FIRST NATIONAL BANK OF COMMERCE
Transferor and Servicer
and
THE FIRST NATIONAL BANK OF CHICAGO
Trustee
on behalf of the Series 1997-1 Holders
--------------------------------------
SERIES 1997-1 SUPPLEMENT
Dated as of August 1, 1997
to
POOLING AND SERVICING AGREEMENT
Dated as of August 1, 1997
------------------------
FIRST NBC CREDIT CARD MASTER TRUST
Series 1997-1
------------------------------------
TABLE OF CONTENTS
Page
SECTION 1. Designation.....................................................1
SECTION 2. Definitions.....................................................2
SECTION 3. Servicing Compensation and Assignment of Interchange and Other
Account Revenues..................................................19
SECTION 4. Reassignment and Transfer Terms............................... 21
SECTION 5. Delivery and Payment for the Investor Certificates.............21
SECTION 6. Depository; Form of Delivery of Investor Certificates; Legends;
Transfer Restrictions and Procedures...........................21
SECTION 7. Article IV of Agreement........................................21
SECTION 4.6 Rights of Holders and the Collateral Interest Holder.21
SECTION 4.7 Allocations..........................................22
SECTION 4.8 Determination of Monthly Interest....................28
SECTION 4.9 Determination of Monthly Principal...................29
SECTION 4.10 Coverage of Required Amount.........................30
SECTION 4.11 Monthly Payments....................................31
SECTION 4.12 Series Investor Charge-Offs.........................36
SECTION 4.13 Excess Spread.......................................37
SECTION 4.14 Reallocated Investor Finance Charge Collections.....39
SECTION 4.15 Reallocated Principal Collections...................40
SECTION 4.16 Shared Principal Collections........................41
SECTION 4.17 Principal Account and Principal Funding Account.....42
SECTION 4.18 Reserve Account.....................................43
SECTION 4.19 [RESERVED]..........................................45
SECTION 4.20 Transferor's or Servicer's Failure to Make a Deposit
or Payment........................................45
SECTION 4.21. Conversion Date.....................................45
SECTION 8. Article V of the Agreement.....................................45
SECTION 5.1 Distributions........................................45
SECTION 5.2 Monthly Series 1997-1 Holders' Statement.............46
SECTION 9. Series 1997-1 Pay Out Events...................................47
SECTION 10. Series 1997-1 Termination.....................................48
H-i
Page
SECTION 11. Periodic Finance Charges and Other Fees.......................48
SECTION 12. Counterparts..................................................48
SECTION 13. Governing Law.................................................48
SECTION 14. No Petition...................................................49
SECTION 15. Amendments....................................................49
EXHIBITS
EXHIBIT A-1 Form of Class A Certificate
EXHIBIT A-2 Form of Class B Certificate
EXHIBIT B Form of Monthly Payment Instructions
and Notification to Trustee
EXHIBIT C Form of Monthly Series 1997-1 Holders' Statement
H-ii
SERIES 1997-1 SUPPLEMENT, dated as of August 1, 1997 (this "Series
Supplement"), by and between FIRST NATIONAL BANK OF COMMERCE, a national
banking association ("First NBC"), as Transferor and Servicer, and THE
FIRST NATIONAL BANK OF CHICAGO, as Trustee under the Pooling and Servicing
Agreement dated as of August 1, 1997 between First NBC and Trustee (the
"Agreement").
Section 6.9 of the Agreement provides, among other things, that
Transferor and Trustee may at any time and from time to time enter into a
supplement to the Agreement for the purpose of authorizing the delivery by
Trustee to Transferor for the execution and redelivery to Trustee for
authentication of one or more Series of Certificates.
Pursuant to this Series Supplement, Transferor and the Trust shall
create a new Series of Investor Certificates and shall specify the
Principal Terms thereof.
SECTION 6. Designation. (a) There is hereby created a Series of
Investor Certificates to be issued in two Classes pursuant to the Agreement
and this Series Supplement and to be known together as the "Series 1997-1
Certificates." The two classes shall be designated the Class A 6.15% Asset
Backed Certificates, Series 1997-1 (the "Class A Certificates") and the
Class B 6.35% Asset Backed Certificates, Series 1997-1 (the "Class B
Certificates"). The Class A Certificates and the Class B Certificates shall
be substantially in the form of Exhibits A-1 and A-2, respectively. In
addition, there is hereby created a third Class which constitutes an
uncertificated interest in the Trust, shall be deemed to be an "Investor
Certificate" for all purposes under the Agreement and this Series
Supplement, except as expressly provided herein, and shall be known as the
Collateral Interest, Series 1997-1 and have the rights assigned to the
Collateral Interest in this Series Supplement.
(b) Series 1997-1 shall be included in Group I, which shall be a
Reallocation Group in which all Series shall also be Excess Allocation
Series. Series 1997-1 shall be a Principal Sharing Series. Series 1997-1
shall not be subordinated to any other Series.
(c) The Collateral Interest Holder, as holder of an "Investor
Certificate" under the Agreement, shall be entitled to the benefits of the
Agreement and this Series Supplement upon payment by the Collateral
Interest Holder of amounts owing on the Closing Date pursuant to the Loan
Agreement. Notwithstanding the foregoing, except as expressly provided
herein, the provisions of Article VI and Article XII of the Agreement
relating to the registration, authentication, delivery, presentation,
cancellation and surrender of Registered Certificates shall not be
applicable to the Collateral Interest.
1
SECTION 7. Definitions. If any term or provision contained herein
shall conflict with or be inconsistent with any provision contained in the
Agreement, the terms and provisions of this Series Supplement shall govern.
References to any Article, Section or subsection are references to
Articles, Sections or subsections of the Agreement, except as otherwise
expressly provided. All capitalized terms not otherwise defined herein are
defined in the Agreement, and the interpretive provisions set out in
Section 1.2 of the Agreement apply to this Series Supplement. Each
capitalized term defined herein relates only to the Investor Certificates
and no other Series of Certificates issued by the Trust.
"Accumulation Shortfall" initially means zero and thereafter
means, with respect to any Monthly Period during the Controlled
Accumulation Period, the excess, if any, of the Controlled Deposit Amount
for the previous Monthly Period over the amount deposited into the
Principal Funding Account pursuant to subsection 4.11(e)(i) with respect to
the Class A Certificates for the previous Monthly Period.
"Actual Allocations" is defined in subsection 4.7(e).
"Adjusted Investor Interest" means, on any date of determination,
an amount equal to the sum of (a) the Class A Adjusted Investor Interest
and (b) the Class B Investor Interest and (c) the Collateral Interest.
"Available Investor Principal Collections" means, as to any
Monthly Period, an amount equal to (a) the Investor Principal Collections
for such Monthly Period, minus (b) the amount of Reallocated Principal
Collections with respect to such Monthly Period that, pursuant to Section
4.15, are required to fund the Class A Required Amount and the Class B
Required Amount (other than any portions thereof that are applied pursuant
to (x) subsection 4.11(a)(iii) and (y) subsection 4.13(c) (to the extent
such portions pursuant to subsection 4.13(c) are available to pay the Class
B Net Default Amount), which shall, without duplication, be included as
Available Investor Principal Collections), plus (c) the amount of Shared
Principal Collections that are allocated to Series 1997-1 in accordance
with subsection 4.16(b).
"Available Reserve Account Amount" means, as to any Transfer Date,
the lesser of (a) the amount on deposit in the Reserve Account on such date
(after taking into account any interest and earnings retained in the
Reserve Account pursuant to subsection 4.18(b) on such date, but before
giving effect to any deposit made or to be made pursuant to subsection
4.13(i) to the Reserve Account on such date) and (b) the Required Reserve
Account Amount.
"Base Rate" means, as to any Monthly Period, the sum of (a) the
weighted average of the Class A Certificate Rate, the Class B Certificate
Rate, and the Collateral Rate (each for the related Interest Period) plus
(b) the Series Servicing Fee Percentage.
2
"Class A Additional Interest" is defined in Section 4.8(a).
"Class A Adjusted Investor Interest" means, on any date of
determination, an amount equal to the Class A Investor Interest minus the
Principal Funding Account Balance on such date of determination.
"Class A Available Funds" means, as to any Monthly Period, an
amount equal to the sum of (a) the Class A Floating Allocation of
Reallocated Investor Finance Charge Collections (excluding the portion of
Reallocated Investor Finance Charge Collections attributable to Servicer
Interchange) and Series Investment Earnings, (b) with respect to any
Monthly Period during the Controlled Accumulation Period prior to the
payment in full of the Class A Investor Interest, the Principal Funding
Investment Proceeds arising pursuant to subsection 4.17(b), if any, with
respect to the related Transfer Date that are to be applied as Class A
Available Funds pursuant to subsection 4.17(b) and (c) amounts, if any, to
be withdrawn from the Reserve Account that will be deposited into the
Finance Charge Account on the related Transfer Date pursuant to subsections
4.18(b) and 4.18(d) (or that will be required to be deposited in the
Finance Charge Account pursuant to such subsections on the related Transfer
Date (before giving effect to any permitted netting)).
"Class A Certificate Rate" means 6.15%.
"Class A Certificates" is defined in subsection 1(a) of this Series
Supplement.
"Class A Deficiency Amount" is defined in subsection 4.8(a).
"Class A Fixed Allocation" means, for any Monthly Period following
the Revolving Period, the percentage equivalent (which percentage shall
never exceed 100%) of a fraction, the numerator of which is the Class A
Investor Interest as of the close of business on the last day of the
Revolving Period and the denominator of which is equal to the numerator
used in determining the related Fixed Investor Percentage; provided that if
Series 1997-1 is paired with a Paired Series and a Pay Out Event occurs
with respect to such Paired Series during the Controlled Accumulation
Period, Transferor may, by written notice delivered to Trustee and
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).
"Class A Floating Allocation" means, for any Monthly Period, the
percentage equivalent (which percentage shall never exceed 100%) of a
fraction, the numerator of which is the Class A Adjusted Investor Interest
as of the close of business on the last day of the preceding Monthly Period
and the denominator of which is equal to the Adjusted Investor Interest as
of the close of business on such day; provided that, with respect to the
first Monthly Period, the Class A Floating Allocation means the
3
percentage equivalent of a fraction, the numerator of which is the Class A
Initial Investor Interest and the denominator of which is the Initial
Investor Interest.
"Class A Holder" means the Person in whose name a Class A
Certificate is registered in the Certificate Register.
"Class A Initial Investor Interest" means the aggregate initial
principal amount of the Class A Certificates, which is $259,500,000.
"Class A Investor Allocation" means, for any Monthly Period, (a)
with respect to Net Default Amounts and Reallocated Investor Finance Charge
Collections at any time and Principal Receivables during the Revolving
Period, the Class A Floating Allocation and (b) with respect to Principal
Receivables during the Controlled Accumulation Period or Rapid Amortization
Period, the Class A Fixed Allocation.
"Class A Investor Charge-Off" is defined in subsection 4.12(a).
"Class A Investor Interest" means, on any date of determination,
an amount equal to (a) the Class A Initial Investor Interest, minus (b) the
aggregate amount of principal payments made to Class A Holders prior to
such date and minus (c) the excess, if any, of the aggregate amount of
Class A Investor Charge-Offs pursuant to subsection 4.12(a) over Class A
Investor Charge-Offs reimbursed pursuant to subsection 4.13(b) prior to
such date of determination; provided that the Class A Investor Interest may
not be reduced below zero.
"Class A Monthly Interest" is defined in subsection 4.8(a).
"Class A Monthly Principal" is defined in subsection 4.9(a).
"Class A Net Default Amount" means, as to each Transfer Date, an
amount equal to the product of (a) the Series Net Default Amount for such
Transfer Date and (b) the Class A Floating Allocation applicable for the
related Monthly Period.
"Class A Required Amount" is defined in subsection 4.10(a).
"Class A Scheduled Payment Date" means the August, 2002
Distribution Date.
"Class A Servicing Fee" is defined in subsection 3(a) of this
Series Supplement.
"Class B Additional Interest" is defined in subsection 4.8(b).
4
"Class B Available Funds" means, as to any Monthly Period, an
amount equal to the Class B Floating Allocation of Reallocated Investor
Finance Charge Collections (excluding the portion of Reallocated Investor
Finance Charge Collections attributable to Servicer Interchange) and Series
Investment Earnings.
"Class B Certificate Rate" means 6.35%.
"Class B Certificates" is defined in subsection 1(a) of this
Series \ Supplement.
"Class B Deficiency Amount" is defined in subsection 4.8(b).
"Class B Fixed Allocation" means, for any Monthly Period following
the Revolving Period, the percentage equivalent (which percentage shall
never exceed 100%) of a fraction, the numerator of which is the Class B
Investor Interest as of the close of business on the last day of the
Revolving Period and the denominator of which is equal to the numerator
used in determining the related Fixed Investor Percentage; provided that if
Series 1997-1 is paired with a Paired Series and a Pay Out Event occurs
with respect to such Paired Series during the Controlled Accumulation
Period, Transferor may, by written notice delivered to Trustee and
Servicer, designate 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 B Floating Allocation" means, for any Monthly Period, the
percentage equivalent (which percentage shall never exceed 100%) of a
fraction, the numerator of which is the Class B Investor Interest as of the
close of business on the last day of the preceding Monthly Period and the
denominator of which is equal to the Adjusted Investor Interest as of the
close of business on such day; provided that, with respect to the first
Monthly Period, the Class B Floating Allocation means the percentage
equivalent of a fraction, the numerator of which is the Class B Initial
Investor Interest and the denominator of which is the Initial Investor
Interest.
"Class B Holder" means the Person in whose name a Class B
Certificate is registered in the Certificate Register.
"Class B Initial Investor Interest" means the aggregate initial
principal amount of the Class B Certificates, which is $21,000,000.
"Class B Investor Allocation" means, for any Monthly Period, (a)
with respect to Net Default Amounts and Reallocated Investor Finance Charge
Collections at any time and Principal Receivables during the Revolving
Period, the Class B Floating Allocation and (b) with respect to Principal
Receivables during the
5
Controlled Accumulation Period or Rapid Amortization Period, the Class B Fixed
Allocation.
"Class B Investor Charge-Off" is defined in subsection 4.12(b).
"Class B Investor Interest" means, on any date of determination,
an amount equal to (a) the Class B Initial Investor Interest, minus (b) the
aggregate amount of principal payments made to Class B Holders prior to
such date, minus (c) the aggregate amount of Class B Investor Charge-Offs
for all prior Transfer Dates pursuant to subsection 4.12(b), minus (d) the
amount of the Reallocated Class B Principal Collections allocated pursuant
to subsection 4.15(a) on all prior Transfer Dates for which the Collateral
Interest has not been reduced, minus (e) an amount equal to the amount by
which the Class B Investor Interest has been reduced on all prior Transfer
Dates pursuant to subsection 4.12(a), plus (f) the aggregate amount of
Excess Spread allocated and available on all prior Transfer Dates pursuant
to subsection 4.13(d) for the purpose of reimbursing amounts deducted
pursuant to the foregoing clauses (c), (d) and (e); provided that the Class
B Investor Interest may not be reduced below zero.
"Class B Monthly Interest" is defined in subsection 4.8(b).
"Class B Monthly Principal" is defined in subsection 4.9(b).
"Class B Net Default Amount" means, as to each Transfer Date, an
amount equal to the product of (a) the Series Net Default Amount for such
Transfer Date and (b) the Class B Floating Allocation applicable for the
related Monthly Period.
"Class B Required Amount" is defined in subsection 4.10(b).
"Class B Scheduled Payment Date" means the September, 2002
Distribution Date.
"Class B Servicing Fee" is defined in subsection 3(a) of this
Series Supplement.
"Closing Date" means August 7, 1997.
"Collateral Allocation" means, for any Monthly Period, (a) with
respect to Net Default Amounts and Reallocated Investor Finance Charge
Collections at any time and Principal Receivables during the Revolving
Period, the Collateral Floating Allocation and (b) with respect to
Principal Receivables during the Controlled Accumulation Period or Rapid
Amortization Period, the Collateral Fixed Allocation.
6
"Collateral Available Funds" means, as to any Monthly Period, an
amount equal to the Collateral Floating Allocation of Reallocated Investor
Finance Charge Collections (excluding the portion of Reallocated Investor
Finance Charge Collections attributable to Servicer Interchange) and Series
Investment Earnings.
"Collateral Charge-Off" is defined in subsection 4.12(c).
"Collateral Fixed Allocation" means, for any Monthly Period
following the Revolving Period, the percentage equivalent (which percentage
shall never exceed 100%) of a fraction, the numerator of which is the
Collateral Interest as of the close of business on the last day of the
Revolving Period and the denominator of which is equal to the numerator
used in determining the related Fixed Investor Percentage; provided that if
Series 1997-1 is paired with a Paired Series and a Pay Out Event occurs
with respect to such Paired Series during the Controlled Accumulation
Period, Transferor may, by written notice delivered to Trustee and
Servicer, designate a different numerator (provided that such numerator is
not less than the Collateral Interest (less, if the Class B Fixed
Allocation is zero, the balance on deposit in the Principal Account, to the
extent not subtracted in reducing the Class B Fixed Allocation to zero) as
of the last day of the revolving period for such Paired Series).
"Collateral Floating Allocation" means, for any Monthly Period,
the percentage equivalent (which percentage shall never exceed 100%) of a
fraction, the numerator of which is the Collateral Interest as of the close
of business on the last day of the preceding Monthly Period and the
denominator of which is equal to the Adjusted Investor Interest as of the
close of business on such day; provided that, with respect to the first
Monthly Period, the Collateral Floating Allocation means the percentage
equivalent of a fraction, the numerator of which is the Collateral Initial
Interest and the denominator of which is the Initial Investor Interest.
"Collateral Initial Interest" means $19,500,000.
"Collateral Interest" means, on any date of determination, a
fractional undivided interest in the Trust that shall consist of the right
to receive, to the extent necessary to make the required payments to the
Collateral Interest Holder under this Series Supplement, the portion of
Collections allocable thereto under the Agreement and this Series
Supplement and funds on deposit in the Collection Account allocable thereto
pursuant to the Agreement and this Series Supplement. On any date, for
purposes of all calculations in the Agreement and this Series Supplement,
the amount of the Collateral Interest shall be an amount equal to (a) the
Collateral Initial Interest, minus (b) the aggregate amount of principal
payments made to the Collateral Interest Holder prior to such date, minus
(c) the aggregate amount of Collateral Charge-Offs for all prior Transfer
Dates pursuant to subsection 4.12(c), minus (d) the amount of Reallocated
Principal Collections allocated pursuant to subsections 4.15(a) and (b) on
all prior Transfer Dates, minus (e) an amount equal to the amount by which
the
7
Collateral Interest has been reduced on all prior Transfer Dates pursuant
to subsections 4.12(a) and (b), plus (f) the aggregate amount of Excess
Spread allocated and available on all prior Transfer Dates pursuant to
subsection 4.13(h) for the purpose of reimbursing amounts deducted pursuant
to the foregoing clauses (c), (d) and (e); provided that the Collateral
Interest may not be reduced below zero.
"Collateral Interest Holder" means the entity so designated in the
Loan Agreement.
"Collateral Interest Servicing Fee" is defined in subsection 3(a)
of this Series Supplement.
"Collateral Monthly Interest" is defined in subsection 4.8(c).
"Collateral Monthly Principal" is defined in subsection 4.9(c).
"Collateral Net Default Amount" means, as to any Transfer Date, an
amount equal to the product of (a) the Series Net Default Amount for such
Transfer Date and (b) the Collateral Floating Allocation applicable for the
related Monthly Period.
"Collateral Rate" means, for any Interest Period, the rate specified
in the Loan Agreement.
"Collection Recomputation Date" means, with respect to Collections
received during any Billing Cycle that are initially allocated on an
estimated basis as provided in subsection 4.7(d), the date on which
Servicer performs the recomputations provided for in subsection 4.7(e),
which date shall not be later than the Determination Date in the Monthly
Period following the Monthly Period in which such Billing Cycle ends.
"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, $21,625,000; provided that if the
Controlled Accumulation Period Length is modified pursuant to subsection
4.11(i), (i) the Controlled Accumulation Amount for each Transfer Date with
respect to the Controlled Accumulation Period shall mean the amount
determined in accordance with Section 4.11(i) on the date on which the
Controlled Accumulation Period has most recently been modified and (ii) the
sum of the Controlled Accumulation Amounts for all Transfer Dates with
respect to the modified Controlled Accumulation Period shall not be less
than the Class A Investor Interest.
"Controlled Accumulation Date" means July 31, 2001.
8
"Controlled Accumulation Period" means, unless a Pay Out Event
shall have occurred prior thereto, the period commencing at the close of
business on the Controlled Accumulation Date or such later date as is
determined in accordance with subsection 4.11(i) and ending on the first to
occur of (a) the commencement of the Rapid Amortization Period and (b) the
Series 1997-1 Termination Date.
"Controlled Accumulation Period Length" is defined in subsection
4.11(i).
"Controlled Deposit Amount" means, with respect to any Transfer
Date, the sum of (a) the Controlled Accumulation Amount for such Transfer
Date and (b) any existing Accumulation Shortfall.
"Covered Amount" means an amount determined as of each Transfer
Date with respect to any Interest Period as the product of (a) (i)
one-twelfth, times (ii) the Class A Certificate Rate in effect with respect
to such Interest Period, and (b) the Principal Funding Account Balance as
of the Record Date preceding such Transfer Date.
"Credit Enhancement" means (a) with respect to the Class A
Certificates, the subordination of the Class B Certificates and the
Collateral Interest and (b) with respect to the Class B Certificates, the
subordination of the Collateral Interest.
"Credit Enhancement Provider" means the Collateral Interest Holder.
"Cumulative Series Principal Shortfall" means the sum of the
Series Principal Shortfalls (as such term is defined in each of the related
Supplements) for each Principal Sharing Series.
"Deficiency Amount" means, at any time of determination, the sum
of (a) the Class A Deficiency Amount and (b) the Class B Deficiency Amount.
"Distribution Date" means September 15, 1997 and the fifteenth day
of each calendar month thereafter or, if such fifteenth day is not a
Business Day, the next succeeding Business Day.
"Estimated Allocations" is defined in subsection 4.7(e).
"Excess Principal Funding Investment Proceeds" means, with respect
to each Transfer Date relating to the Controlled Accumulation Period, the
amount, if any, by which the Principal Funding Investment Proceeds for such
Transfer Date exceed the Covered Amount determined on such Transfer Date.
"Excess Spread" means, with respect to any Transfer Date, the sum
of (a) the sum of the amounts, if any, with respect to that Transfer Date
specified pursuant to
9
subsections 4.11(a)(iv), 4.11(b)(iii) and 4.11(c)(ii), plus (b) the Excess
Finance Charge Collections, if any, allocated to the Investor Interest
pursuant to Section 4.5 for that Transfer Date.
"Finance Charge Shortfall" means, with respect to any Transfer
Date, an amount equal to the excess, if any, of (a) the sum of the amounts
specified in clauses (a) through (j) of Section 4.13 for that Transfer Date
over (b) the sum of the amounts, if any, with respect to such Transfer Date
specified pursuant to subsections 4.11(a)(iv), 4.11(b)(iii) and
4.11(c)(ii).
"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 determined as of the close of business on
the last day of the prior Monthly Period and (b) the sum of the numerators
used to calculate the Investor Percentages for all outstanding Series with
respect to Principal Receivables on such date of determination; provided
that (x) if Series 1997-1 is paired with a Paired Series and a Pay Out
Event occurs with respect to such Paired Series during the Controlled
Accumulation Period, Transferor may, by written notice delivered to Trustee
and 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
clause (b) above determined as of the subject Reset Date.
"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 and (b) the sum of
the numerators used to calculate the Investor Percentages for all
outstanding Series with respect to Finance Charge Receivables, Net Default
Amounts or Principal Receivables, as applicable, on such date of
determination; provided that if one or more Reset Dates occurs 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 on
or prior to the earlier of the last day of the current Monthly Period and
any subsequent Reset Date shall be determined using a
10
denominator equal to the greater of the amounts specified in clause (a) and
clause (b) above determined as of the subject Reset Date.
"Group I" means Series 1997-1 and each other Series specified in
the related Supplement to be included in Group I.
"Group I Investor Charge-Offs" means, with respect to any Transfer
Date, the sum of (a) the Series Investor Charge-Offs for such Transfer Date
and (b) the series investor charge-offs for all other Series included in
Group I for such Transfer Date.
"Group I Investor Finance Charge Collections" means, with respect
to any Transfer Date, the sum of (a) the Investor Finance Charge
Collections for such Distribution Date and (b) the aggregate investor
finance charge collections for all other Series included in Group I for
such Distribution Date.
"Group I Monthly Fees" means, with respect to any Transfer Date,
the sum of (a) the Series Monthly Fees for such Transfer Date and (b) the
aggregate series monthly fees for all other Series included in Group I for
such Transfer Date.
"Group I Monthly Interest" means, with respect to any Transfer
Date, the sum of (a) the Series Monthly Interest for such Transfer Date and
(b) the aggregate series monthly interest for all other Series included in
Group I for such Transfer Date.
"Group I Net Default Amount" means, with respect to any Transfer
Date, the sum of (a) the Series Net Default Amount for such Transfer Date
and (b) the aggregate series net default amounts for all other Series
included in Group I for such Transfer Date.
"Initial Investor Interest" means $300,000,000.
"Interest Period" means, with respect to any Distribution Date,
the period from and including the previous Distribution Date through and
including the day preceding such Distribution Date, except that the initial
Interest Period will be the period from and including the Closing Date
through the day preceding the initial Distribution Date.
"Investor Certificates" means the Class A Certificates, the Class
B Certificates and the Collateral Interest.
"Investor Finance Charge Collections" means for any Transfer Date,
the sum of the following amounts determined for the related Monthly Period:
11
(a) insofar as such Monthly Period fell prior to the
Conversion Date, an amount equal to the aggregate Collections of
Finance Charge Receivables processed during each Billing Cycle
which ended during such Monthly Period (and prior to the
Conversion Date) which are deposited in the Finance Charge Account
(or required to be deposited in the Finance Charge Account on that
Transfer Date (before giving effect to any permitted netting) with
respect to such portion of such Monthly Period pursuant to
subsection 4.2(e), the third paragraph of subsection 4.3(a) and
subsection 4.7(d) of the Agreement), less any amount required to
be withdrawn from the Finance Charge Account with respect to such
portion of such Monthly Period pursuant to subsection 4.7(f); plus
(b) insofar as such Monthly Period fell on or after the
Conversion Date, an amount equal to the aggregate Collections of
Finance Charge Receivables deposited in the Finance Charge Account
on each day in such Monthly Period falling on or after the
Conversion Date (or required to be deposited in the Finance Charge
Account on that Transfer Date (before giving effect to any
permitted netting) with respect to any such day pursuant to
subsection 4.2(e), the third paragraph of subsection 4.3(a) and
subsection 4.7(d) of the Agreement); plus
(c) any amount required to be deposited in the Finance
Charge Account on that Transfer Date (before giving effect to any
permitted netting) with respect to such Monthly Period pursuant to
subsection 3(b) of this Series Supplement and investment earnings
(net of losses and investment expenses) accrued on or prior to
that Transfer Date in connection with the investment of funds on
deposit in the Principal Account.
"Investor Holder" means (a) with respect to the Class A
Certificates, the holder of record of a Class A Certificate, (b) with
respect to the Class B Certificates, the holder of record of a Class B
Certificate and (c) with respect to the Collateral Interest, the Collateral
Interest Holder.
"Investor Interest" means, on any date of determination, an amount
equal to the sum of (a) the Class A Investor Interest, (b) the Class B
Investor Interest and (c) the Collateral Interest, each as of such date.
"Investor Percentage" with respect to Series 1997-1 means, for any
Monthly Period, (a) with respect to Finance Charge Receivables and Net
Default Amounts at any time and Principal Receivables during the Revolving
Period, the Floating Investor Percentage and (b) with respect to Principal
Receivables during the Controlled Accumulation Period or the Rapid
Amortization Period, the Fixed Investor Percentage.
12
"Investor Principal Collections" means, for any Monthly Period,
the sum of:
(a) insofar as such Monthly Period fell prior to the
Conversion Date, an amount equal to the aggregate Collections of
Principal Receivables processed during each Billing Cycle which
ended during such Monthly Period (and prior to the Conversion
Date) which are deposited (or required to be deposited on the
related Transfer Date (before giving effect to any permitted
netting)) into the Principal Account for such Monthly Period
pursuant to subsections 4.7(a)(ii), (iii) and (iv), 4.7(b)(ii),
(iii) and (iv), or 4.7(c)(ii), in each case, as applicable to such
Monthly Period, minus any amount required to be withdrawn from the
Principal Account with respect to such Monthly Period pursuant to
subsection 4.7(e) of the Agreement; plus
(b) insofar as such Monthly Period fell on or after the
Conversion Date, an amount equal to the aggregate Collections of
Principal Receivables (or required to be deposited on the related
Transfer Date (before giving effect to any permitted netting))
into the Principal Account on any day in such Monthly Period
falling on or after the Conversion Date pursuant to subsections
4.7(a)(ii), (iii) and (iv), 4.7(b)(ii), (iii) and (iv), or
4.7(c)(ii), in each case, as applicable to such Monthly Period;
plus
(c) the aggregate amount to be treated as Investor
Principal Collections pursuant to subsections 4.11(a)(iii) and
4.13(a), (b), (c), (d), (g) and (h) for such Monthly Period (other
than such amount paid from Reallocated Principal Collections),
plus
(d) the aggregate amount transferred (or required to be
transferred on the related Distribution Date (before giving effect
to any permitted netting)) from the Excess Funding Account into
the Principal Account pursuant to subsection 4.2(f).
"Investor Servicing Fee" is defined in subsection 3(a) of this Series
Supplement.
"Loan Agreement" means the agreement among Transferor, Servicer,
Trustee, and the Collateral Interest Holder, dated as of August 7, 1997, as
amended or modified from time to time.
"London Business Day" means any Business Day on which dealings in
deposits in United States dollars are transacted in the London interbank
market.
"Monthly Period" is defined in the Agreement.
13
"Net Servicing Fee Rate" means (a) so long as Transferor or The
First National Bank of Chicago is Servicer, 1.25% per annum, and (b) if
neither Transferor nor The First National Bank of Chicago is Servicer,
2.00% per annum.
"Paired Series" means a Series that has been paired with Series
1997-1 (which Series may be prefunded or partially prefunded or may be a
Variable Interest) such that a reduction of the Adjusted Investor Interest
results in (or permits) an increase of the investor interest of such Series
that has been paired with Series 1997-1.
"Pay Out Commencement Date" means the date on which a Trust Pay
Out Event is deemed to occur pursuant to Section 9.1 of the Agreement or a
Series 1997-1 Pay Out Event is deemed to occur pursuant to Section 9 of
this Series Supplement.
"Portfolio Adjusted Yield" means, with respect to any Transfer
Date, the average of the percentages obtained for each of the three
preceding Monthly Periods by subtracting the Base Rate from the Portfolio
Yield for such Monthly Period and deducting 0.50% from the result for each
Monthly Period.
"Portfolio Yield" means, with respect to any Monthly Period, the
annualized percentage equivalent of a fraction, the numerator of which is
an amount equal to the sum of (a) the amount of Reallocated Investor
Finance Charge Collections for the related Transfer Date, (b) the Principal
Funding Investment Proceeds deposited into the Finance Charge Account on
the Transfer Date related to such Monthly Period and (c) the amount of the
Reserve Draw Amount (up to the Available Reserve Account Amount) plus any
amounts of interest and earnings described in Section 4.18, each deposited
or required to be deposited into the Finance Charge Account on the Transfer
Date (before giving effect to any permitted netting) relating to such
Monthly Period, such sum to be calculated on a cash basis after subtracting
the Series Default Amount for such Monthly Period, and the denominator of
which is the Investor Interest as of the close of business on the last day
of such Monthly Period.
"Principal Account" is defined in subsection 4.17(a).
"Principal Funding Account" is defined in subsection 4.17(a).
"Principal Funding Account Balance" means, with respect to any
date of determination, the principal amount, if any, on deposit in the
Principal Funding Account on such date of determination.
"Principal Funding Investment Proceeds" means, with respect to
each Transfer Date, the investment earnings on funds in the Principal
Funding Account
14
(net of investment expenses and losses) for the period from and including
the immediately preceding Transfer Date to but excluding such Transfer
Date.
"Principal Funding Investment Shortfall" means, with respect to
each Transfer Date relating to the Controlled Accumulation Period, the
amount, if any, by which the Principal Funding Investment Proceeds for such
Transfer Date are less than the Covered Amount determined as of such
Transfer Date.
"Rapid Amortization Period" means the period commencing on the Pay
Out Commencement Date and ending on the earlier to occur of (a) the Series
1997-1 Termination Date and (b) the termination of the Trust pursuant to
Section 12.1.
"Rating Agency" means Moody's and Standard & Poor's.
"Rating Agency Condition" means the notification in writing by
each Rating Agency to Transferor, Servicer and Trustee that an action will
not result in any Rating Agency reducing or withdrawing its then existing
rating of the Class A Certificates or the Class B Certificates.
"Reallocated Class B Principal Collections" means, with respect to
any Transfer Date, Collections of Principal Receivables applied in
accordance with subsection 4.15(a) in an amount not to exceed the product
of (a) the Class B Investor Allocation for the Monthly Period relating to
such Transfer Date and (b) the Investor Percentage for the Monthly Period
relating to such Transfer Date and (c) the amount of Collections of
Principal Receivables for the Monthly Period relating to such Transfer
Date; provided that such amount shall not exceed the Class B Investor
Interest after giving effect to any Class B Investor Charge-Offs for such
Transfer Date.
"Reallocated Collateral Principal Collections" means, with respect
to any Transfer Date, Collections of Principal Receivables applied in
accordance with subsections 4.15(a) and (b) in an amount not to exceed the
product of (a) the Collateral Allocation for the Monthly Period relating to
such Transfer Date and (b) the Investor Percentage for the Monthly Period
relating to such Transfer Date and (c) the amount of Collections of
Principal Receivables for the Monthly Period relating to such Transfer
Date; provided that such amount shall not exceed the Collateral Interest
after giving effect to any Collateral Charge-Offs for such Transfer Date.
"Reallocated Investor Finance Charge Collections" means that portion
of Group I Investor Finance Charge Collections allocated to Series 1997-1
pursuant to Section 4.14.
15
"Reallocated Principal Collections" means the sum of (a) Reallocated
Class B Principal Collections and (b) Reallocated Collateral Principal
Collections.
"Reference Banks" means four major banks in the London interbank
market selected by Servicer.
"Required Collateral Interest" means (a) initially, $19,500,000
and (b) on any Transfer Date thereafter, 6.5% of (1) the sum of the Class A
Adjusted Investor Interest and the Class B Investor Interest on such
Transfer Date, in each case 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 (2) the Collateral Interest on the
prior Transfer Date, after any adjustments to be made on such date, but not
less than $9,000,000; provided that (x) if either (i) there is a reduction
in the Collateral Interest pursuant to clause (c), (d) or (e) of the
definition of such term or (ii) a Pay Out Event with respect to the
Investor Certificates has occurred, the Required Collateral Interest for
any Transfer Date shall (subject to clauses (y) and (z)) equal the Required
Collateral Interest for the Transfer Date immediately preceding such
reduction or Pay Out Event, (y) in no event shall the Required Collateral
Interest exceed the sum of the outstanding principal amounts of (i) the
Class A Certificates and (ii) the Class B Certificates, each as of the last
day of the Monthly Period preceding such Transfer Date after taking into
account the payments to be made on the related Distribution Date and (z)
the Required Collateral Interest may be reduced at Transferor's option at
any time to a lesser amount if Transferor, Servicer, the Collateral
Interest Holder and Trustee have been provided evidence that the Rating
Agency Condition has been satisfied.
"Required Reserve Account Amount" means, with respect to any
Transfer Date on or after the Reserve Account Funding Date, an amount equal
to (a) 0.50% of the outstanding principal balance of the Class A
Certificates or (b) any other amount designated by Transferor; provided
that if such designation is less than the amount determined pursuant to
clause (a), Transferor shall (i) provide Servicer, the Collateral Interest
Holder and Trustee with evidence that the Rating Agency Condition has been
satisfied and (ii) deliver to 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 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 1997-1.
"Reserve Account" is defined in subsection 4.18(a).
"Reserve Account Funding Date" means the Transfer Date that occurs
not later than the earliest of: (a) the Transfer Date with respect to the
Monthly Period that commences three months prior to the commencement of the
Controlled Accumulation Period; (b) the first Transfer Date for which the
Portfolio Adjusted
16
Yield is less than 2.00%, but in such event the Reserve Account Funding
Date shall not be required to occur earlier than the Transfer Date with
respect to the Monthly Period that commences 12 months prior to the
commencement of the Controlled Accumulation Period; (c) the first Transfer
Date for which the Portfolio Adjusted Yield is less than 3.00%, but in such
event the Reserve Account Funding Date shall not be required to occur
earlier than the Transfer Date with respect to the Monthly Period that
commences 6 months prior to the commencement of the Controlled Accumulation
Period; and (d) the first Transfer Date for which the Portfolio Adjusted
Yield is less than 4.00%, but in such event the Reserve Account Funding
Date shall not be required to occur earlier than the Transfer Date with
respect to the Monthly Period that commences 4 months prior to the
commencement of the Controlled Accumulation Period.
"Reserve Account Surplus" means, as of any Transfer Date following
the Reserve Account Funding Date, the amount, if any, by which the amount
on deposit in the Reserve Account exceeds the Required Reserve Account
Amount.
"Reserve Draw Amount" is defined in subsection 4.18(c).
"Reset Date" means any of the following occurring after the
Conversion Date: (a) an Addition Date; (b) a Removal Date on which, if any
Series has been paid in full, Principal Receivables in an aggregate amount
approximately equal to the initial investor interest of such Series are
removed from the Trust; and (c) a date on which there is an increase in the
Investor Interest under any Variable Interest issued by the Trust.
"Revolving Period" means the period from and including August 1,
1997 to, but not including, the earlier of (a) the day the Controlled
Accumulation Period commences and (b) the Pay Out Commencement Date.
"Series Investment Earnings" means, for any Monthly Period, the
sum of (a) the Floating Investor Percentage of the aggregate amount of
investment earnings (net of losses and investment expenses) accrued during
the period after the Transfer Date falling in that Monthly Period (or, in
the case of the first Monthly Period, from the Closing Date) to and
including the next following Transfer Date in connection with the
investment of funds on deposit in the Collection Account, the Distribution
Account, the Excess Funding Account and the Finance Charge Account plus (b)
the aggregate amount of investment earnings (net of losses and investment
expenses) accrued during the same period in connection with the investment
of funds on deposit in the Principal Account.
"Series Investor Charge-Offs" means, for any Transfer Date, the
sum of the Class A Investor Charge-Offs, Class B Investor Charge-Offs and
the Collateral Investor Charge-Offs for such Transfer Date.
17
"Series Monthly Fees" means, for any Transfer Date, the sum of the
Investor Servicing Fee and Servicer Interchange for such Transfer Date.
"Series Monthly Interest" means, for any Transfer Date, the sum of
the Class A Monthly Interest, Class A Deficiency Amount, Class A Additional
Interest, Class B Monthly Interest, Class B Deficiency Amount, Class B
Additional Interest, Collateral Monthly Interest, Collateral Deficiency
Amount and Collateral Additional Interest for such Transfer Date.
"Series Net Default Amount" means, for any Transfer Date, the
product of the Net Default Amount and the Floating Investor Percentage, in
each case, for the related Monthly Period.
"Series Principal Shortfall" means, with respect to any Transfer
Date, the excess, if any, of (a) the sum of (i) with respect to any
Transfer Date relating to the Controlled Accumulation Period, the sum of
(A) the Controlled Deposit Amount for such Transfer Date, (B) on the
Transfer Date after the Transfer Date on which the Class A Adjusted
Investor Interest is reduced to zero, the Class B Invested Amount and (C)
the excess, if any, of the Collateral Interest for such Transfer Date over
the Required Collateral Interest for such Transfer Date, (ii) with respect
to any Transfer Date during the Rapid Amortization Period, the Adjusted
Investor Interest and (iii) with respect to any Transfer Date relating to
the Revolving Period, the amount specified in clause (a)(i)(C) above over
(b) the Investor Principal Collections minus the Reallocated Principal
Collections (other than any portions thereof that are applied pursuant to
(x) subsection 4.11(a)(iii) and (y) subsection 4.13(c) (to the extent such
portions pursuant to subsection 4.13(c) are available to pay the Class B
Net Default Amount)) for such Transfer Date.
"Series Servicing Fee Percentage" means 2.0%.
"Series 1997-1" means the Series of the First NBC Credit Card
Master Trust represented by the Investor Certificates.
"Series 1997-1 Certificates" means the Class A Certificates and
the Class B Certificates.
"Series 1997-1 Holder" means the holder of record of a Series 1997-1
Certificate.
"Series 1997-1 Pay Out Event" is defined in Section 9 of this
Series Supplement.
18
"Series 1997-1 Termination Date" means the earliest to occur of
(a) the Distribution Date on which the Investor Interest is paid in full,
(b) the September, 2004 Distribution Date and (c) the Trust Termination
Date.
"Servicer Interchange" is defined in subsection 3(a) of this Series
Supplement.
"Shared Principal Collections" means, as the context requires,
either (a) the amount allocated to the Investor Certificates which may be
applied to the Series Principal Shortfall with respect to other outstanding
Principal Sharing Series or (b) the amounts allocated to the investor
certificates of other Principal Sharing Series which the applicable
Supplements for such Series specify are to be treated as "Shared Principal
Collections" and which may be applied to cover the Series Principal
Shortfall with respect to the Investor Certificates.
"Specified Deposit" is defined in subsection 4.7(d).
"Target Amount" is defined in subsection 4.7(d).
SECTION 8. Servicing Compensation and Assignment of Interchange
and Other Account Revenues. (a) The share of the Servicing Fee allocable to
Series 1997-1 with respect to any Transfer Date (the "Investor Servicing
Fee") shall, for purposes of calculating the Base Rate for the related
Monthly Period, be equal to one-twelfth of the product of (i) the Series
Servicing Fee Percentage and (ii) the Adjusted Investor Interest as of the
last day of the Monthly Period preceding such Transfer Date; provided that
with respect to the first Transfer Date, the Investor Servicing Fee shall
equal $383,333.33. The Investor Servicing Fee shall be paid only from the
sources and to the extent provided in this Section 3. On each Transfer Date
for which Transferor or Trustee is Servicer, a portion of Interchange with
respect to the related Monthly Period that is on deposit in the Finance
Charge Account shall be withdrawn from the Finance Charge Account and paid
to Servicer in payment of a portion of the Investor Servicing Fee with
respect to such Monthly Period ("Servicer Interchange"); provided the
amount so withdrawn and paid to Servicer (and constituting 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) 0.75%. Should Servicer Interchange on deposit in
the Finance Charge Account on any Transfer Date with respect to the related
Monthly Period be less than one-twelfth of 0.75% of the Adjusted Investor
Interest as of the last day of such Monthly Period, the Investor Servicing
Fee with respect to such Monthly Period will not be paid to the extent of
such insufficiency of Servicer Interchange on deposit in the Finance Charge
Account. The share of the Investor Servicing Fee allocable to the Class A
Investor Interest (the "Class A Servicing Fee"), the Class B Investor
Interest (the "Class B Servicing Fee") and the Collateral Interest (the
"Collateral Interest Servicing Fee") with respect to any Transfer Date
19
shall equal one-twelfth of the product of (i) the Class A Floating
Allocation, the Class B Floating Allocation or the Collateral Floating
Allocation, respectively, (ii) the Net Servicing Fee Rate and (iii) the
Adjusted Investor Interest as of the last day of the Monthly Period
preceding such Transfer Date; provided that with respect to the first
Transfer Date, the Class A Servicing Fee, the Class B Servicing Fee and the
Collateral Interest Servicing Fee shall equal $207,239.58, $16,770.83 and
$15,572.92, respectively. Except as specifically provided in this
subsection 3(a), the Servicing Fee shall be paid by the cash flows from the
Trust allocated to the Transferor or the certificateholders of other Series
(as provided in the related Supplements) and in no event shall the Trust,
Trustee or the Investor Holders be liable therefor. The Class A Servicing
Fee shall be payable to Servicer solely to the extent amounts are available
for distribution in respect thereof pursuant to subsections 4.11(a)(ii) and
4.13(a). The Class B Servicing Fee shall be payable solely to the extent
amounts are available for distribution in respect thereof pursuant to
subsections 4.11(b)(ii) and 4.13(c). The Collateral Interest Servicing Fee
shall be payable solely to the extent amounts are available for
distribution in respect thereof pursuant to subsection 4.13(f) or, if
applicable. subsection 4.11(c)(i).
(b) On or before each Transfer Date, Transferor shall notify
Servicer of the amount of Interchange and Other Account Revenues to be
included as Finance Charge Collections with respect to the preceding
Monthly Period as determined pursuant to this subsection 3(b). The amount
of Interchange to be so included shall be equal to the product of (i) the
total amount of Interchange paid or payable to Transferor with respect to
such Monthly Period and (ii) a fraction, the numerator of which is the
aggregate amount of cardholder charges for goods and services in the
Accounts with respect to such Monthly Period, and the denominator of which
is the aggregate amount of cardholder charges for goods and services in all
MasterCard and VISA consumer revolving credit card accounts owned by
Transferor with respect to such Monthly Period. The amount of Other Account
Revenues to be so included shall be equal to the portion of the revenues in
each applicable category for the entire Bank Portfolio that is allocable to
the Accounts, as determined by Transferor using any reasonable method. On
each Transfer Date, Transferor shall pay to Servicer, and Servicer shall
deposit into the Finance Charge Account, in immediately available funds,
the amount of Interchange and Other Account Revenues to be so included as
Finance Charge Collections with respect to the preceding Monthly Period.
Transferor hereby assigns, sets over, conveys, pledges and grants a
security interest and lien to Trustee, for the benefit of the Investor
Holders, in Interchange and Other Account Revenues and the proceeds of
both, as set forth in this subsection 3(b). In connection with the
foregoing grant of a security interest, this Series Supplement shall
constitute a security agreement under applicable law. To the extent that a
Supplement for a related Series, other than Series 1997-1, assigns, sets
over, conveys, pledges or grants a security interest in Interchange and
Other Account Revenues allocable to the Trust, all investor certificates of
any such Series (except as otherwise specified in any such Supplement) and
the Investor Certificates shall rank pari passu and be
20
equally and ratably entitled as provided herein to the benefits of such
Interchange and Other Account Revenues without preference or priority on
account of the actual time or times of authentication and delivery, all in
accordance with the terms and provisions of this Series Supplement and
other related Supplements.
SECTION 9. Reassignment and Transfer Terms. The Investor
Certificates shall be subject to retransfer to Transferor at its option, in
accordance with subsection 12.2(a), on any Distribution Date on or after
the Distribution Date on which the Investor Interest is reduced to an
amount less than or equal to 5% of the Initial Investor Interest. The
deposit required in connection with any such repurchase shall include the
amount, if any, on deposit in the Principal Funding Account and will be
equal to the sum of (a) the Investor Interest and (b) accrued and unpaid
interest on the Investor Certificates through the day preceding the
Distribution Date on which the repurchase occurs.
SECTION 10. Delivery and Payment for the Investor Certificates.
Transferor shall execute and deliver the Series 1997-1 Certificates to
Trustee for authentication in accordance with Section 6.1. The Trustee
shall deliver such Certificates when authenticated in accordance with
Section 6.2.
SECTION 11. Depository; Form of Delivery of Investor Certificates;
Legends; Transfer Restrictions and Procedures. (a) The Class A Certificates
and the Class B Certificates shall be delivered as Book-Entry Certificates
as provided in Sections 6.1 and 6.10.
(b) The Depository for Series 1997-1 shall be The Depository Trust
Company, and the Class A Certificates shall be initially registered in the
name of Cede & Co., its nominee.
SECTION 12. Article IV of Agreement. Sections 4.1 through 4.5
shall read in their entirety as provided in the Agreement. Article IV
(except for Sections 4.1 through 4.5 thereof) shall be read in its entirety
as follows and shall be applicable only to the Investor Certificates:
ARTICLE IV RIGHTS OF HOLDERS AND ALLOCATION AND
APPLICATION OF COLLECTIONS
SECTION 4.6 Rights of Holders and the Collateral Interest Holder.
The Investor Certificates shall represent undivided interests in the Trust,
consisting of the right to receive, to the extent necessary to make the
required payments with respect to such Investor Certificates at the times
and in the amounts specified in this Agreement (and subject to reallocation
as provided herein), (a) the applicable Investor Percentage of Collections
received with respect to the Receivables and (b) funds on deposit in the
Collection Account, the Finance Charge Account, the
21
Principal Account, the Principal Funding Account, the Reserve Account and
the Distribution Account. The Collateral Interest shall be subordinate to
the Class A Certificates and the Class B Certificates to the extent
described herein. The Class B Certificates shall be subordinate to the
Class A Certificates to the extent described herein. Transferor shall not
have any interest in the Collection Account, the Finance Charge Account,
the Principal Account, the Principal Funding Account, the Reserve Account
or the Distribution Account, except as specifically provided in this
Article IV.
SECTION 4.7 Allocations. (a) Allocations During the Revolving
Period. During the Revolving Period, Servicer shall allocate Collections to
the Investor Holders as follows:
(i) allocate to the Investor Holders an amount equal to
the product of (A) the Investor Percentage on the Date of
Processing of such Collections and (B) the aggregate amount of
Collections processed in respect of Finance Charge Receivables on
such Date of Processing;
(ii) allocate to the Investor Holders an amount equal to
the product of (A) the Collateral Allocation on the Date of
Processing of such Collections, (B) the Investor Percentage on the
Date of Processing of such Collections and (C) the aggregate
amount of Collections processed in respect of Principal
Receivables on such Date of Processing; and
(iii) allocate to the Investor Holders an amount equal to
the product of (A) the Class B Investor Allocation on the Date of
Processing of such Collections, (B) the Investor Percentage on the
Date of Processing of such Collections and (C) the aggregate
amount of Collections processed in respect of Principal
Receivables on such Date of Processing.
In addition, an amount equal to the product of (1) the Class A
Investor Allocation on the Date of Processing of such Collections, (2) the
Investor Percentage on the Date of Processing of such Collections and (3)
the aggregate amount of Collections processed in respect of Principal
Receivables on each Date of Processing shall be treated as Shared Principal
Collections.
(b) Allocations During the Controlled Amortization Period. During
the Controlled Amortization Period, Servicer shall allocate Collections to
the Investor Holders as follows:
(i) allocate to the Investor Holders an amount equal to
the product of (A) the Investor Percentage on the Date of
Processing of such Collections and (B) the aggregate amount of
Collections processed in respect of Finance Charge Receivables on
such Date of Processing;
22
(ii) allocate to the Investor Holders an amount equal to
the product of (A) the Collateral Allocation on the Date of
Processing of such Collections, (B) the Investor Percentage on the
Date of Processing of such Collections and (C) the aggregate
amount of Collections processed in respect of Principal
Receivables on such Date of Processing;
(iii) allocate to the Investor Holders an amount equal to
the product of (A) the Class B Investor Allocation on the Date of
Processing of such Collections, (B) the Investor Percentage on the
Date of Processing of such Collections and (C) the aggregate
amount of Collections processed in respect of Principal
Receivables on such Date of Processing; and
(iv) (A) allocate to the Investor Holders an amount equal
to the product of (1) the Class A Investor Allocation on the Date
of Processing of such Collections, (2) the Investor Percentage on
the Date of Processing of such Collections and (3) the aggregate
amount of Collections processed in respect of Principal
Receivables on such Date of Processing; provided that the amount
allocated pursuant to this subsection 4.7(b)(iv)(A) during any
Monthly Period shall not exceed the Controlled Deposit Amount for
the related Transfer Date (after taking into account any payments
to be made on the immediately preceding Distribution Date) and (B)
treat as Shared Principal Collections any amount not allocated as
a result of the proviso to clause (A).
(c) Allocations During the Rapid Amortization Period. During the
Rapid Amortization Period, Servicer shall allocate Collections to the Investor
Holders as follows:
(i) allocate to the Investor Holders an amount equal to
the product of (A) the Investor Percentage on the Date of
Processing of such Collections and (B) the aggregate amount of
Collections processed in respect of Finance Charge Receivables on
such Date of Processing;
(ii) allocate to the Investor Holders an amount equal to
the product of (A) the Collateral Allocation on the Date of
Processing of such Collections and (B) the Investor Percentage on
the Date of Processing of such Collections and (C) the aggregate
amount of Collections processed in respect of Principal
Receivables on such Date of Processing;
(iii) allocate to the Investor Holders an amount equal to
the product of (A) the Class B Investor Allocation on the Date of
Processing of such Collections, (B) the Investor Percentage on the
Date of Processing of such Collections and (C) the aggregate
amount of Collections processed in respect of Principal
Receivables on such Date of Processing; and
23
(iv) (A) allocate to the Investor Holders an amount equal
to the product of (1) the Class A Investor Allocation on the Date
of Processing of such Collections and (2) the Investor Percentage
on the Date of Processing of such Collections and (3) the
aggregate amount of Collections processed in respect of Principal
Receivables on such Date of Processing; provided that the
aggregate amount allocated pursuant to this subsection
4.7(c)(iv)(A) during any Monthly Period shall not exceed the
Adjusted Investor Interest as of the close of business on the last
day of the prior Monthly Period (after taking into account any
payments to be made on the Distribution Date relating to such
prior Monthly Period and deposits and any adjustments to be made
to the Invested Amount to be made on the Transfer Date relating to
such Monthly Period) and (B) treat as Shared Principal Collections
any amount not allocated as a result of the proviso to clause (A).
(d) Applications of Allocated Funds. On or prior to the Closing
Date, Transferor shall transfer to Trustee for deposit into the Finance
Charge Account, to be held for the benefit of the Investor Holders,
immediately available funds in the amount of $1,441,062.50 (the "Specified
Deposit"). The Specified Deposit shall not be released from the Finance
Charge Account except (1) for deposit into the Distribution Account if on
any Transfer Date Transferor fails to make the deposit required by the next
following grammatical paragraph (in which case such funds shall be used to
pay the Class A Monthly Interest and Class B Monthly Interest on the
related Distribution Date), or (2) at such time as Transferor shall request
(in which case such funds shall be returned to Transferor), provided that
at the time of any withdrawal pursuant to this clause (2), Transferor and
Servicer must be in compliance with the remainder of this subsection 4.7(d)
as it applies when the Specified Deposit is not being maintained in the
Finance Charge Account.
During any Monthly Period during the Revolving Period when
Transferor is maintaining the Specified Deposit in the Finance Charge
Account and during any other period when Servicer is permitted by Section
4.3 to make a single monthly deposit to the Collection Account, amounts
allocated to the Investor Holders pursuant to Sections 4.7(a), (b) and (c)
with respect to any Monthly Period need not be deposited into the
Collection Account or any Series Account prior to the related Transfer
Date, and, when so deposited, (x) may be deposited net of any amounts
required to be distributed to Transferor and, if First NBC is Servicer,
Servicer and (y) shall be deposited into the Finance Charge Account (in the
case of Collections of Finance Charge Receivables) and the Principal
Account (in the case of Collections of Principal Receivables (not including
any Shared Principal Collections allocated to Series 1997-1 pursuant to
Section 4.16)), subject in either case to the proviso to the next sentence.
At any other time, amounts so allocated on each Date of Processing shall be
deposited on that Date of Processing into the Finance Charge Account (in
the case of Collections of Finance Charge Receivables) and the Principal
24
Account (in the case of Collections of Principal Receivables (not including
any Shared Principal Collections allocated to Series 1996-A pursuant to
Section 4.16)), provided that:
(i) with respect to any day falling in each Monthly
Period falling in the Revolving Period or in that portion of each
Monthly Period in the Controlled Accumulation Period falling on or
after the day on which Collections of Principal Receivables equal
to the related Controlled Deposit Amount have been allocated
pursuant to subsection 4.7(b)(iv) and deposited pursuant to this
subsection 4.7(d)), Collections of Finance Charge Receivables
shall be deposited into the Finance Charge Account only until such
time as the aggregate amount so deposited, plus amounts similarly
deposited pursuant to the Supplement for each other outstanding
Series in Group I, equals the sum of (x) the sum (the "Target
Amount") of (A) the amounts of Class A Monthly Interest, Class B
Monthly Interest, and any Class A Deficiency Amount, Class A
Additional Interest, Class B Deficiency Amount and Class B
Additional Interest for the related Distribution Date, (B) if
First NBC is not Servicer, the Class A Servicing Fee, Class B
Servicing Fee and Collateral Interest Servicing Fee for the
related Distribution Date, (C) any Collateral Monthly Interest due
on the related Transfer Date, plus (y) the target amounts for each
other Series in Group I, calculated as provided in the related
Supplements, plus (z) any Finance Charge Shortfalls (as defined in
the related Supplement) for any outstanding Excess Allocation
Series not included in Group I; and
(ii) with respect to each Monthly Period falling in the
Revolving Period, (A) until such time as (x) the sum of the
aggregate Collections of Finance Charge Receivables deposited into
the Finance Charge Account pursuant to clause (i) above with
respect to that Monthly Period and the aggregate Collections of
Principal Receivables deposited into the Principal Account
pursuant to this clause (ii)(A) with respect to that Monthly
Period equals (y) the sum of Class A Monthly Interest, Class B
Monthly Interest, and any Class A Deficiency Amount, Class A
Additional Interest, Class B Deficiency Amount and Class B
Additional Interest for the related Distribution Date, Collections
of Principal Receivables allocated to the Investor Holders
pursuant to Section 4.7(a)(ii) and (iii) shall be deposited into
the Principal Account and be subject to use as Reallocated
Principal Collections on the related Transfer Date and (B)
thereafter, Collections of Principal Receivables allocated to the
Investor Holders pursuant to Section 4.7(a)(ii) and (iii) shall
(after an amount equal to any Collateral Monthly Principal for
that Monthly Period has been deposited into the Principal Account)
be paid to Transferor (or, if the Transferor Interest is less than
the Minimum Transferor Interest, deposited into the Excess Funding
Account), but Transferor shall make an amount equal to the
Reallocated Principal
25
Collections for the related Transfer Date available on that
Transfer Date for application in accordance with Section 4.15.
Funds deposited in the Principal Account pursuant to clause (A)
above may be withdrawn at any time to the extent that (1) the sum
of the amounts specified in subclause (x) of clause (A) (less the
aggregate amount of such withdrawals during the applicable Monthly
Period) would not be less than the sum of the amounts specified in
subclause (y) of clause (A) and (2) such funds are not required to
be retained in the Principal Account puruant to clause (B) above.
With respect to any Monthly Period when deposits of Collections of Finance
Charge Receivables into the Finance Charge Account are limited in
accordance with clause (i) of the preceding proviso, notwithstanding such
limitation: (1) "Excess Spread" for the related Transfer Date shall be
calculated as if the full amount of Finance Charge Collections allocated to
the Investor Certificates during that Monthly Period had been deposited in
the Finance Charge Account and applied on such Transfer Date in accordance
with Sections 4.11(a), 4.11(b) and 4.11(c); (2) Collections of Finance
Charge Receivables released to Transferor pursuant to such clause (i) shall
be deemed, for purposes of all calculations under this Supplement and the
Loan Agreement, to have been distributed on account of or otherwise applied
to the items specified in Sections 4.11(a), 4.11(b), 4.11(c) and 4.13 to
which such amounts would have been applied (and in the priority in which
they would have been applied) had such amounts been available in the
Finance Charge Account on such Transfer Date. To avoid doubt, the
calculations referred to in the preceding clause (2) include the
calculations required by clause (c) of the definition of Class A Investor
Interest, clause (f) of the definition of Class B Investor Interest, clause
(f) of the definition of Collateral Interest and Section 4.10.
Notwithstanding clause (i) above, if on any Business Day Servicer
determines that the Target Amount for a Monthly Period exceeds the Target
Amount for that Monthly Period as previously calculated by Servicer, then
(x) Servicer shall (on the same Business Day) inform Transferor of such
determination, and (y) within two Business Days of receiving such notice
Transferor shall deposit into the Finance Charge Account funds in an amount
equal to the amount of Collections of Finance Charge Receivables allocated
to the Investor Certificates for that Monthly Period but not deposited into
the Finance Charge Account due to the operation of clause (i) (but not in
excess of the amount required so that the aggregate amount deposited for
the subject Monthly Period equals the Target Amount). In addition, if on
any Transfer Date the Transferor Interest will be less than the Minimum
Transferor Interest after giving effect to all transfers and deposits on
that Transfer Date, Transferor shall, on that Transfer Date, deposit into
the Principal Account funds in an amount equal to the amounts of Class A
Available Funds and Excess Spread that are required to be treated as
Investor Principal Collections pursuant to Sections 4.11(a)(iii) and 4.13
but are not available from funds in the Finance Charge Account as a result
of the operation of clause (i).
26
(e) Allocation Adjustments. Unless the Servicer is depositing
Collections monthly pursuant to Section 4.3, on each Collection
Recomputation Date to and including the Collection Recomputation Date after
the Collection Recomputation Date referred to in clause (ii) below, the
Servicer shall recompute the allocations to the Series 1997-1 Certificates
previously made pursuant to subsections 4.7(a), (b) and (c)
(i) in the case of a Collection Recomputation Date which
occurs prior to the Conversion Date, during each Billing Cycle
which ended during the preceding Monthly Period and
(ii) in the case of the Collection Recomputation Date
which occurs in the Monthly Period in which the Conversion Date
occurs, during each Billing Cycle which ended during the preceding
Monthly Period and on any other Date of Processing during such
Monthly Period prior to the Conversion Date
(such allocations with respect to any such period, the "Estimated
Allocations") based on the Collected Finance Charge Receivables and the
Collected Principal Receivables (such allocations with respect to any such
period, the "Actual Allocations"), and based on the Actual Allocations of
Finance Charge Receivables and Principal Receivables not later than 11:00
a.m. New York City time on the Transfer Date following such Collection
Recomputation Date:
(1) make any necessary deposits or withdrawals with
respect to the Finance Charge Account and the Principal Account
such that the amount on deposit in each such account with respect
to such Monthly Period is equal to the amount that would have been
on deposit if the Actual Allocation of Finance Charge Receivables
and the Actual Allocation of Principal Receivables had been made
on each day during such Monthly Period;
(2) pay to the Transferor any underpayment with respect
to allocations of Principal Receivables or Finance Charge
Receivables with respect to such Monthly Period;
(3) notify the Transferor of the amount of any
overpayment to such Holder which such recomputation discloses, and
the Transferor shall deposit into the Finance Charge Account, the
Principal Account and the Excess Funding Account, as provided in
the notice from the Servicer, any portion of any such overpayment
which resulted in a shortfall in the amounts deposited into each
such account; and
(4) for the purposes of administrative convenience,
payments to be made to the Transferor and deposits to be made by
the Transferor pursuant to this subsection 4.7(e) may be netted
against each other.
27
It is the intention of the parties that this subsection 4.7(e) be
construed so that the reallocation provided for herein shall result in the
Series 1997-1 Certificateholders and the Collateral Interest Holder on the
one hand and the Transferor on the other hand being in the same position
they would have been in if the Estimated Allocations had been based upon
actual Collections of Principal Receivables.
(f) Certain Investment Earnings. On each Transfer Date, Servicer
shall allocate to the Investor Holders an amount equal to the product of
the Investor Percentage for the related Monthly Period and the aggregate
amount of interest and other investment earnings (net of losses and
investment expenses) accrued on or prior to the related Transfer Date in
connection with the investment of funds on deposit in the Collection
Account, the Distribution Account, the Excess Funding Account and the
Finance Charge Account and apply such amount as provided in subsection
4.7(d) as if such amount had been allocated to the Investor Holders as
Collections of Finance Charge Receivables during the related Monthly
Period.
(g) Errors. On any date, Servicer may withdraw from the Collection
Account or any Series Account any amounts inadvertently deposited in such
account that should have not been so deposited.
SECTION 4.8 Determination of Monthly Interest. (a) The amount of
monthly interest distributable to the Class A Certificates shall equal the
product of (i) (A) one-twelfth, times (B) the Class A Certificate Rate
times (ii) the outstanding principal balance of the Class A Certificates
determined as of the Record Date preceding the related Transfer Date,
provided that on the first Distribution Date interest will be distributable
to the Class A Certificates in the amount of $1,684,587.50 (the "Class A
Monthly Interest"); provided further that in addition to Class A Monthly
Interest an amount equal to the amount of any unpaid Class A Deficiency
Amounts, as defined below plus an amount equal to the product of (A) (1)
one-twelfth times (2) the sum of the Class A Certificate Rate plus 2% per
annum, and (B) any Class A Deficiency Amount from the prior Transfer Date,
as defined below (or the portion thereof that has not theretofore been paid
to Class A Holders) (the "Class A Additional Interest"), shall also be
distributable to the Class A Certificates, and on such Transfer Date
Trustee shall deposit such funds, to the extent available, into the
Distribution Account. The "Class A Deficiency Amount" for any Transfer Date
shall equal the excess, if any, of the aggregate amount accrued pursuant to
this subsection 4.8(a) as of the prior Interest Period over the amount
actually transferred to the Distribution Account for payment of such
amount. Notwithstanding anything to the contrary herein, Class A Additional
Interest shall be payable or distributed to the Class A Certificateholders
only to the extent permitted by applicable law.
28
(b) The amount of monthly interest distributable to the Class B
Certificates shall equal the product of (i) (A) one-twelfth, times (B) the
Class B Certificate Rate times (ii) the outstanding principal balance of
the Class B Certificates determined as of the Record Date preceding the
related Transfer Date (the "Class B Monthly Interest"); provided that on
the first Distribution Date interest will be distributable to the Class B
Certificates in an amount equal to $140,758.33; provided, further that in
addition to the Class B Monthly Interest, an amount equal to the amount of
any unpaid Class B Deficiency Amounts, as defined below, plus an amount
equal to the product of (A) (1) one-twelfth times (2) the sum of the Class
B Certificate Rate plus 2% per annum, and (B) any Class B Deficiency Amount
from the prior Transfer Date, as defined below (or the portion thereof
which has not theretofore been paid to Class B Holders) (the "Class B
Additional Interest") shall also be distributable to the Class B
Certificates, and on such Transfer Date Trustee shall deposit such funds,
to the extent available, into the Distribution Account. The "Class B
Deficiency Amount" for any Transfer Date shall equal the excess, if any, of
the aggregate amount accrued pursuant to this subsection 4.8(b) as of the
prior Interest Period over the amount actually transferred to the
Distribution Account for payment of such amount. Notwithstanding anything
to the contrary herein, Class B Additional Interest shall be payable or
distributed to the Class B Certificateholders only to the extent permitted
by applicable law.
(c) The amount of monthly interest distributable to the Collateral
Interest shall equal the product of (i) (A) a fraction, the numerator of
which is the actual number of days in the related Interest Period and the
denominator of which is 360, times (B) the Collateral Rate in effect with
respect to the related Interest Period, times (ii) the Collateral Interest
determined as of the Record Date preceding such Transfer Date or, in the
case of the initial Interest Period, as of the Closing Date (the
"Collateral Monthly Interest").
SECTION 4.9 Determination of Monthly Principal. (a) The amount of
monthly principal distributable from the Principal Account with respect to
the Class A Certificates on each Transfer Date ("Class A Monthly
Principal"), beginning with the Transfer Date in the month following the
month in which the Controlled Accumulation Period begins or, if earlier,
the Transfer Date following the commencement of the Rapid Amortization
Period, shall be equal to the least of (i) the Available Investor Principal
Collections on deposit in the Principal Account with respect to such
Transfer Date, (ii) for each Transfer Date with respect to the Controlled
Accumulation Period prior to the Class A Scheduled Payment Date, the
Controlled Deposit Amount for such Transfer Date and (iii) the Class A
Adjusted Investor Interest on such Transfer Date prior to any deposit into
the Principal Funding Account to be made on such day.
(b) The amount of monthly principal distributable from the
Principal Account with respect to the Class B Certificates on each Transfer
Date (the "Class
29
B Monthly Principal") for the Controlled Accumulation Period, beginning
with the Transfer Date after the one on which the Class A Adjusted Investor
Interest is reduced to zero (and for the Rapid Amortization Period
beginning with the Transfer Date on which the Class A Investor Interest is
reduced to zero, after giving effect to payments to be made on the related
Distribution Date), shall be an amount equal to the lesser of (i) the
excess, if any, of (A) the Available Investor Principal Collections on such
Transfer Date over (B) the Class A Monthly Principal on such Transfer Date,
if any, and (ii) the Class B Investor Interest (after taking into account
any adjustments to be made on such Transfer Date pursuant to Sections 4.12
and 4.15) on such Transfer Date.
(c) The amount of monthly principal (the "Collateral Monthly
Principal") distributable from the Principal Account with respect to the
Collateral Interest on each Transfer Date shall be (i) if any reduction of
the Required Collateral Interest has occurred pursuant to clause (z) of the
proviso in the definition thereof during the Revolving Period, an amount
equal to the lesser of (A) the excess, if any, of the Collateral Interest
(after taking into account any adjustments to be made on such Transfer Date
pursuant to Sections 4.12 and 4.15) over the Required Collateral Interest
on such Transfer Date, and (B) the Available Investor Principal Collections
on such Transfer Date or (ii) at all times during the Controlled
Accumulation Period or Rapid Amortization Period, an amount equal to the
lesser of (A) the excess, if any, of the Collateral Interest (after taking
into account any adjustments to be made on such Transfer Date pursuant to
Sections 4.12 and 4.15) over the Required Collateral Interest on such
Transfer Date and (B) the excess, if any, of (1) the Available Investor
Principal Collections on such Transfer Date over (2) the sum of the Class A
Monthly Principal and the Class B Monthly Principal for such Transfer Date.
SECTION 4.10 Coverage of Required Amount. (a) On or before each
Transfer Date, Servicer shall determine the amount (the "Class A Required
Amount"), if any, by which the sum of (i) the Class A Monthly Interest for
such Transfer Date, plus (ii) the Class A Deficiency Amount, if any, for
such Transfer Date, plus (iii) the Class A Additional Interest, if any, for
such Transfer Date, plus (iv) the Class A Servicing Fee for the prior
Monthly Period, plus (v) the Class A Servicing Fee, if any, due but not
paid on any prior Transfer Date, plus (vi) the Class A Net Default Amount,
if any, for such Transfer Date, exceeds the Class A Available Funds for the
related Monthly Period.
(b) On or before each Transfer Date, Servicer shall also determine
the amount (the "Class B Required Amount"), if any, equal to the sum of (i)
the amount, if any, by which the sum of (A) the Class B Monthly Interest
for such Transfer Date, plus (B) the Class B Deficiency Amount, if any, for
such Transfer Date, plus (C) the Class B Additional Interest, if any, for
such Transfer Date, plus (D) the Class B Servicing Fee for the prior
Monthly Period, plus (E) the Class B Servicing Fee, if any, due but not
paid on any prior Transfer Date, exceeds the Class B Available
30
Funds for the related Monthly Period, plus (ii) the Class B Net Default
Amount, if any, for the prior Monthly Period.
(c) If the sum of the Class A Required Amount and the Class B
Required Amount for such Transfer Date is greater than zero, Servicer shall
give written notice to Trustee of such positive Class A Required Amount
and/or Class B Required Amount on or before such Transfer Date. In
addition:
(i) If the Class A Required Amount for such Transfer Date
is greater than zero, all or a portion of the Excess Spread with
respect to such Transfer Date in an amount equal to the Class A
Required Amount, to the extent available, for such Transfer Date
shall be distributed from the Finance Charge Account on such
Transfer Date pursuant to subsection 4.13(a). If the Class A
Required Amount for such Transfer Date exceeds the amount of
Excess Spread with respect to such Transfer Date, the Collections
of Principal Receivables allocable to the Collateral Interest and
the Class B Certificates with respect to the prior Monthly Period
shall be applied as specified in Section 4.15.
(ii) If the Class B Required Amount for such Transfer
Date is greater than zero, all or a portion of the Excess Spread
with respect to such Transfer Date in an amount equal to the Class
B Required Amount, to the extent available, for such Transfer Date
shall be distributed from the Finance Charge Account on such
Transfer Date pursuant to subsection 4.13(c). If the Class B
Required Amount for such Transfer Date exceeds the amount of
Excess Spread available to fund the Class B Required Amount
pursuant to subsection 4.13(c), the Collections of Principal
Receivables allocable to the Collateral Interest (after
application to the Class A Required Amount) shall be applied as
specified in Section 4.15; provided that the sum of any payments
pursuant to this subsection 4.10(c) shall not exceed the sum of
the Class A Required Amount and the Class B Required Amount.
SECTION 4.11 Monthly Payments. On or before each Transfer Date,
Servicer shall instruct Trustee in writing (which writing shall be
substantially in the form of Exhibit B to the Series Supplement) to
withdraw, and Trustee, acting in accordance with such instructions, shall
withdraw on such Transfer Date or the related Distribution Date, as
applicable, to the extent of available funds, the amounts required to be
withdrawn from the Finance Charge Account, the Principal Account, the
Principal Funding Account and the Distribution Account as follows:
(a) An amount equal to the Class A Available Funds for the related
Monthly Period will be distributed on each Transfer Date, to the extent
available, in the following priority:
31
(i) an amount equal to Class A Monthly Interest plus any
Class A Deficiency Amount plus any Class A Additional Interest (in
each case for such Transfer Date) shall be deposited by Servicer
or Trustee into the Distribution Account;
(ii) an amount equal to the Class A Servicing Fee for
such Transfer Date plus any Class A Servicing Fee due but not paid
to Servicer on any prior Transfer Date shall be distributed to
Servicer;
(iii) an amount equal to the Class A Net Default Amount,
if any, for the preceding Monthly Period shall be treated as a
portion of Investor Principal Collections and deposited into the
Principal Account on such Transfer Date; and
(iv) the balance, if any, shall constitute Excess Spread
and shall be allocated and distributed as set forth in Section
4.13.
(b) An amount equal to the Class B Available Funds for the related
Monthly Period will be distributed on each Transfer Date, to the extent
available, in the following priority:
(i) an amount equal to the Class B Monthly Interest plus
any Class B Deficiency Amount plus any Class B Additional Interest
(in each case for such Transfer Date) shall be deposited by
Servicer or Trustee into the Distribution Account;
(ii) an amount equal to the Class B Servicing Fee for
such Transfer Date plus any Class B Servicing Fee due but not paid
to Servicer on any prior Transfer Date for such Transfer Date
shall be distributed to Servicer; and
(iii) the balance, if any, shall constitute Excess Spread
and shall be allocated and distributed as set forth in Section
4.13.
(c) An amount equal to the Collateral Available Funds for the
related Monthly Period will be distributed on each Transfer Date, to the
extent available, in the following priority:
(i) if Transferor or Trustee is no longer Servicer, an
amount equal to the Collateral Interest Servicing Fee for such
Transfer Date plus any Collateral Interest Servicing Fee due but
not paid to Servicer on any prior Transfer Date shall be
distributed to Servicer; and
(ii) the balance, if any, shall constitute Excess Spread
and shall be allocated and distributed as set forth in Section
4.13.
32
(d) During the Revolving Period, an amount equal to the Available
Investor Principal Collections for the related Monthly Period will be
distributed on each Transfer Date, to the extent available, in the
following priority:
(i) an amount equal to the Collateral Monthly Principal
for such Transfer Date shall be held in the Principal Account,
invested overnight in Permitted Investments and distributed to the
Collateral Interest Holder on the related Distribution Date in
accordance with the Loan Agreement;
(ii) an amount equal to the lesser of (A) the product of
(1) a fraction, the numerator of which is equal to the Available
Investor Principal Collections remaining after the application
specified in subsection 4.11(d)(i) and the denominator of which is
equal to the sum of (x) the Shared Principal Collections
(determined in accordance with clause (b) of the definition
thereof), plus (y) the Available Investor Principal Collections
remaining after the application specified in subsection 4.11(d)(i)
and (2) the Cumulative Series Principal Shortfall and (B)
Available Investor Principal Collections shall remain in the
Principal Account to be treated as Shared Principal Collections
and applied to Principal Sharing Series other than this Series
1997-1; and
(iii) an amount equal to the excess, if any, of (A) the
Available Investor Principal Collections for such Transfer Date
over (B) the applications specified in subsections 4.11(d)(i) and
(ii) above shall be paid to the Transferor; provided that the
amount to be paid to the Transferor pursuant to this subsection
4.11(d)(iii) with respect to such Transfer Date shall be paid to
the Transferor only to the extent that the Transferor Interest on
such Transfer Date is greater than the Minimum Transferor Interest
(after giving effect to the inclusion in the Trust of all
Receivables created on or prior to such Transfer Date and the
application of payments referred to in subsection 4.3(b)) and
otherwise shall be deposited into the Excess Funding Account in
accordance with subsection 4.7(d).
(e) During the Controlled Accumulation Period or the Rapid
Amortization Period, an amount equal to the Available Investor Principal
Collections for the related Monthly Period will be distributed on each
Transfer Date, beginning with the Transfer Date in the month following the
month in which the Controlled Accumulation Period began or the Transfer
Date following the commencement of the Rapid Amortization Period, as
applicable, to the extent available, in the following priority:
(i) an amount equal to the Class A Monthly Principal for
such Transfer Date shall be, (A) during the Controlled
Accumulation Period,
33
deposited into the Principal Funding Account, and (B) during the
Rapid Amortization Period, deposited into the Distribution
Account;
(ii) after giving effect to the distribution referred to
in clause (i), an amount equal to the Class B Monthly Principal
shall be deposited into the Distribution Account;
(iii) for each Transfer Date (other than the Transfer
Date immediately preceding the Series 1997-1 Termination Date, in
which case on the Series 1997-1 Termination Date), after giving
effect to the distribution referred to in clauses (i) and (ii), an
amount equal to Collateral Monthly Principal shall be held in the
Principal Account, invested overnight in Permitted Investments and
distributed to the Collateral Interest Holder on the related
Distribution Date in accordance with the Loan Agreement;
(iv) an amount equal to the lesser of (A) the product of
(1) a fraction, the numerator of which is equal to the Available
Investor Principal Collections remaining after the application
specified in subsections 4.11(e)(i), (ii) and (iii) and the
denominator of which is equal to the sum of the Shared Principal
Collections (determined in accordance with clause (b) of the
definition thereof), and (2) the Cumulative Series Principal
Shortfall and (B) the Available Investor Principal Collections
shall remain in the Principal Account to be treated as Shared
Principal Collections and applied to Principal Sharing Series
other than this Series 1997-1; and
(v) an amount equal to the excess, if any, of (A) the
Available Investor Principal Collections over (B) the applications
specified in subsections 4.11(e)(i) through (iv) shall be paid to
the Transferor; provided that the amount to be paid to the
Transferor pursuant to this subsection 4.11(e)(v) with respect to
such Transfer Date shall be paid to the Transferor only to the
extent that the Transferor Interest on such Transfer Date is
greater than the Minimum Transferor Interest (after giving effect
to the inclusion in the Trust of all Receivables created on or
prior to such Transfer Date and the application of payments
referred to in subsection 4.3(b)) and otherwise shall be deposited
into the Excess Funding Account in accordance with subsection
4.7(d).
(f) On the earlier to occur of (i) the first Transfer Date with
respect to the Rapid Amortization Period and (ii) the Transfer Date
immediately preceding the Class A Scheduled Payment Date, Trustee, acting
in accordance with instructions from Servicer, shall withdraw from the
Principal Funding Account and deposit in the Distribution Account the
amount on deposit in the Principal Funding Account.
34
(g) On each Distribution Date, Trustee shall pay (i) in accordance
with subsection 5.1(a) to the Class A Holders from the Distribution
Account, the amount deposited into the Distribution Account pursuant to
subsection 4.11(a)(i) on the preceding Transfer Date and (ii) in accordance
with subsection 5.1(b) to the Class B Holders from the Distribution
Account, the amount deposited into the Distribution Account pursuant to
subsection 4.11(b)(i) on the preceding Transfer Date.
(h) On the earlier to occur of (i) the first Distribution Date
with respect to the Rapid Amortization Period and (ii) the Class A
Scheduled Payment Date and on each Distribution Date thereafter, Trustee,
acting in accordance with instructions from Servicer, shall pay in
accordance with Section 5.1 from the Distribution Account the amount so
deposited into the Distribution Account pursuant to subsections 4.11(e) and
(f) on the related Transfer Date in the following priority:
(i) an amount equal to the lesser of such amount on
deposit in the Distribution Account and the Class A Investor
Interest shall be paid to the Class A Holders; and
(ii) for each Distribution Date with respect to the Rapid
Amortization Period and on the Class B Scheduled Payment Date,
after giving effect to the distributions referred to in clause (i)
above, an amount equal to the lesser of such amount on deposit in
the Distribution Account and the Class B Investor Interest shall
be paid to the Class B Holders.
(i) The Controlled Accumulation Period is scheduled to commence at
the close of business on the Controlled Accumulation Date; provided that if
the Controlled Accumulation Period Length (determined as described below)
on any Determination Date on or after the July 2001 Determination Date is
less than twelve months, upon written notice to Trustee, Transferor and
each Rating Agency, Servicer, at its option, may elect to modify the date
on which the Controlled Accumulation Period actually commences to the first
day of the month that is a number of months prior to the month in which the
Class A Scheduled Payment Date occurs at least equal to the Controlled
Accumulation Period Length (so that as a result of such election the number
of Monthly Periods in the Controlled Accumulation Period will at least
equal the Controlled Accumulation Period Length); provided that (i) the
length of the Controlled Accumulation Period will not be less than one
month; (ii) such determination of the Controlled Accumulation Period Length
shall be made on each Determination Date on and after the July 2001
Determination Date but prior to the commencement of the Controlled
Accumulation Period, and any election to shorten the Controlled
Accumulation Period shall be subject to the subsequent lengthening of the
Controlled Accumulation Period to the Controlled Accumulation Period Length
determined on any subsequent Determination Date, but the Controlled
Accumulation Period shall in no event commence prior to the Controlled
Accumulation Date and (iii) notwithstanding any
35
other provision of this Series Supplement to the contrary, no election to
postpone the commencement of the Controlled Accumulation Period shall be
made after a Pay Out Event shall have occurred and be continuing with
respect to any other Series. The "Controlled Accumulation Period Length"
will mean 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 for this purpose that (1) the payment rate with respect
to Collections of Principal Receivables remains constant at the lowest
level of such payment rate during the twelve preceding Monthly Periods (or
such lower payment rate as Servicer may select), (2) the total amount of
Principal Receivables in the Trust (and the principal amount on deposit in
the Excess Funding Account, if any) remains constant at the level on such
date of determination, (3) no Pay Out Event with respect to any Series will
subsequently occur and (4) no additional Series (other than any Series
being issued on such date of determination) will be subsequently issued.
Any notice by Servicer electing to modify the commencement of the
Controlled Accumulation Period pursuant to this clause (i) shall specify
(i) the Controlled Accumulation Period Length, (ii) the commencement date
of the Controlled Accumulation Period and (iii) the Controlled Accumulation
Amount with respect to each Monthly Period during the Controlled
Accumulation Period.
SECTION 4.12 Series Investor Charge-Offs. (a) On or before each
Transfer Date, Servicer shall calculate the Class A Net Default Amount. If,
on any Transfer Date, the Class A Net Default Amount for the prior Monthly
Period exceeds the sum of the amounts available for allocation with respect
thereto pursuant to subsection 4.11(a)(iii), subsection 4.13(a) and Section
4.15 with respect to such Monthly Period, then the Collateral Interest
(after giving effect to reductions for any Collateral Charge-Offs and any
Reallocated Principal Collections on such Transfer Date) will be reduced by
the amount of such excess, but not by more than the lesser of the Class A
Net 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. 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 (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. If such reduction would cause
the Class B Investor Interest to be a negative number, the Class B Investor
Interest will be reduced to zero, and the Class A Investor Interest will be
reduced by the amount by which the Class B Investor Interest would have
been reduced below zero, but not by more than the Class A Net Default
Amount for such Transfer Date (a "Class A Investor Charge-Off"). If the
Class A Investor Interest has been reduced by the amount of any Class A
Investor Charge-Offs, it will be reimbursed on any Transfer Date by the
amount of Excess Spread allocated and available for such purpose pursuant
to subsection 4.13(b).
36
(b) On or before each Transfer Date, Servicer shall calculate the
Class B Net Default Amount. If, on any Transfer Date, the Class B Net
Default Amount for the prior Monthly Period exceeds the amount of Excess
Spread and Reallocated Collateral Principal Collections that are allocated
and available to fund such amount pursuant to subsection 4.13(c) and
Section 4.15, the Collateral Interest (after giving effect to reductions
for any Collateral Charge-Offs and any Reallocated Principal Collections on
such Transfer Date and any adjustments with respect thereto as described in
subsection 4.12(a)) will be reduced by the amount of such excess, but not
by more than the lesser of the Class B Net Default Amount and the
Collateral Interest (after giving effect to reductions for any Collateral
Charge-Offs and any Reallocated Principal Collections on such Transfer Date
and any adjustments with respect thereto as described in subsection
4.12(a)) for such Transfer Date. If such reduction would cause the
Collateral Interest to be a negative number, the Collateral Interest shall
be reduced to zero and the Class B Investor Interest shall be reduced by
the amount by which the Collateral Interest would have been reduced below
zero, but not by more than the Class B Net Default Amount for such Transfer
Date (a "Class B Investor Charge-Off"). The Class B Investor Interest will
also be reduced by the amount of Reallocated Class B Principal Collections
in excess of the Collateral Interest pursuant to Section 4.15 and the
amount of any portion of the Class B Investor Interest allocated to the
Class A Certificates to avoid a reduction in the Class A Investor Interest
pursuant to subsection 4.12(a). The Class B Investor Interest will
thereafter be reimbursed on any Transfer Date by the amount of Excess
Spread allocated and available for that purpose as described under
subsection 4.13(d).
(c) On or before each Transfer Date, Servicer shall calculate the
Collateral Net Default Amount. If, on any Transfer Date, the Collateral Net
Default Amount for the prior Monthly Period exceeds the amount of Excess
Spread which is allocated and available to fund such amount pursuant to
subsection 4.13(g), the Collateral Interest will be reduced by the amount
of such excess but not by more than the lesser of the Collateral Net
Default Amount and the Collateral Interest for such Transfer Date (a
"Collateral Charge-Off"). The Collateral Interest will also be reduced by
the amount of Reallocated Principal Collections pursuant to Section 4.15
and the amount of any portion of the Collateral Interest allocated to the
Class A Certificates or the Class B Certificates to avoid a reduction in
the Class A Investor Interest, pursuant to subsection 4.12(a), or the Class
B Investor Interest, pursuant to subsection 4.12(b), respectively. The
Collateral Interest will thereafter be reimbursed on any Transfer Date by
the amount of the Excess Spread allocated and available for that purpose as
described under subsection 4.13(h).
SECTION 4.13 Excess Spread. On or before each Transfer Date,
Servicer shall instruct Trustee in writing (which writing shall be
substantially in the form of Exhibit B to the Series Supplement) to apply,
and Trustee, acting in accordance with such instructions shall apply,
Excess Spread with respect to the related Monthly
37
Period, to make the following distributions on each Transfer Date in the
following priority:
(a) an amount equal to the Class A Required Amount, if any, with
respect to such Transfer Date will be used to fund the Class A Required
Amount and be applied in accordance with, and in the priority set forth in,
subsection 4.11(a);
(b) an amount equal to the aggregate amount of Class A Investor
Charge- Offs which have not been previously reimbursed will be treated as a
portion of Investor Principal Collections and deposited into the Principal
Account on such Transfer Date;
(c) an amount equal to the Class B Required Amount, if any, with
respect to such Transfer Date will be used to fund the Class B Required
Amount and be applied first in accordance with, and in the priority set
forth in, subsection 4.11(b) and then any remaining amount available to pay
the Class B Net Default Amount shall be treated as a portion of Investor
Principal Collections and deposited into the Principal Account on such
Transfer Date;
(d) an amount equal to the aggregate amount by which the Class B
Investor Interest has been reduced below the Class B Initial 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 treated as a portion of
Investor Principal Collections and deposited into the Principal Account on
such Transfer Date;
(e) an amount equal to the Collateral Monthly Interest plus the
amount of any past due Collateral Monthly Interest for such Transfer Date
will be held in the Finance Charge Account, invested overnight in Permitted
Investments and paid to the Collateral Interest Holder on the related
Distribution Date in accordance with the Loan Agreement;
(f) if Transferor or Trustee is Servicer, an amount equal to the
aggregate amount of accrued but unpaid Collateral Interest Servicing Fee
will be paid to Servicer;
(g) an amount equal to the Collateral Net Default Amount, if any,
for the prior Monthly Period will be treated as a portion of Investor
Principal Collections and deposited into the Principal Account on such
Transfer Date;
(h) an amount equal to the aggregate amount by which the
Collateral Interest has been reduced below the Required Collateral Interest
for reasons other than the payment of principal to the Collateral Interest
Holder (but not in excess of the aggregate amount of such reductions which
have not been previously reimbursed)
38
will be treated as a portion of Investor Principal Collections and deposited
into the Principal Account on such Transfer Date;
(i) on each Transfer Date from and after the Reserve Account
Funding Date, but prior to the date on which the Reserve Account terminates
as described in subsection 4.18(f), an amount up to the excess, if any, of
the Required Reserve Account Amount over the Available Reserve Account
Amount shall be deposited into the Reserve Account;
(j) an amount equal to all other amounts specified in the Loan
Agreement (to the extent payable from "Available Non-Principal Funds," as
defined therein) shall be held in the Finance Charge Account, invested
overnight in Permitted Investments and distributed on the related
Distribution Date in accordance with the Loan Agreement; and
(k) the balance, if any, after giving effect to the payments made
pursuant to clauses (a) through (j), shall constitute "Excess Finance
Charge Collections" to be applied with respect to other Principal Sharing
Series in accordance with Section 4.5 of the Agreement.
SECTION 4.14 Reallocated Investor Finance Charge Collections. (a)
That portion of Group I Investor Finance Charge Collections for any
Transfer Date equal to the amount of Reallocated Investor Finance Charge
Collections for such Transfer Date will be allocated to Series 1997-1 and
will be distributed as set forth in this Supplement.
(b) Reallocated Investor Finance Charge Collections with respect
to any Transfer Date shall equal the sum of (i) the aggregate amount of
Series Monthly Interest, Series Monthly Fees, Series Net Default Amount and
Series Investor Charge-Offs for such Distribution Date and (ii) that
portion of excess Group I Investor Finance Charge Collections to be
included in Reallocated Investor Finance Charge Collections pursuant to
subsection 4.14(c); provided that if the amount of Group I Investor Finance
Charge Collections for such Distribution Date is less than the sum of (w)
Group I Investor Monthly Interest, (x) Group I Investor Monthly Fees, (y)
Group I Net Default Amount and (z) Group I Investor Charge-Offs, then
"Reallocated Investor Finance Charge Collections" shall equal the sum of
the following amounts for such Distribution Date:
(A) The product of (I) Group I Investor Finance Charge
Collections (up to the amount of Group I Investor Monthly
Interest) and (II) a fraction, the numerator of which is Series
Monthly Interest and the denominator of which is Group I Investor
Monthly Interest;
39
(B) the product of (I) Group I Investor Finance Charge
Collections less the amount of Group I Investor Monthly Interest
(up to the Group I Investor Monthly Fees) and (II) a fraction, the
numerator of which is the Series Monthly Fees and the denominator
of which is the Group I Investor Monthly Fees;
(C) the product of (I) Group I Investor Finance Charge
Collections less the amount of Group I Investor Monthly Interest
and the Group I Investor Monthly Fees (up to Group I Net Default
Amount) and (II) a fraction, the numerator of which is Series Net
Default Amount and the denominator of which is Group I Net Default
Amount; and
(D) the product of (I) Group I Investor Finance Charge
Collections less the sum of (x) Group I Investor Monthly Interest,
(y) the Group I Investor Monthly Fees and (z) Group I Net Default
Amount and (II) a fraction, the numerator of which is Series
Investor Charge-Offs and the denominator of which is Group I
Investor Charge-Offs.
(c) If the amount of Group I Investor Finance Charge Collections
for such Distribution Date exceeds the sum of (i) Group I Investor Monthly
Interest, (ii) Group I Investor Monthly Fees, (iii) Group I Net Default
Amount and (iv) Group I Investor Charge-Offs, then Reallocated Investor
Finance Charge Collections for such Distribution Date shall include an
amount equal to the product of (x) the amount of such excess and (y) a
fraction, the numerator of which is the Investor Interest as of the last
day of the second preceding Monthly Period (or, for Series 1997-1 only,
with respect to the first Transfer Date, as of the Closing Date) and the
denominator of which is the sum of such Investor Interest and the aggregate
Investor Interests for all other Series included in Group I as of such last
day (or, for Series 1997-1 only, with respect to the first Transfer Date,
as of the Closing Date).
SECTION 4.15 Reallocated Principal Collections. On or before each
Transfer Date, Servicer shall instruct Trustee in writing (which writing
shall be substantially in the form of Exhibit B to the Series Supplement)
to, and Trustee in accordance with such instructions shall, withdraw from
the Principal Account and apply Reallocated Principal Collections (applying
all Reallocated Collateral Principal Collections in accordance with
subsections 4.15(a) and (b) prior to applying any Reallocated Class B
Principal Collections in accordance with subsection 4.15(a) for any amounts
still owing after the application of Reallocated Collateral Principal
Collections) with respect to such Transfer Date, to make the following
distributions on each Transfer Date in the following priority:
(a) an amount equal to the excess, if any, of (i) the Class A
Required Amount, if any, with respect to such Transfer Date over (ii) the
amount of Excess
40
Spread with respect to the related Monthly Period, shall be applied
pursuant to subsections 4.11(a)(i), (ii) and (iii); and
(b) an amount equal to the excess, if any, of (i) the Class B
Required Amount, if any, with respect to such Transfer Date over (ii) the
amount of Excess Spread allocated and available to the Class B Certificates
pursuant to subsection 4.13(c) on such Transfer Date shall be applied first
pursuant to subsections 4.11(b)(i) and (ii) and then pursuant to subsection
4.13(c).
On each Transfer Date, the Collateral Interest shall be reduced by
the amount of Reallocated Collateral Principal Collections and by the
amount of Reallocated Class B Principal Collections applied pursuant to
subsections 4.15(a) and/or (b) on such Transfer Date. If such reduction
would cause the Collateral Interest (after giving effect to any Collateral
Charge-Offs for such Transfer Date) to be a negative number, the Collateral
Interest (after giving effect to any Collateral Charge-Offs for such
Transfer Date) shall be reduced to zero and the Class B Investor Interest
shall be reduced by the amount by which the Collateral Interest would have
been reduced below zero. If the reallocation of Reallocated Principal
Collections would cause the Class B Investor Interest (after giving effect
to any Class B Investor Charge-Offs for such Transfer Date) to be a
negative number on any Transfer Date, Reallocated Principal Collections
shall be reallocated on such Transfer Date in an aggregate amount not to
exceed the amount which would cause the Class B Investor Interest (after
giving effect to any Class B Investor Charge-Offs for such Transfer Date)
to be reduced to zero.
SECTION 4.16 Shared Principal Collections. (a) The portion of
Shared Principal Collections on deposit in the Principal Account equal to
the amount of Shared Principal Collections allocable to Series 1997-1 on
any Transfer Date shall be applied as Available Investor Principal
Collections pursuant to Section 4.11 and pursuant to such Section 4.11
shall be deposited in the Distribution Account or distributed in accordance
with the Loan Agreement.
(b) Shared Principal Collections allocable to Series 1997-1 with
respect to any Transfer Date means an amount equal to the Series Principal
Shortfall, if any, with respect to Series 1997-1 for such Transfer Date;
provided that if the aggregate amount of Shared Principal Collections for
all Principal Sharing Series for such Transfer Date is less than the
Cumulative Series Principal Shortfall for such Transfer Date, then Shared
Principal Collections allocable to Series 1997-1 on such Transfer Date
shall equal the product of (i) Shared Principal Collections for all
Principal Sharing Series for such Transfer Date and (ii) a fraction, the
numerator of which is the Series Principal Shortfall with respect to Series
1997-1 for such Transfer Date and the denominator of which is the
Cumulative Series Principal Shortfall for all Principal Sharing Series for
such Transfer Date.
41
(c) Solely for the purpose of determining the amount of Available
Investor Principal Collections to be treated as Shared Principal
Collections on any Transfer Date allocable to other Principal Sharing
Series, on each Determination Date, Servicer shall determine the Class A
Required Amount, the Class B Required Amount, Excess Spread and Reallocated
Principal Collections as of such Determination Date for the following
Transfer Date.
SECTION 4.17 Principal Account and Principal Funding Account. (a)
The Trustee shall establish and maintain with a Qualified Institution,
which may be Trustee, in the name of the Trustee, on behalf of the Trust,
for the benefit of the Investor Holders, two segregated trust accounts with
the corporate trust department of such Qualified Institution (the
"Principal Account" and the "Principal Funding Account"), bearing a
designation clearly indicating that the funds deposited therein are held
for the benefit of the Investor Holders. The Trustee shall possess all
right, title and interest in all funds on deposit from time to time in the
Principal Account and the Principal Funding Account and in all proceeds
thereof. The Principal Account and the Principal Funding Account shall be
under the sole dominion and control of Trustee for the benefit of the
Investor Holders. If at any time the institution holding the Principal
Account and the Principal Funding Account ceases to be a Qualified
Institution, Transferor shall notify Trustee, and Trustee upon being
notified (or Servicer on its behalf) shall, within 10 Business Days,
establish a new Principal Account and a new Principal Funding Account
meeting the conditions specified above with a Qualified Institution, and
shall transfer any cash or any investments to such new Principal Account
and Principal Funding Account. The Trustee, at the direction of Servicer,
shall (i) make withdrawals from the Principal Account and the Principal
Funding Account from time to time in the amounts and for the purposes set
forth in this Agreement, and (ii) on each Transfer Date (from and after the
commencement of the Controlled Accumulation Period) prior to termination of
the Principal Funding Account make a deposit into the Principal Funding
Account in the amount specified in, and otherwise in accordance with,
subsection 4.11(e).
(b) Funds on deposit in the Principal Account and the Principal
Funding Account shall be invested at the direction of Servicer by Trustee
in Permitted Investments. Funds on deposit in the Principal Funding Account
on any Transfer Date, after giving effect to any withdrawals from the
Principal Funding Account on such Transfer Date, shall be invested in such
investments that will mature so that such funds will be available for
withdrawal on or prior to the following Transfer Date. The Trustee shall
maintain, for the benefit of the Investor Holders, possession of the
negotiable instruments or securities, if any, evidencing such Permitted
Investments. No Permitted Investment shall be disposed of prior to its
maturity.
On each Transfer Date, Trustee, acting at Servicer's direction
given on or before such Transfer Date, shall transfer (i) from the
Principal Account to the Finance Charge Account all investment earnings
(net of losses and investment
42
expenses) accrued on or prior to that Transfer Date in connection with the
investment of funds on deposit in the Principal Account for application as
a part of Investor Finance Charge Collections and (ii) from the Principal
Funding Account to the Finance Charge Account the Principal Funding
Investment Proceeds on deposit in the Principal Funding Account, but not in
excess of the Covered Amount, for application as Class A Available Funds
applied pursuant to subsection 4.11(a)(i).
Any Excess Principal Funding Investment Proceeds shall be paid to
the Transferor on each Transfer Date. An amount equal to any Principal
Funding Investment Shortfall will be deposited in the Finance Charge
Account on each Transfer Date from the Reserve Account to the extent funds
are available pursuant to subsection 4.18(d). Principal Funding Investment
Proceeds (including reinvested interest) shall not be considered part of
the amounts on deposit in the Principal Funding Account for purposes of
this Agreement.
SECTION 4.18 Reserve Account. (a) The Trustee shall establish and
maintain with a Qualified Institution, which may be Trustee, in the name of
the Trust, on behalf of the Trust, for the benefit of the Investor Holders,
a segregated trust account with the corporate trust department of such
Qualified Institution (the "Reserve Account"), bearing a designation
clearly indicating that the funds deposited therein are held for the
benefit of the Investor Holders. The Trustee shall possess all right, title
and interest in all funds on deposit from time to time in the Reserve
Account and in all proceeds thereof. The Reserve Account shall be under the
sole dominion and control of Trustee for the benefit of the Investor
Holders. If at any time the institution holding the Reserve Account ceases
to be a Qualified Institution, Transferor shall notify Trustee, and Trustee
upon being notified (or Servicer on its behalf) shall, within 10 Business
Days, establish a new Reserve Account meeting the conditions specified
above with a Qualified Institution, and shall transfer any cash or any
investments to such new Reserve Account. The Trustee, at the direction of
Servicer, shall (i) make withdrawals from the Reserve Account from time to
time in an amount up to the Available Reserve Account Amount at such time,
for the purposes set forth in this Agreement, and (ii) on each Transfer
Date (from and after the Reserve Account Funding Date) prior to termination
of the Reserve Account make a deposit into the Reserve Account in the
amount specified in, and otherwise in accordance with, subsection 4.13(i).
(b) Funds on deposit in the Reserve Account shall be invested at
the direction of Servicer by Trustee in Permitted Investments. Funds on
deposit in the Reserve Account on any Transfer Date, after giving effect to
any withdrawals from the Reserve Account on such Transfer Date, shall be
invested in such investments that will mature so that such funds will be
available for withdrawal on or prior to the following Transfer Date. The
Trustee shall maintain, for the benefit of the Investor Holders, possession
of the negotiable instruments or securities, if any, evidencing
43
such Permitted Investments. No Permitted Investment shall be disposed of
prior to its maturity. On each Transfer Date, all interest and earnings
(net of losses and investment expenses) accrued since the preceding
Transfer Date on funds on deposit in the Reserve Account shall be retained
in the Reserve Account (to the extent that the Available Reserve Account
Amount is less than the Required Reserve Account Amount) and the balance,
if any, shall be deposited into the Finance Charge Account and included in
Class A Available Funds for such Transfer Date. For purposes of determining
the availability of funds or the balance in the Reserve Account for any
reason under this Agreement, except as otherwise provided in the preceding
sentence, investment earnings on such funds shall be deemed not to be
available or on deposit.
(c) On or before each Transfer Date with respect to the Controlled
Accumulation Period prior to the payment in full of the Class A Investor
Interest and on or before the first Transfer Date with respect to the Rapid
Amortization Period, Servicer shall calculate the "Reserve Draw Amount"
which shall be equal to the Principal Funding Investment Shortfall with
respect to each Transfer Date with respect to the Controlled Accumulation
Period or the first Transfer Date with respect to the Rapid Amortization
Period less, in each case, the amount of funds deposited into the Finance
Charge Account on such Transfer Date pursuant to subsection 4.18(b).
(d) If the Reserve Draw Amount for any Transfer Date is greater
than zero, the Reserve Draw Amount, up to the Available Reserve Account
Amount, shall be withdrawn from the Reserve Account on such Transfer Date
by Trustee (acting in accordance with the instructions of Servicer),
deposited into the Finance Charge Account and included in Class A Available
Funds for such Transfer Date.
(e) If the Reserve Account Surplus on any Distribution Date, after
giving effect to all deposits to and withdrawals from the Reserve Account
with respect to the related Transfer Date, is greater than zero, Trustee,
acting in accordance with the instructions of Servicer, shall withdraw from
the Reserve Account, and pay in accordance with the Loan Agreement, an
amount equal to such Reserve Account Surplus.
(f) Upon the earliest to occur of (i) the termination of the Trust
pursuant to Article XII, (ii) the first Distribution Date relating to the
Rapid Amortization Period and (iii) the Distribution Date immediately
preceding the Class A Scheduled Payment Date, Trustee, acting in accordance
with the instructions of Servicer, after the prior payment of all amounts
owing to the Series 1997-1 Holders that are payable from the Reserve
Account as provided herein, shall withdraw from the Reserve Account and pay
in accordance with the Loan Agreement all amounts, if any, on deposit in
the Reserve Account and the Reserve Account shall be deemed to have
terminated for purposes of this Series Supplement.
44
SECTION 4.19 [RESERVED]
SECTION 4.20 Transferor's or Servicer's Failure to Make a Deposit
or Payment. If Servicer or Transferor fails to make, or give instructions
to make, any payment or deposit (other than as required by subsections
2.4(d) and (e) and 12.2(a) or Sections 10.2 and 12.1) required to be made
or given by Servicer or Transferor, respectively, at the time specified in
the Agreement (including applicable grace periods), Trustee shall make such
payment or deposit from the applicable Investor Account without instruction
from Servicer or Transferor. The Trustee shall be required to make any such
payment, deposit or withdrawal hereunder only to the extent that Trustee
has sufficient information to allow it to determine the amount thereof;
provided that Trustee shall in all cases be deemed to have sufficient
information to determine the amount of interest payable to the Series
1997-1 Holders on each Distribution Date. The Servicer shall, upon request
of Trustee, promptly provide Trustee with all information necessary to
allow Trustee to make such payment, deposit or withdrawal. Such funds or
the proceeds of such withdrawal shall be applied by Trustee in the manner
in which such payment or deposit should have been made by Transferor or
Servicer, as the case may be.
SECTION 4.21. Conversion Date. Notwithstanding anything contained
in the Agreement to the contrary, the Agreement and this Series Supplement
may be amended pursuant to subsection 13.1(a) from time to time by
Transferor, Servicer and Trustee and without the consent of the
Certificateholders, to facilitate the conversion from a Billing Cycle basis
to Monthly Period basis for allocations or to remove provisions of the
Agreement or this Series Supplement made superfluous by such conversion.
SECTION 13. Article V of the Agreement. Article V of the Agreement
shall read in its entirety as follows and shall be applicable only to the
Investor Holders:
ARTICLE V DISTRIBUTIONS AND REPORTS TO
INVESTOR HOLDERS
SECTION 5.1 Distributions. (a) On each Distribution Date, Trustee
shall distribute (in accordance with the certificate delivered on or before
the related Transfer Date by Servicer to Trustee pursuant to subsection
3.4(b)) to each Class A Holder of record on the immediately preceding
Record Date (other than as provided in subsection 2.4(e) or Section 12.3
respecting a final distribution) such Holder's pro rata share (based on the
aggregate Undivided Interests represented by Class A Certificates held by
such Holder) of amounts on deposit in the Distribution Account as are
payable to the Class A Holders pursuant to Section 4.11 by check mailed to
each Class A Holder (at such Holder's address as it appears in the
Certificate Register), except that with respect to Class A Certificates
registered in the name of
45
the nominee of a Clearing Agency, such distribution shall be made in
immediately available funds.
(b) On each Distribution Date, Trustee shall distribute (in
accordance with the certificate delivered on or before the related Transfer
Date by Servicer to Trustee pursuant to subsection 3.4(b)) to each Class B
Holder of record on the immediately preceding Record Date (other than as
provided in subsection 2.4(e) or Section 12.3 respecting a final
distribution) such Holder's pro rata share (based on the aggregate
Undivided Interests represented by Class B Certificates held by such
Holder) of amounts on deposit in the Distribution Account as are payable to
the Class B Holders pursuant to Section 4.11 by check mailed to each Class
B Holder (at such Holder's address as it appears in the Certificate
Register), except that with respect to Class B Certificates registered in
the name of the nominee of a Clearing Agency, such distribution shall be
made in immediately available funds.
SECTION 5.2 Monthly Series 1997-1 Holders' Statement. (a) On or
before each Distribution Date, Trustee shall forward to each Series 1997-1
Holder a statement substantially in the form of Exhibit C to the Series
Supplement prepared by Servicer and delivered to Trustee.
(b) Annual Holders' Tax Statement. On or before January 31 of each
calendar year, beginning with calendar year 1998, Trustee shall distribute
to each Person who at any time during the preceding calendar year was a
Series 1997-1 Holder, a statement prepared by Servicer containing the
following information:
(i) the amount of the current distribution allocable to
Class A Monthly Principal, Class B Monthly Principal and
Collateral Monthly Principal, respectively; and
(ii) the amount of the current distribution allocable to
Class A Monthly Interest, Class A Deficiency Amounts, Class A
Additional Interest, Class B Monthly Interest, Class B Deficiency
Amounts, Class B Additional Interest and Collateral Monthly
Interest, and any accrued and unpaid Collateral Monthly Interest,
respectively.
Such information shall be aggregated for such calendar year or the
applicable portion thereof during which such Person was a Series 1997-1
Holder, together with such other customary information (consistent with the
treatment of the Certificates as debt) as Servicer deems necessary or
desirable to enable the Series 1997-1 Holders to prepare their tax returns.
Such obligations of Trustee shall be deemed to have been satisfied to the
extent that substantially comparable information shall be provided by
Trustee pursuant to any requirements of the Internal Revenue Code.
46
SECTION 14. Series 1997-1 Pay Out Events. If any one of the following
events shall occur with respect to the Investor Certificates:
(a) failure on the part of Transferor (i) to make any payment or
deposit required by the terms of (A) the Agreement or (B) this Series
Supplement, on or before the date occurring five days after the date such
payment or deposit is herein required to be made or (ii) duly to observe or
perform in any material respect any covenants or agreements of Transferor
set forth in the Agreement or this Series Supplement (including the
covenant of Transferor contained in Section 11 of this Series Supplement),
which failure has a material adverse effect on the Series 1997-1 Holders
(which determination shall be made without reference to whether any funds
are available under the Collateral Interest) and which continues unremedied
for a period of 60 days after the date on which written notice of such
failure, requiring the same to be remedied, shall have been given to
Transferor by Trustee, or to Transferor and Trustee by the Holders of
Investor Certificates evidencing Undivided Interests aggregating not less
than 50% of the Investor Interest of this Series 1997-1, and continues to
materially and adversely affect the interests of the Series 1997-1 Holders
(which determination shall be made without reference to whether any funds
are available under the Collateral Interest) for such period;
(b) any representation or warranty made by Transferor in the
Agreement or this Series Supplement, or any information contained in an
Account Schedule required to be delivered by Transferor pursuant to Section
2.1 or 2.6, (i) shall prove to have been incorrect in any material respect
when made or when delivered, which continues to be incorrect in any
material respect for a period of 60 days after the date on which written
notice of such failure, requiring the same to be remedied, shall have been
given to Transferor by Trustee, or to Transferor and Trustee by the Holders
of Investor Certificates evidencing Undivided Interests aggregating not
less than 50% of the Investor Interest of this Series 1997-1, and (ii)
results in a material and adverse effect on the interests of the Series
1997-1 Holders (which material adverse effect shall be determined without
reference to whether any funds are available under the Collateral
Interest), which result continues for such period; provided that a Series
1997-1 Pay Out Event pursuant to this subsection 9(b) shall not be deemed
to have occurred hereunder if Transferor has accepted reassignment of the
related Receivable, or all of such Receivables, if applicable, during such
period in accordance with the provisions of the Agreement;
(c) the average Portfolio Yield for any three consecutive Monthly
Periods is reduced to a rate which is less than the average Base Rate for
such period;
(d) Transferor shall fail to convey Receivables arising under
Additional Accounts, or Participations, to the Trust, as required by
subsection 2.6(b);
47
(e) any Servicer Default shall occur which would have a material
adverse effect on the Series 1997-1 Holders; or
(f) the Class A Investor Interest shall not be paid in full on the
Class A Scheduled Payment Date or the Class B Investor Interest shall not
be paid in full on the Class B Scheduled Payment Date;
then, in the case of any event described in subsection 9(a), (b) or (e) of
this Series Supplement, after the applicable grace period set forth in such
subsections, either Trustee or Holders of Series 1997-1 Certificates
(including, for this purpose, the Collateral Interest Holder) evidencing
Undivided Interests aggregating not less than 50% of the Investor Interest
of this Series 1997-1 by notice then given in writing to Transferor and
Servicer (and to Trustee if given by the Holders) may declare that a pay
out event (a "Series 1997-1 Pay Out Event") has occurred as of the date of
such notice, and in the case of any event described in subsection 9 (c),
(d) or (f) of this Series Supplement, a Series 1997-1 Pay Out Event shall
occur without any notice or other action on the part of Trustee or the
Investor Holders immediately upon the occurrence of such event.
SECTION 15. Series 1997-1 Termination. The right of the Investor
Holders to receive payments from the Trust will terminate on the first
Business Day following the Series 1997-1 Termination Date.
SECTION 16. Periodic Finance Charges and Other Fees. Transferor
hereby agrees that, except as otherwise required by any Requirement of Law,
or as is deemed by Transferor to be necessary in order for Transferor to
maintain its revolving credit business, based upon a good faith assessment
by Transferor, in its sole discretion, of the nature of the competition in
the credit card business, it shall not at any time reduce the Periodic
Finance Charges assessed on any Receivable or other fees on any Account if
Transferor reasonably expects that, as a result of such reduction, the
Portfolio Yield for the Monthly Period during which such reduction becomes
effective will be less than the Base Rate as at the beginning of such
Monthly Period.
SECTION 17. Counterparts. This Series Supplement may be executed
in any number of counterparts, each of which so executed shall be deemed to
be an original, but all of such counterparts shall together constitute but
one and the same instrument.
SECTION 18. Governing Law. THIS SERIES SUPPLEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.
48
SECTION 19. No Petition. Transferor, Servicer and Trustee, by
entering into this Series Supplement and each Holder, by accepting a Series
1997-1 Certificate, hereby covenant and agree that they will not at any
time institute against the Trust, or join in any institution against the
Trust of, any bankruptcy proceedings under any United States Federal or
state bankruptcy or similar law in connection with any obligations relating
to the Investor Holders, the Agreement or this Series Supplement.
SECTION 20. Amendments. This Series Supplement may be amended
pursuant to Section 13.1 of the Agreement. This Series Supplement may also
be amended by Transferor without the consent of Servicer, Trustee or any
Investor Holder if Transferor provides Trustee with (i) an Opinion of
Counsel to the effect that such amendment or modification would reduce the
risk that the Trust would be treated as taxable as a publicly traded
partnership pursuant to Internal Revenue Code section 7704 and would not
cause the Trust to be classified, for Federal income tax purposes, as an
association (or publicly traded partnership) taxable as a corporation or
cause or constitute an event in which gain or loss would be recognized by
any Investor Holder and (ii) a certificate that such amendment or
modification would not materially and adversely affect any Investor Holder;
provided that no such amendment shall be deemed effective without Trustee's
consent, if Trustee's rights, duties and obligations hereunder are thereby
modified. Promptly after the execution of any such amendment (other than an
amendment pursuant to subsection 13.1(a)), Trustee shall furnish
notification of the substance of such amendment to each Rating Agency.
49
IN WITNESS WHEREOF, Transferor, Servicer and Trustee have caused
this Series 1997-1 Supplement to be duly executed by their respective
officers as of the day and year first above written.
FIRST NATIONAL BANK OF COMMERCE,
Transferor and Servicer
By:_____________________________________
Name: Michael J. Fowler
Title: Chief ALCO Officer
THE FIRST NATIONAL BANK OF CHICAGO,
Trustee
By:______________________________________
Name: T. Marshall
Title: Trust Officer
EXHIBIT A-1
FORM OF CERTIFICATE
-------------------
CLASS A
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation
("DTC"), to First National Bank of Commerce or its agent for registration
of transfer, exchange or payment, and any certificate issued is registered
in the name of Cede & Co. or in such other name as requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or
to such other entity as is requested by an authorized representative of
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede &
Co., has an interest herein.
No. ___ $_____
CUSIP No. 320958AA9
FIRST NBC CREDIT CARD MASTER TRUST
CLASS A 6.15%
ASSET BACKED CERTIFICATE, SERIES 1997-1
Evidencing an Undivided Interest in a trust, the corpus of which consists
of a portfolio of MasterCard(R), VISA(R)** and Private Label credit card
receivables generated or acquired by First National Bank of Commerce and
other assets and interests constituting the Trust under the Pooling and
Servicing Agreement described below.
(Not an interest in or obligation of
First National Bank of Commerce
or any Affiliate thereof.)
- ----------------------
** MasterCard(R) and VISA(R) are federally registered servicemarks of
MasterCard International Inc. and of VISA U.S.A., Inc., respectively.
This certifies that CEDE & CO. (the "Class A Holder") is the
registered owner of an Undivided Interest in a trust (the "Trust"), the
corpus of which consists of a portfolio of receivables (the "Receivables")
now existing or hereafter created and arising in connection with selected
MasterCard, VISA and Private Label credit card accounts (the "Accounts") of
First National Bank of Commerce, a national banking association organized
under the laws of the United States, all monies due or to become due in
payment of the Receivables (including all Finance Charge Receivables and
Recoveries), the right to certain amounts received as Interchange with
respect to the Accounts, the benefits of the Collateral Interest (as
defined below) and the other assets and interests constituting the Trust
pursuant to a Pooling and Servicing Agreement dated as of August 1, 1997 as
supplemented by the Series 1997-1 Supplement dated as of August 1, 1997
(collectively, the "Pooling and Servicing Agreement"), by and between First
National Bank of Commerce, as Transferor ("Transferor") and as Servicer
("Servicer"), and The First National Bank of Chicago, as Trustee
("Trustee"). The Series 1997-1 Certificates are issued in two classes, the
Class A Certificates (of which this certificate is one) and the Class B
Certificates, which are subordinated to the Class A Certificates in certain
rights of payment as described herein and in the Pooling and Servicing
Agreement.
Transferor has structured the Pooling and Servicing Agreement and
the Series 1997-1 Certificates with the intention that the Series 1997-1
Certificates will qualify under applicable tax law as indebtedness, and
each of Transferor, Servicer and each Series 1997-1 Holder (or Series
1997-1 Certificate Owner) by acceptance of its Series 1997-1 Certificate
(or in the case of a Series 1997-1 Certificate Owner, by virtue of such
Series 1997-1 Certificate Owner's acquisition of a beneficial interest
therein), agrees to treat and to take no action inconsistent with the
treatment of the Series 1997-1 Certificates (or any beneficial interest
therein) as indebtedness for purposes of federal, state, local and foreign
income or franchise taxes and any other tax imposed on or measured by
income. Each Series 1997-1 Holder agrees that it will cause any Series
1997-1 Certificate Owner acquiring an interest in a Series 1997-1
Certificate through it to comply with the Pooling and Servicing Agreement
as to treatment of the Series 1997-1 Certificates as indebtedness for
certain tax purposes.
To the extent not defined herein, capitalized terms used herein
have the respective meanings assigned to them in the Pooling and Servicing
Agreement. This Class A Certificate is issued under and is subject to the
terms, provisions and conditions of the Pooling and Servicing Agreement, to
which Pooling and Servicing Agreement, as amended from time to time, the
Class A Holder by virtue of the acceptance hereof assents and by which the
Class A Holder is bound.
This Class A Certificate represents an interest in only the First
NBC Credit Card Master Trust. This Class A Certificate does not represent
an obligation of, or an interest in, Transferor or Servicer, and neither
the Series 1997-1 Certificates nor the Accounts or Receivables are insured
or guaranteed by the Federal Deposit
Insurance Corporation or (except for Receivables in Private Label Accounts)
any other governmental agency. This Series 1997-1 Certificate is limited in
right of payment to certain collections respecting the Receivables, all as
more specifically set forth hereinabove and in the Pooling and Servicing
Agreement.
Unless the certificate of authentication hereon has been executed
by or on behalf of Trustee, by manual signature, this Class A Certificate
shall not be entitled to any benefit under the Pooling and Servicing
Agreement, or be valid for any purpose.
IN WITNESS WHEREOF, First National Bank of Commerce has
caused this Class A Certificate to be duly executed under its official
seal.
By:_______________________________
Authorized Officer
Attested to:
By:__________________________
Assistant Secretary
Date:________________________
Form of Trustee's Certificate of Authentication
-----------------------------------------------
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Class A Certificates, Series 1997-1, of the
First NBC Credit Card Master Trust referred to in the within-mentioned
Pooling and Servicing Agreement.
THE FIRST NATIONAL BANK OF
CHICAGO, Trustee
By:__________________________________
Authorized Signatory
EXHIBIT A-2
FORM OF CERTIFICATE
-------------------
CLASS B
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation
("DTC"), to First National Bank of Commerce or its agent for registration
of transfer, exchange or payment, and any certificate issued is registered
in the name of Cede & Co. or in such other name as requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or
to such other entity as is requested by an authorized representative of
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede &
Co., has an interest herein.
No. ___ $______
CUSIP No. 320958AB7
FIRST NBC CREDIT CARD MASTER TRUST
CLASS B 6.35%
ASSET BACKED CERTIFICATE, SERIES 1997-1
Evidencing an Undivided Interest in a trust, the corpus of which consists
of a portfolio of MasterCard(R), VISA(R)* and Private Label credit card
receivables generated or acquired by First National Bank of Commerce and
other assets and interests constituting the Trust under the Pooling and
Servicing Agreement described below.
(Not an interest in or obligation of
First National Bank of Commerce
or any Affiliate thereof.)
- ----------------------
* MasterCard(R) and VISA(R) are federally registered servicemarks of
MasterCard International Inc. and of VISA U.S.A., Inc., respectively.
Exhibit A-2, Page 1
This certifies that CEDE & CO. (the "Class B Holder") is the
registered owner of an Undivided Interest in a trust (the "Trust"), the
corpus of which consists of a portfolio of receivables (the "Receivables")
now existing or hereafter created and arising in connection with selected
MasterCard, VISA and Private Label credit card accounts (the "Accounts") of
First National Bank of Commerce, a national banking association organized
under the laws of the United States, all monies due or to become due in
payment of the Receivables (including all Finance Charge Receivables and
Recoveries), the right to certain amounts received as Interchange with
respect to the Accounts, the benefits of the Collateral Interest (as
defined below) and the other assets and interests constituting the Trust
pursuant to a Pooling and Servicing Agreement dated as of August 1, 1997 as
supplemented by the Series 1997-1 Supplement dated as of August 1, 1997
(collectively, the "Pooling and Servicing Agreement"), by and between First
National Bank of Commerce, as Transferor ("Transferor") and as Servicer
("Servicer"), and The First National Bank of Chicago, as Trustee
("Trustee"). The Series 1997-1 Certificates are issued in two classes, the
Class A Certificates and the Class B Certificates (of which this
certificate is one), which are subordinated to the Class A Certificates in
certain rights of payment as described herein and in the Pooling and
Servicing Agreement.
Transferor has structured the Pooling and Servicing Agreement and
the Series 1997-1 Certificates with the intention that the Series 1997-1
Certificates will qualify under applicable tax law as indebtedness, and
each of Transferor, Servicer and each Series 1997-1 Holder (or Series
1997-1 Certificate Owner) by acceptance of its Series 1997-1 Certificate
(or in the case of a Series 1997-1 Certificate Owner, by virtue of such
Series 1997-1 Certificate Owner's acquisition of a beneficial interest
therein), agrees to treat and to take no action inconsistent with the
treatment of the Series 1997-1 Certificates (or any beneficial interest
therein) as indebtedness for purposes of federal, state, local and foreign
income or franchise taxes and any other tax imposed on or measured by
income. Each Series 1997-1 Holder agrees that it will cause any Series
1997-1 Certificate Owner acquiring an interest in a Series 1997-1
Certificate through it to comply with the Pooling and Servicing Agreement
as to treatment of the Series 1997-1 Certificates as indebtedness for
certain tax purposes.
To the extent not defined herein, capitalized terms used herein
have the respective meanings assigned to them in the Pooling and Servicing
Agreement. This Class B Certificate is issued under and is subject to the
terms, provisions and conditions of the Pooling and Servicing Agreement, to
which Pooling and Servicing Agreement, as amended from time to time, the
Class B Holder by virtue of the acceptance hereof assents and by which the
Class B Holder is bound.
This Class B Certificate represents an interest in only the First
NBC Credit Card Master Trust. This Class B Certificate does not represent
an obligation of, or an interest in, Transferor or Servicer, and neither
the Series 1997-1 Certificates nor the Accounts or Receivables are insured
or guaranteed by the Federal Deposit
Exhibit A-2, Page 2
Insurance Corporation or (except for Receivables in Private Label Accounts)
any other governmental agency. This Series 1997-1 Certificate is limited in
right of payment to certain collections respecting the Receivables, all as
more specifically set forth hereinabove and in the Pooling and Servicing
Agreement.
Unless the certificate of authentication hereon has been executed
by or on behalf of Trustee, by manual signature, this Class B Certificate
shall not be entitled to any benefit under the Pooling and Servicing
Agreement, or be valid for any purpose.
Exhibit A-2, Page 3
IN WITNESS WHEREOF, First National Bank of Commerce has
caused this Class B Certificate to be duly executed under its official
seal.
By:___________________________
Authorized Officer
Attested to:
By:________________________
Assistant Secretary
Date:______________________
Exhibit A-2, Page 4
Form of Trustee's Certificate of Authentication
CERTIFICATE OF AUTHENTICATION
This is one of the Class B Certificates, Series 1997-1, of the
First NBC Credit Card Master Trust referred to in the within-mentioned
Pooling and Servicing Agreement.
THE FIRST NATIONAL BANK OF CHICAGO,
Trustee
By:________________________________
Authorized Signatory