall have been satisfied with respect to reliance on such
letter of credit or other credit enhancement or (b) the certificate of
deposit or unsecured short-term debt obligations of the Transferor are
rated P-1 by Moody's and at least A-1 by Standard & Poor's (and, if
rated by Fitch Investors Service, L.P. ("Fitch"), at least F-1 by
Fitch) and insured by either BIF or SAIF or (c) the Transferor makes
other arrangements satisfactory to each Rating Agency rating any
Series then outstanding, then the Servicer may make such deposits and
payments on the business day immediately prior to the Distribution
Date (the "Transfer Date") in an amount equal to the net amount of
such deposits and payments which would have been made had the
conditions of this proviso not applied. The Pooling and Servicing
Agreement provides, that before the Conversion Date, the Servicer will
make such deposits and payments based on the assumption that all
collections received by the Servicer with respect to the Receivables
in each Billing Cycle are collections of Finance Charge Receivables up
to the amount of Finance Charge Receivables billed with respect to
Receivables in such Billing Cycle (with respect to each Billing Cycle,
the "Billed Finance Charge Receivables") and collections in excess of
the Billed Finance Charge Receivables are collections of Principal
Receivables. The term "Aggregate Principal Receivables" means in the
case of any date of determination which occurs before the Conversion
Date, the aggregate amount of Principal Receivables as of the end of
the Billing Cycles during the Monthly Period immediately preceding
such date of determination or, in the case of any date of
determination which occurs on or after the Conversion Date, the
aggregate amount of Principal Receivables as of the end of the last
day of the Monthly Period immediately preceding such date of
determination.
Whether the Servicer is required to make monthly or daily
deposits into the Collection Account, (i) the Servicer will only be
required to deposit Collections into the Collection Account or from
the Collection Account into the Finance Charge Account or the
Principal Account up to the required amount to be deposited into any
such deposit account or, without duplication, distributed on or prior
to the related Distribution Date to Holders or to the Collateral
Interest Holder and (ii) if at any time prior to such Distribution
Date the amount of Collections deposited in any such deposit account
exceeds the amount required to be deposited pursuant to clause (i)
above, the Servicer will be permitted to withdraw the excess from such
an account.
Payment of Interest, Fees and Other Items. On each Transfer
Date, the Trustee, acting pursuant to Servicer's instructions, will
apply the Class A Available Funds, Class B Available Funds and
Collateral Available Funds in the Finance Charge Account in the
following manner:
(a) On each Transfer Date, an amount equal to the Class A
Available Funds will be distributed in the following priority:
(i) an amount equal to Class A Monthly Interest for the
related Distribution Date, plus the amount of any overdue
Class A Monthly Interest and Class A Additional Interest
thereon, if any, will be deposited into the Distribution
Account for distribution to Class A Holders on such
Distribution Date;
(ii) an amount equal to the Class A Servicing Fee for
the related Monthly Period, plus the amount of any overdue
Class A Servicing Fee, will be paid to the Servicer;
(iii) an amount equal to the Class A Investor Default
Amount, if any, for the related Monthly Period will be
treated as a portion of Available Investor Principal
Collections and deposited into the Principal Account for
such Transfer Date; and
(iv) the balance, if any, will constitute a portion of Excess
Spread and will be allocated and distributed as described
under "- Excess Spread."
(b) On each Transfer Date, an amount equal to the Class B
Available Funds will be distributed in the following priority:
(i) an amount equal to Class B Monthly Interest for the
related Distribution Date, plus the amount of any overdue
Class B Monthly Interest and Class B Additional Interest
thereon, if any, will be deposited into the Distribution
Account for distribution to Class B Holders on such
Distribution Date;
(ii) an amount equal to the Class B Servicing Fee for the
related Monthly Period, plus the amount of any overdue Class
B Servicing Fee, will be paid to the Servicer; and
(iii) the balance, if any, will constitute a portion of Excess
Spread and will be allocated and distributed as described
under "- Excess Spread."
(c) On each Transfer Date, an amount equal to the Collateral
Available Funds will be distributed in the following priority:
(i) if First NBC is no longer the Servicer, an amount equal to
the Collateral Interest Servicing Fee for the related
Monthly Period, plus the amount of any overdue Collateral
Interest Servicing Fee, will be paid to the Servicer; and
(ii) the balance, if any, will constitute a portion of Excess
Spread and will be allocated and distributed as described
under "- Excess Spread."
"Class A Monthly Interest" with respect to any Distribution
Date will equal the product of (i) the Class A Rate for the related
Interest Period, (ii) the actual number of days in such Interest
Period divided by 360] [one-twelfth, or in the case of the initial
Distribution Date, _______] and (iii) the outstanding principal
balance of the Class A Certificates as of the related Record Date;
provided, however, with respect to the first Distribution Date, Class
A Monthly Interest will be equal to the interest accrued on the
initial outstanding principal balance of the Class A Certificates at
the applicable Class A Rate for the period from the Closing Date
through ________ __, 199_.
"Class B Monthly Interest" with respect to any Distribution
Date will equal the product of (i) the Class B Rate for the related
Interest Period, (ii) [the actual number of days in such Interest
Period divided by 360] [one-twelfth, or in the case of the initial
Distribution Date, _______] and (iii) the outstanding principal
balance of the Class B Certificates as of the related Record Date;
provided, however, with respect to the first Distribution Date, Class
B Monthly Interest will be equal to the interest accrued on the
initial outstanding principal balance of the Class B Certificates at
the applicable Class B Rate for the period from the Closing Date
through ________ __, 199_.
"Collateral Available Funds" means, with respect to any Monthly
Period, an amount equal to the Collateral Floating Allocation of
Reallocated Investor Finance Charge Receivables allocated to the
Investor Interest with respect to such Monthly Period (excluding the
portion of collections of Finance Charge Receivables attributable to
Interchange that is allocable to Servicer Interchange).
"Excess Spread" means, with respect to any Transfer Date, an
amount equal to the sum of the amounts described in clause (a) (iv),
clause (b) (iii) and clause (c) (ii) above. To the extent such
amounts are insufficient to make the distributions required by
subparagraphs (a) through (i) below under "- Excess Spread," Excess
Spread shall also be deemed to include any Excess Finance Charge
Collections allocable to other Series available to Series 199_-_ in
accordance with the Agreement.
Excess Spread. On each Transfer Date, the Trustee, acting
pursuant to the Servicer's instructions, will apply Excess Spread with
respect to the related Monthly Period, to make the following
distributions in the following priority:
(a) an amount equal to the Class A Required Amount, if any,
with respect to such Transfer Date will be used to fund the Class
A Required Amount; provided, that in the event the Class A
Required Amount for such Transfer Date exceeds the amount of
Excess Spread, such Excess Spread shall be applied first to pay
amounts due with respect to such Transfer Date pursuant to clause
(a)(i) above under "- Payment of Interest, Fees and Other Items,"
second to pay amounts due with respect to such Transfer Date
pursuant to clause (a) (ii) above under "- Payment of Interest,
Fees and Other Items" and third to pay amounts due with respect
to such Transfer Date pursuant to clause (a) (iii) above under "-
Payment of Interest, Fees and Other Items";
(b) an amount equal to the aggregate amount of Class A
Investor Charge-Offs which have not been previously reimbursed
(after giving effect to the allocation on such Transfer Date of
certain other amounts applied for that purpose) will be deposited
into the Principal Account and treated as a portion of Available
Investor Principal Collections for such Transfer Date as
described under "- Payments of Principal" below;
(c) an amount equal to the Class B Required Amount, if any,
with respect to such Transfer Date will be used to fund the Class
B Required Amount and will be applied first to pay amounts due
with respect to such Transfer Date pursuant to clause (b) (i)
above under "- Payment of Interest, Fees and Other Items," second
to pay amounts due with respect to such Transfer Date pursuant to
clause (b) (ii) above under "- Payment of Interest, Fees and
Other Items" and third, the amount remaining, up to the Class B
Investor Default Amount, will be deposited into the Principal
Account and treated as a portion of Available Investor Principal
Collections for such Transfer Date as described under "- Payments
of Principal" below;
(d) an amount equal to the aggregate amount by which the Class
B Investor Interest has been reduced below the initial Class B
Investor Interest for reasons other than the payment of principal
to the Class B Holders (but not in excess of the aggregate amount
of such reductions which have not been previously reimbursed)
will be deposited into the Principal Account and treated as a
portion of Available Investor Principal Collections for such
Transfer Date as described under "- Payments of Principal" below;
(e) an amount equal to the Collateral Monthly Interest for
such Transfer Date, plus the amount of any Collateral Monthly
Interest previously due but not distributed to the Collateral
Interest Holder on a prior Transfer Date, will be distributed to
the Collateral Interest Holder for distribution in accordance
with the Loan Agreement;
(f) if First NBC or the Trustee is the Servicer, an amount
equal to the Collateral Interest Servicing Fee for the related
Monthly Period, plus the amount of any overdue Collateral
Interest Servicing Fee, will be paid to the Servicer;
(g) an amount equal to the aggregate Collateral Investor
Default Amount, if any, for such Transfer Date will be deposited
into the Principal Account and treated as a portion of Available
Investor Principal Collections for such Transfer Date as
described under "- Payments of Principal" below;
(h) an amount equal to the aggregate amount by which the
Collateral Interest has been reduced below the Required
Collateral Interest for reasons other than the payment of
principal to the Collateral Interest Holder (but not in excess of
the aggregate amount of such reductions which have not been
previously reimbursed) will be deposited into the Principal
Account and treated as a portion of Available Investor Principal
Collections for such Transfer Date as described under "- Payments
of Principal" below;
(i) on each Transfer Date from and after the Reserve
Account Funding Date, but prior to the date on which the Reserve
Account terminates as described under "- Reserve Account," an
amount up to the excess, if any, of the Required Reserve Account
Amount over the Available Reserve Account Amount will be
deposited into the Reserve Account;
(j) an amount equal to all other amounts due under the Loan
Agreement (to the extent payable out of Excess Spread or Excess
Finance Charge Collections) shall be distributed in accordance
with the Loan Agreement; and
(k) the balance, if any, after giving effect to the payments
made pursuant to subparagraphs (a) through (j) above, will
constitute "Excess Finance Charge Collections" to be applied with
respect to other Series in accordance with the Agreement.
"Collateral Monthly Interest" with respect to any Transfer Date
will equal the product of (a) an amount equal to LIBOR plus 1.0% per
annum, or such lesser amount as may be designated in the Loan
Agreement (the "Collateral Rate"), (b) the actual number of days in
the related Interest Period divided by 360 and (c) the Collateral
Interest as of the related Record Date; provided, however, with
respect to the first Distribution Date, Collateral Monthly Interest
will be equal to the sum of (A) the product of (x) the Collateral
Rate, determined as described herein using a[n] ____________ __, 1997
LIBOR Determination Date, (y) the actual number of days during the
period from the Closing Date through ___________ __, 1997 divided by
360 and (z) the Collateral Interest as of the Closing Date, plus (B)
the product of (x) the Collateral Rate, determined as described herein
using a[n] __________ __, 1997 LIBOR Determination Date, (y) the
actual number of days during the period from __________ __, 1997
through __________ __, 1997 divided by 360 and (z) the Collateral
Interest as of the Closing Date.
Payments of Principal. On each Transfer Date, the Trustee,
acting pursuant to the Servicer's instructions, will distribute
Available Investor Principal Collections (see "- Principal Payments"
above) on deposit in the Principal Account in the following manner:
(a) on each Transfer Date with respect to the Revolving
Period, all such Available Investor Principal Collections will be
distributed or deposited in the following priority:
(i) an amount equal to the Collateral Monthly Principal will
be paid to the Collateral Interest Holder in accordance with
the Loan Agreement; and
(ii) the balance will be treated as Shared Principal
Collections and applied as described under "Description of
the Certificates - Shared Principal Collections" herein and
in the Prospectus;
(b) on each Transfer Date with respect to the Controlled
Accumulation Period or the Rapid Amortization Period, all such
Available Investor Principal Collections will be distributed or
deposited in the following priority:
(i) an amount equal to Class A Monthly Principal will be
deposited in the Principal Funding Account (during the
Controlled Accumulation Period) or distributed to the Class
A Holders (during the Rapid Amortization Period); and
(ii) for each Transfer Date after the Class A Investor
Interest has been paid in full (after taking into account
payments to be made on the related Distribution Date), an
amount equal to the Class B Monthly Principal for such
Transfer Date will be distributed to the Class B Holders;
(c) on each Transfer Date with respect to the Controlled
Accumulation Period and the Rapid Amortization Period in which a
reduction in the Required Collateral Interest has occurred,
Available Investor Principal Collections not applied to Class A
Monthly Principal or Class B Monthly Principal will be applied to
reduce the Collateral Interest to the Required Collateral
Interest; and
(d) on each Transfer Date with respect to the Controlled
Accumulation Period and Rapid Amortization Period, the balance of
Available Investor Principal Collections not applied pursuant to
(b) and (c) above, if any, will be treated as Shared Principal
Collections and applied as described under "Description of the
Certificates - Shared Principal Collections" herein and in the
Prospectus.
"Class A Monthly Principal" with respect to any Transfer Date
relating to the Controlled Accumulation Period or the Rapid
Amortization Period, prior to the payment in full of the Class A
Investor Interest, will equal the least of (i) the Available Investor
Principal Collections on deposit in the Principal Account with respect
to such Transfer Date, (ii) for each Transfer Date with respect to the
Controlled Accumulation Period, prior to the payment in full of the
Class A Investor Interest, and on or prior to the Class A Scheduled
Payment Date, the applicable Controlled Deposit Amount for such
Transfer Date and (iii) the Class A Adjusted Investor Interest prior
to any deposits on such Transfer Date.
"Class B Monthly Principal" with respect to any Transfer Date
relating to the Controlled Accumulation Period or the Rapid
Amortization Period, after the Class A Certificates have been paid in
full (after taking into account payments to be made on the related
Distribution Date), will equal the lesser of (i) the Available
Investor Principal Collections on deposit in the Principal Account
with respect to such Transfer Date (minus the portion of such
Available Investor Principal Collections applied to Class A Monthly
Principal on such Transfer Date) and (ii) the Class B Investor
Interest for such Transfer Date.
"Collateral Monthly Principal" means (a) with respect to any
Transfer Date relating to the Revolving Period following any reduction
of the Required Collateral Interest pursuant to clause (3) of the
proviso in the definition thereof an amount equal to the lesser of (i)
the excess, if any, of the Collateral Interest (after giving effect to
reductions for any Collateral Charge-Offs and Reallocated Principal
Collections on such Transfer Date and after giving effect to any
adjustments thereto for the benefit of the Class A Holders and the
Class B Holders on such Transfer Date) over the Required Collateral
Interest on such Transfer Date, and (ii) the Available Investor
Principal Collections on such Transfer Date or (b) with respect to any
Transfer Date relating to the Controlled Accumulation Period or Rapid
Amortization Period an amount equal to the lesser of (i) the excess,
if any, of the Collateral Interest (after giving effect to reductions
for any Collateral Charge-Offs and Reallocated Principal Collections
on such Transfer Date and after giving effect to any adjustments
thereto for the benefit of the Class A Holders and the Class B Holders
on such Transfer Date) over the Required Collateral Interest on such
Transfer Date, and (ii) the excess, if any, of (A) the Available
Investor Principal Collections on such Transfer Date over (B) the sum
of the Class A Monthly Principal and the Class B Monthly Principal for
such Transfer Date.
"Controlled Accumulation Amount" means for any Transfer Date
with respect to the Controlled Accumulation Period, prior to the
payment in full of the Class A Investor Interest, $ ;
provided, however, that if the commencement of the Controlled
Accumulation Period is modified as described above under "-
Postponement of Controlled Accumulation Period," (i) the Controlled
Accumulation Amount for each Transfer Date with respect to the
Controlled Accumulation Period shall mean the amount determined in
accordance with the Agreement on the date on which the Controlled
Accumulation Period has most recently been modified and (ii) the sum
of the Controlled Accumulation Amounts for all Transfer Dates with
respect to the modified Controlled Accumulation Period shall not be
less than the Class A Investor Interest.
Shared Excess Finance Charge Collections
Each Series in Group I, including Series 199_-_, will be an
Excess Allocation Series. To the extent that collections of Finance
Charge Receivables allocated to the Investor Interest (and any other
amounts that are to be treated as collections of Finance Charge
Receivables allocated to the Investor Interest) are not needed to make
payment in respect of the Investor Interest as described above under
"- Application of Collections - Payment of Interest, Fees and Other
Items" and "- Excess Spread," such Excess Finance Charge Collections
will be applied to make payments in respect of other Series in Group I
entitled to share therein in accordance with the Agreement. In
addition, Excess Finance Charge Collections with respect to certain
other Series in Group I, to the extent not required to make payments
in respect of such Series, may be applied to cover shortfalls in
amounts payable from Excess Spread as described above under "-
Application of Collections - Excess Spread" (as well as shortfalls
experienced by other Series).
Shared Principal Collections
Series 1996_-_ is a Principal Sharing Series. Collections of
Principal Receivables for any Monthly Period allocated to the Investor
Interest (and not allocated as Reallocated Principal Collections) will
first be used to cover, with respect to any Monthly Period during the
Controlled Accumulation Period, deposits of the applicable Controlled
Deposit Amount to the Principal Funding Account or the Distribution
Account, and during the Rapid Amortization Period, payments to the
Holders and then under certain circumstances payments to the
Collateral Interest Holder. The Servicer will determine the amount of
collections of Principal Receivables for any Monthly Period allocated
to the Investor Interest remaining after covering required payments to
the Holders and any similar amount remaining for any other Series
("Shared Principal Collections"). The Servicer will allocate the
Shared Principal Collections to cover any scheduled or permitted
principal distributions to certificateholders and deposits to
principal funding accounts, if any, for any Principal Sharing Series
entitled thereto which have not been covered out of the Collections of
Principal Receivables allocable to such Principal Sharing Series and
certain other amounts for such Series ("Principal Shortfalls").
Shared Principal Collections will not be used to cover investor
charge-offs for any Series. If Principal Shortfalls exceed Shared
Principal Collections for any Monthly Period, Shared Principal
Collections will be allocated pro rata among the applicable Principal
Sharing Series based on the relative amounts of Principal Shortfalls.
To the extent that Shared Principal Collections exceed Principal
Shortfalls, the balance will be paid to the holder of the Transferor
Certificate or, under certain circumstances, deposited into the Excess
Funding Account.
Defeasance
Pursuant to the Agreement, the Transferor may be discharged
from its substantive obligations in respect of the Certificates or in
respect of any or all Series issued by the Trust (in any case, the
"Defeased Series") by depositing with the Trustee, under the terms of
an irrevocable trust agreement satisfactory to the Trustee, from
amounts representing or acquired with collections on the Receivables
(allocable to the Defeased Series and available to purchase additional
Receivables) monies or Permitted Investments sufficient to make all
remaining scheduled interest and principal payments on the Defeased
Series on the dates scheduled for such payments and to pay all amounts
owing to the Collateral Interest Holder or any Credit Enhancement
Provider, as the case may be, for the Defeased Series. To achieve
that end, the Transferor has the right to use collections on
Receivables to purchase Permitted Investments rather than additional
Receivables. Prior to its first exercise of its right to substitute
monies or Permitted Investments for Receivables, the Transferor shall
deliver to the Trustee an opinion of counsel that such deposit and
discharge of obligations will not be treated for United States federal
income tax purposes as a sale or exchange by the holders of the
Defeased Series and the Rating Agency Condition shall have been
satisfied. In addition, the Transferor must comply with certain other
requirements set forth in the Agreement, including requirements that
the Transferor deliver to the Trustee an opinion of counsel to the
effect that the deposit and termination of obligations will not
require the Trust to register as an "investment company" within the
meaning of the Investment Company Act of 1940, as amended, and that
the Transferor deliver to the Trustee and certain Credit Enhancement
Providers a certificate of an authorized officer stating that, based
on the facts known to such officer at the time, in the reasonable
opinion of the Transferor, such deposit and discharge of obligations
will not at the time of its occurrence cause a Pay-Out Event or an
event that, after the giving of notice or the lapse of time, would
constitute a Pay-Out Event, to occur with respect to any Series issued
by the Trust. If the Transferor discharges its substantive
obligations in respect of a Defeased Series, any Enhancement for the
affected Series might no longer be available to make payments with
respect thereto.
Required Collateral Interest
The "Required Collateral Interest" with respect to any Transfer
Date means (i) initially $ and (ii) thereafter on each Transfer
Date an amount equal to ___% of the sum of the Class A Adjusted
Investor Interest and the Class B Investor Interest on such Transfer
Date, after taking into account deposits into the Principal Funding
Account on such Transfer Date and payments to be made on the related
Distribution Date, plus the Collateral Interest on the prior Transfer
Date after any adjustments made on such Transfer Date, but not less
than $ ; provided, however, (1) that if certain reductions in
the Collateral Interest are made or if a Pay Out Event occurs, the
Required Collateral Interest for such Transfer Date shall equal the
Required Collateral Interest for the Transfer Date immediately
preceding the occurrence of such reduction or Pay Out Event, (2) in no
event shall the Required Collateral Interest exceed the unpaid
principal amount of the Certificates as of the last day of the Monthly
Period preceding such Transfer Date after taking into account payments
to be made on the related Distribution Date and (3) the Required
Collateral Interest may be reduced to a lesser amount at any time if
the Rating Agency Condition is satisfied.
"Rating Agency Condition" means the notification in writing by
each Rating Agency that a proposed action will not result in such
Rating Agency reducing or withdrawing its then existing rating of the
investor certificates of any outstanding Series or class with respect
to which it is a Rating Agency.
With respect to any Transfer Date, if the Collateral Interest is
less than the Required Collateral Interest, certain Excess Spread, if
available, will be allocated to increase the Collateral Interest to
the extent of such shortfall. Any of such Excess Spread not required
to be so allocated or deposited into the Reserve Account with respect
to any Transfer Date will be applied in accordance with the Loan
Agreement or will be applied as Excess Finance Charge Collections.
See "- Application of Collections - Excess Spread."
Defaulted Receivables; Investor Charge-Offs
On or before each Transfer Date, the Servicer will calculate
the Investor Default Amount for the preceding Monthly Period. The
term "Investor Default Amount" means, for any Monthly Period, the
product of (a) the Floating Investor Percentage with respect to such
Monthly Period (which shall be calculated on a weighted average basis
if a Reset Date occurred during that Monthly Period) and (b) the Net
Default Amount for such Monthly Period. A portion of the Investor
Default Amount will be allocated to the Class A Holders (the "Class A
Investor Default Amount") on each Transfer Date in an amount equal to
the product of the Class A Floating Allocation applicable during the
related Monthly Period and the Investor Default Amount for such
Monthly Period. A portion of the Investor Default Amount will be
allocated to the Class B Holders (the "Class B Investor Default
Amount") on each Transfer Date in an amount equal to the product of
the Class B Floating Allocation applicable during the related Monthly
Period and the Investor Default Amount for such Monthly Period. A
portion of the Investor Default Amount will be allocated to the
Collateral Interest Holder (the "Collateral Investor Default Amount")
on each Transfer Date in an amount equal to the product of the
Collateral Floating Allocation applicable during the related Monthly
Period and the Investor Default Amount for such Monthly Period.
On each Transfer Date, if the Class A Investor Default Amount for
such Transfer Date exceeds the amount of Excess Spread and Reallocated
Principal Collections available to fund such amount with respect to
the Monthly Period immediately preceding such Transfer Date, the
Collateral Interest (after giving effect to reductions for any
Collateral Charge-Offs and any Reallocated Principal Collections on
such Transfer Date) will be reduced by the amount of such excess, but
not more than the lesser of the Class A Investor Default Amount and
the Collateral Interest (after giving effect to reductions for any
Collateral Charge-Offs and any Reallocated Principal Collections on
such Transfer Date) for such Transfer Date. In the event that such
reduction would cause the Collateral Interest to be a negative number,
the Collateral Interest will be reduced to zero, and the Class B
Investor Interest (after giving effect to reductions for any Class B
Investor Charge-Offs and any Reallocated Class B Principal Collections
on such Transfer Date) will be reduced by the amount by which the
Collateral Interest would have been reduced below zero. In the event
that such reduction would cause the Class B Investor Interest to be a
negative number, the Class B Investor Interest will be reduced to
zero, and the Class A Investor Interest will be reduced by the amount
by which the Class B Investor Interest would have been reduced below
zero, but not more than the Class A Investor Default Amount for such
Transfer Date (a "Class A Investor Charge-Off"), which will have the
effect of slowing or reducing the return of principal and interest to
the Class A Holders. If the Class A Investor Interest has been
reduced by the amount of any Class A Investor Charge-Offs, it will be
reimbursed on any Transfer Date (but not by an amount in excess of the
aggregate Class A Investor Charge-Offs) by the amount of Excess Spread
allocated and available for such purpose as described under "-
Application of Collections - Excess Spread."
On each Transfer Date, if the Class B Investor Default Amount
for such Transfer Date exceeds the amount of Excess Spread and
Reallocated Collateral Principal Collections which are allocated and
available to fund such amount with respect to the Monthly Period
preceding such Transfer Date, the Collateral Interest (after giving
effect to reductions for any Collateral Charge-Offs and any
Reallocated Principal Collections on such Transfer Date and after
giving effect to any adjustments with respect thereto as described in
the preceding paragraph) will be reduced by the amount of such excess
but not more than the lesser of the Class B Investor Default Amount
and the Collateral Interest (after giving effect to reductions for any
Collateral Charge-Offs and any Reallocated Principal Collections on
such Transfer Date and after giving effect to any adjustments with
respect thereto as described in the preceding paragraph) for such
Transfer Date. In the event that such reduction would cause the
Collateral Interest to be a negative number, the Collateral Interest
will be reduced to zero and the Class B Investor Interest will be
reduced by the amount by which the Collateral Interest would have been
reduced below zero, but not more than the Class B Investor Default
Amount for such Transfer Date (a "Class B Investor Charge-Off"). The
Class B Investor Interest will also be reduced by the amount of
Reallocated Class B Principal Collections in excess of the Collateral
Interest (after giving effect to reductions for any Collateral
Charge-Offs and any Reallocated Collateral Principal Collections on
such Transfer Date) and the amount of any portion of the Class B
Investor Interest allocated to the Class A Certificates to avoid a
reduction in the Class A Investor Interest. The Class B Investor
Interest will thereafter be reimbursed (but not in excess of the
unpaid principal balance of the Class B Certificates) on any Transfer
Date by the amount of Excess Spread allocated and available for that
purpose as described under "- Application of Collections - Excess
Spread."
On each Transfer Date, if the Collateral Investor Default
Amount for such Transfer Date exceeds the amount of Excess Spread
which is allocated and available to fund such amount as described
under "- Application of Collections - Excess Spread," the Collateral
Interest will be reduced by the amount of such excess but not more
than the lesser of the Collateral Investor Default Amount and the
Collateral Interest for such Transfer Date (a "Collateral
Charge-Off"). The Collateral Interest will also be reduced by the
amount of Reallocated Principal Collections and the amount of any
portion of the Collateral Interest allocated to the Class A
Certificates to avoid a reduction in the Class A Investor Interest or
to the Class B Certificates to avoid a reduction in the Class B
Investor Interest. The Collateral Interest will thereafter be
reimbursed on any Transfer Date by the amount of Excess Spread
allocated and available for that purpose as described under "-
Application of Collections - Excess Spread."
Principal Funding Account
Pursuant to the Series 199_-_ Supplement, the Trustee will
establish and maintain with a Qualified Institution a segregated trust
account held for the benefit of the Holders (the "Principal Funding
Account"). During the Controlled Accumulation Period, the Trustee at
the direction of the Servicer will transfer collections in respect of
Principal Receivables (other than Reallocated Principal Collections)
and Shared Principal Collections from other Principal Sharing Series,
if any, allocated to Series 199_-_ from the Principal Account to the
Principal Funding Account as described under "- Application of
Collections."
Funds on deposit in the Principal Funding Account will be
invested to the following Transfer Date by the Trustee at the
direction of the Servicer in Permitted Investments. Investment
earnings (net of investment losses and expenses) on funds on deposit
in the Principal Funding Account (the "Principal Funding Investment
Proceeds") will be used to pay interest on the Class A Certificates in
an amount up to, for each Transfer Date, the product of (a) a
fraction, the numerator of which is the actual number of days in the
related Interest Period and the denominator of which is 360, (b) the
Class A Rate in effect with respect to the related Interest Period and
(c) the Principal Funding Account Balance as of the Record Date
preceding such Transfer Date (the "Class A Covered Amount"). If, for
any Transfer Date, the Principal Funding Investment Proceeds are less
than the Class A Covered Amount, the amount of such deficiency (the
"Class A Principal Funding Investment Shortfall") shall be withdrawn,
to the extent available, from the Reserve Account and deposited in the
Finance Charge Account and included in collections of Finance Charge
Receivables to be applied to the payment of Class A Monthly Interest.
Reserve Account
Pursuant to the Series 199_-_ Supplement, the Trustee will
establish and maintain with a Qualified Institution a segregated trust
account held for the benefit of the Holders (the "Reserve Account").
The Reserve Account is established to assist with the subsequent
distribution of interest on the Certificates during the Controlled
Accumulation Period. On each Transfer Date from and after the Reserve
Account Funding Date, but prior to the termination of the Reserve
Account, the Trustee, acting pursuant to the Servicer's instructions,
will apply Excess Spread allocated to the Certificates (to the extent
described above under "- Application of Collections - Excess Spread")
to increase the amount on deposit in the Reserve Account (to the
extent such amount is less than the Required Reserve Account Amount).
The "Reserve Account Funding Date" will be the Transfer Date with
respect to the Monthly Period which commences no later than three
months prior to the commencement of the Controlled Accumulation
Period, or such earlier date as the Agreement may require. The
"Required Reserve Account Amount" for any Transfer Date on or after
the Reserve Account Funding Date will be equal to (a) __% of the
outstanding principal balance of the Class A Certificates or (b) any
other amount designated by the Transferor; provided, that if such
designation is of a lesser amount, the Transferor shall have provided
the Servicer, the Collateral Interest Holder and the Trustee with
evidence that the Rating Agency Condition has been satisfied and the
Transferor shall have delivered to the Trustee a certificate of an
authorized officer to the effect that, based on the facts known to
such officer at such time, in the reasonable belief of the Transferor,
such designation will not cause a Pay Out Event or an event that,
after the giving of notice or the lapse of time, would cause a Pay Out
Event to occur with respect to Series 199_-_. On each Transfer Date,
after giving effect to any deposit to be made to, and any withdrawal
to be made from, the Reserve Account on such Transfer Date, the
Trustee will withdraw from the Reserve Account an amount equal to the
excess, if any, of the amount on deposit in the Reserve Account over
the Required Reserve Account Amount and distribute such excess to the
Collateral Interest Holder for application in accordance with the
terms of the Loan Agreement.
Provided that the Reserve Account has not terminated as described
below, all amounts on deposit in the Reserve Account on any Transfer
Date (after giving effect to any deposits to, or withdrawals from, the
Reserve Account to be made on such Transfer Date) will be invested to
the following Transfer Date by the Trustee at the direction of the
Servicer in Permitted Investments. The interest and other investment
income (net of investment expenses and losses) earned on such
investments will be retained in the Reserve Account (to the extent the
amount on deposit is less than the Required Reserve Account Amount) or
deposited in the Finance Charge Account and treated as Class A
Available Funds.
On or before each Transfer Date with respect to the Controlled
Accumulation Period and on the first Transfer Date with respect to the
Rapid Amortization Period, a withdrawal will be made from the Reserve
Account, and the amount of such withdrawal will be deposited in the
Finance Charge Account and included in collections of Finance Charge
Receivables to be applied to the payment of the Class A Monthly
Interest for such Transfer Date in an amount equal to the lesser of
(a) the Available Reserve Account Amount with respect to such Transfer
Date and (b) the Class A Principal Funding Investment Shortfall with
respect to such Transfer Date; provided, that the amount of such
withdrawal shall be reduced to the extent that funds otherwise would
be available to be deposited in the Reserve Account on such Transfer
Date. On each Transfer Date, the amount available to be withdrawn
from the Reserve Account (the "Available Reserve Account Amount") will
be equal to the lesser of the amount on deposit in the Reserve Account
(before giving effect to any deposit to be made to the Reserve Account
on such Transfer Date) and the Required Reserve Account Amount for
such Transfer Date.
The Reserve Account will be terminated upon the earlier to occur
of (a) the termination of the Trust pursuant to the Agreement and (b)
if the Controlled Accumulation Period has not commenced, the first
Transfer Date with respect to the Rapid Amortization Period or, if the
Controlled Accumulation Period has commenced, the earlier to occur of
(i) the first Transfer Date with respect to the Rapid Amortization
Period and (ii) the Transfer Date immediately preceding the Class A
Scheduled Payment Date. Upon the termination of the Reserve Account,
all amounts on deposit therein (after giving effect to any withdrawal
from the Reserve Account on such date as described above) will be
distributed to the Collateral Interest Holder for application in
accordance with the terms of the Loan Agreement. Any amounts
withdrawn from the Reserve Account and distributed to the Collateral
Interest Holder as described above will not be available for
distribution to the Holders.
Paired Series
Series 199_-_ may be paired with one or more other Series (each
a "Paired Series"). Each Paired Series either will be prefunded with
an initial deposit to a Pre-Funding Account in an amount up to the
initial principal balance of such Paired Series and primarily from the
proceeds of the sale of such Paired Series or will be a Variable
Interest. Any such Pre-Funding Account will be held for the benefit
of such Paired Series and not for the benefit of the Holders. As
principal is deposited into the Principal Funding Account with respect
to the Certificates, either (i) in the case of a prefunded Paired
Series, an equal amount of funds on deposit in the Pre-Funding Account
for such prefunded Paired Series will be released (which funds will be
distributed to the Transferor) or (ii) in the case of a Paired Series
which is a Variable Interest, an interest in such variable Paired
Series in an equal or lesser amount may be sold by the Trust (and the
proceeds thereof will be distributed to the Transferor) and, in either
case, the investor interest of such Paired Series will increase by up
to a corresponding amount. Upon payment in full of the Certificates,
assuming that there have been no unreimbursed charge-offs with respect
to any related Paired Series, the aggregate investor interest of such
related Paired Series will have been increased by an amount up to an
aggregate amount equal to the payments of principal of the
Certificates since the issuance of such Paired Series. The issuance
of a Paired Series will be subject to the conditions described under
"Description of the Certificates - Exchanges" in the Prospectus.
There can be no assurance, however, that the terms of any Paired
Series might not have an impact on the timing or amount of payments
received by a Holder. In particular, the denominator of the Fixed
Allocation Percentage may be reduced upon the occurrence of a Pay Out
Event with respect to a Paired Series resulting in a possible
reduction of the percentage of collections of Principal Receivables
allocated to the Holders and possible delays in payments to the
Holders. See "Maturity Assumptions" herein.
Pay Out Events
As described above, the Revolving Period will continue through
_______ (unless such date is postponed as described under "-
Postponement of Controlled Accumulation Period"), unless a Pay Out
Event occurs prior to such date. A "Pay Out Event" refers to any of
the following events:
(a) failure on the part of the Transferor (i) to make any
payment or deposit on the date required under the Agreement (or
within the applicable grace period which shall not exceed five
days) or (ii) to observe or perform in any material respect any
other covenants or agreements of the Transferor set forth in the
Agreement, which failure has a material adverse effect on the
Holders (which determination shall be made without regard to the
existence of the Collateral Interest) and which continues for a
period of 60 days after written notice and continues to
materially and adversely affect the interests of the Holders
(which determination shall be made without regard to the
existence of the Collateral Interest) for such period;
(b) any representation or warranty made by the Transferor
in the Agreement, or any information required to be given by the
Transferor to the Trustee to identify the Accounts proves to have
been incorrect in any material respect when made and which
continues to be incorrect in any material respect for a period of
60 days after written notice and as a result of which the
interests of the Holders are materially and adversely affected
(which determination shall be made without regard to the
existence of the Collateral Interest) and continue to be
materially and adversely affected for such period; provided,
however, that a Pay Out Event pursuant to this subparagraph (b)
shall not be deemed to occur thereunder if the Transferor has
accepted reassignment of the related Receivable or all such
Receivables, if applicable, during such period (or such longer
period as the Trustee may specify) in accordance with the
provisions of the Agreement;
(c) any reduction of the average of the Portfolio Yields for
any three consecutive Monthly Periods to a rate which is less
than the average of the Base Rates for such period;
(d) a failure by the Transferor to convey Receivables arising
under Additional Accounts, or Participations, to the Trust when
required by the Agreement;
(e) any Servicer Default occurs which would have a material
adverse effect on the Holders;
(f) insufficient moneys in the Distribution Account to pay the
Class A Investor Interest on the Class A Scheduled Payment Date
or the Class B Investor Interest on the Class B Scheduled Payment
Date;
(g) certain events of insolvency, conservatorship or
receivership relating to the Transferor;
(h) the Transferor becomes unable for any reason to transfer
Receivables to the Trust in accordance with the provisions of the
Agreement; or
(i) the Trust becomes an "investment company" within the
meaning of the Investment Company Act of 1940, as amended.
In the case of any event described in clause (a), (b) or (e)
above, a Pay Out Event will be deemed to have occurred with respect to
the Certificates only if, after any applicable grace period, either
the Trustee or Holders and the Collateral Interest Holder evidencing
undivided interests aggregating more than 50% of the Investor
Interest, by written notice to the Transferor and the Servicer (and to
the Trustee if given by the Holders) declare that a Pay Out Event has
occurred with respect to the Certificates as of the date of such
notice. In the case of any event described in clause (g), (h) or (i),
a Pay Out Event with respect to all Series then outstanding, and in
the case of any event described in clause (c), (d) or (f), a Pay Out
Event with respect to only the Certificates, will be deemed to have
occurred without any notice or other action on the part of the Trustee
or the Holders, the Collateral Interest Holder or all
certificateholders, as appropriate, immediately upon the occurrence of
such event. On the date on which a Pay Out Event is deemed to have
occurred, the Rapid Amortization Period will commence. In such event,
distributions of principal to the Holders will begin on the first
Distribution Date following the month in which such Pay Out Event
occurred. If, because of the occurrence of a Pay Out Event, the Rapid
Amortization Period begins earlier than __________, the scheduled
commencement of the Controlled Accumulation Period, Holders will be
receiving distributions of principal earlier than they otherwise would
have, which may shorten the average life of the Certificates.
See "Description of the Certificates - Pay Out Events" in the
Prospectus for an additional discussion of the consequences of an
insolvency, conservatorship or receivership of the Transferor.
Servicing Compensation and Payment of Expenses
The share of the Servicing Fee allocable to the Investor
Interest with respect to any Transfer Date (the "Monthly Investor
Servicing Fee") shall be equal to one-twelfth of the product of (a)
2.00% and (b) the Adjusted Investor Interest as of the last day of the
Monthly Period preceding such Transfer Date; provided, however, with
respect to the first Transfer Date, the Monthly Investor Servicing Fee
shall be equal to $ . On each Transfer Date, but only if
First NBC or the Trustee is the Servicer, Servicer Interchange with
respect to the related Monthly Period that is on deposit in the
Finance Charge Account will be withdrawn from the Finance Charge
Account and paid to the Servicer in payment of a portion of the
Monthly Investor Servicing Fee with respect to such Monthly Period.
The "Servicer Interchange" for any Monthly Period for which First NBC
is the Servicer will be an amount equal to the portion of collections
of Finance Charge Receivables allocated to the Investor Interest with
respect to such Monthly Period that is attributable to Interchange,
provided, however, that Servicer Interchange for a Monthly Period
shall not exceed one-twelfth of the product of (i) the Adjusted
Investor Interest, as of the last day of such Monthly Period and (ii)
1.0%. In the case of any insufficiency of Servicer Interchange on
deposit in the Finance Charge Account, a portion of the Monthly
Investor Servicing Fee with respect to such Monthly Period will not be
paid to the extent of such insufficiency and in no event shall the
Trust, the Trustee, the Holders or the Collateral Interest Holder be
liable for the share of the Servicing Fee to be paid out of Servicer
Interchange.
The share of the Monthly Investor Servicing Fee allocable to
the Class A Holders with respect to any Transfer Date (the "Class A
Servicing Fee") shall be equal to one-twelfth of the product of (a)
the Class A Floating Allocation, (b) the Net Servicing Fee Rate and
(c) the Adjusted Investor Interest as of the last day of the Monthly
Period preceding such Transfer Date; provided however, that with
respect to the first Transfer Date, the Class A Servicing Fee shall be
equal to $ . The share of the Monthly Investor Servicing Fee
allocable to the Class B Holders with respect to any Transfer Date (the
"Class B Servicing Fee") shall be equal to one-twelfth of the product of
(a) the Class B Floating Allocation, (b) the Net Servicing Fee Rate and (c)
the Adjusted Investor Interest as of the last day of the Monthly Period
preceding such Transfer Date, provided however, that with respect to
the first Transfer Date, the Class B Servicing Fee shall be equal to
$ . The share of the Monthly Investor Servicing Fee allocable to the
Collateral Interest Holder with respect to any Transfer Date (the
"Collateral Interest Servicing Fee") shall be equal to one-twelfth of
the product of (a) the Collateral Floating Allocation, (b) the Net
Servicing Fee Rate and (c) the Adjusted Investor Interest as of the
last day of the Monthly Period preceding such Transfer Date; provided,
however, that with respect to the first Transfer Date, the Collateral
Interest Servicing Fee shall be equal to $ . The "Net Servicing
Fee Rate" shall mean (a) so long as First NBC is the Servicer, 0.50%
per annum, (b) so long as the Trustee is the Servicer, 1.00% per
annum, and (c) so long as a Person other than First NBC or the Trustee
is the Servicer, 2.00% per annum. The remainder of the Servicing Fee
shall be paid by the holder of the Transferor Certificate or other
Series (as provided in the related Series Supplements) or, to the
extent of any insufficiency of Servicer Interchange as described
above, not be paid. In no event shall the Trust, the Trustee, the
Holders or the Collateral Interest Holder be liable for the share of
the Servicing Fee to be paid out of Servicer Interchange. The Class A
Servicing Fee and the Class B Servicing Fee shall be payable to the
Servicer solely to the extent amounts are available for distribution
in respect thereof as described under "- Application of Collections."
The Servicer will pay from its servicing compensation certain
expenses incurred in connection with servicing the Receivables
including, without limitation, payment of the fees and disbursements
of the Trustee and independent certified public accountants and other
fees which are not expressly stated in the Agreement to be payable by
the Trust or the Holders other than federal, state and local income
and franchise taxes, if any, of the Trust.
Reports to Holders
On each Transfer Date, the Trustee will forward to each Holder of
record, a statement prepared by the Servicer setting forth the items
described in "Description of the Certificates - Reports to Holders" in
the Prospectus. In addition, such statement will include (a) the
amount, if any, withdrawn from the Principal Funding Account for such
Transfer Date, and (b) the Collateral Interest, if any, for such
Transfer Date.
UNDERWRITING
Subject to the terms and conditions set forth in the Class A
Underwriting Agreement (the "Class A Underwriting Agreement") between
the Transferor and the Class A Underwriters named below (the "Class A
Underwriters"), and the terms and conditions set forth in the Class B
Underwriting Agreement (the "Class B Underwriting Agreement," and
together with the Class A Underwriting Agreement, the "Underwriting
Agreement") between the Transferor and the Class B Underwriters named
below (the "Class B Underwriters," and together with the Class A
Underwriters, the "Underwriters"), the Transferor has agreed to sell
to the Underwriters, and each of the Underwriters has severally agreed
to purchase, the principal amount of the Certificates set forth
opposite its name:
Principal Amount of
Class A Underwriters Class A Certificates
- -------------------- --------------------
.......................... $
..........................
Total................
Principal Amount of
Class B Underwriters Class B Certificates
- -------------------- --------------------
.......................... $
..........................
Total................
In addition, _______________, as selling agent will directly
offer $____________ aggregate principal amount of the Class A
Certificates and $____________ aggregate principal amount of Class B
Certificates.
The _____________ has an arrangement with _____________ under
which it may act as selling agent for the Certificates at the same
prices, concessions and discounts to dealers applicable to the
Underwriters.
In the Class A Underwriting Agreement, the Class A Underwriters
have agreed, subject to the terms and conditions set forth therein, to
purchase all of the Class A Certificates offered hereby if any of the
Class A Certificates are purchased. In the Class B Underwriting
Agreement, the Class B Underwriters have agreed, subject to the terms
and conditions set forth therein, to purchase all of the Class B
Certificates offered hereby if any of the Class B Certificates are
purchased. The Underwriters have agreed to reimburse the Transferor
for certain expenses of the issuance and distribution of the
Certificates.
The Class A Underwriters propose initially to offer the Class A
Certificates to the public at the price set forth on the cover page
hereof and to certain dealers at such price less concessions not in
excess of % of the principal amount of the Class A Certificates.
The Class A Underwriters may allow, and such dealers may reallow,
concessions not in excess of % of the principal amount of the Class
A Certificates to certain brokers and dealers. After the initial
public offering, the public offering price and other selling terms may
be changed by the Class A Underwriters.
The Class B Underwriters propose initially to offer the Class B
Certificates to the public at the price set forth on the cover page
hereof and to certain dealers at such price less concessions not in
excess of % of the principal amount of the Class B Certificates. The
Class B Underwriters may allow, and such dealers may reallow,
concessions not in excess of % of the principal amount of the Class B
Certificates to certain brokers and dealers. After the initial public
offering, the public offering price and other selling terms may be
changed by the Class B Underwriters.
___________________, on behalf of the Class A Underwriters and
the Class B Underwriters, may engage in stabilizing transactions and
syndicate covering transactions with respect to the Class A
Certificates or the Class B Certificates, respectively, in accordance
with Rule 104 under the Exchange Act. Stabilizing transactions permit
bids to purchase the underlying security so long as the stabilizing
bids do not exceed a specified maximum. Syndicate covering
transactions involve purchases of the Certificates in the open market
after the distribution has been completed in order to cover syndicate
short positions. Such stabilizing transactions and syndicate covering
transactions may cause the price of the Certificates to be higher than
it would otherwise be in the absence of such transactions. These
transactions, if commenced, may be discontinued at any time.
Each Underwriter has represented and agreed that (a) it has not
offered or sold, and will not offer or sell any Certificates to
persons in the United Kingdom except to persons whose ordinary
activities involve them in acquiring, holding, managing or disposing
of investments (as principal or agent) for the purposes of their
businesses or otherwise in circumstances which do not constitute an
offer to the public in the United Kingdom for the purposes of the
Public Offers of Securities Regulations 1995, (b) it has complied and
will comply with all applicable provisions of the Financial Services
Act 1986 of Great Britain with respect to anything done by it in
relation to the Certificates in, from or otherwise involving the
United Kingdom and (c) it has only issued or passed on and will only
issue or pass on in the United Kingdom any document in connection with
the issue of the Certificates to a person who is of a kind described
in Article 8 of the Financial Services Act 1986 (Investment
Advertisements) (Exemptions) (No. 2) Order 1995 of Great Britain or is
a person to whom the document may otherwise lawfully be issued or
passed on.
The Transferor will indemnify the Underwriters against
liabilities relating to the adequacy of disclosure to investors,
including liabilities under the Securities Act, or contribute to
payments the Underwriters may be required to make in respect thereof.
INDEX OF DEFINED TERMS FOR PROSPECTUS SUPPLEMENT
Page
----
Accounts......................................................S-1
Accumulation Period Length...................................S-31
Additional Interest..........................................S-29
Adjusted Investor Interest....................................S-7
Aggregate Principal Receivables..............................S-36
Agreement.....................................................S-6
Automatic Additional Accounts................................S-21
Available Investor Principal Collections.....................S-31
Available Reserve Account Amount.............................S-44
Bank..........................................................S-1
Base Rate....................................................S-26
Billed Finance Charge Receivables............................S-36
Certificates.............................................S-1, S-5
Class A Additional Interest..................................S-29
Class A Adjusted Investor Interest......................S-7, S-34
Class A Available Funds......................................S-29
Class A Certificates.....................................S-1, S-5
Class A Covered Amount.................................S-10, S-44
Class A Fixed Allocation.....................................S-33
Class A Floating Allocation..................................S-33
Class A Holders...............................................S-6
Class A Investor Charge-Off............................S-13, S-43
Class A Investor Default Amount..............................S-42
Class A Investor Interest...............................S-6, S-34
Class A Monthly Interest.....................................S-37
Class A Monthly Principal....................................S-40
Class A Principal Funding Investment Shortfall.........S-10, S-44
Class A Rate.......................................S-4, S-5, S-30
Class A Required Amount................................S-12, S-34
Class A Scheduled Payment Date...........................S-4, S-5
Class A Servicing Fee........................................S-47
Class A Underwriters.........................................S-47
Class A Underwriting Agreement...............................S-47
Class B Additional Interest..................................S-29
Class B Available Funds......................................S-30
Class B Certificates.....................................S-1, S-5
Class B Fixed Allocation.....................................S-33
Class B Floating Allocation..................................S-33
Class B Holders...............................................S-6
Class B Investor Charge-Off............................S-13, S-43
Class B Investor Default Amount..............................S-42
Class B Investor Interest...............................S-6, S-34
Class B Monthly Interest.....................................S-37
Class B Monthly Principal....................................S-40
Class B Rate.......................................S-4, S-5, S-30
Class B Required Amount................................S-12, S-35
Class B Scheduled Payment Date...........................S-4, S-5
Class B Servicing Fee........................................S-47
Class B Underwriters.........................................S-47
Class B Underwriting Agreement...............................S-47
Closing Date.............................................S-4, S-5
Code.........................................................S-16
Collateral Available Funds...................................S-38
Collateral Charge-Off........................................S-43
Collateral Fixed Allocation..................................S-33
Collateral Floating Allocation...............................S-33
Collateral Interest.....................................S-6, S-34
Collateral Interest Holder....................................S-6
Collateral Interest Servicing Fee............................S-47
Collateral Investor Default Amount...........................S-42
Collateral Monthly Interest..................................S-39
Collateral Monthly Principal.................................S-40
Collateral Rate..............................................S-39
Commission....................................................S-1
Controlled Accumulation Amount...............................S-40
Controlled Accumulation Period................................S-9
Controlled Deposit Amount...............................S-9, S-25
Credit Enhancement............................................S-5
Defeased Series..............................................S-41
Distribution Date.............................................S-4
Distribution Dates............................................S-5
ERISA........................................................S-16
Excess Finance Charge Collections............................S-39
Excess Spread..........................................S-12, S-38
First NBC.....................................................S-1
Fitch........................................................S-36
Fixed Investor Percentage....................................S-33
Floating Investor Percentage.................................S-32
Group I......................................................S-14
Holders.......................................................S-6
Initial Collateral Interest..................................S-13
Interest Period..............................................S-30
Investor Default Amount......................................S-42
Investor Interest.............................................S-6
LIBOR...................................................S-4, S-30
LIBOR Determination Date.....................................S-30
Loan Agreement...............................................S-14
Minimum Aggregate Principal Receivables......................S-21
Minimum Transferor Interest..................................S-21
Monthly Investor Servicing Fee...............................S-46
Monthly Period................................................S-7
Net Servicing Fee Rate.......................................S-47
Paired Series..........................................S-14, S-45
Pay Out Event................................................S-45
Portfolio Yield..............................................S-26
Principal Funding Account.........................S-9, S-25, S-43
Principal Funding Account Balance............................S-25
Principal Funding Investment Proceeds..................S-10, S-44
Principal Shortfalls.........................................S-41
Rapid Amortization Period....................................S-11
Rating Agency Condition......................................S-42
Reallocated Class B Principal Collections....................S-35
Reallocated Collateral Principal Collections.................S-36
Reallocated Principal Collections............................S-36
Receivables...................................................S-1
Record Date..................................................S-29
Reference Banks..............................................S-30
Required Amount..............................................S-12
Required Collateral Interest...........................S-13, S-42
Required Reserve Account Amount..............................S-44
Reserve Account..............................................S-44
Reserve Account Funding Date.................................S-44
Reset Date...................................................S-34
Revolving Period..............................................S-9
Series 199_-_ Supplement......................................S-6
Series 199_-_ Termination Date................................S-7
Servicer Interchange.........................................S-46
Shared Principal Collections...........................S-15, S-41
Subject Reset Date..........................................S-32,
Transfer Date................................................S-36
Transferor Interest...........................................S-6
Trust....................................................S-1, S-5
Trust Portfolio..............................................S-21
Underwriters.................................................S-47
Underwriting Agreement.......................................S-47
Variable Interest............................................S-34
ANNEX I
[OTHER SERIES ISSUED
The table below sets forth the principal characteristics of the
other Series previously issued by the
the Trust. For more specific information with respect to any Series,
any prospective investor should contact
First NBC at ( ) ______________. First NBC will provide, without
charge, to any prospective purchaser of the Certificates, a copy of
the Disclosure Documents for any previous publicly-issued Series.]
- --------------------------------- ---------------------------------
No dealer, salesman or other
person has been authorized to give
any information or to make any
representation not contained or First NBC
incorporated by reference in this Credit Card Master Trust
Prospectus Supplement or the
accompanying Prospectus and, if
given or made, such information or
representation must not be relied
upon as having been authorized by
the Transferor or any agent or
Underwriter. Neither this Prospectus
Supplement nor the accompanying
Prospectus constitutes an offer or
solicitation by anyone in any state $________________Class A
in which such offer or [Floating Rate] [__%]
solicitation is not authorized Asset Backed
or in which the person making such Certificates, Series 199_-_
offer or solicitation is not
qualified to do so or to anyone
to whom it is unlawful to make
such offer or solicitation. Neither
the delivery of this Prospectus
Supplement or the accompanying
Prospectus, nor any sale made
hereunder or thereunder shall, $________________Class B
under any circumstances, create [Floating Rate] [__%]
any implication that there has Asset Backed
been no change in the affairs of Certificates, Series 199_-_
the Transferor or the Receivables
or the Accounts since the date
hereof or thereof or that the
information contained or
incorporated by reference herein
or therein is correct as of any
time subsequent to its date.
TABLE OF CONTENTS
Prospectus Supplement
Page
----
SUMMARY OF TERMS.............S-4
FIRST NBC'S CREDIT CARD First National Bank
PORTFOLIO..................S-17 of Commerce
Transferor amd Servicer
THE RECEIVABLES..............S-20
MATURITY ASSUMPTIONS.........S-24
RECEIVABLE YIELD
CONSIDERATIONS.............S-26
FIRST NBC AND FIRST COMMERCE
CORPORATION................S-27
DESCRIPTION OF THE
CERTIFICATES...............S-27
UNDERWRITING.................S-46
INDEX OF DEFINED TERMS FOR
PROSPECTUS SUPPLEMENT..S-48
Prospectus ------------------------------------
PROSPECTUS SUPPLEMENT
Prospectus Supplement ------------------------------------
Reports to Certificateholders
Available Information
Incorporation of Certain Documents Underwriters of the Class A Certificates
by Reference
Prospectus Summary
Risk Factors
The Trust
First NBC's Credit Card Activities [ ]
The Receivables
Maturity Assumptions
Use of Proceeds
First NBC and First Commerce
Corporation [ ]
Description of the Certificates
Credit Enhancement
Certain Legal Aspects of the Underwriters of the Class B Certificates
Receivables
U.S. Federal Income Tax Consequences
State and Local Taxation
ERISA Considerations [ ]
Plan of Distribution
Legal Matters
Index of Terms for Prospectus
Annex 1: Global Clearance, Settlement
and Tax Documentation Procedures
Until ___________ __, 199_, all
dealers effecting transactions in
the Certificates, whether or not [ ]
participating in this distribution,
may be required to deliver a
Prospectus Supplement and a Prospectus.
This delivery requirement is in
addition to the obligation of dealers
to deliver a Prospectus Supplement
and a Prospectus when acting as
underwriters and with respect to their
unsold allotments or subscriptions.