EXHIBIT 4.2
Brown & Wood
Draft 8/30/96
FIRESTONE RETAIL CREDIT CORPORATION,
Transferor,
BRIDGESTONE/FIRESTONE, INC.
and
THE FUJI BANK AND TRUST COMPANY,
Trustee
on behalf of the Series 1996-1
Certificateholders
______________________________
SERIES 1996-1 SUPPLEMENT
Dated as of ________ 1, 1996
to
POOLING AND SERVICING AGREEMENT
Dated as of November 1, 1992
______________________________
BRIDGESTONE/FIRESTONE MASTER TRUST
SERIES 1996-1
TABLE OF CONTENTS
SECTION 1. Designation . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 2. Definitions . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 3. Aggregate Receivables . . . . . . . . . . . . . . . . . . . .
SECTION 4. Reassignment and Transfer Terms . . . . . . . . . . . . . . .
SECTION 5. Delivery and Payment for the Series 1996-1 Certificates . . .
SECTION 6. Form of Delivery of the Series 1996-1 Certificates . . . . . .
SECTION 7. Subordination of Transferor Interest.
SECTION 8. Article IV of the Agreement . . . . . . . . . . . . . . . . .
Section 4.02. Rights of Certificateholders . . . . . . . . . . . . . .
Section 4.03. Collections and Allocation . . . . . . . . . . . . . . .
Section 4.04. Determination of Monthly Interest for the Series 1996-1
Certificates . . . . . . . . . . . . . . . . . . . .
Section 4.05. Determination of Monthly Principal . . . . . . . . . . .
Section 4.06. Coverage of Required Amount for the Series 1996-1
Certificates . . . . . . . . . . . . . . . . . . . .
Section 4.07. Application of Funds on Deposit in the Collection
Account for the Series 1996-1 Certificates . . . . .
Section 4.08. Investor Charge-Offs . . . . . . . . . . . . . . . . .
Section 4.09. Excess Finance Charge Collections for the Series 1996-1
Certificates . . . . . . . . . . . . . . . . . . .
Section 4.10. Reallocated Principal Collections for the Series 1996-1
Certificates . . . . . . . . . . . . . . . . . . . .
SECTION 9. Article V of the Agreement . . . . . . . . . . . . . . . . . .
Section 5.01. Distributions . . . . . . . . . . . . . . . . . . . . . .
Section 5.02. Statements to Series 1996-1
Certificateholders . . . . . . . . . . . . . . . . . . .
SECTION 10. Article VI of the Agreement . . . . . . . . . . . . . . . . .
Section 6.14 Transfers of the Class C and the Subordinated Transferor
Certificates . . . . . . . . . . . . . . . . . . . .
SECTION 11. Consents of the Series 1996-1
Certificateholders . . . . . . . . . . . . . . . . . . . . . .
SECTION 12. Amortization Events . . . . . . . . . . . . . . . . . . . . .
SECTION 13. Servicing Fee . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 14. Ratification of Pooling and Servicing Agreement . . . . . . .
SECTION 15. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 16. Governing Law . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 17. Certain Amendments . . . . . . . . . . . . . . . . . . . . . .
SERIES 1996-1 SUPPLEMENT, dated as of ________ 1, 1996 (this "Series
------
Supplement") among FIRESTONE RETAIL CREDIT CORPORATION, a corporation
- - ----------
organized and existing under the laws of the Commonwealth of Massachusetts,
as Transferor, BRIDGESTONE/FIRESTONE, INC., a corporation organized and
existing under the laws of the State of Ohio, individually and as Servicer
and THE FUJI BANK AND TRUST COMPANY, a banking corporation organized and
existing under the laws of the State of New York (together with its
successors in trust thereunder as provided in the Agreement referred to
below, the "Trustee"), as trustee under the Pooling and Servicing Agreement
-------
dated as of November 1, 1992, as amended, modified or supplemented from time
to time (the "Agreement").
----------
PRELIMINARY STATEMENT
Section 6.09 of the Agreement provides, among other things, that the
Transferor and the Trustee may at any time and from time to time enter into
a Supplement to the Agreement for the purpose of authorizing the issuance by
the Trustee to the Transferor for execution and redelivery to the Trustee for
authentication of one or more Series of Certificates. The Transferor has
tendered the Exchange Notice required by Section 6.09(b) of the Agreement and
hereby enters into this Supplement with the Trustee as required by Section
6.09(c) of the Agreement to provide for the issuance, authentication and
delivery of the Series 1996-1 Asset Backed Certificates (the "Investor
--------
Certificates"). In the event that any term or provision contained herein
- - ------------
shall conflict with or be inconsistent with any term or provision contained
in the Agreement, the terms and provisions of this Series Supplement shall
govern.
All capitalized terms not otherwise defined herein are defined in the
Agreement. All Article or Section references herein shall mean Article or
Section of the Agreement, except as otherwise provided herein. Unless
otherwise stated herein, as the context otherwise requires or if such term
is otherwise defined in the Agreement, each capitalized term used or defined
herein shall relate only to the Series 1996-1 Certificates and no other
Series of Investor Certificates issued by the Trust.
SECTION 1. Designation. There is hereby created a Series of Investor
-----------
Certificates to be issued pursuant to the Agreement and this Series
Supplement to be known as the Series 1996-1 Asset Backed Certificates (the
"Series 1996-1 Certificates"), consisting of $(200,000,000) principal amount
--------------------------
of Class A Certificates (the "Class A Certificates"), $(50,000,000) principal
--------------------
amount of Class B Certificates (the "Class B Certificates"), $( )
--------------------
principal amount of Class C Certificates (the "Class C Certificates"), and
--------------------
$( )
principal amount of a Subordinated Transferor Certificate (the "Subordinated
------------
Transferor Certificate").
- - ----------------------
SECTION 2. Definitions. The following words and phrases shall have the
-----------
meanings set forth below with respect to the Series 1996-1 Certificates and
the definitions of such terms are applicable to the singular as well as the
plural form of such terms and to the masculine as well as the feminine and
neuter genders of such terms:
"Amortization Event" shall have the meaning specified in Section
------------------
12.
"Amortization Period" shall mean, with respect to the Investor
-------------------
Certificates, the period following the Revolving Period which shall be either
the Controlled Amortization Period or the Rapid Amortization Period.
"Base Rate" shall mean the Class A Certificate Rate plus 2.00% per
---------
annum.
"Class A Additional Interest" shall have the meaning specified in
---------------------------
Section 4.04 of the Agreement.
"Class A Certificate Rate" shall mean, with respect to any Interest
------------------------
Accrual Period, a per annum rate equal to LIBOR for such Interest Accrual
Period plus % provided, however, with respect to the first Interest
-------
Accrual Period, the Class A Certificate Rate will be equal to %.
----
"Class A Certificateholder" shall mean the Person in whose name a
-------------------------
Class A Certificate is registered in the Certificate Register.
"Class A Certificateholders' Interest" shall mean the portion of
------------------------------------
the Series 1996-1 Certificateholders' Interest evidenced by the Class A
Certificates.
"Class A Certificates" shall mean any one of the certificates
--------------------
executed by the Transferor and authenticated by or on behalf of the Trustee,
substantially in the form of exhibit A-1 hereto.
("Class A Controlled Amortization Amount" shall mean $__________.)
--------------------------------------
"Class A Floating Allocation Percentage" shall mean, with respect
--------------------------------------
to any Collection Period, the percentage equivalent of a fraction, the
numerator of which is the Class A Invested Amount and the denominator of
which is the Aggregate Receivables
in the Trust each on the last day of the immediately preceding Collection
Period; provided, however, that when used in respect of the allocation of
Finance Charge Collections, such percentage shall be the percentage
equivalent of a fraction the numerator of which is the Class A Invested
Amount on the last day of the immediately preceding Collection Period and the
denominator of which is the sum of the numerators used to calculate the
Invested Percentage for the allocation of Finance Charge Collections for all
Series of Certificates outstanding during such Collection Period (including
all classes of such Series) and the B/F Amount.
"Class A Initial Invested Amount" shall mean the aggregate initial
-------------------------------
principal amount of the Class A Certificates, which is $(200,000,000).
"Class A Interest Shortfall" shall have the meaning specified in
--------------------------
Section 4.04(a).
"Class A Invested Amount" shall mean, when used with respect to any
-----------------------
date, an amount equal to (a) the Class A Initial Invested Amount, minus (b)
the aggregate amount of principal payments made to Class A Certificateholders
prior to such date and minus (c) the excess, if any, of the aggregate amount
of Class A Investor Charge-Offs for all Distribution Dates preceding such
date over Class A Investor Charge-Offs reimbursed pursuant to Section 4.08(a)
prior to such date.
"Class A Invested Percentage" shall mean for any Collection Period,
---------------------------
(a) with respect to Finance Charge Collections and Defaulted Receivables at
any time or Principal Collections during the Revolving Period, the Class A
Floating Allocation Percentage and (b) with respect to Principal Collections
during any Amortization Period, the Fixed Allocation Percentage.
"Class A Investor Charge-Offs" shall have the meaning specified in
----------------------------
Section 4.08(a).
"Class A Investor Default Amount" shall mean, with respect to each
-------------------------------
Distribution Date, an amount equal to the product of the Class A Floating
Allocation Percentage applicable during the immediately preceding Collection
Period and the amount of Defaulted Receivables for such Collection Period.
"Class A Monthly Interest" shall mean the monthly interest
------------------------
distributable in respect of the Class A Certificates as calculated in
accordance with Section 4.04(a).
"Class A Monthly Principal" shall mean the monthly principal
-------------------------
distributable in respect of the Class A Certificates as calculated in
accordance with Section 4.05(a).
"Class A Monthly Servicing Fee" shall mean, with respect to any
-----------------------------
Distribution Date, one twelfth of the product of 2.00% and the Class A
Invested Amount on the last day of the second preceding Collection Period (or
in the case of the first Distribution Date, the initial principal amount of
the Class A Certificates).
"Class A Pool Factor" shall mean, with respect to any Record Date,
-------------------
a number carried out to eight decimal places representing the ratio of the
Class A Invested Amount as of such Record Date (determined after taking into
account any decreases in the Class A Invested Amount which will occur on the
following Distribution Date) to the Class A Initial Invested Amount.
"Class A Required Amount" shall mean, with respect to any
-----------------------
Distribution Date, the amount by which (a) the sum of (i) Class A Monthly
Interest for such Distribution Date, (ii) any Class A Monthly Interest
previously due but not paid to the Class A Certificateholders on a prior
Distribution Date, (iii) Class A Additional Interest, if any, for such
Distribution Date and any Class A Additional Interest previously due but not
paid to the Class A Certificateholders on a prior Distribution Date, (iv) the
Class A Monthly Servicing Fee for such Distribution Date and (v) the Class
A Investor Default Amount, if any, for such Distribution Date exceeds (b) the
Class A Floating Allocation Percentage of Finance Charge Collections
deposited in the Collection Account for the immediately preceding Collection
Period.
"Class B Additional Interest" shall have the meaning specified in
---------------------------
Section 4.04 of the Agreement.
"Class B Certificate Rate" shall mean, with respect to any Interest
------------------------
Accrual Period, a per annum rate equal to LIBOR for such Interest Accrual
Period plus % provided, however, with respect to the first Interest
------
Accrual Period, the Class B Certificate Rate will be equal to %.
---
"Class B Certificateholder" shall mean the Person in whose name a
-------------------------
related Class B Certificate is registered in the Certificate Register.
"Class B Certificateholders' Interest" shall mean the portion of
------------------------------------
the Series 1996-1 Certificateholders' Interest evidenced by the Class B
Certificates.
"Class B Certificates" shall mean any one of the certificates
--------------------
executed by the Transferor and authenticated by or
on behalf of the Trustee, substantially in the form of Exhibit A-2.
"Class B Floating Allocation Percentage" shall mean, with respect
--------------------------------------
to any Collection Period, the percentage equivalent of a fraction, the
numerator of which is the Class B Invested Amount and the denominator of
which is the Aggregate Receivables in the Trust each on the last day of the
immediately preceding Collection Period; provided, however, that when used
in respect of the allocation of Finance Charge Collections, such percentage
shall be the percentage equivalent of a fraction the numerator of which is
the Class B Invested Amount on the last day of the immediately preceding
Collection Period and the denominator of which is the sum of the numerators
used to calculate the Invested Percentage for the allocation of Finance
Charge Collections for all Series of Certificates outstanding during such
Collection Period (including all classes of such Series) and the B/F Amount.
"Class B Initial Invested Amount" shall mean the aggregate initial
-------------------------------
principal amount of the Class B Certificates, which is $(50,000,000).
"Class B Interest Shortfall" shall have the meaning specified in
--------------------------
Section 4.04(b).
"Class B Invested Amount" shall mean, when used with respect to any
-----------------------
date, an amount equal to (a) the Class B Initial Invested Amount, minus (b)
the amount of principal payments made to Class B Certificateholders prior to
such date, minus (c) the aggregate amount of Class B Investor Charge-Offs for
all prior Distribution Dates, minus (d) the aggregate amount of Class B
Reallocated Principal Collections for all prior Distribution Dates which have
been used to fund the Required Amount with respect to such Distribution Dates
pursuant to Sections 4.06 and 4.10 for which neither the Subordinated
Transferor Invested Amount nor the Class C Invested Amount has been reduced
for all prior Business Days (provided that the Class B Invested Amount shall
in no event be reduced to an amount less than zero), minus (e) an amount
equal to the aggregate amount by which the Class B Invested Amount has been
reduced to fund the Class A Investor Default Amount on all prior Distribution
Dates pursuant to Section 4.08(a) and plus (f) the amount of Excess Finance
Charge Collections allocated and available on all prior Distribution Dates
pursuant to Section 4.09(d), for the purpose of reimbursing amounts deducted
pursuant to the foregoing clauses (c), (d) and (e).
"Class B Investor Charge-Offs" shall have the meaning specified in
----------------------------
Section 4.08(b).
"Class B Investor Default Amount" shall mean, with respect to each
-------------------------------
Distribution Date, an amount equal to the product of the Class B Floating
Allocation Percentage applicable during the immediately preceding Collection
Period and the amount of Defaulted Receivables for such Collection Period.
"Class B Monthly Interest" shall mean the monthly interest
------------------------
distributable in respect of the Class B Certificates as calculated in
accordance with Section 4.04(b).
"Class B Monthly Principal" shall mean the monthly principal
-------------------------
distributable in respect of the Class B Certificates as calculated in
accordance with Section 4.05(b).
"Class B Monthly Servicing Fee" shall mean, with respect to any
-----------------------------
Distribution Date, one twelfth of the product of 2.00% and the Class B
Invested Amount on the last day of the second preceding Collection Period (or
in the case of the first Distribution Date, the initial principal amount of
the Class B Certificates).
"Class B Pool Factor" shall mean, with respect to any Record Date,
-------------------
a number carried out to eight decimal places representing the ratio of the
Class B Invested Amount as of such Record Date (determined after taking into
account any increases or decreases in the Class B Invested Amount which will
occur on the following Distribution Date) to the Class B Initial Invested
Amount.
"Class B Reallocated Principal Collections" shall mean, with
-----------------------------------------
respect to each Distribution Date, the Principal Collections allocable to the
Class B Certificates with respect to such Distribution Date (equal to the
Class B Floating Allocation Percentage of Principal Collections for the
related Collection Period for any such Distribution Date during the Revolving
Period and equal to the product of the Fixed Allocation Percentage of
Principal Collections and a fraction, the numerator of which is the Class B
Invested Amount and the denominator of which is the Invested Amount of the
Series 1996-1 Certificates as of the last day of the prior Collection Period
for any such Distribution Date during any Amortization Period), in an amount
equal to the Class A Required Amount, if any, with respect to such
Distribution Date after giving effect to any payment of the Class A Required
Amount from Excess Finance Charge Collections, Class C Reallocated Principal
Collections and Subordinated Transferor Reallocated Principal Collections.
"Class B Required Amount" shall mean, with respect to any
-----------------------
Distribution Date, the amount by which (a) the sum of (i) Class B Monthly
Interest for such Distribution Date, (ii) any
Class B Monthly Interest previously due but not paid to the Class B
Certificateholders on a prior Distribution Date, (iii) Class B Additional
Interest, if any, for such Distribution Date and any Class B Additional
Interest previously due but not paid to the Class B Certificateholders on a
prior Distribution Date, (iv) the Class B Monthly Servicing Fee for such
Distribution Date and (v) the Class B Investor Default Amount, if any, for
such Distribution Date exceeds (b) the Class B Floating Allocation Percentage
of Finance Charge Collections deposited in the Collection Account for the
immediately preceding Collection Period.
"Class C Additional Interest" shall have the meaning specified in
---------------------------
Section 4.04(c) of the Agreement.
"Class C Certificate Rate" shall mean, with respect to any Interest
------------------------
Accrual Period, a per annum rate equal to LIBOR for such Interest Accrual
Period plus % provided, however, with respect to the first Interest
------
Accrual Period, the Class C Certificate Rate will be equal to %.
---
"Class C Certificateholder" shall mean the Person in whose name a
-------------------------
related Class C Certificate is registered in the Certificate Register.
"Class C Certificateholders' Interest" shall mean the portion of
------------------------------------
the Series 1996-1 Certificateholders' Interest evidenced by the Class C
Certificates.
"Class C Certificates" shall mean any one of the certificates
--------------------
executed by the Transferor and authenticated by or on behalf of the Trustee,
substantially in the form of Exhibit A-3.
"Class C Floating Allocation Percentage" shall mean, with respect
--------------------------------------
to any Collection Period, the percentage equivalent of a fraction, the
numerator of which is the Class C Invested Amount and the denominator of
which is the Aggregate Receivables in the Trust each on the last day of the
immediately preceding Collection Period; provided, however, that when used
in respect of the allocation of Finance Charge Collections, such percentage
shall be the percentage equivalent of a fraction the numerator of which is
the Class C Invested Amount on the last day of the immediately preceding
Collection Period and the denominator of which is the sum of the numerators
used to calculate the Invested Percentage for the allocation of Finance
Charge Collections for all Series of Certificates outstanding during such
Collection Period (including all classes of such Series) and the B/F Amount.
"Class C Initial Invested Amount" shall mean the aggregate initial
-------------------------------
principal amount of the Class C Certificates, which is $__________.
"Class C Interest Shortfall" shall have the meaning specified in
--------------------------
Section 4.04(c).
"Class C Invested Amount" shall mean, when used with respect to any
-----------------------
date, an amount equal to (a) the Class C Initial Invested Amount, minus (b)
the amount of principal payments made to Class C Certificateholders prior to
such date, minus (c) the aggregate amount of Class C Investor Charge-Offs for
all prior Distribution Dates, minus (d) the aggregate amount of Class C
Reallocated Principal Collections for all prior Distribution Dates which have
been used to fund the Required Amount with respect to such Distribution Dates
pursuant to Sections 4.06 and 4.10 for which the Subordinated Transferor
Invested Amount has not been reduced for all prior Business Days (provided
that the Class C Invested Amount shall in no event be reduced to an amount
less than zero), minus (e) an amount equal to the aggregate amount by which
the Class C Invested Amount has been reduced to fund the Class A Investor
Default Amount on all prior Distribution Dates pursuant to Section 4.08 and
plus (f) the amount of Excess Finance Charge Collections allocated and
available on all prior Distribution Dates pursuant to Section 4.09(f), for
the purpose of reimbursing amounts deducted pursuant to the foregoing clauses
(c), (d) and (e).
"Class C Investor Charge-Offs" shall have the meaning specified in
----------------------------
Section 4.08(c).
"Class C Investor Default Amount" shall mean, with respect to each
-------------------------------
Distribution Date, an amount equal to the product of the Class C Floating
Allocation Percentage applicable during the immediately preceding Collection
Period and the amount of Defaulted Receivables for such Collection Period.
"Class C Monthly Interest" shall mean the monthly interest
------------------------
distributable in respect of the Class C Certificates as calculated in
accordance with Section 4.04(c).
"Class C Monthly Principal" shall mean the monthly principal
-------------------------
distributable in respect of the Class C Certificates as calculated in
accordance with Section 4.05(c).
"Class C Monthly Servicing Fee" shall mean, with respect to any
-----------------------------
Distribution Date, one twelfth of the product of 2.00% and the Class C
Invested Amount on the last day of the second preceding Collection Period (or
in the case of the first
Distribution Date, the initial principal amount of the Class C Certificates).
"Class C Pool Factor" shall mean, with respect to any Record Date,
-------------------
a number carried out to eight decimal places representing the ratio of the
Class C Invested Amount as of such Record Date (determined after taking into
account any increases or decreases in the Class C Invested Amount which will
occur on the following Distribution Date) to the Class C Initial Invested
Amount.
"Class C Reallocated Principal Collections" shall mean, with
-----------------------------------------
respect to each Distribution Date, the Principal Collections allocable to the
Class C Certificates with respect to such Distribution Date (equal to the
Class C Floating Allocation Percentage of Principal Collections for the
related Collection Period for any such Distribution Date during the Revolving
Period and equal to the product of the Fixed Allocation Percentage of
Principal Collections and a fraction, the numerator of which is the Class C
Invested Amount and the denominator of which is the Invested Amount of the
Series 1996-1 Certificates as of the last day of the prior Collection Period
for any such Distribution Date during any Amortization Period) in an amount
equal to the Class A and Class B Required Amount, if any, with respect to
such Distribution Date after giving effect to any payment of the Class A and
Class B Required Amount from Excess Finance Charge Collections and
Subordinated Transferor Reallocated Principal Collections.
"Class C Required Amount" shall mean, with respect to any
-----------------------
Distribution Date, the amount by which (a) the sum of (i) Class C Monthly
Interest for such Distribution Date, (ii) any Class C Monthly Interest
previously due but not paid to the Class C Certificateholders on a prior
Distribution Date, (iii) Class C Additional Interest, if any, for such
Distribution Date and any Class C Additional Interest previously due but not
paid to the Class C Certificateholders on a prior Distribution Date, (iv) the
Class C Monthly Servicing Fee for such Distribution Date and (v) the Class
C Investor Default Amount, if any, for such Distribution Date exceeds (b) the
Class C Floating Allocation Percentage of Finance Charge Collections
deposited in the Collection Account for the immediately preceding Collection
Period.
"Closing Date" shall mean, with respect to the Series 1996-1
------------
Certificates, ___________, 1996.
"Controlled Amortization Period" shall mean an amortization period
------------------------------
commencing on ________, 1998 and continuing to, but not including, the date
on which the Class A Invested Amount has been paid in full or to, and
including, (i) the date
of termination of the Trust pursuant to Section 12.01 or (ii) the Final
Series 1996-1 Termination Date or (iii) the day on which an Amortization
Event occurs or is deemed to have occurred.
"Controlled Distribution Amount" shall mean, for any Distribution
------------------------------
Date with respect to the Controlled Amortization Period, an amount equal to
the sum of the Controlled Amortization Amount and any existing Deficit
Controlled Amortization Amount.
"Deficit Controlled Amortization Amounts" shall mean, on the first
---------------------------------------
Distribution Date with respect to the Controlled Amortization Period, the
excess, if any, of the Controlled Amortization Amount over the amount
distributed as Class A Monthly Principal for such Distribution Date and, on
each subsequent Distribution Date with respect to the Controlled Amortization
Period, the excess, if any, of the Controlled Amortization Amount and any
then existing Deficit Controlled Amortization Amount over the aggregate Class
A Monthly Principal distributed on such Distribution Date.
"Designated Maturity" shall mean, for any LIBOR Determination Date,
-------------------
(a) with respect to the Class A Certificates, prior to the occurrence of an
Amortization Event, (three months), and after the occurrence of an
Amortization Event, (one month) and (b) with respect to the Class B
Certificates, (one month).
"Distribution Date" shall mean the first day of each month, unless
-----------------
such first day is not a Business Day, in which case the next Business Day,
commencing on __________, 1996.
"Excess Finance Charge Collections" shall mean, with respect to any
---------------------------------
Distribution Date, the sum of the amounts, if any, specified pursuant to
Sections 4.07 (a)(iv), (b)(iv), (c)(iv) and (d)(ii) with respect to such
Distribution Date.
"Final Series 1996-1 Termination Date" shall mean ________________.
------------------------------------
"Fixed Allocation Percentage" shall mean, for any Collection Period
---------------------------
with respect to an Amortization Period when used with respect to the
allocation of Principal Collections, the percentage equivalent of the ratio
which the sum of the Class A Invested Amount, the Class B Invested Amount,
the Class C Invested Amount and the Subordinated Transferor Invested Amount,
each as of the last day of the Revolving Period, bears to the greater of (a)
the Aggregate Receivables on the last day of the prior Collection Period and
(b) the sum of the numerators used to calculate the Invested Percentage with
respect to Principal Collections for all Series of Certificates outstanding
for such Collection Period.
"Floating Allocation Percentage" shall mean for any Collection
------------------------------
Period, the sum of the applicable Class A Floating Allocation Percentage, the
Class B Floating Allocation Percentage for such Collection Period, the Class
C Floating Percentage and the Subordinated Transferor Floating Allocation
Percentage.
"Floating Rate Interest Factor" shall mean with respect to any
-----------------------------
Interest Accrual Period, the number of days from and including the first day
in the Interest Accrual Period to but excluding the last day in the Interest
Accrual Period, divided by 360.
"Initial Invested Amount" shall mean the aggregate initial
-----------------------
principal amount of the Investor Certificates of Series 1996-1, which is
$___________.
"Interest Accrual Period" shall mean, with respect to any
-----------------------
Distribution Date, the period from and including the first day of the
preceding calendar month to and including the last day of such preceding
calendar month, except the initial Interest Accrual Period shall be deemed
to be the period from the Closing Date through the last day of the calendar
month preceding the initial Distribution Date.
"Invested Amount" shall mean, when used with respect to any date,
---------------
an amount equal to the sum of the Class A Invested Amount, the Class B
Invested Amount, the Class C Invested Amount and Subordinated Transferor
Invested Amount, each as of such date.
"Invested Percentage" shall mean for any Collection Period, (a)
-------------------
with respect to Finance Charge Collections and Defaulted Receivables at any
time or Principal Collections during the Revolving Period, the Floating
Allocation Percentage and (b) with respect to Principal Collections during
the Amortization Period, the Fixed Allocation Percentage.
"Investor Certificateholder" shall mean the Holder of record of an
--------------------------
Investor Certificate of Series 1996-1.
"Investor Certificates" shall mean the Class A Certificates, the
---------------------
Class B Certificates, the Class C Certificates and the Subordinated
Transferor Certificate.
"Investor Default Amount" shall mean, with respect to each
-----------------------
Distribution Date, an amount equal to the sum of the Class A Investor Default
Amount, the Class B Investor Default Amount, the Class C Investor Default
Amount and the Subordinated Transferor Investor Default Amount, each for such
Distribution Date.
"LIBOR" shall mean, as of any LIBOR Determination Date, the rate
-----
for deposits in United States dollars for a period of the Designated Maturity
commencing on the first day of the relevant Interest Accrual Period which
appears on Telerate Page 3750 as of 11:00 a.m., London time, on the day that
is the LIBOR Determination Date. If such rate does not appear on Telerate
Page 3750, the rate for that day will be determined on the basis of the rates
at which deposits in United States dollars are offered by the Reference Banks
at approximately 11:00 a.m., London time, on that day to major banks in the
London interbank market for a period of the Designated Maturity commencing
on the first day of the relevant Interest Accrual Period. The Servicer will
request the principal London office of each of the Reference Banks to provide
a quotation of its rate. If at least two such quotations are provided, the
rate for that day will be the arithmetic mean of the quotations. If fewer
than two quotations are provided as requested, the rate for that day will be
the arithmetic mean of the rates quoted by major banks in New York City,
selected by the Servicer, at approximately 11:00 a.m., New York City time,
on that day for loans in United States dollars to leading European banks for
the Designated Maturity commencing on the first day of the relevant Interest
Accrual Period.
"LIBOR Determination Date" shall mean, with respect to any Interest
------------------------
Accrual Period, the second London Business Day prior to the commencement of
such Interest Accrual Period.
"London Business Day" shall mean, a business day on which dealings
-------------------
in deposits in United States dollars are transacted in the London interbank
market.
"Payment Date Statement" shall have the meaning specified in
----------------------
Section 5.02(a).
"Principal Shortfalls" shall mean on any Business Day (x) for
--------------------
Series 1996-1, (i) during the Controlled Amortization Period, the excess of
the Class A Controlled Distribution Amount over the aggregate amount applied
with respect thereto for such Business Day and for each prior Business Day
in such Collection Period, and (ii) at all other times, the Invested Amount
of the class then receiving principal payments after the application of
Principal Collections on such Business Day or (y) for any other Series the
amounts specified as such in the Supplement for such other Series.
"Rapid Amortization Period" shall mean an Amortization Period
-------------------------
commencing on the earlier of the day on which (i) the Class A Invested Amount
has been reduced to zero or (ii) an Amortization Event occurs or is deemed
to have occurred and
ending on the earlier to occur of (x) the date on which the Invested Amount
has been paid in full or (x) the Final Series 1996-1 Termination Date.
"Rating Agency" shall mean Standard & Poor's, Moody's and Fitch,
-------------
to the extent such entities were selected by the Transferor to rate the
Series 1996-1 Investor Certificates.
"Reallocated Principal Collections" shall mean, with respect to
---------------------------------
each Distribution Date, the sum of the Class B Reallocated Principal
Collections, Class C Reallocated Principal Collections and the Subordinated
Transferor Reallocated Principal Collections.
"Record Date" shall mean, with respect to any Distribution Date,
-----------
the 15th day of the calendar month immediately preceding such Distribution
Date.
"Reference Banks" shall mean four major banks in the London
---------------
interbank market selected by the Servicer.
"Required Amount" shall mean the sum of the Class A Required
---------------
Amount, the Class B Required Amount and the Class C Required Amount.
"Revolving Period" shall mean, with respect to the Series 1996-1
----------------
Certificates, the period from and including the Closing Date, up to and
including the day prior to the day on which an Amortization Period commences.
"Series 1996-1 Certificateholders' Interest" shall have the meaning
------------------------------------------
specified in Section 4.02.
"Servicing Fee Percentage" shall mean 2.00% per annum.
------------------------
"Shared Principal Collections" shall mean, as the context requires,
----------------------------
either (a) the amount allocated to the Series 1996-1 Certificates which may
be applied in accordance with Article IV of the Agreement or (b) the amounts
allocated to the investor certificates (other than Transferor Retained
Certificates) of other Series which the applicable Series Supplements for
such Series specify are to be treated as "Shared Principal Collections" and
which may be applied to cover Principal Shortfalls with respect to the Series
1996-1 Certificates.
"Subordinated Transferor Certificate" shall mean the certificate
-----------------------------------
executed by the Transferor and authenticated by or on behalf of the Trustee,
substantially in the form of Exhibit A-4.
"Subordinated Transferor Certificateholder" shall mean the Person
-----------------------------------------
in whose name the Subordinated Transferor Certificate is registered in the
Certificate Register.
"Subordinated Transferor Certificateholders' Interest" shall mean
----------------------------------------------------
the Series 1996-1 Certificateholders' Interest evidenced by the Subordinated
Transferor Certificate.
"Subordinated Transferor Investor Default Amount" shall mean, with
-----------------------------------------------
respect to each Distribution Date, an amount equal to the product of the
Subordinated Transferor Floating Allocation Percentage applicable during the
immediately preceding Collection Period and the amount of Defaulted
Receivables for such Collection Period.
"Subordinated Transferor Floating Allocation Percentage" shall
------------------------------------------------------
mean, with respect to any Collection Period, the percentage equivalent of a
fraction, the numerator of which is the Subordinated Transferor Invested
Amount and the denominator of which is the Aggregate Receivables in the Trust
each on the last day of the immediately preceding Collection Period;
provided, however, that when used in respect of the allocation of Finance
Charge Collections, such percentage shall be the percentage equivalent of a
fraction the numerator of which is the Subordinated Transferor Invested
Amount on the last day of the immediately preceding Collection Period and the
denominator of which is the sum of the numerators used to calculate the
Invested Percentage for the allocation of Finance Charge Collections for all
Series of Certificates outstanding during such Collection Period (including
all classes of such Series) and the B/F Amount.
"Subordinated Transferor Initial Invested Amount" shall mean the
-----------------------------------------------
aggregate initial principal amount of the Subordinated Transferor
Certificate, which is $__________.
"Subordinated Transferor Invested Amount" shall mean, when used
---------------------------------------
with respect to any date, an amount equal to (a) the Subordinated Transferor
Initial Invested Amount, minus (b) the amount of principal payments made to
the Subordinated Transferor Certificateholder prior to such date, minus (c)
the aggregate amount of Subordinated Transferor Investor Charge-Offs for all
prior Distribution Dates, minus (d) the aggregate amount of Reallocated
Principal Collections for all prior Distribution Dates which have been used
to fund the Required Amount with respect to such Distribution Dates pursuant
to Sections 4.06 and 4.10 (provided that the Subordinated Transferor Invested
Amount shall in no event be reduced to an amount less than zero), minus (e)
an amount equal to the aggregate amount by which the Subordinate Transferor
Invested Amount has been reduced to fund
the Class A Investor Default Amount on all prior Distribution Dates pursuant
to Section 4.08 and plus (f) the amount of Excess Finance Charge Collections
allocated and available on all prior Distribution Dates pursuant to Section
4.09(h), for the purpose of reimbursing amounts deducted pursuant to the
foregoing clauses (c), (d) and (e).
"Subordinated Transferor Investor Charge-Offs" shall have the
--------------------------------------------
meaning specified in Section 4.08(d).
("Subordinated Transferor Monthly Principal" shall mean the monthly
-----------------------------------------
principal distributable in respect of the Subordinated Transferor Certificate
as calculated in accordance with Section 4.05(d).)
"Subordinated Transferor Monthly Servicing Fee" shall mean, with
---------------------------------------------
respect to any Distribution Date, one twelfth of the product of 2.00% and the
Subordinated Transferor Invested Amount on the last day of the second
preceding Collection Period (or in the case of the first Distribution Date,
the initial principal amount of the Subordinated Transferor Certificate).
"Subordinated Transferor Pool Factor" shall mean, with respect to
-----------------------------------
any Record Date, a number carried out to eight decimal places representing
the ratio of the Subordinated Transferor Invested Amount as of such Record
Date (determined after taking into account any increases or decreases in the
Subordinated Transferor Invested Amount which will occur on the following
Distribution Date) to the Subordinated Transferor Initial Invested Amount.
"Subordinated Transferor Reallocated Principal Collections" shall
---------------------------------------------------------
mean, with respect to each Distribution Date, the Principal Collections
allocable to the Subordinated Transferor Certificate with respect to such
Distribution Date (equal to the Subordinated Transferor Floating Allocation
Percentage of Principal Collections for the related Collection Period for any
such Distribution Date during the Revolving Period and equal to the product
of the Fixed Allocation Percentage of Principal Collections and a fraction,
the numerator of which is the Subordinated Transferor Invested Amount and the
denominator of which is the Invested Amount of the Series 1996-1 Certificates
as of the last day of the prior Collection Period for any such Distribution
Date during any Amortization Period) in an amount equal to the Class A, Class
B and Class C Required Amount, if any, with respect to such Distribution Date
(after giving effect to any payment of the Class A, Class B and Class C
Required Amount from Excess Finance Charge Collections).
"Telerate Page 3750" means the display page currently so designated
------------------
on the Dow Jones Telerate Service (or such other page as may replace that
page on that service for the purpose of displaying comparable rates or
prices).
"Termination Payment Date" shall mean the earlier of the first
------------------------
Distribution Date following the liquidation or sale of the Receivables as a
result of an Amortization Event and the occurrence of the Final Series 1996-1
Termination Date.
SECTION 3. Aggregate Receivables. The Transferor shall maintain
---------------------
the Aggregate Receivables at a level such that the Transferor Amount (plus
any amounts available under the Transferor Letter of Credit or the Transferor
Escrow Account and the B/F Amount) is equal to or greater than _% (the
"Minimum Transferor Interest Percentage") of the Aggregate Invested Amount
--------------------------------------
of all Series of Certificates issued by the Trust.
SECTION 4. Reassignment and Transfer Terms. The Series 1996-1
-------------------------------
Certificates may be reassigned and transferred to the Transferor on any
Distribution Date on or after which the Invested Amount is reduced to an
amount less than or equal to $__________ or 5% of the Initial Invested
Amount, subject to the provisions of Section 12.02.
SECTION 5. Delivery and Payment for the Series 1996-1
------------------------------------------
Certificates. The Trustee shall deliver the Series 1996-1 Certificates when
- - ------------
authenticated in accordance with Section 6.02 of the Agreement.
SECTION 6. Form of Delivery of the Series 1996-1 Certificates.
--------------------------------------------------
The Class A Certificates and the Class B Certificates shall be delivered as
Book-Entry Certificates as provided in Section 6.11 of the Agreement. The
Class C Certificates and the Subordinated Transferor Certificate shall be
delivered in physical form.
(SECTION 7. Subordination of Transferor Interest. For the benefit
------------------------------------
of the Investor Certificateholders of the Series established hereby, the
Transferor hereby subordinates, if required pursuant to Section 4.09A hereof,
and to the extent and in the manner set forth in Section 4.08(a) hereof all
of the Transferor's right, title and interest in and to future distributions
due on the Exchangeable Transferor Certificate to the extent, and only to the
extent, of the Available Subordinated Amount.)
SECTION 8. Article IV of the Agreement. Any provisions of Article
---------------------------
IV of the Agreement which distribute Collections to the Transferor on the
basis of the Transferor
Percentage shall continue to apply irrespective of the issuance of the Series
1996-1 Certificates. Section 4.01, Section 4.01A and Section 4.01B of the
Agreement shall read in their entirety as provided in the Agreement.
Article IV of the Agreement (except for Sections 4.01, 4.01A and
4.01B) shall read in its entirety as follows and shall be applicable to the
Series 1996-1 Certificates:
ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS AND
ALLOCATION AND APPLICATION OF COLLECTIONS
Section 4.02. Rights of Certificateholders. The Series 1996-1
----------------------------
Certificates shall represent undivided interests in the Trust, consisting of
the right to receive, to the extent necessary to make the required payments
with respect to such Investor Certificates at the times and in the amounts
specified in this Agreement, (a) the Floating Allocation Percentage and Fixed
Allocation Percentage (as applicable from time to time pursuant to Sections
4.04 and 4.05 of the Agreement) of Collections received with respect to the
Receivables and (b) funds on deposit in the Collection Account (for such
Series, the "Series 1996-1 Certificateholders' Interest"). The Subordinated
------------------------------------------
Transferor Certificate shall be subordinate to the Class C Certificates, the
Class C Certificates shall be subordinate to the Class B Certificates and the
Class B Certificates shall be subordinate to the Class A Certificates. The
Exchangeable Transferor Certificate shall not represent any interest in the
Collection Account, except as specifically provided in this Article IV.
Section 4.03. Collections and Allocation.
--------------------------
(a) Collections. The Servicer will apply or will instruct the
-----------
Trustee to apply all funds on deposit in the Collection Account as described
in this Article IV.
(b) Allocations. On each Determination Date, the Servicer shall
-----------
determine whether an Amortization Event is deemed to have occurred in the
related Collection Period with respect to the Series 1996-1 Certificates, and
the Servicer shall allocate Collections with respect to the related
Collection Period as follows:
(i) During the Revolving Period. On each Determination Date,
---------------------------
or more frequently at the option of the Servicer, allocate to the Series
1996-1 Certificateholders' Interest (x) an amount equal to the Floating
Allocation Percentage of the Principal
Collections for the prior Collection Period and remit such amounts
to the Holder of the Exchangeable Transferor Certificate (except that such
remittance shall not include Reallocated Principal Collections used to cover
the Required Amount (except to the extent of the Class A Investor Default
Amount) and shall not exceed the Transferor Interest on such Determination
Date, after giving effect to any new Receivables purchased by the Holder of
the Exchangeable Transferor Certificate and transferred to the Trust on such
day) and (y) an amount equal to the Floating Allocation Percentage of the
Finance Charge Collections for the prior Collection Period and deposit such
amount into the Collection Account as and when required pursuant to Section
4.01;
(ii) During any Amortization Period. On each Determination
------------------------------
Date, or more frequently at the option of the Servicer, allocate to the
Series 1996-1 Certificateholders' Interest (x) an amount equal to the Fixed
Allocation Percentage of the Principal Collections for the prior Collection
Period and deposit such amount into the Collection Account and (y) an amount
equal to the Floating Allocation Percentage of the Finance Charge Collections
for the prior Collection Period and deposit such amount into the Collection
Account as and when required pursuant to Section 4.01; and
(iii) Allocations and Payments to the Holder of the
---------------------------------------------
Exchangeable Transferor Certificate and the Bridgestone/Firestone
- - -----------------------------------------------------------------
Certificate. Amounts to be allocated to the Holder of the Exchangeable
- - -----------
Transferor Certificate and the Bridgestone/Firestone Certificate and payments
with respect thereto shall be determined and made only as provided in
Sections 4.03(b)(i), 4.01(d) and 4.01(g).
The allocations to be made pursuant to this Section 4.03(b) also apply to
deposits into the Collection Account that are treated as Collections,
including Transfer Deposit Amounts, Adjustment Payments, proceeds from the
sale, disposition or liquidation of the Receivables pursuant to Section 9.02
or 12.01. Such deposits to be treated as Collections will be allocated as
Finance Charge Collections or Principal Collections as provided in the
Agreement.
Section 4.04. Determination of Monthly Interest for the Series
------------------------------------------------
1996-1 Certificates. (a) The amount of monthly interest (the "Class A
- - -------------------
Monthly Interest") distributable from the
Collection Account with respect to the Class A Certificates of the Series
1996-1 Certificates on any Distribution Date shall be an amount equal to the
product of (i) the Floating Rate Interest Factor, (ii) the Class A
Certificate Rate and (iii) the outstanding principal balance of the Class A
Certificates as of the preceding Distribution Date (after subtracting
therefrom the aggregate amount of all distributions of Class A Monthly
Principal made through such Distribution Date to the Class A
Certificateholders); provided, however, that with respect to the first
-------- -------
Distribution Date for the Series 1996-1 Certificates, Class A Monthly
Interest shall be equal to $____________.
On the Determination Date preceding each Distribution Date, the
Servicer shall determine an amount (the "Class A Interest Shortfall") equal
--------------------------
to the excess, if any, of (x) the aggregate Class A Monthly Interest for the
Interest Accrual Period applicable to the preceding Distribution Date over
----
(y) the amount which was paid to the Class A Certificateholders in respect
of interest on such preceding Distribution Date. If there is a Class A
Interest Shortfall with respect to any Distribution Date, an additional
amount ("Class A Additional Interest") shall be payable as provided herein
---------------------------
with respect to the Class A Certificates on each Distribution Date following
such Distribution Date to and including the Distribution Date on which such
Class A Interest Shortfall is paid to Class A Certificateholders equal to the
product of (i) the Floating Rate Interest Factor, (ii) the Class A
Certificate Rate and (iii) such Class A Interest Shortfall. Notwithstanding
anything to the contrary herein, Class A Additional Interest shall be payable
or distributed to Class A Certificateholders only to the extent permitted by
applicable law.
(b) The amount of monthly interest (the "Class B Monthly Interest")
------------------------
distributable from the Collection Account with respect to the Class B
Certificates of the Series 1996-1 Certificates on any Distribution Date shall
be an amount equal to one-twelfth of the product of (i) the Floating Rate
Interest Factor, (ii) the Class B Certificate Rate and (iii) the outstanding
principal balance of the Class B Certificates as of the preceding
Distribution Date (after subtracting therefrom the aggregate amount of all
distributions of Class B Monthly Principal made through such Distribution
Date to the Class B Certificate-holders); provided, however, that with
-------- -------
respect to the first Distribution Date for the Series 1996-1 Certificates,
Class B Monthly Interest shall be equal to $ .
--------------
On the Determination Date preceding each Distribution Date, the
Servicer shall determine an amount (the "Class B Interest Shortfall") equal
--------------------------
to the excess, if any, of (x) the aggregate Class-B Monthly Interest for the
Interest Accrual
Period applicable to the preceding Distribution Date over (y) the amount
----
which was paid to the Class B Certificateholders in respect of interest on
such preceding Distribution Date. If there is a Class B Interest Shortfall
with respect to any Distribution Date, an additional amount ("Class B
-------
Additional Interest") shall be payable as provided herein with respect to the
- - -------------------
Class B Certificates on each Distribution Date following such Distribution
Date to and including the Distribution Date on which such Class B Interest
Shortfall is paid to Class B Certificateholders equal the product of (i) the
Floating Rate Interest Factor, (ii) the Class B Certificate Rate and (iii)
such Class B Interest Shortfall. Notwithstanding anything to the contrary
herein, Class B Additional Interest shall be payable or distributed to Class
B Certificateholders only to the extent permitted by applicable law.
(c) The amount of monthly interest (the "Class C Monthly Interest")
------------------------
distributable from the Collection Account with respect to the Class C
Certificates of the Series 1996-1 Certificates on any Distribution Date shall
be an amount equal the product of (i) the Floating Rate Interest Factor, (ii)
the Class C Certificate Rate and (iii) the outstanding principal balance of
the Class C Certificates as of the preceding Distribution Date (after
subtracting therefrom the aggregate amount of all distributions of Class C
Monthly Principal made through such Distribution Date to the Class C
Certificate-holders); provided, however, that with respect to the first
-------- -------
Distribution Date for the Series 1996-1 Certificates, Class C Monthly
Interest shall be equal to $ .
--------------
On the Determination Date preceding each Distribution Date, the
Servicer shall determine an amount (the "Class C Interest Shortfall") equal
--------------------------
to the excess, if any, of (x) the aggregate Class-C Monthly Interest for the
Interest Accrual Period applicable to the preceding Distribution Date over
----
(y) the amount which was paid to the Class C Certificateholders in respect
of interest on such preceding Distribution Date. If there is a Class C
Interest Shortfall with respect to any Distribution Date, an additional
amount ("Class C Additional Interest") shall be payable as provided herein
---------------------------
with respect to the Class C Certificates on each Distribution Date following
such Distribution Date to and including the Distribution Date on which such
Class C Interest Shortfall is paid to Class C Certificateholders equal to the
product of (i) the Floating Rate Interest Factor, (ii) the Class C
Certificate Rate and (iii) such Class C Interest Shortfall. Notwithstanding
anything to the contrary herein, Class C Additional Interest shall be payable
or distributed to Class C Certificateholders only to the extent permitted by
applicable law.
Section 4.05. Determination of Monthly Principal. (a) The amount
----------------------------------
of monthly principal (the "Class A Monthly Principal") distributable from the
-------------------------
Collection Account with respect to the Class A Certificates on each
Distribution Date beginning with the Distribution Date related to the
Collection Period in which the Controlled Amortization Period or any Rapid
Amortization Period begins shall be equal to an amount calculated as follows:
the sum of (i) an amount equal to the Fixed Allocation Percentage of all
Principal Collections received during the Collection Period immediately
preceding such Distribution Date (or portion thereof, in the case of an
Amortization Event which occurs during such Collection Period) (other than
Reallocated Principal Collections used to pay the Required Amount due on the
Class A Certificates), (ii) the amount of Shared Principal Collections
allocated to the Class A Certificates with respect to the preceding
Collection Period pursuant to Section 4.05(e), (iii) the amount, if any, of
Transfer Deposit Amounts and Adjustment Payments with respect to such
Distribution Date and (iv) the amount, if any, of Finance Charge Collections
and Excess Finance Charge Collections allocated and available on such
Distribution Date to (A) fund the Class A Investor Default Amount and the
Class B Investor Default Amount with respect to such Distribution Date and
(B) reimburse Class A Investor Charge-Offs and previous reductions in the
Class B Invested Amount; provided, however, that for each Distribution Date
-------- -------
with respect to the Controlled Amortization Period (unless and until an
Amortization Event shall have occurred), Class A Monthly Principal shall not
exceed the Controlled Distribution Amount for such Distribution Date;
provided, however, that with respect to the Final Series 1996-1 Termination
- - -------- -------
Date, Class A Monthly Principal shall be an amount equal to the Class A
Invested Amount.
(b) The amount of (monthly) principal (the "Class B Monthly
---------------
Principal") distributable from the Collection Account with respect to the
- - ---------
Class B Certificates on each Distribution Date, beginning with the
Distribution Date on which the Class A Invested Amount is paid in full, shall
be an amount equal to and calculated as follows: the sum of (a)(i) an amount
equal to the Fixed Allocation Percentage of Principal Collections received
during the Collection Period immediately preceding such Distribution Date (or
portion thereof, in the case of an Amortization Event which occurs during
such Collection Period), (ii) the amount of Shared Principal Collections
allocated to the Class B Certificates with respect to the preceding
Collection Period pursuant to Section 4.05(e), and (iii) the amount, if any,
of Excess Finance Charge Collections to be distributed pursuant to Section
4.09(c) and (d) with respect to such Distribution Date, minus (b) the Class
A Monthly Principal, if any, with respect to such Distribution Date.
(c) The amount of (monthly) principal (the "Class C Monthly
---------------
Principal") distributable from the Collection Account with respect to the
- - ---------
Class C Certificates on each Distribution Date, beginning with the
Distribution Date on which the Class B Invested Amount is paid in full, shall
be an amount equal to and calculated as follows: the sum of (a)(i) an amount
equal to the Fixed Allocation Percentage of Principal Collections received
during the Collection Period immediately preceding such Distribution Date (or
portion thereof, in the case of an Amortization Event which occurs during
such Collection Period), (ii) the amount of Shared Principal Collections
allocated to the Class C Certificates with respect to the preceding
Collection Period pursuant to Section 4.05(e), and (iii) the amount, if any,
of Excess Finance Charge Collections to be distributed pursuant to Section
4.09(e) and (f) with respect to such Distribution Date, minus (b) the Class
B Monthly Principal, if any, with respect to such Distribution Date.
(d) The amount of (monthly) principal (the "Subordinated
------------
Transferor Monthly Principal") distributable from the Collection Account with
- - ----------------------------
respect to the Subordinated Transferor Certificates on each Distribution
Date, beginning with the Distribution Date on which the Class C Invested
Amount is paid in full, shall be an amount equal to and calculated as
follows: the sum of (a)(i) an amount equal to the Fixed Allocation Percentage
of Principal Collections received during the Collection Period immediately
preceding such Distribution Date (or portion thereof, in the case of an
Amortization Event which occurs during such Collection Period), (ii) the
amount of Shared Principal Collections allocated to the Subordinated
Transferor Certificate with respect to the preceding Collection Period
pursuant to Section 4.05(e), and (iii) the amount, if any, of Excess Finance
Charge Collections to be distributed pursuant to Section 4.09(g) and (h) with
respect to such Distribution Date, minus (b) the Class C Monthly Principal,
if any, with respect to such Distribution Date.
(e) Shared Principal Collections allocated to the Series 1996-1
Certificates for any Business Day with respect to the Amortization Period
shall mean an amount equal to the product of (x) Shared Principal Collections
for all Series for such Business Day and (y) a fraction, the numerator of
which is the Principal Shortfall for the Series 1996-1 Certificates for such
Business Day and the denominator of which is the aggregate amount of
Principal Shortfalls for all Series for such Business Day. For any Business
Day with respect to the Revolving Period, Shared Principal Collections
allocated to the Series 1996-1 Certificates shall be zero.
Section 4.06. Coverage of Required Amount for the Series 1996-1
-------------------------------------------------
Certificates. On each Determination Date, the Servicer shall determine the
- - ------------
Required Amount, if any. In the event that the Required Amount for such
Distribution Date is greater than zero, the Servicer shall give written
notice to the Trustee of such positive Required Amount on the Determination
Date prior to such Distribution Date and all or a portion of the Excess
Finance Charge Collections with respect to such Distribution Date in an
amount equal to the Required Amount for such Distribution Date shall be
distributed from the Collection Account on such Distribution Date pursuant
to Section 4.09(a). In the event that the Required Amount for such
Distribution Date exceeds the amount of Excess Finance Charge Collections
with respect to such Distribution Date, first, all or a portion of the
-----
Subordinated Transferor Reallocated Principal Collections, second, the Class
------
C Reallocated Principal Collections, and third, the Class B Reallocated
-----
Principal Collections, in an amount equal to such excess shall be distributed
from the Collection Account on such Distribution Date to or for the benefit
of first, the Class A Certificateholders, second, the Class B
----- ------
Certificateholders and third, the Class C Certificateholders pursuant to
-----
Section 4.10.
In the event that the Required Amount exceeds the amount of such
Excess Finance Charge Collections and Reallocated Principal Collections, the
Subordinated Transferor Invested Amount shall be reduced by the amount of
such remaining deficiency, but not to exceed the amount of the Class A, Class
B and Class C Investor Default Amount for the related Collection Period. In
the event that any such reduction would cause the Subordinated Transferor
Invested Amount to be a negative number, the Class C Invested Amount shall
be reduced as provided in Section 4.08. In the event that any such reduction
would cause the Class C Invested Amount to be a negative number, the Class
B Invested Amount shall be reduced as provided in Section 4.08. In the event
that any such reduction would cause the Class B Invested Amount to be a
negative number, the Class A Invested Amount shall be reduced as provided in
Section 4.08.
Section 4.07. Application of Funds on Deposit in the Collection
-------------------------------------------------
Account for the Series 1996-1 Certificates. The Servicer shall apply or
- - ------------------------------------------
cause the Trustee to apply, on each Distribution Date funds on deposit in the
Collection Account with respect to such Distribution Date, to make the
following distributions:
(a) On each Distribution Date, an amount equal to the Class A
Floating Allocation Percentage of Finance Charge Collections deposited in the
Collection Account for the
Collection Period immediately preceding such Distribution Date shall be
distributed in the following priority:
(i) an amount equal to Class A Monthly Interest for such
Distribution Date, plus the amount of any Class A Monthly Interest
----
previously due but not paid to Class A Certificateholders on a prior
Distribution Date, plus the amount of any Class A Additional Interest for
----
such Distribution Date, plus the amount of any Class A Additional Interest
----
previously due but not paid to the Class A Certificateholders on a prior
Distribution Date, shall be paid to the Class A Certificateholders;
(ii) an amount equal to the aggregate Class A Investor Default
Amount for such Distribution Date shall be distributed to the Transferor on
Distribution Dates with respect to the Revolving Period (unless such amount
has been previously netted against deposits to the Collection Account) (but
not exceeding the Transferor Interest after giving effect to any new
Receivables transferred to the Trust on such date) and thereafter shall be
included in the funds on deposit in the Collection Account to be paid
pursuant to Section 4.07(e) to the Series 1996-1 Certificateholders on
Distribution Dates with respect to any Amortization Period;
(iii) an amount equal to the Class A Monthly Servicing Fee for such
Distribution Date shall be distributed to the Servicer (unless such amount
has been previously netted against deposits to the Collection Account):
(iv) the balance, if any, shall constitute Excess Finance Charge
Collections and shall be allocated and distributed as set forth in Section
4.09: and
(v) if Bridgestone/Firestone is not the Servicer the priority of
items (ii) and (iii) above shall be reversed.
(b) On each Distribution Date, an amount equal to the Class B
Floating Allocation Percentage of Finance Charge Collections deposited in the
Collection Account for the Collection Period immediately preceding such
Distribution Date shall be distributed in the following priority:
(i) an amount equal to Class B Monthly Interest for such
Distribution Date, plus the amount of any Class B Monthly Interest
----
previously due but not paid to Class B Certificateholders on a prior
Distribution Date, plus the amount of any Class B Additional Interest for
----
such Distribution Date, plus the amount of any Class B Additional
----
Interest previously due but not paid to the Class B Certificateholders
on a prior Distribution Date, shall be paid to the Class B
Certificateholders;
(ii) an amount equal to the aggregate Class B Investor Default
Amount for such Distribution Date shall be distributed to the Transferor on
Distribution Dates with respect to the Revolving Period (unless such amount
has been previously netted against deposits to the Collection Account) (but
not exceeding the Transferor Interest after giving effect to any new
Receivables transferred to the Trust on such date) and thereafter shall be
included in the funds on deposit in the Collection Account to be paid
pursuant to Section 4.07(e) to the Series 1996-1 Certificateholders on
Distribution Dates with respect to any Amortization Period;
(iii) an amount equal to the Class B Monthly Servicing Fee for such
Distribution Date shall be distributed to the Servicer (unless such amount
has been previously netted against deposits to the Collection Account):
(iv) the balance, if any, shall constitute Excess Finance Charge
Collections and shall be allocated and distributed as set forth in Section
4.09: and
(v) if Bridgestone/Firestone is not the Servicer the priority of
items (ii) and (iii) above shall be reversed.
(c) On each Distribution Date, an amount equal to the Class C
Floating Allocation Percentage of Finance Charge Collections deposited in the
Collection Account for the Collection Period immediately preceding such
Distribution Date shall be distributed in the following priority:
(i) an amount equal to Class C Monthly Interest for such
Distribution Date, plus the amount of any Class C Monthly Interest
----
previously due but not paid to Class C Certificateholders on a prior
Distribution Date, plus the amount of any Class C Additional Interest for
----
such Distribution Date, plus the amount of any Class C Additional Interest
----
previously due but not paid to the Class C Certificateholders on a prior
Distribution Date, shall be paid to the Class C Certificateholders;
(ii) an amount equal to the aggregate Class C Investor Default
Amount for such Distribution Date shall be distributed to the Transferor on
Distribution Dates with respect to the Revolving Period (unless such amount
has been previously netted against deposits to the Collection
Account) (but not exceeding the Transferor Interest after giving effect
to any new Receivables transferred to the Trust on such date) and thereafter
shall be included in the funds on deposit in the Collection Account to be
paid pursuant to Section 4.07(e) to the Series 1996-1 Certificateholders on
Distribution Dates with respect to any Amortization Period;
(iii) an amount equal to the Class C Monthly Servicing Fee for such
Distribution Date shall be distributed to the Servicer (unless such amount
has been previously netted against deposits to the Collection Account);
(iv) the balance, if any, shall constitute Excess Finance Charge
Collections and shall be allocated and distributed as set forth in Section
4.09; and
(v) if Bridgestone/Firestone is not the Servicer the priority of
items (ii) and (iii) above shall be reversed.
(d) On each Distribution Date, an amount equal to the Subordinated
Transferor Floating Allocation Percentage of Finance Charge Collections
deposited in the Collection Account for the Collection Period immediately
preceding such Distribution Date shall be distributed in the following
priority;
(i) an amount equal to the Subordinated Transferor Monthly
Servicing Fee for such Distribution Date shall be distributed to the Servicer
(unless such amount has been previously netted against deposits to the
Collection Account); and
(ii) the balance, if any, shall constitute Excess Finance Charge
Collections and shall be allocated and distributed as set forth in Section
4.09.
(e) On each Distribution Date with respect to the Controlled
Amortization Period or any Rapid Amortization Period, the remaining funds on
deposit in the Collection Account (other than Excess Finance Charge
Collections and any Reallocated Principal Collections which pursuant to
Section 4.09 or 4.10 are not to be included in the funds to be distributed
pursuant to this Section 4.07(e)) will be distributed in the following
priority:
(i) an amount equal to the Class A Monthly Principal for such
Distribution Date to the extent of the Class A Invested Amount, shall be paid
to the Class A Certificateholders;
(ii) for each Distribution Date, beginning with the Distribution
Date on which the Class A Invested Amount is paid in full, after giving
effect to the transactions referred to in clause (i) above, the amount of any
such remaining funds then on deposit in the Collection Account, up to the
amount of Class B Monthly Principal, shall be paid to the Class B
Certificateholders; and
(iii) for each Distribution Date, beginning with the Distribution
Date on which the Class B Invested Amount is paid in full, after giving
effect to the transactions referred to in clause (ii) above, the amount of
any such remaining funds then on deposit in the Collection Account, up to the
amount of Class C Monthly Principal, shall be paid to the Class C
Certificateholders; and
(iv) for each Distribution Date, beginning with the Distribution
Date on which the Class C Invested Amount is paid in full, after giving
effect to the transactions referred to in clause (iii) above, the amount of
any such remaining funds then on deposit in the Collection Account, up to the
amount of Subordinated Transferor Monthly Principal, shall be paid to the
Subordinated Transferor Certificateholder; and
(v) for each Distribution Date, after giving effect to the
transactions referred to in clauses (iv) above, an amount equal to the
balance, if any, of such remaining funds then on deposit in the Collection
Account and allocable to the Series 1996-1 Certificates shall be treated as
Shared Principal Collections and applied in accordance with Article IV of the
Agreement and thereafter be paid by the Servicer or the Trustee to the
Transferor but not exceeding the Transferor Interest (after giving effect to
any new Receivables transferred to the Trust).
Section 4.08. Investor Charge-Offs. (a) On each Determination
--------------------
Date, the Servicer shall calculate the Class A Investor Default Amount, if
any, for the related Distribution Date. If on any Distribution Date, the
Required Amount for such Distribution Date exceeds the sum of (i) Excess
Finance Charge Collections with respect to the Collection Period immediately
preceding such Distribution Date, ((ii) the amount of the Transferor Interest
available to be written down, if any, to cover Investor Charge-Offs) and
(iii) the amount of Reallocated Principal Collections with respect to such
Collection Period, the Subordinated Transferor Invested Amount shall be
reduced by the amount of such excess, but not more than the Class A, Class
B and Class C Investor Default Amount for such Distribution Date second, the
------
Class C Invested Amount shall be reduced by the
amount of such excess, but not more than the Class A and Class B Investor
Default Amount for such Distribution Date, and third, the Class B Invested
-----
Amount shall be reduced by the amount of such excess, but not more than the
Class A Investor Default Amount for such Distribution Date. In the event
that such reduction would cause the Class B Invested Amount to be a negative
number, the Class B Invested Amount shall be reduced to zero, the Class A
Invested Amount shall be reduced by the amount by which the Class B Invested
Amount would have been reduced below zero, but not more than the Class A
Investor Default Amount for such Distribution Date (a "Class A Investor
----------------
Charge-Off").
- - ----------
Class A Investor Charge-Offs shall thereafter be reimbursed (but not by
an amount in excess of the aggregate Class A Investor Charge-Offs) (and the
Class B, Class C and Subordinated Transferor Invested Amount increased) by
the amount of Excess Finance Charge Collections allocated and available for
that purpose pursuant to Section 4.09(b).
(b) On each Determination Date, the Servicer shall calculate the
Class B Investor Default Amount, if any, for the related Distribution Date.
If on any Distribution Date, the Class B Investor Default Amount, if any, for
such Distribution Date exceeds the sum of Excess Finance Charge Collections
with respect to the Collection Period immediately preceding the Distribution
Date which are allocated and available to pay such amount pursuant to Section
4.09(c) and the amount of Class C and Subordinated Transferor Reallocated
Principal Collections, then the Class B Invested Amount shall be reduced by
the aggregate amount of such excess, but not more than the Class B Investor
Default Amount for such Distribution Date (a "Class B Investor Charge-Off").
---------------------------
Class B Investor Charge-Offs shall thereafter be reimbursed (and the Class
B Invested Amount increased) on any Distribution Date by the amount of Excess
Finance Charge Collections allocated and available for that purpose pursuant
to Section 4.09(d) (but only, in any case, to the extent such amount is not
required to reimburse Class A Investor Charge-Offs pursuant to Section
4.08(a) and not, in any case, in excess of the unpaid principal balance of
the Class B Certificates).
(c) On each Determination Date, the Servicer shall calculate the
Class C Investor Default Amount, if any, for the related Distribution Date.
If on any Distribution Date, the Class C Investor Default Amount, if any, for
such Distribution Date exceeds the sum of Excess Finance Charge Collections
with respect to the Collection Period immediately preceding the Distribution
Date which are allocated and available to pay such amount pursuant to Section
4.09(e) and the amount of Subordinated Transferor Reallocated Principal
Collections, then the Class C Invested Amount shall be reduced by the
aggregate amount of such
excess, but not more than the Class C Investor Default Amount for such
Distribution Date (a "Class C Investor Charge-Off"). Class C Investor
---------------------------
Charge-Offs shall thereafter be reimbursed (and the Class C Invested Amount
increased) on any Distribution Date by the amount of Excess Finance Charge
Collections allocated and available for that purpose pursuant to Section
4.09(f) (but only, in any case, to the extent such amount is not required to
reimburse Class A and Class B Investor Charge-Offs pursuant to Section
4.08(a) and (b) and not, in any case, in excess of the unpaid principal
balance of the Class C Certificates).
(d) On each Determination Date, the Servicer shall calculate the
Subordinated Transferor Investor Default Amount, if any, for the related
Distribution Date. If on any Distribution Date, the Subordinated Transferor
Investor Default Amount, if any, for such Distribution Date exceeds the
amount of Excess Finance Charge Collections with respect to the Collection
Period immediately preceding the Distribution Date which are allocated and
available to pay such amount pursuant to Section 4.09(g), then the
Subordinated Transferor Invested Amount shall be reduced by the aggregate
amount of such excess, but not more than the Subordinated Transferor Investor
Default Amount for such Distribution Date (a "Subordinated Transferor
-----------------------
Investor Charge-Off"). Subordinated Transferor Investor Charge-Offs shall
- - -------------------
thereafter be reimbursed (and the Subordinated Transferor Invested Amount
increased) on any Distribution Date by the amount of Excess Finance Charge
Collections allocated and available for that purpose pursuant to Section
4.09(h) (but only, in any case, to the extent such amount is not required to
reimburse Class A, Class B and Class C Investor Charge-Offs pursuant to
Section 4.08(a), (b) and (c) and not, in any case, in excess of the unpaid
principal balance of the Subordinated Transferor Certificate).
Section 4.09. Excess Finance Charge Collections for the Series 1996-1
-------------------------------------------------------
Certificates. The Servicer shall apply or shall cause the Trustee to apply,
- - ------------
on each Distribution Date, Excess Finance Charge Collections for the Series
1996-1 Certificates with respect to the Collection Period immediately
preceding such Distribution Date, to make the following distributions in the
following priority:
(a) an amount equal to the Class A Required Amount, if any, with
respect to such Distribution Date shall be distributed by the Servicer or the
Trustee to fund any deficiency pursuant to Sections 4.07(a)(i), 4.07(a)(ii)
or 4.07(a)(iii); provided that in the event the Class A Required Amount for
such Distribution Date exceeds the amount of Excess Finance Charge
Collections, such Excess Finance Charge Collections shall be applied first,
-----
to pay amounts due pursuant to Section 4.07(a)(i), second, to pay
------
the Class A Investor Default Amount, if any, pursuant to Section 4.07(a)(ii),
and third, to pay the Class A Monthly Servicing Fee to the Servicer pursuant
-----
to Section 4.07(a)(iii) (in the event that Bridgestone/Firestone is not the
Servicer, the Class A Monthly Servicing Fee shall be paid prior to the Class
A Investor Default Amount);
(b) an amount equal to the aggregate amount of Class A Investor
Charge-Offs which have not been previously reimbursed pursuant to this
Section 4.09(b) shall be distributed by the Servicer or the Trustee to the
Holder of the Exchangeable Transferor Certificate on Distribution Dates with
respect to the Revolving Period, but not exceeding the Transferor Interest
on such day (after giving effect to any new Receivables transferred to the
Trust on such date) and thereafter shall be included in the funds on deposit
in the Collection Account to be distributed pursuant to Section 4.07(c) on
Distribution Dates with respect to the Amortization Period;
(c) an amount equal to the Class B Required Amount, if any, with
respect to such Distribution Date shall be distributed by the Servicer or the
Trustee to fund any deficiency pursuant to Sections 4.07(b)(i), 4.07(b)(ii)
or 4.07(b)(iii); provided that in the event the Class B Required Amount for
such Distribution Date exceeds the amount of available Excess Finance Charge
Collections, such Excess Finance Charge Collections shall be applied first
to pay amounts due pursuant to Section 4.07(b)(i), second to pay the Class
B Investor Default Amount, if any, pursuant to Section 4.07(b)(ii), and third
to pay the Class B Monthly Servicing Fee to the Servicer pursuant to Section
4.07(b)(iii) (in the event that Bridgestone/Firestone is not the Servicer,
the Class B Monthly Servicing Fee shall be paid prior to the Class B Investor
Default Amount);
(d) an amount equal to the aggregate amount by which the Class B
Invested Amount has been reduced below the Class B Initial Invested Amount
(other than by payments to the Class B Certificateholders) (but not in excess
of the aggregate amount of such reductions which have not been previously
reimbursed) shall be distributed by the Servicer or the Trustee to the Holder
of the Exchangeable Transferor Certificate on Distribution Dates with respect
to the Revolving Period, but not exceeding the Transferor Interest on such
day (after giving effect to any new Receivables transferred to the Trust on
such date) and thereafter shall be included in the funds on deposit in the
Collection Account to be distributed pursuant to Section 4.07(e) on
Distribution Dates with respect to any Amortization Period;
(e) an amount equal to the Class C Required Amount, if any, with
respect to such Distribution Date shall be distributed
by the Servicer or the Trustee to fund any deficiency pursuant to Sections
4.07(c)(i), 4.07(c)(ii) or 4.07(c)(iii); provided that in the event the Class
B Required Amount for such Distribution Date exceeds the amount of available
Excess Finance Charge Collections, such Excess Finance Charge Collections
shall be applied first to pay amounts due pursuant to Section 4.07(c)(i),
second to pay the Class C Investor Default Amount, if any, pursuant to
Section 4.07(c)(ii), and third to pay the Class C Monthly Servicing Fee to
the Servicer pursuant to Section 4.07(c)(iii) (in the event that
Bridgestone/Firestone is not the Servicer, the Class C Monthly Servicing Fee
shall be paid prior to the Class C Investor Default Amount);
(f) an amount equal to the aggregate amount by which the Class C
Invested Amount has been reduced below the Class C Initial Invested Amount
(other than by payments to the Class C Certificateholders) (but not in excess
of the aggregate amount of such reductions which have not been previously
reimbursed) shall be distributed by the Servicer or the Trustee to the Holder
of the Exchangeable Transferor Certificate on Distribution Dates with respect
to the Revolving Period, but not exceeding the Transferor Interest on such
day (after giving effect to any new Receivables transferred to the Trust on
such date) and thereafter shall be included in the funds on deposit in the
Collection Account to be distributed pursuant to Section 4.07(e) on
Distribution Dates with respect to any Amortization Period;
(g) an amount equal to the aggregate Subordinated Transferor
Investor Default Amount, if any, for such Distribution Date shall be
distributed by the Servicer or the Trustee to the Holder of the Exchangeable
Transferor Certificate on Distribution Dates with respect to the Revolving
Period, but not exceeding the Transferor Interest on such day (after giving
effect to any new Receivables transferred to the Trust on such date) and
thereafter shall be included in the funds on deposit in the Collection
Account to be distributed pursuant to Section 4.07(e) on Distribution Dates
with respect to any Amortization Period;
(h) an amount equal to the aggregate amount by which the
Subordinated Transferor Invested Amount has been reduced below the
Subordinated Transferor Initial Invested Amount (other than by payments to
the Holder of the Subordinated Transferor Certificate) (but not in excess of
the aggregate amount of such reductions which have not been previously
reimbursed) shall be distributed by the Servicer or the Trustee to the Holder
of the Exchangeable Transferor Certificate on Distribution Dates with respect
to the Revolving Period, but not exceeding the Transferor Interest on such
day (after giving effect to any new Receivables transferred to the Trust on
such date) and thereafter shall be included in the funds on deposit in the
Collection Account to be
distributed pursuant to Section 4.07(e) on Distribution Dates with respect
to any Amortization Period;
(i) the balance, if any, shall be treated as (Shared) Excess
Finance Charge Collections, and the Servicer shall direct the Trustee in
writing on each Business Day to withdraw such amounts from the Collection
Account and to make such amounts available to pay to Certificateholders of
other Series to the extent of shortfalls, if any, in amounts payable to such
Certificateholders from Finance Charge Collections allocated to such other
Series;
(j) the balance, if any, shall be treated as Shared Principal
Collections; and
(k) the balance, if any, shall be distributed by the Servicer or
the Trustee to Bridgestone/Firestone.
For each Business Day with respect to the Revolving Period, the
funds on deposit in the Collection Account to the extent of the product of
(i) the sum of the Class A Floating Allocation Percentage, the Class B
Floating Allocation Percentage and the Class C Floating Allocation Percentage
and (ii) Principal Collections with respect to such Business Day (less the
amount of Class C Reallocated Principal Collections and Class B Reallocated
Principal Collections on such Business Day) will be treated as Shared
Principal Collections and applied, pursuant to the written direction of the
Servicer in the Payment Date Statement for such Business Day.
Section 4.10. Reallocated Principal Collections for the Series
------------------------------------------------
1996-1 Certificates. (a) The Servicer shall apply or cause the Trustee to
- - -------------------
apply, on each Distribution Date, Subordinated Transferor Reallocated
Principal Collections with respect to the Collection Period immediately
preceding such Distribution Date, first to the components of the Class A
Required Amount, if any, then to the components of the Class B Required
Amount, if any, and then to the components of the Class C Required Amount,
if any, in the same priority as such amounts are applied to such components
from Excess Finance Charge Collections pursuant to Section 4.09 herein.
(b) The Servicer shall apply or cause the Trustee to apply, on
each Distribution Date, Class C Reallocated Principal Collections with
respect to the Collection Period immediately preceding such Distribution
Date, first to the components of the Class A Required Amount, if any, and
then to the components of the Class B Required Amount, if any, in the same
priority as such amounts are applied to such components from Excess Finance
Charge Collections pursuant to Section 4.09 herein.
(c) The Servicer shall apply or cause the Trustee to apply, on
each Distribution Date, Class B Reallocated Principal Collections with
respect to the Collection Period immediately preceding such Distribution Date
to the components of the Class A Required Amount, if any, in the same
priority as such amounts are applied to such components from Excess Finance
Charge Collections pursuant to Section 4.09 herein.
SECTION 9. Article V of the Agreement. Article V of the Agreement
--------------------------
shall read in its entirety as follows:
ARTICLE V
DISTRIBUTIONS AND REPORTS TO
CERTIFICATEHOLDERS
Section 5.01. Distributions. (a) On each Distribution Date, the
-------------
Paying Agent shall distribute (in accordance with the Monthly Servicer's
Certificate) to each Class A, Class B, Class C and Subordinated Transferor
Certificateholder on the preceding Record Date (other than as provided in
Section 12.02 of the Agreement respecting a final distribution) such
Certificateholder's pro rata share (based on the aggregate Undivided
Interests represented by the Certificates held by such Certificateholder) of
the amounts on deposit in the Collection Account pursuant to Section 4.07.
(b) Except as provided in Section 12.02 with respect to a final
distribution, distributions to Investor Certificateholders hereunder shall
be made by check mailed to each such Certificateholder at such
Certificateholder's address appearing in the Certificate Register without
presentation or surrender of any such Investor Certificate or the making of
any notation thereon; provided, however, that with respect to such Investor
Certificates registered in the name of a Clearing Agency, such distributions
shall be made to such Clearing Agency in immediately available funds.
Section 5.02. Statements to Series 1996-1 Certificateholders. (a) On
----------------------------------------------
each Distribution Date, the Paying Agent, on behalf of the Trustee, shall
forward to each Class A, Class B and Class C Certificateholder a statement
substantially in the form of (Item G to Exhibit B) (the "Payment Date
------------
Statement") prepared by the Servicer setting forth certain information
- - ---------
relating to the Trust and the Investor Certificates.
(b) Annual Certificateholders' Statement. On or before January
------------------------------------
31 of each calendar year, beginning with calendar year 1997, the Paying
Agent, on behalf of Bridgestone/Firestone, shall furnish or cause to be
furnished to each Person who at any
time during the preceding calendar year was an Investor Certificateholder,
a statement prepared by the Trustee on behalf of Bridgestone/Firestone
containing such information as is required to be provided to a holder of
indebtedness under the Internal Revenue Code and such other information as
may be reasonably requested by the Investor Certificateholders to prepare
their tax returns. Such obligation of the Trustee shall be deemed to have
been satisfied to the extent that substantially comparable information shall
be provided by the Paying Agent pursuant to any requirements of the Internal
Revenue Code as from time to time in effect.
(c) No later than the second business day prior to each
Distribution Date, the Servicer shall forward by facsimile (to be followed
by original confirmation in writing) or overnight delivery service to the
Trustee, the Paying Agent and each Rating Agency a certificate of a Servicing
Officer substantially in the form attached as (Exhibit B) (the "Monthly
---------
Servicer's Certificate").
(END OF ARTICLE V)
SECTION 10. Article VI of the Agreement. Article VI shall, for
---------------------------
purposes of Series 1996-1, contain the following Section 6.14:
Section 6.14 Transfers of the Class C and the Subordinated
---------------------------------------------
Transferor Certificate.
- - ----------------------
(a) The Class C Certificates shall be issued in minimum
denominations of 1/80th of the Class C Initial Invested Amount. At any point
in time, the Class C Certificates shall not be held by more than eighty
different investors.
(b) No transfer of any Class C Certificate shall be made unless
that transfer is made pursuant to an effective registration statement under
the Securities Act of 1933, as amended (the "1933 Act"), and effective
registration or qualification under applicable state securities laws, or is
made in a transaction which does not require such registration or
qualification. If such a transfer is to be made without registration or
qualification, then the Certificate Registrar shall require, in order to
assure compliance with such laws, receipt of: (i) if such transfer is of a
Class C Certificate and is purportedly being made in reliance upon Rule 144A
under the 1933 Act, a certificate from the Certificateholder desiring to
effect such transfer substantially in the form attached as Exhibit ___ hereto
and a certificate from such Certificateholder's prospective transferee
substantially in the form attached as Exhibit ___ hereto; and (ii) in all
other cases,
(A) except where the Transferor or an Affiliate thereof is the transferor or
transferee, an Opinion of Counsel satisfactory to the Trustee to the effect
that such transfer may be made without such registration or qualification
(which Opinion of Counsel shall not be an expense of the Trust Fund or the
Transferor or the Trustee in their respective capacities as such), (B) a
certificate from the Certificateholder desiring to effect such transfer
substantially in the form attached as Exhibit ___ hereto and (C) a
certificate from such Certificateholder's prospective transferee
substantially in the form attached as Exhibit ___ hereto. Neither the
Transferor nor the Trustee is obligated to register or qualify the Class C
Certificates under the 1933 Act or any other securities law or to take any
action not otherwise required under this Agreement to permit the transfer of
any Class C Certificate without registration or qualification. Any Class C
Certificateholder desiring to effect such a transfer shall, and does hereby
agree to, indemnify the Trustee and the Transferor against any liability that
may result if the transfer is not so exempt or is not made in accordance with
such federal and state laws.
(c) No transfer of any Class C Certificate shall be made unless
the prospective transferee represents (i) that it is acquiring the
Certificate for its own behalf and is not acting as agent or custodian for
any other person or entity in connection with such acquisition, and (ii) if
the prospective transferee is a partnership, grantor trust or S corporation
for federal income tax purposes (a "Flow-Through Entity"), any Class C
Certificates owned by such Flow-Through Entity will represent less than 50%
of the value of all the assets owned by such Flow-Through Entity and no
special allocation of income, gain, loss, deduction or credit from such
Certificates will be made among the beneficial owners of such Flow-Through
Entity. Such representation shall be made by the transferee in a letter
substantially in the form of Exhibit __ hereto.
(d) The Subordinated Transferor Certificate may not be sold,
assigned, transferred, participated, pledged, hypothecated, or otherwise
conveyed by the Transferor except that an interest in the Subordinated
Transferor Certificate may be participated to Bridgestone/Firestone.
SECTION 11. Consents of Series 1996-1 Certificateholders.
--------------------------------------------
Whenever the Agreement provides for the vote, consent or waiver of Series
1996-1 Certificateholders, such vote, consent or waiver shall be obtained on
the basis of the Investor Certificateholders on an aggregate basis, except
with respect to the votes, consents or waivers permitted or required by the
Sections indicated below, with respect to which such
votes, consents or waivers shall be obtained from either Class, or each and
every Class, as a separate Class, as specified below:
shall be required on
Section: the following basis:
- - ------- -------------------
6.13 Class A, B and C
9.02 Class A, B and C
10.01(b) and (c) Class A, B and C
10.04 Class A, B and C
13.01 Class A, B and C
13.07 Class A, B and C
SECTION 12. Amortization Events. If any one of the events
-------------------
specified in Section 9.01 of the Agreement (after any grace periods or
consents applicable thereto) or any one of the following events shall occur
during the Revolving Period or the Controlled Amortization Period with
respect to the Series 1996-1 Certificates (each, an "Amortization Event"):
------------------
(a) failure on the part of the Servicer, the Originator or the
Transferor, as applicable (i) to make any payment or deposit required by the
terms of the Agreement or Supplement on or before five Business Days after
the date such payment or deposit is required to be made herein, or (ii) duly
to observe or perform in any material respect the covenant of the Transferor
set forth in Section 2.08(b) of the Agreement, or (iii) duly to observe or
perform in any material respect any other covenants or agreements of the
Transferor set forth in this Agreement or Supplement, which, in the case of
clause (iii), continues unremedied for a period of 60 days after the date on
which written notice of such failure, requiring the same to be remedied,
shall have been given to the Servicer, the Originator or the Transferor, as
applicable by the Trustee, or to the Transferor and the Trustee by the
Holders of Investor Certificates evidencing Undivided Interests aggregating
not less than 10% of the Invested Amount of either Class of the Series 1996-1
Certificates provided, however, that an Amortization Event pursuant to this
-------- -------
Section 12(a) shall not be deemed to have occurred hereunder with respect to
any such Series if the Transferor has accepted the transfer of the
Receivable, or all of such Receivables, if applicable, during such period (or
such
longer period as the Trustee may specify) in accordance with the provisions
hereof;
(b) any representation or warranty made by the Servicer, the
Originator or the Transferor, as applicable in the Purchase and Sale
Agreement or this Supplement or any information contained in a list required
to be delivered by the Transferor pursuant to Section 2.01 or 2.05 of the
Agreement shall prove to have been incorrect in any material respect when
made or when delivered, which continues to be incorrect in any material
respect for a period of 60 days after the date on which written notice of
such failure, requiring the same to be remedied, shall have been given to the
Servicer, the Originator or the Transferor, as applicable by the Trustee, or
to the Transferor and the Trustee by the Holders of Investor Certificates
evidencing Undivided Interests aggregating not less than 10% of the Invested
Amount of any Class of the Series 1996-1 Certificates and as a result of
which the interests of such Series are materially and adversely affected
provided, however, that an Amortization Event pursuant to this Section 12(b)
shall not be deemed to have occurred hereunder with respect to any such
Series if the Transferor has accepted the transfer of the Receivable, or all
of such Receivables, if applicable, during such period (or such longer period
as the Trustee may specify) in accordance with the provisions hereof;
(c) the Portfolio Yield averaged over any three consecutive
Collection Periods in less than the Base Rate of such Series;
(d) any Servicer Default shall occur which would have a material
adverse effect on the Holders of the Investor Certificates;
(e) the Transferor Amount (plus any amounts available under the
Transferor Letter of Credit or the Transferor Escrow Account and the B/F
Amount) is less than __% of the Aggregate Invested Amount of all Series each
on the last day of any Collection Period; or
(f) the Transferor Amount plus the B/F Amount and the Subordinated
Transferor Invested Amount (plus the invested amount of the Series 1992-B
Class B Certificates and any other subordinated class of certificates of
additional Series which is retained by the Transferor and with respect to
which no legal opinion is delivered characterizing such certificates as
indebtedness for federal income tax purposes) is less than __% of Aggregate
Receivables on the last day of any Collection Period:
then, (x) in the case of any event described in subparagraphs (a),
(b) or (d) of this Section 12, after the applicable grace period, if any,
either the Trustee or the Investor Certificateholders evidencing interest
aggregating not less than 50% of the Invested Amount by written notice to the
Transferor (and to the Trustee if given by the Investor Certificateholders)
may declare that an Amortization Event has occurred with respect to the
Investor Certificates as of the date of such notice, or (y) in the case of
any event described in Section 9.01(a) or (b) of the Agreement an
Amortization Event with respect to all series of certificates, including the
Investor Certificates, or (z) in the case of subparagraphs (c), (e) or (f)
of this Section 12 an Amortization Event with respect to the Investor
Certificates, shall occur immediately upon the occurrence of such event,
without any notice or other action on the part of the Trustee or the
Certificateholders.
SECTION 13. Servicing Fee. Notwithstanding Section 3.02 of the
-------------
Agreement, the Monthly Servicing Fee shall equal the sum of the Class A
Monthly Servicing Fee, the Class B Monthly Servicing Fee, the Class C Monthly
Servicing Fee and the Subordinated Transferor Monthly Servicing Fee.
SECTION 14. Ratification of Pooling and Servicing Agreement. As
-----------------------------------------------
supplemented or modified by this Supplement, the Agreement is in all respects
ratified and confirmed and the Agreement as so supplemented or modified by
this Supplement shall be read, taken, and construed as one and the same
instrument.
SECTION 15. Counterparts. This Supplement may be executed in any
------------
number of counterparts, each of which when so executed shall be deemed to be
an original, but all of which counterparts shall together constitute but one
and the same instrument.
SECTION 16. Governing Law. THIS SUPPLEMENT SHALL BE GOVERNED BY
-------------
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
REFERENCE TO ITS CONFLICTS OF LAW PROVISIONS.
SECTION 17. Certain Amendments. In the event that federal
------------------
legislation creates a new type of entity for federal income tax purposes, the
"financial asset securitization investment trust" (a "FASIT"), the Transferor
may amend this Series Supplement in order to effect a FASIT election for all
or a portion of the Trust or the Investor Certificates; provided, that the
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Transferor delivers an opinion to the Trustee to the effect that such
election will not adversely affect the Federal or applicable state income tax
characterization of any
outstanding Series of Investor Certificates or the taxability of the Trust
under Federal or applicable state income tax laws.
IN WITNESS WHEREOF, the Transferor, the Servicer and the Trustee
have caused this Supplement to be duly executed by their respective officers
duly authorized as of the day and year first above written.
FIRESTONE RETAIL CREDIT
CORPORATION, as Transferor
By
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Name:
Title:
BRIDGESTONE/FIRESTONE, INC.
as Servicer and individually
By
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Name:
Title:
THE FUJI BANK AND TRUST
COMPANY, as Trustee
By
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Name:
Title: