AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 12, 1999
REGISTRATION NO. 333-79453
=============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
THE FIRST NATIONAL BANK OF ATLANTA
(Originator of the Trust described herein)
(Exact name as specified in registrant's charter)
WACHOVIA CREDIT CARD MASTER TRUST
(Issuer of Certificates)
UNITED STATES 6025 22-2716130
(State or other jurisdiction (Primary Standard (IRS Employer
of incorporation or Industrial Classification Identification
organization) Code Number) Number)
77 READ'S WAY
NEW CASTLE CORPORATE COMMONS
NEW CASTLE, DELAWARE 19720
(302) 323-2395
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
JOAN S. SUTTIN, ESQ.
WACHOVIA BANK CARD SERVICES
FOUR PIEDMONT CENTER
3565 PIEDMONT ROAD
ATLANTA, GEORGIA 30305
(404) 842-3883
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
COPIES TO:
JOHN H. LOUGHRIDGE, JR., ESQ. ANDREW M. FAULKNER, ESQ.
WACHOVIA LEGAL DEPARTMENT SKADDEN, ARPS, SLATE,
100 N. MAIN STREET MEAGHER & FLOM LLP
WINSTON-SALEM, NORTH CAROLINA 27150 919 THIRD AVENUE
(336) 732-6375 NEW YORK, NY 10022
(212) 735-3000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after this registration statement becomes
effective as determined by market conditions.
If the only securities being registered on this form are to be offered
pursuant to dividend or interest reinvestment plans, please check the
following box. |__|
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. |X|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, please check the
following box and list the Securities Act registration statement number of
the earlier effective registration statement for the same offering. |__|
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act of 1933, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. |__|
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. |__|
CALCULATION OF REGISTRATION FEE
==========================================================================================
TITLE OF PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
SECURITIES TO AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING REGISTRATION
BE REGISTERED REGISTERED (1) CERTIFICATE (2) PRICE (2) FEE (3)
- ------------------------------------------------------------------------------------------
Asset Backed
Certificates $2,000,000,000 100% $2,000,000,000 $556,000
==========================================================================================
(1) INCLUDES AN INDETERMINATE AMOUNT OF SECURITIES THAT ARE TO BE OFFERED
OR SOLD IN CONNECTION WITH MARKET-MAKING ACTIVITIES BY AFFILIATES OF
THE REGISTRANT, INCLUDING WACHOVIA SECURITIES INC.
(2) ESTIMATED SOLELY FOR THE PURPOSE OF CALCULATING THE REGISTRATION FEE.
(3) $556 OF WHICH HAS PREVIOUSLY BEEN PAID.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE
REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT
THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE
WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
============================================================================
[FLAG]
The information in this prospectus is not complete and may be changed. We
can not sell these securities until the registration statement filed with
the Securities and Exchange Commission is effective. This prospectus is not
an offer to sell these securities and it is not soliciting an offer to buy
these securities in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED JULY 12, 1999
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED , 1999
$[ ]
WACHOVIA CREDIT CARD MASTER TRUST
$_____ Class A Floating Rate Asset Backed Certificates,
Series 1999-_
$_____ Class B Floating Rate Asset Backed Certificates,
Series 1999-_
THE FIRST NATIONAL BANK OF ATLANTA D/B/A WACHOVIA BANK CARD SERVICES
Transferor and Servicer
CLASS A CERTIFICATES CLASS B CERTIFICATES
Principal Amount $[________] $_________
Price $[________] (___%) $_________ (___%)
Underwriting Discount $[________] (___%) $_________ (___%)
Proceeds to the Transferor $[________] (___%) $_________ (___%)
Certificate Rate one-month LIBOR + one-month LIBOR +
___% p.a. ___% p.a.
Interest Payment Dates monthly on the [ ]th monthly on the [ ]th
First Interest Payment Date [___________] __________
Scheduled Principal Payment
Date [___________] __________
THESE SECURITIES ARE INTERESTS IN WACHOVIA CREDIT CARD MASTER TRUST AND
ARE BACKED ONLY BY THE ASSETS OF THE TRUST. NEITHER THESE SECURITIES
NOR THE ASSETS OF THE TRUST ARE OBLIGATIONS OF THE FIRST NATIONAL
BANK OF ATLANTA D/B/A WACHOVIA BANK CARD SERVICES OR ANY OF ITS
AFFILIATES, OR OBLIGATIONS INSURED BY THE FDIC.
THESE SECURITIES ARE HIGHLY STRUCTURED. BEFORE YOU PURCHASE THESE
SECURITIES, BE SURE YOU UNDERSTAND THE STRUCTURE AND THE RISKS.
SEE "RISK FACTORS" BEGINNING ON PAGE S-8 IN THIS PROSPECTUS
SUPPLEMENT.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED ON THE
ADEQUACY OR ACCURACY OF THE DISCLOSURES IN THIS SUPPLEMENT AND THE ATTACHED
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
These securities are offered subject to availability.
[Names of Underwriters]
The date of this Prospectus Supplement is , 1999
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
WHERE TO FIND INFORMATION IN THESE DOCUMENTS............................S-3
SUMMARY OF TERMS........................................................S-4
STRUCTURAL SUMMARY......................................................S-5
RISK FACTORS............................................................S-8
Potential Early Repayment or Delayed Payment
due to Reduced Portfolio Yield.....................................S-8
Allocations of Charged-Off Receivables Could
Reduce Payments to Certificateholders.............................S-11
Limited Ability to Resell Certificates...............................S-11
Certain Liens Could Be Given Priority Over
Your Securities....................................................S-12
Insolvency or Bankruptcy of Wachovia Could
Result in Accelerated, Delayed or Reduced
Payments to Certificateholders....................................S-12
Issuance of Additional Series by the Trust
May Affect the Timing of Payments..................................S-13
Individual Certificateholders Will Have
Limited Control of Trust Actions...................................S-14
WACHOVIA'S CREDIT CARD PORTFOLIO.......................................S-15
General..............................................................S-15
Billing and Payments.................................................S-15
Portfolio Acquisitions...............................................S-16
Delinquency and Loss Experience......................................S-16
Interchange..........................................................S-18
THE RECEIVABLES........................................................S-19
MATURITY CONSIDERATIONS................................................S-23
Controlled Accumulation Period.......................................S-23
Rapid Amortization Period............................................S-23
Pay Out Events.......................................................S-24
Payment Rates........................................................S-24
RECEIVABLE YIELD CONSIDERATIONS........................................S-25
WACHOVIA AND WACHOVIA CORPORATION......................................S-26
DESCRIPTION OF THE CERTIFICATES........................................S-26
General..............................................................S-26
Exchanges............................................................S-27
Interest Payments....................................................S-27
Principal Payments...................................................S-29
Postponement of Controlled Accumulation Period.......................S-30
Subordination of the Class B Certificates............................S-31
Allocation Percentages...............................................S-31
Reallocation of Cash Flows...........................................S-33
Application of Collections...........................................S-34
Shared Excess Finance Charge Collections.............................S-39
Shared Principal Collections.........................................S-39
Required Collateral Interest.........................................S-40
Defaulted Receivables; Investor Charge-Offs..........................S-40
Principal Funding Account............................................S-42
Reserve Account......................................................S-42
Pay Out Events.......................................................S-43
Defeasance...........................................................S-44
Servicing Compensation and Payment of Expenses.......................S-45
Reports to Class A Certificateholders................................S-46
ERISA CONSIDERATIONS...................................................S-46
Class A Certificates.................................................S-46
Class B Certificates.................................................S-47
Consultation with Counsel............................................S-47
UNDERWRITING...........................................................S-48
INDEX OF TERMS FOR PROSPECTUS SUPPLEMENT...............................S-50
WHERE TO FIND INFORMATION IN THESE DOCUMENTS
The attached prospectus provides general information about Wachovia
Credit Card Master Trust, including terms and conditions that are generally
applicable to the securities issued by the trust. The specific terms of
Series 1999-_ are described in this supplement.
This supplement begins with several introductory sections describing
your series and Wachovia Credit Card Master Trust in abbreviated form:
o Summary of Terms provides important amounts, dates and other terms
of your series;
o Structural Summary gives a brief introduction of the key
structural features of your series and directions for locating
further information; and
o Risk Factors describes risks that apply to your series.
As you read through these sections, cross-references will direct you
to more detailed descriptions in the attached prospectus and elsewhere in
this supplement. You can also directly reference key topics by looking at
the table of contents pages in this supplement and the attached prospectus.
This supplement and the attached prospectus may be used by Wachovia
Securities, Inc. and its successors in connection with offers and sales
related to market-making transactions in the certificates offered by this
supplement and the attached prospectus. Wachovia Securities, Inc. may act
as principal or agent in those transactions. The sales will be made at
varying prices related to prevailing market prices at the time of sale.
TO UNDERSTAND THE STRUCTURE OF THESE SECURITIES, YOU MUST READ CAREFULLY
THE ATTACHED PROSPECTUS AND THIS SUPPLEMENT IN THEIR ENTIRETY.
SUMMARY OF TERMS
Transferor: The First National Bank of Atlanta d/b/a Wachovia
Bank Card Services--"Wachovia" or the "Bank"
Servicer: Wachovia
Trustee: The Bank of New York (Delaware)
Pricing Date: [ ]
Closing Date: [ ]
Clearance and Settlement: DTC/Cedelbank/Euroclear
Trust Assets: receivables originated in VISA(R) and
MasterCard(R) accounts, including
recoveries on charged-off accounts
Series Structure: Amount % of Total Series
Class A $[ ] [ ]%
Class B $[ ] [ ]%
Collateral interest $[ ] [ ]%
Annual Servicing Fee: [ ]%
CLASS A CLASS B
----------------- -----------------
Anticipated Ratings:*
(Moody's/S&P/Fitch IBCA) [ ] [ ]
Credit Enhancement: [ ] [ ]
Interest Rate: one-month LIBOR + one-month LIBOR +
[ ]% p.a. [ ]% p.a.
Interest Accrual Method: actual/360 actual/360
Interest Payment Dates: monthly [( th)] monthly [( th)]
First Interest Payment Date: [ ] [ ]
Scheduled Payment Date: [ ] [ ]
Commencement of Accumulation
Period (subject to adjustment): [ ] [ ]
Stated Series Termination Date: [ ] [ ]
CUSIP: [ ] [ ]
- ---------
* It is a condition to issuance that one of these ratings be obtained.
STRUCTURAL SUMMARY
This summary briefly describes certain major structural components of
Series 1999-_. To fully understand the terms of Series 1999-_, you will
need to read both this supplement and the attached prospectus in their
entirety.
THE SERIES 1999-_ CERTIFICATES
Your certificates represent the right to a portion of collections on
the underlying Trust assets. Your certificates will also be allocated a
portion of losses on receivables, if any. Any collections of finance
charges allocated to your series will be used to make interest payments, to
pay a portion of the fees of Wachovia as servicer and to cover losses
allocated to your series. Remaining collections of finance charges
allocated to your series will be applied for the benefit of the holder of
the collateral interest. Any principal collections allocated to your series
in excess of the amount owed to certificates of your series on any
distribution date will be shared with other series of certificates issued
by Wachovia Credit Card Master Trust, retained in a trust account, or
returned to Wachovia. In no case will you receive more than the principal
and interest owed to you under the terms described in this supplement and
the attached prospectus.
For further information on allocations and payments, see "Description
of the Certificates--Allocation Percentages " and "--Application of
Collections" in this supplement and "Description of the
Certificates--Investor Percentage and Transferor Percentage" and
"--Application of Collections" in the attached prospectus.
Your certificates feature credit enhancement by means of the
subordination of other interests, which is intended to protect you from
losses and shortfalls in cash flow. Credit enhancement for your series is
for your series' benefit only. Credit enhancement is provided to Class A by
the following:
o subordination of Class B; and
o subordination of the collateral interest.
Credit enhancement is provided to Class B by the following:
o subordination of the collateral interest.
The more subordinated interests will absorb any losses allocated to
Series 1999-_ and make up any shortfalls in cash flow, before the more
senior interests are affected. On the closing date, there will be $[ ] of
Class B certificates and a $[ ] collateral interest, or together [ ]%
of the sum of the initial Class A invested amount, the initial Class B
invested amount and the initial collateral interest amount. If the cash
flow and any subordinated interest do not cover all losses allocated to
Series 1999-_, your payments of interest and principal will be reduced and
you may suffer a loss of principal.
For a more detailed description of the subordination provisions of
Series 1999-_, see "Description of the Certificates--Subordination of Class
B Certificates," --"Reallocation of Cash Flows," "--Required Collateral
Interest" and "--Defaulted Receivables; Investor Charge-Offs" in this
supplement. For a discussion of losses, see "Description of the
Certificates--Defaulted Receivables; Investor Charge-Offs" in this
supplement. See "Risk Factors" in this supplement for more detailed
discussions of the risks of investing in Series 1999-_.
WACHOVIA CREDIT CARD MASTER TRUST
Your series is one of two series issued by Wachovia Credit Card
Master Trust which are expected to be outstanding as of the closing date.
Wachovia Credit Card Master Trust is maintained by the trustee, for the
benefit of:
o certificateholders of Series 1999-_;
o certificateholders of other series issued by Wachovia Credit Card
Master Trust;
o providers of credit enhancements for Series 1999-_ and other
series issued by Wachovia Credit Card Master Trust; and
o Wachovia.
For a summary of the terms of the previously issued series, see
"Annex I: Other Series."
Each series has a claim to a fixed dollar amount of Wachovia Credit
Card Master Trust's assets, regardless of the total amount of receivables
in the Trust at any time. Wachovia holds the remaining claim to Wachovia
Credit Card Master Trust's assets, which fluctuates with the total amount
of receivables in the Trust. Wachovia, as the holder of that amount, has
the right to purchase the outstanding Series 1999-_ certificates at any
time when the outstanding amount of the Series 1999-_ certificateholders'
interest in the Wachovia Credit Card Master Trust is less than or equal to
5% of the original amount of that interest. The purchase price for these
outstanding Series 1999-_ certificates will be equal to the outstanding
amount plus accrued and unpaid interest on the certificates through the
last day of the period on which the repurchase occurs.
For more information on Wachovia Credit Card Master Trust's assets,
see "Wachovia's Credit Card Portfolio" and "The Receivables" in this
supplement and "Wachovia's Credit Card Activities" and "The Receivables" in
the attached prospectus.
SCHEDULED PRINCIPAL PAYMENTS AND POTENTIAL LATER PAYMENTS
Wachovia Credit Card Master Trust expects to pay the entire principal
amount of Class A in one payment on [ ] and the entire principal amount of
Class B in one payment on [ ]. In order to accumulate the funds to pay
Class A on its scheduled payment date, the Trust will accumulate principal
collections in a principal funding account. The Trust will deposit funds
into the principal funding account on each "transfer date." The Trust will
deposit funds into the principal funding account during a "controlled
accumulation period." The length of the controlled accumulation period may
be as long as twelve months, but will be shortened if Wachovia expects that
a shorter period will suffice for the accumulation of the Class A amount.
If Class A is not fully repaid on the scheduled payment date, Class A
will begin to amortize by means of monthly payments of all principal
collections allocated to Series 1999-_ until it is fully repaid.
After Class A is fully repaid, the Trust will use principal
collections allocated to Series 1999-_ to repay Class B. If Class B is not
fully repaid on its scheduled payment date, Class B will begin to amortize
by means of monthly payments of all monthly principal collections allocated
to Series 1999-_ after Class A is fully repaid.
For more information on scheduled principal payments and the
controlled accumulation period, see "Maturity Considerations" and
"Description of the Certificates--Principal Payments," "--Postponement of
Controlled Accumulation Period" and "--Application of Collections" in this
supplement and "Maturity Considerations" and "Description of the
Certificates--Principal Payments" in the attached prospectus.
Prior to the commencement of an accumulation or amortization period
for Series 1999-_, principal collections will be paid to Wachovia,
retained in a trust account or shared with other series that are amortizing
or in an accumulation period.
MINIMUM YIELD ON THE RECEIVABLES; POSSIBLE EARLY PRINCIPAL REPAYMENT
OF SERIES 1999-_
Class A or Class B may be repaid earlier than its scheduled principal
payment date if collections on the underlying receivables, together with
other amounts available for payment to certificateholders, are too low. The
minimum amount that must be available for payment to Series 1999-_ in any
month, referred to as the "base rate," is the sum of the Class A interest
rate, the Class B interest rate, the collateral interest rate, and the
investor servicing fee, divided by the investor interest. If the average
Trust portfolio yield, net of losses allocated to your series, for any
three consecutive months is less than the average base rate for the same
three consecutive months, a "pay out event" will occur with respect to
Series 1999-_, the Trust will commence a rapid amortization of Series
1999-_, and holders of Series 1999-_ certificates will receive principal
payments earlier than their scheduled principal payment date.
Series 1999-_ is also subject to several other pay out events, which
could cause Series 1999-_ to amortize, and which are summarized under the
headings "Maturity Considerations" and "Description of the
Certificates--Pay Out Events" in this supplement. If Series 1999-_ begins
to amortize, Class A will receive monthly payments of principal until it is
fully repaid; Class B will then receive monthly payments of principal until
it is fully repaid. In that event, your certificates may be repaid prior to
the scheduled payment date.
The final payment of principal and interest will be made no later
than [ ], which is the Series 1999-_ Termination Date.
For more information on pay out events, the portfolio yield and base
rate, early principal payment and rapid amortization, see "Maturity
Considerations," "Description of the Certificates--Principal Payments" and
"--Pay Out Events" in this supplement and "Description of the
Certificates--Principal Payments" and "--Final Payment of Principal;
Termination" in the attached prospectus.
TAX STATUS OF CLASS A AND CLASS B
Skadden, Arps, Slate, Meagher & Flom LLP, special tax counsel to
Wachovia, is of the opinion that under existing law the Class A and Class B
certificates will be characterized as debt for U.S. federal income tax
purposes.
The Transferor, the Servicer, the holders of the Class A certificates
and the Class B certificates and the owners of such certificates will agree
to treat the Class A certificates as debt for federal, state, local and
foreign income and franchise tax purposes.
For further information regarding the application of U.S. federal
income tax laws, see "Certain U.S. Federal Income Tax Consequences" in the
attached prospectus.
ERISA CONSIDERATIONS
Class A Certificates: The underwriters anticipate that the Class A
certificates will be held by at least 100 independent persons. Wachovia
expects the other requirements will be met so that the Class A certificates
will be considered "publicly-offered securities." If so, subject to
important considerations described under "ERISA Considerations" in this
supplement and "Employee Benefit Plan Considerations" in the attached
prospectus, the Class A certificates will be eligible for purchase by
persons investing assets of employee benefit plans or individual retirement
accounts.
Class B Certificates: It is not anticipated that the Class B certificates
will meet the criteria for treatment as "publicly-offered securities." As a
result, pension plans and other investors subject to ERISA may not acquire
Class B certificates. Prohibited investors include:
o "employee benefit plans" as defined in section 3(3) of ERISA.
o any "plan" as defined in section 4975 of the U.S. Internal
Revenue Code; and
o any entity whose underlying assets may be deemed to include "plan
assets" under ERISA by reason of any such plan's investment in
the entity, including insurance company general accounts.
By purchasing any Class B certificates, you certify that you are not within
any of those categories.
For further information regarding the application of ERISA, see
"ERISA Considerations" in this supplement and "Employee Benefit Plan
Considerations" in the attached prospectus.
MAILING ADDRESS AND TELEPHONE NUMBER OF PRINCIPAL EXECUTIVE OFFICES
The mailing address of The First National Bank of Atlanta is 77
Read's Way, New Castle Corporate Commons, New Castle, Delaware 19720 and
the telephone number is (302) 323-2395.
RISK FACTORS
You should consider the following risk factors in deciding whether to
purchase the asset backed certificates described herein.
POTENTIAL EARLY REPAYMENT
OR DELAYED PAYMENT DUE TO
REDUCED PORTFOLIO YIELD If the average trust portfolio yield, net of
losses allocated to your series, for any
three consecutive months is less than the
average base rate for the same three
consecutive months, a "pay out event" will
occur with respect to Series 1999-_ and the
Trust will commence a rapid amortization of
Series 1999-_, and holders of Series 1999-_
certificates will receive principal payments
earlier than the scheduled principal payment
date. Moreover, if principal collections on
receivables allocated to other series are
available for application to a rapid
amortization of any outstanding securities,
the period during which that rapid
amortization occurs may be substantially
shortened. Because of the potential for
early repayment if collections on the
receivables fall below the minimum amount,
any circumstances that tend to reduce
collections may increase the risk of early
repayment of Series 1999-_.
Conversely, any reduction in collections may
cause the period during which collections
are accumulated in the principal funding
account for payment of Class A to be longer
than otherwise would have been the case.
The following factors could result in
circumstances that tend to reduce
collections:
WACHOVIA MAY CHANGE THE TERMS AND CONDITIONS
OF THE ACCOUNTS
Wachovia will transfer receivables to the
Wachovia Credit Card Master Trust arising
under specified credit card accounts, but
Wachovia will continue to own those
accounts. As the owner of those accounts,
Wachovia retains the right to change various
terms and conditions of those accounts,
including finance charges and other fees it
charges and the required minimum monthly
payment. Wachovia may change the terms of
the accounts to maintain its competitive
position in the credit card industry.
Changes in the terms of the accounts may
reduce the amount of receivables arising
under the accounts, reduce the amount of
collections on those receivables, or
otherwise alter payment patterns.
Wachovia has agreed that it will not change
the terms of the accounts or its policies
relating to the operation of its credit card
business, including the reduction of the
required minimum monthly payment and the
calculation of the amount or the timing of
finance charges, other fees and charge-offs,
unless it reasonably believes such a change
would not result in a pay out event for any
series and takes the same action on its
other substantially similar accounts, to the
extent permitted by those accounts.
As Servicer, Wachovia is also required to
exercise the same care and apply the same
policies that it exercises in handling
similar matters for its own comparable
accounts.
WACHOVIA MAY ADD ACCOUNTS TO THE TRUST
PORTFOLIO
In addition to the accounts already
designated for Wachovia Credit Card Master
Trust, Wachovia is permitted to designate
additional accounts for the Trust portfolio
and to transfer the receivables in those
accounts to the Trust. Wachovia may
designate certain accounts and add to the
Trust the receivables in those accounts or
may designate that receivables in certain
eligible accounts will automatically be
added to the Trust, subject to certain
limitations. Any new accounts and
receivables may have different terms and
conditions than the accounts and receivables
already in the Trust--such as higher or
lower fees or interest rates, or longer or
shorter principal payment terms. Credit card
accounts purchased by Wachovia may be
included as additional accounts if certain
conditions are satisfied. Credit card
accounts purchased by Wachovia will have
been originated using the account
originator's underwriting criteria, not
those of Wachovia. The account originator's
underwriting criteria may be more or less
stringent than those of Wachovia.
Additionally, additional credit card
accounts may have been originated by
Wachovia using credit criteria which is
different from those which were applied by
Wachovia to the current credit card
accounts. The new accounts and receivables
may produce higher or lower collections or
charge-offs over time than the accounts and
receivables already in the Trust and could
tend to reduce the amount of collections
allocated to Series 1999-_.
Also, if Wachovia's percentage interest in
the accounts of the Trust falls to 5% or
less, Wachovia will be required to maintain
that level by designating additional
accounts for the Trust portfolio and
transferring the receivables in those
accounts to the Trust. If Wachovia is
required to add accounts to the Trust, it
may not have any accounts available to be
added to the Trust. If Wachovia fails to add
accounts when required, a "pay out event"
will occur and you could receive payment of
principal sooner than expected. See
"Description of the Certificates--Addition
of Trust Assets" in the attached prospectus.
CERTIFICATE AND RECEIVABLES INTEREST RATE
RESET TERMS MAY DIFFER
Finance charges on the accounts in the
Wachovia Credit Card Master Trust may accrue
at a fixed rate or a variable rate above a
designated prime rate or other designated
index. The certificate rate of your
certificate is based on LIBOR. Changes in
LIBOR might not be reflected in the prime
rate or the designated index, resulting in a
higher or lower spread, or difference,
between the amount of collections of finance
charge receivables on the accounts and the
amounts of interest payable on Series 1999-_
and other amounts required to be funded out
of collections of finance charge
receivables. With respect to accounts in the
Trust that accrue finance charges at a fixed
rate, if LIBOR increases, the amount of
interest on your certificate and other
amounts required to be funded out of
collections of finance charge receivables
will increase, while the amount of
collections of finance charge receivables on
those accounts will remain the same until
the rates on the accounts are reset.
A decrease in the spread between collections
of finance charge receivables and interest
payments on your certificate could increase
the risk of early repayment.
CHANGES TO CONSUMER PROTECTION LAWS MAY
IMPEDE WACHOVIA'S COLLECTION EFFORTS
Federal and state consumer protection laws
regulate the creation and enforcement of
consumer loans, including credit card
accounts and receivables. Changes or
additions to those regulations could make it
more difficult for the servicer of the
receivables to collect payments on the
receivables. The U.S. Congress or state or
local legislatures could pass legislation
limiting the finance charges and fees that
may be charged on credit card accounts. The
impact could be a reduction of the portfolio
yield which could result in a pay out event.
See "Description of the Certificates--Pay
Out Events" in this supplement and "Certain
Legal Aspects of the Receivables--Consumer
Protection Laws" in the attached prospectus.
Receivables that do not comply with consumer
protection laws may not be valid or
enforceable in accordance with their terms
against the obligors on those receivables.
Wachovia makes representations and
warranties relating to the validity and
enforceability of the receivables arising
under the accounts in the Trust portfolio.
Subject to certain conditions described
under "Description of the
Certificates--Representations and
Warranties" in the attached prospectus,
Wachovia must accept reassignment of each
receivable that does not comply in all
material respects with all requirements of
applicable law. However, we do not
anticipate that the trustee under the
pooling and servicing agreement will make
any examination of the receivables or the
related records for the purpose of
determining the presence or absence of
defects, compliance with representations and
warranties, or for any other purpose. The
only remedy if any representation or
warranty is violated, and the violation
continues beyond the period of time Wachovia
has to correct the violation, is that
Wachovia must accept reassignment of the
receivables affected by the violation,
subject to certain conditions described
under "Description of the
Certificates--Representations and
Warranties" in the attached prospectus. See
also "Certain Legal Aspects of the
Receivables--Consumer Protection Laws" in
the attached prospectus.
If a cardholder sought protection under
federal or state bankruptcy or debtor relief
laws, a court could reduce or discharge
completely the cardholder's obligations to
repay amounts due on its account and, as a
result, the related receivables would be
written off as uncollectible. See
"Description of the Certificates--Defaulted
Receivables; Investor Charge-Offs" in this
supplement and "Description of the
Certificates--Defaulted Receivables; Rebates
and Fraudulent Charges; Investor
Charge-Offs" in the attached prospectus.
SLOWER GENERATION OF RECEIVABLES COULD
REDUCE COLLECTIONS
The receivables transferred to the Wachovia
Credit Card Master Trust may be paid at any
time. We cannot assure the creation of
additional receivables in those accounts or
that any particular pattern of cardholder
payments will occur. A significant decline
in the amount of new receivables generated
by the accounts in the Trust could result in
reduced collections. See "Maturity
Considerations" in this supplement and in
the attached prospectus.
ALLOCATIONS OF CHARGED-OFF
RECEIVABLES COULD REDUCE
PAYMENTS TO
CERTIFICATEHOLDERS Wachovia anticipates that it will write off
as uncollectible some portion of the
receivables arising in accounts in the trust
portfolio. Each class of Series 1999-_ will
be allocated a portion of those charged-off
receivables. See "Description of the
Certificates--Allocation Percentages" and
"Wachovia's Credit Card
Portfolio--Delinquency and Loss Experience"
in this supplement. If the amount of
charged-off receivables allocated to any
class of certificates exceeds the amount of
other funds available for reimbursement of
those charge-offs (which could occur if the
limited amount of credit enhancement for
those certificates is reduced to zero), the
holders of those certificates may not
receive the full amount of principal and
interest due to them. See "Description of
the Certificates--Reallocation of Cash
Flows," "--Application of Collections" and
"--Defaulted Receivables; Investor
Charge-Offs" in this supplement.
LIMITED ABILITY TO RESELL
CERTIFICATES The underwriters may assist in resales of
Class A certificates but they are not
required to do so. A secondary market for
any such securities may not develop. If a
secondary market does develop, it might not
continue or it might not be sufficiently
liquid to allow you to resell any of your
securities.
CERTAIN LIENS COULD BE
GIVEN PRIORITY OVER YOUR
SECURITIES Wachovia accounts for the transfer of the
receivables to the Trust as a sale. However,
a court could conclude that Wachovia still
owns the receivables and that the Trust
holds only a security interest. Wachovia
will take steps to give the trustee a "first
priority perfected security interest" in the
receivables. If Wachovia became insolvent
and the Federal Deposit Insurance
Corporation were appointed conservator or
receiver of Wachovia, the FDIC's
administrative expenses might be paid from
the receivables before the Trust received
any payments on the receivables. If a court
concludes that the transfer to the Trust is
only a grant of a security interest in the
receivables, certain liens on Wachovia's
property arising before new receivables come
into existence may get paid before the
Trust's interest in those receivables. Those
liens include a tax or government lien or
other liens permitted under the law without
the consent of Wachovia. See "Certain Legal
Aspects of the Receivables--Transfer of
Receivables" and "Description of the
Certificates--Representations and
Warranties" in the attached prospectus.
INSOLVENCY OR BANKRUPTCY OF
WACHOVIA COULD RESULT IN
ACCELERATED, DELAYED OR
REDUCED PAYMENTS TO
CERTIFICATEHOLDERS Under the Federal Deposit Insurance Act, as
amended by the Financial Institutions
Reform, Recovery and Enforcement Act of
1989, if Wachovia becomes insolvent and the
FDIC is appointed conservator or receiver of
Wachovia, the FDIC could--
o require The Bank of New York (Delaware),
as trustee for the Trust, to go through
an administrative claims procedure under
which the FDIC could have up to 180 days
to determine the Trustee's right to
payments collected on the receivables in
the Trust;
o request a stay of up to 90 days of any
judicial action or proceeding involving
Wachovia; or
o repudiate the pooling and servicing
agreement establishing the Trust up to
180 days following the date of
receivership and limit the Trust's
resulting claim to "actual direct
compensatory damages" measured as of the
date of receivership.
If the FDIC were to take any of these
actions, your payments of outstanding
principal and interest could be delayed and
possibly reduced. In this regard, among
other possibilities, it is likely that the
FDIC would not pay you the interest accrued
from the date of receivership to the date of
repudiation or payment. See "Certain Legal
Aspects of the Receivables--Certain Matters
Relating to Receivership" in the attached
prospectus.
If a conservator or receiver were appointed
for Wachovia, then a "pay out event" could
occur for all outstanding series. Under the
terms of the pooling and servicing
agreement, new principal receivables would
not be transferred to the Trust and, if
Series 1999-_ remains outstanding, the
trustee would sell the receivables allocated
to a series unless holders of more than 50%
of the invested amount of the series or, if
the series has more than one class, each
class of the series gave the trustee other
instructions. The Trust would terminate
earlier than was planned if each series did
not vote to continue the Trust. You could
have a loss if the sale of the receivables
produced insufficient net proceeds to pay
you in full. The conservator or receiver may
nonetheless have the power--
o regardless of the terms of the pooling
and servicing agreement, (a) to prevent
the beginning of a rapid amortization
period, (b) to prevent the early sale of
the receivables and termination of the
Trust or (c) to require new principal
receivables to continue being
transferred to the Trust; or
o regardless of the instructions of the
certificateholders, (a) to require the
early sale of the Trust's receivables,
(b) to require termination of the Trust
and retirement of the Trust's
certificates (including Series 1999-_)
or (c) to prohibit the continued
transfer of principal receivables to the
Trust.
The FDIC as conservator or receiver would
also have the power to repudiate or refuse
to perform any obligations of Wachovia,
including any obligations of Wachovia as
servicer, and to request a stay of up to 90
days of any judicial action or proceeding
involving Wachovia. In addition, if
Wachovia, as servicer, defaults on its
obligations under the pooling and servicing
agreement solely because the FDIC is
appointed conservator or receiver for
Wachovia, the FDIC might have the power to
prevent the trustee or the
certificateholders from appointing a new
servicer under the pooling and servicing
agreement. See "Certain Legal Aspects of the
Receivables--Certain Matters Relating to
Receivership" in the attached prospectus.
ISSUANCE OF ADDITIONAL
SERIES BY THE TRUST MAY
AFFECT THE TIMING OF
PAYMENTS Wachovia Credit Card Master Trust, as a
master trust, may issue series of
certificates from time to time. The Trust
may issue additional series with terms that
are different from your series without the
prior review or consent of any
certificateholders. It is a condition to the
issuance of each new series that each rating
agency that has rated an outstanding series
confirm in writing that the issuance of the
new series will not result in a reduction or
withdrawal of its rating of any class of any
outstanding series.
However, the terms of a new series could
affect the timing and amounts of payments on
any other outstanding series. See
"Description of the Certificates--Exchanges"
in the attached prospectus.
INDIVIDUAL CERTIFICATEHOLDERS
WILL HAVE LIMITED CONTROL OF
TRUST ACTIONS Certificateholders of any series or any
class within a series may need the consent
or approval of a specified percentage of the
invested amount of other series or a class
of such other series to take or direct
certain actions, including to require the
appointment of a successor servicer after
Wachovia, as servicer, defaults on its
obligations under the pooling and servicing
agreement, to amend the pooling and
servicing agreement in some cases, and to
direct a repurchase of all outstanding
series after certain violations of
Wachovia's representations and warranties.
The interests of the certificateholders of
any such series may not coincide with yours,
making it more difficult for any particular
certificateholder to achieve the desired
results from such vote.
CLASS B BEARS ADDITIONAL
CREDIT RISK Because Class B is subordinated to Class A,
principal payments to Class B will not begin
until Class A is repaid in full. Also, if
collections of finance charge receivables
allocated to Series 1999-__ are insufficient
to cover amounts due to Class A, the
invested amount for Class B may be reduced.
This would reduce the amount of the
collections of finance charge receivables
available to Class B in future periods and
could cause a possible delay or reduction in
principal and interest payments on Class B.
If the receivables are sold, the net
proceeds of that sale available to pay
principal would be paid first to Class A and
any remaining net proceeds would be paid to
Class B. See "Description of the
Certificates--Subordination of the Class B
Certificates" in this supplement.
WACHOVIA'S CREDIT CARD PORTFOLIO
Capitalized terms are defined in the attached prospectus or in this
supplement. Definitions are indicated by boldface type. Both the attached
prospectus and this supplement contain an index of terms listing the page
numbers where definitions can be found.
GENERAL
The receivables (the "RECEIVABLES") conveyed to Wachovia Credit Card
Master Trust ("TRUST I") by Wachovia pursuant to the pooling and servicing
agreement (as the same may be amended from time to time, the "POOLING AND
SERVICING AGREEMENT"), between The First National Bank of Atlanta d/b/a
Wachovia Bank Card Services ("WACHOVIA" or the "BANK") as transferor (in
such capacity, the "TRANSFEROR") and as servicer of the Receivables (in
such capacity, the "SERVICER"), and The Bank of New York (Delaware), as
trustee (the "Trustee"), as supplemented by the supplement relating to the
Certificates (the "SERIES 1999-_ SUPPLEMENT") (the term "AGREEMENT," unless
the context requires otherwise, refers to the Pooling and Servicing
Agreement as supplemented by the Series 1999-_ Supplement) have been or
will be generated from transactions made by holders of selected
MasterCard(R) and VISA(R) credit card accounts, including premium accounts
and standard accounts, from the Bank Portfolio. Each Class A Floating Rate
Asset Backed Certificate, Series 1999-_ (collectively, the "CLASS A
CERTIFICATES"), each Class B Floating Rate Asset Backed Certificate, Series
1999-_ (collectively, the "CLASS B CERTIFICATES" and, together with the
Class A Certificates, the "OFFERED CERTIFICATES") and the interest in the
collateral (the "COLLATERAL INTEREST" and, together with the Offered
Certificates, the "INVESTOR CERTIFICATES") will represent the right to
receive certain payments from the Trust. As used in this prospectus
supplement, the term "CLASS A CERTIFICATEHOLDERS" refers to holders of the
Class A Certificates, the term "CLASS B CERTIFICATEHOLDERS" refers to
holders of the Class B Certificates, the term "COLLATERAL INTEREST HOLDERS"
refers to the holders of the Collateral Interest and the "INVESTOR
CERTIFICATEHOLDERS" refers to the Class A Certificateholders, Class B
Certificateholders and Collateral Interest Holders.
Certain MasterCard and VISA credit card accounts (the "ACCOUNTS")
represent only a portion of the entire portfolio of consumer revolving
credit loans arising in the VISA and MasterCard accounts currently owned by
Wachovia (such portfolio, excluding the Wells Portfolio (as defined below),
the "BANK PORTFOLIO"). Additional Accounts may include Accounts originated
after the date of this offering and which are selected using eligibility
criteria different from those used in selecting the Accounts presently
included in the Trust.
Wachovia is a member of VISA and MasterCard International. VISA and
MasterCard credit cards are issued as part of the worldwide VISA and
MasterCard International systems, and transactions creating the receivables
through the use of those credit cards are processed through the VISA and
MasterCard International authorization and settlement systems. If either
system were to materially curtail its activities, or if Wachovia were to
cease being a member of VISA or MasterCard International, for any reason,
an Early Amortization Event, as such term is defined in the related Series
1999-_ Supplement, could occur, and delays in payments on the Receivables
and possible reductions in the amounts thereof could also occur. The VISA
and MasterCard accounts, the receivables in which have been conveyed to the
Trust, include both standard and premium VISA and MasterCard accounts.
The VISA and MasterCard credit cards may be used to purchase merchandise
and services and to obtain cash advances. A cash advance is made when a
credit card account is used to obtain cash from a financial institution or
automated teller machine, which may be located at a financial institution,
supermarket or other business establishment. Amounts due with respect to
both purchases and cash advances will be included in the Receivables.
BILLING AND PAYMENTS
Wachovia, using Wachovia Operational Services Corporation ("WOSC") as
its service bureau, generates and mails to cardholders monthly statements
summarizing account activity and processes cardholder monthly payments.
Customers generally receive a 20-day grace period on purchases. Currently,
cardholders must make a minimum monthly payment at least equal to the
greater of (i)1/48th of the statement balance plus past due amounts and
(ii) a stated minimum payment (generally $10) plus past due amounts.
Certain eligible cardholders are given the option periodically to take a
payment deferral. The finance charges on purchases assessed monthly are
calculated by multiplying the account's average daily purchase balance by
the applicable monthly periodic rate. Finance charges are calculated on
purchases from the date of the purchase or the first day of the billing
cycle in which the purchase is posted to the account, whichever is later.
Monthly periodic finance charges are not assessed in most circumstances on
purchases if all balances shown in the billing statement are paid by the
due date, which is generally 20 days after the billing date. Finance
charges are calculated on cash advances (including balance transfers) from
the date of the transaction. Currently, Wachovia generally treats the date
of the cash advance check as the transaction date for the check. Wachovia
offers fixed rate and variable rate credit card accounts. Generally, fixed
annual percentage rates range from 14.98% to 17.98%, and variable rates
range from prime to prime plus 9.9% per annum. Wachovia also offers
temporary promotional rates and, under certain circumstances, the periodic
finance charges on a limited number of accounts may be less than those
assessed by Wachovia generally. In addition, certain delinquent accounts
may be priced at higher rates up to the greater of 22.99% per annum or
prime plus 14.99% per annum.
Wachovia assesses annual membership fees (generally ranging from $15 to
$98) on certain accounts, although under various marketing programs these
fees may be waived or rebated. For most credit card accounts, Wachovia also
assesses late and over limit charges (generally $29) and returned check
charges (generally $29). Wachovia generally assesses a cash advance fee,
typically 4% of the cash advance amount with a $5 minimum.
PORTFOLIO ACQUISITIONS
The Bank merged with Jefferson Bankshares, Inc., headquartered in
Charlottesville, Virginia, and Central Fidelity Banks, Inc., headquartered
in Richmond, Virginia (the "VIRGINIA BANKS") on October 31, 1997 and
December 15, 1997, respectively. In connection with these mergers, Wachovia
purchased from Jefferson Bankshares, Inc. approximately $16 million of
credit card receivables and from Central Fidelity Banks, Inc. approximately
$749 million of credit card receivables (collectively, the "VIRGINIA
PORTFOLIOS"). On September 4, 1998, Wachovia purchased $269 million of
credit card receivables from Wells Fargo & Co. (the "WELLS PORTFOLIO").
None of the accounts in the Virginia Portfolios or the Wells Portfolio has
been designated to have its receivables included in the Trust I Portfolio.
Such accounts were originated using criteria different from those which
were applied in originating the Accounts designated on the initial Cut Off
Date. Consequently, there can be no assurance that Additional Accounts
designated in the future from such accounts, if any, will be of the same
credit quality as previously designated Accounts. Additionally, it is
possible that if receivables arising in accounts in the Virginia Portfolios
and/or the Wells Portfolio were added to the Trust I Portfolio, subject to
satisfaction of the Rating Agency Condition (as defined herein), the
quality of the Trust I Portfolio may change.
DELINQUENCY AND LOSS EXPERIENCE
An account is contractually delinquent if the minimum payment is not
received by the due date indicated on the customer's statement. Efforts to
collect contractually delinquent credit card receivables are currently made
by Wachovia's Account Management Department. Collection activities include
statement messages, telephone calls and formal collection letters. Wachovia
utilizes an automated collection system in conjunction with a power dialing
system to gain efficiencies and productivity in the collection effort of
the past due accounts. The automated collection system appends a behavioral
scoring model on accounts five days or more past due and prioritizes the
accounts for initial contact with the objective of contacting the highest
risk and balance accounts first. This information is then downloaded into
the power dialing system which sorts the accounts into the appropriate time
zone and dials the delinquent accounts in order of priority.
Representatives are automatically linked to the cardholder's account
information and voice line when contact is established.
Accounts are worked continually at each stage of delinquency through the
120 day past due level. As an account enters the 120 day delinquency level,
it is classified as a potential charge-off. Accounts failing to make a
payment during the 120 day cycle are written off on or prior to becoming
150 days past due. Managers may defer a charge-off of an account for
another month, pending continued payment activity or other special
circumstances. Departmental manager approval is required on all exceptions
to charge-off. Accounts of cardholders in bankruptcy are generally
charged-off in the month following the receipt of notification of the
bankruptcy. On February 10, 1999, the Federal Financial Institutions
Examination Council ("FFIEC") adopted a revised Uniform Retail Credit
Classification and Account Management Policy (the "FFIEC UNIFORM POLICY")
that provides that open end retail loans, such as credit card receivables,
that become past due 180 days should be charged off by the end of the month
in which the loan becomes 180 days past due. The Bank is currently
reviewing plans to implement a change in its charge-off policy to conform
it to the FFIEC Uniform Policy.
The following tables set forth the delinquency and loss experience for
each of the periods shown for the Accounts selected from the Bank
Portfolio. The Bank Portfolio's delinquency and loss experience is
comprised of segments which may, when taken individually, have delinquency
and loss characteristics different from those of the overall Bank Portfolio
of credit card accounts. As of _______, 1999 the Receivables in the Trust I
Portfolio represented approximately [ %] of the Bank Portfolio. Because the
Trust I Portfolio is only a portion of the Bank Portfolio, actual
delinquency and loss experience with respect to the Receivables may be
different from that set forth below for the Bank Portfolio. There can be no
assurance that the delinquency and loss experience for the Receivables in
the future will be similar to the historical experience of the Bank
Portfolio set forth below.
DELINQUENCY EXPERIENCE
BANK PORTFOLIO
AS OF DECEMBER 31,
-------------------------------------------------------------------------------------
AS OF _______ 1999(1) 1998(1) 1997(1) 1996(1)
------------------------ --------------------------- --------------------------- ---------------------------
PERCENTAGE PERCENTAGE PERCENTAGE PERCENTAGE
OF TOTAL OF TOTAL OF TOTAL OF TOTAL
RECEIVABLES RECEIVABLES RECEIVABLES RECEIVABLES RECEIVABLES RECEIVABLES RECEIVABLES RECEIVABLES
----------- ----------- -------------- ----------- -------------- ----------- -------------- -----------
Receivables
Outstanding(2). $6,189,588,274 100.00% $5,591,770,800 100.00% $5,407,813,397 100.00%
=========== =========== ============== =========== ============== =========== ============== ===========
Receivables
Delinquent:
30-59 Days.. $ 82,356,495 1.33% $ 66,278,826 1.18% $ 53,823,867 1.00%
60-89 Days.. 44,694,277 0.72 35,537,859 0.64 27,222,566 0.50
90 or More
Days...... 56,883,834 0.92 47,315,115 0.85 35,415,459 0.65
----------- ----------- -------------- ----------- -------------- ----------- -------------- -----------
TOTAL... $ 183,934,606 2.97% $ 149,131,800 2.67% $ 116,461,892 2.15%
=========== =========== ============== =========== ============== =========== ============== ===========
- --------------
(1) Figures shown include the Virginia Portfolios for the 1998 year end
and do not include the Wells Portfolio.
(2) The Receivables Outstanding on the accounts consist of all amounts
due from cardholders as posted to the accounts as of the end of the
period shown.
LOSS EXPERIENCE
BANK PORTFOLIO
YEAR ENDED DECEMBER 31,
------------------------------------------------
___ MONTHS
ENDED ____ __,
1999(1) 1998(1) 1997(1) 1996(1)
-------------- -------------- -------------- --------------
Average Receivables
Outstanding(2)............. $[ ] $5,885,303,622 $5,398,461,407 $4,818,808,813
Total Gross Charge-Offs(3)... $[ ] $ 292,516,163 $ 224,571,000 $ 171,897,000
Recoveries................... $[ ] $ 28,103,721 $ 23,184,000 $ 18,273,000
Total Net Charge-Offs as a
Percentage of Average
Receivables Outstanding.... [ ]% 4.49% 3.73% 3.19%
- ---------
(1) Figures shown include the Virginia Portfolios from March 20, 1998 and
do not include the Wells Portfolio.
(2) Average Receivables Outstanding is the average of the daily
receivable balance during the period indicated.
(3) Total Gross Charge-Offs are total principal and interest charge-offs
before recoveries and do not include the amount of any reductions in
Average Receivables Outstanding due to fraud, returned goods and
customer disputes.
INTERCHANGE
The Transferor will be required, pursuant to the terms of the
Agreement, to transfer to Trust I a percentage of the Interchange (as
defined in the attached prospectus) attributed to cardholder charges for
goods and services in the Accounts. Interchange arising under the Accounts
will be allocated to Series 1999-_ on the basis of the percentage
equivalent of the ratio which the amount of the Floating Investor
Percentage of cardholder charges for goods and services in the Accounts
bears to the total amount of cardholder charges for goods and services in
the MasterCard and VISA credit card accounts owned by Wachovia, as
reasonably estimated by the Transferor. MasterCard and VISA may from time
to time change the amount of Interchange reimbursed to banks issuing their
credit cards. Interchange will be treated as collections of Finance Charge
Receivables for the purposes of determining the amount of Finance Charge
Receivables, allocating collections of Finance Charge Receivables, making
required monthly payments, and calculating the Portfolio Yield. Under the
circumstances described herein, Interchange will be used to pay a portion
of the Investor Servicing Fee required to be paid on each Transfer Date.
See "Description of the Certificates--Servicing Compensation and Payment of
Expenses" in this supplement and "Wachovia's Credit Card
Activities--Interchange" in the attached prospectus.
THE RECEIVABLES
The Receivables conveyed to Trust I arise in Accounts selected from
the Bank Portfolio (the "TRUST I PORTFOLIO") on the basis of criteria set
forth in the Agreement as applied on the Cut Off Date with respect to the
original Accounts and, with respect to Additional Accounts, as of the date
the Account is selected to have its receivables added to the Trust (the
"ADDITION CUT OFF DATE"). Pursuant to the Agreement, the Transferor has the
right, subject to certain limitations and conditions set forth therein, to
designate from time to time Additional Accounts and Automatic Additional
Accounts and to transfer to Trust I all Receivables of such Additional
Accounts and Automatic Additional Accounts, whether such Receivables are
then existing or thereafter created. Any Additional Accounts designated
pursuant to the Agreement must be Eligible Accounts as of the date the
Transferor designates such accounts as Additional Accounts. Any Automatic
Additional Accounts designated pursuant to the Agreement must be Eligible
Accounts as of the date of their creation. The Transferor will be required
to designate Additional Accounts, to the extent available, (a) to maintain
the Transferor Amount (including the principal amount on deposit in the
Excess Funding Account) so that the Transferor Amount at the end of each
calendar month (the "MONTHLY PERIOD") equals or exceeds the Minimum
Transferor Amount and (b) to maintain, for so long as certificates of any
Series (including Series 1999-_) remain outstanding, the sum of (i) the
aggregate amount of Principal Receivables and (ii) the principal amount on
deposit in the Excess Funding Account equal to or greater than the Minimum
Aggregate Principal Receivables. "MINIMUM TRANSFEROR AMOUNT" means 5% of
the sum of (i) the average Principal Receivables for the preceding Monthly
Period and (ii) the average principal amount on deposit in the Excess
Funding Account for such period; provided, however, that the Transferor may
reduce the Minimum Transferor Amount to not less than 2% of the sum of (i)
the average Principal Receivables for such period and (ii) the average
principal amount on deposit in the Excess Funding Account and any other
account specified from time to time pursuant to the Agreement or any Series
Supplement for such period upon satisfaction of the Rating Agency Condition
and certain other conditions to be set forth in the Agreement. "MINIMUM
AGGREGATE PRINCIPAL RECEIVABLES" means an amount equal to the sum of the
numerators used to calculate the Investor Percentages with respect to the
allocation of collections of Principal Receivables for each Series then
outstanding; provided, however, that the Minimum Aggregate Principal
Receivables may be reduced to a lesser amount at any time if the Rating
Agency Condition is satisfied. Further, pursuant to the Agreement, the
Transferor will have the right (subject to certain limitations and
conditions) to designate certain Removed Accounts and to require the
Trustee to reconvey all Receivables in such Removed Accounts to the
Transferor, whether such Receivables are then existing or thereafter
created. Throughout the term of Trust I, the Accounts from which the
Receivables arise will be the Accounts designated by the Transferor on the
Cut Off Date plus any Additional Accounts designated by the Transferor on
any Addition Cut Off Date and Automatic Additional Accounts minus any
Removed Accounts. As of the Cut Off Date, with respect to the original
Accounts, as of the Addition Cut Off Date with respect to Receivables in
Additional Accounts and, as of the related date of their conveyance to
Trust I with respect to Automatic Additional Accounts , and on the date any
new Receivables are created, the Transferor will represent and warrant to
Trust I that the Receivables meet the eligibility requirements specified in
the Agreement. See "Description of the Certificates--Representations and
Warranties" in the prospectus.
The Receivables in the Trust I Portfolio, as of the _______, 1999
included $[ ] of Principal Receivables and $[ ] of Finance Charge
Receivables. The Accounts had an average Principal Receivable balance of
$[ ] and an average credit limit of $[ ]. The percentage of the
aggregate total Receivable balance to the aggregate total credit limit was
[ ]%. The average age of the Accounts was approximately [ ] months. As
of the _______, 1999 cardholders whose Accounts are included in the Trust I
Portfolio had billing addresses in all [50] states, the District of
Columbia and other United States territories and possessions. As of
_______, 1999 [ ]% of the Accounts were standard accounts and [ ]%
were premium accounts, and the aggregate total Receivable balances of
standard accounts and premium accounts, as a percentage of the aggregate
total Receivables, were [ ]% and [ ]%, respectively.
The following tables summarize the Trust I Portfolio by various
criteria as of _______, 1999. Because the future composition of the Trust I
Portfolio may change over time, these tables are not necessarily indicative
of the composition of the Trust I Portfolio at any subsequent time.
COMPOSITION BY ACCOUNT BALANCE
TRUST I PORTFOLIO
PERCENTAGE OF PERCENTAGE
NUMBER OF TOTAL NUMBER OF TOTAL
ACCOUNT BALANCE RANGE ACCOUNTS OF ACCOUNTS RECEIVABLES RECEIVABLES
- --------------------- ---------- -------------- ----------- ------------
Credit Balance................. % $ %
No Balance.....................
$.01-$1,499.99.................
$1,500.00-$2,999.99............
$3,000.00-$4,499.99............
$4,500.00-$9,999.99............
$10,000.00 or More.............
---------- -------------- ----------- ------------
TOTAL........................ % $ %
========== ============== =========== ============
COMPOSITION BY CREDIT LIMIT
TRUST I PORTFOLIO
PERCENTAGE OF PERCENTAGE
NUMBER OF TOTAL NUMBER OF TOTAL
CREDIT LIMIT RANGE ACCOUNTS OF ACCOUNTS RECEIVABLES RECEIVABLES
- ------------------ ---------- -------------- ----------- ------------
Less than or equal to $1,500... % $ %
$1,501-$3,000..................
$3,001-$4,500..................
$4,501-$10,000.................
$10,001 or More................
---------- -------------- ----------- ------------
TOTAL........................ % $ %
========== ============== =========== ============
COMPOSITION BY PERIOD OF DELINQUENCY
TRUST I PORTFOLIO
PERIOD OF DELINQUENCY PERCENTAGE OF PERCENTAGE
(DAYS CONTRACTUALLY NUMBER OF TOTAL NUMBER OF TOTAL
DELINQUENT) ACCOUNTS OF ACCOUNTS RECEIVABLES RECEIVABLES
- --------------------- ---------- -------------- ----------- ------------
Not Delinquent................. % $ %
6 to 30 Days...................
31 to 60 Days..................
61 to 90 Days..................
91 to 120 Days.................
121 to 150 Days................
Over 150 Days..................
---------- -------------- ----------- ------------
TOTAL........................ % $ %
========== ============== =========== ============
COMPOSITION BY ACCOUNT AGE
TRUST I PORTFOLIO
PERCENTAGE OF PERCENTAGE
NUMBER OF TOTAL NUMBER OF TOTAL
ACCOUNT AGE ACCOUNTS OF ACCOUNTS RECEIVABLES RECEIVABLES
- ----------- ---------- -------------- ----------- ------------
Not More than 24 Months.. % $ %
Over 24 Months to 48 Months....
Over 48 Months to 60 Months....
Over 60 Months.................
---------- -------------- ----------- ------------
TOTAL........................ % $ %
========== ============== =========== ============
GEOGRAPHIC DISTRIBUTION OF ACCOUNTS IN THE
TRUST I PORTFOLIO
PERCENTAGE OF PERCENTAGE
NUMBER OF TOTAL NUMBER OF TOTAL
STATE ACCOUNTS OF ACCOUNTS RECEIVABLES RECEIVABLES
- ----- ---------- -------------- ----------- ------------
Alabama........................ % $ %
Alaska.........................
Arizona........................
Arkansas.......................
California.....................
Colorado.......................
Connecticut....................
Delaware.......................
Florida........................
Georgia........................
Hawaii.........................
Idaho..........................
Illinois.......................
Indiana........................
Iowa...........................
Kansas.........................
Kentucky.......................
Louisiana......................
Maine..........................
Maryland.......................
Massachusetts..................
Michigan.......................
Minnesota......................
Mississippi....................
Missouri.......................
Montana........................
Nebraska.......................
Nevada.........................
New Hampshire..................
New Jersey.....................
New Mexico.....................
New York.......................
North Carolina.................
North Dakota...................
Ohio...........................
Oklahoma.......................
Oregon.........................
Pennsylvania...................
Rhode Island...................
South Carolina.................
South Dakota...................
Tennessee......................
Texas..........................
Utah...........................
Vermont........................
Virginia.......................
Washington.....................
West Virginia..................
Wisconsin......................
Wyoming........................
District of Columbia...........
Other..........................
---------- -------------- ----------- ------------
TOTAL........................ % $ %
========== ============== =========== ============
MATURITY CONSIDERATIONS
The Agreement provides that Class A Certificateholders will not receive
payments of principal until the[ ] Distribution Date (the "CLASS A
SCHEDULED PAYMENT DATE"), or earlier in the event of a Pay Out Event, which
results in the commencement of the Rapid Amortization Period. The Agreement
also provides that Class B Certificateholders will not receive payments of
principal until the [ ] Distribution Date (the "CLASS B SCHEDULED PAYMENT
DATE"), or earlier in the event of a Pay Out Event (as defined below),
which results in the commencement of the Rapid Amortization Period (in the
latter case, only after the Class A Investor Interest (as defined herein)
has been paid in full). The Class B Certificateholders will not begin to
receive payments of principal until the final principal payment on the
Class A Certificates has been made.
CONTROLLED ACCUMULATION PERIOD
On each Transfer Date during the Controlled Accumulation Period prior to
the payment of the Class A Investor Interest in full, an amount equal to,
for each Monthly Period, the least of (a) the Available Investor Principal
Collections, (b) the applicable "CONTROLLED DEPOSIT AMOUNT" for such
Monthly Period, which is equal to the sum of the Controlled Accumulation
Amount for such Monthly Period and the Accumulation Shortfall, if any, for
such Monthly Period and (c) the Class A Adjusted Investor Interest prior to
any deposits on such day, will be deposited in the Principal Funding
Account (the "PRINCIPAL FUNDING ACCOUNT") established by the Servicer until
the principal amount on deposit in the Principal Funding Account (the
"PRINCIPAL FUNDING ACCOUNT BALANCE") equals the Class A Investor Interest.
After the Class A Investor Interest has been paid in full, or following the
first Transfer Date upon which the Principal Funding Account Balance has
increased to the amount of the Class A Investor Interest, Available
Investor Principal Collections, to the extent required, will be distributed
to the Class B Certificateholders on each Distribution Date beginning,
during the Controlled Accumulation Period, on the Class B Scheduled Payment
Date, until the earlier of the date the Class B Investor Interest (as
defined herein) has been paid in full and the Series 1999-_ Termination
Date. After the Class A Investor Interest and the Class B Investor Interest
have each been paid in full, Available Investor Principal Collections, to
the extent required, will be distributed to the Collateral Interest Holder
on each Transfer Date until the earlier of the date the Collateral Interest
has been paid in full and the Series 1999-_ Termination Date. Amounts in
the Principal Funding Account are expected to be available to pay the Class
A Investor Interest on the Class A Scheduled Payment Date. After the
payment of the Class A Investor Interest in full, Available Investor
Principal Collections are expected to be available to pay the Class B
Investor Interest on the Class B Scheduled Payment Date. Although it is
anticipated that collections of Principal Receivables will be available on
each Transfer Date during the Controlled Accumulation Period to make a
deposit of the applicable Controlled Deposit Amount and that the Class A
Investor Interest will be paid to the Class A Certificateholders on the
Class A Scheduled Payment Date and the Class B Investor Interest will be
paid to the Class B Certificateholders on the Class B Scheduled Payment
Date, respectively, no assurance can be given in this regard. If the amount
required to pay the Class A Investor Interest or the Class B Investor
Interest in full is not available on the Class A Scheduled Payment Date or
the Class B Scheduled Payment Date, respectively, a Pay Out Event will
occur and the Rapid Amortization Period will commence.
RAPID AMORTIZATION PERIOD
If a Pay Out Event occurs, the "RAPID AMORTIZATION PERIOD" will commence
and any amount on deposit in the Principal Funding Account will be paid to
the Class A Certificateholders on the Distribution Date in the month
following the commencement of the Rapid Amortization Period. In addition,
to the extent that the Class A Investor Interest has not been paid in full,
the Class A Certificateholders will be entitled to monthly payments of
principal equal to the Available Investor Principal Collections until the
earlier of the date on which the Class A Certificates have been paid in
full and the Series 1999-_ Termination Date. After the Class A Certificates
have been paid in full and if the Series 1999-_ Termination Date has not
occurred, Available Investor Principal Collections will be paid to the
Class B Certificates on each Distribution Date until the earlier of the
date on which the Class B Certificates have been paid in full and the
Series 1999-_ Termination Date.
PAY OUT EVENTS
A "PAY OUT EVENT" occurs, either automatically or after specified
notice, upon (a) the failure of the Transferor to make certain payments or
transfers of funds for the benefit of the Class A Certificateholders within
the time periods stated in the Agreement, (b) material breaches of certain
representations, warranties or covenants of the Transferor, (c) certain
insolvency or bankruptcy events involving the Transferor or any holder of
an interest in the Transferor Certificate (including the Transferor
Participation), (d) a reduction in the average of the Portfolio Yields for
any three consecutive Monthly Periods to a rate that is less than the
average of the Base Rates for such period, (e) Trust I becoming subject to
regulation as an "investment company" within the meaning of the Investment
Company Act of 1940, as amended, (f) the failure of the Transferor to
convey Receivables arising under Additional Accounts or Participations to
Trust I when required by the Agreement, (g) the occurrence of a Servicer
Default which would have a material adverse effect on the Class A
Certificateholders, (h) insufficient monies in the Distribution Account to
pay the Class A Investor Interest or the Class B Investor Interest in full
on the Class A Scheduled Payment Date or the Class B Scheduled Payment
Date, respectively, or (i) the Transferor becomes unable for any reason to
transfer Receivables to Trust I in accordance with the provisions of the
Agreement. See "Description of the Certificates--Pay Out Events" in this
supplement. The term "BASE RATE" means, with respect to any Monthly Period,
the annualized percentage equivalent of a fraction, the numerator of which
is the sum of the Class A Monthly Interest, the Class B Monthly Interest
and the Collateral Monthly Interest, each for the related Interest Period,
and the Investor Servicing Fee for such Monthly Period, and the denominator
of which is the Investor Interest as of the close of business on the last
day of such Monthly Period. The term "PORTFOLIO YIELD" means, with respect
to any Monthly Period, the annualized percentage equivalent of a fraction,
the numerator of which is the sum of collections of Finance Charge
Receivables (including recoveries on charged-off Receivables), Principal
Funding Investment Proceeds and certain other investment earnings and
amounts withdrawn from the Reserve Account deposited into the Finance
Charge Account and allocable to Series 1999-_ for such Monthly Period,
calculated on a cash basis after subtracting the Investor Default Amount
for such Monthly Period, and the denominator of which is the Investor
Interest as of the close of business on the last day of such Monthly
Period.
PAYMENT RATES
The following table sets forth the highest and lowest cardholder monthly
payment rates for the Bank Portfolio during any month in the period shown
and the average cardholder monthly payment rates for all months during the
periods shown, in each case calculated as a percentage of total opening
monthly account balances during the periods shown. Payment rates shown in
the table are based on amounts which would be deemed payments of Principal
Receivables and Finance Charge Receivables with respect to the Accounts.
CARDHOLDER MONTHLY PAYMENT RATES
BANK PORTFOLIO
YEAR ENDED DECEMBER 31,
-----------------------------
__MONTHS
ENDED ___,
1999(1) 1998(1) 1997(1) 1996(1)
--------- ------- ------- -------
Lowest Month.......... [ ]% 10.62% 10.01% 9.78%
Highest Month......... [ ]% 12.55% 11.72% 11.53%
Monthly Average....... [ ]% 11.22% 11.07% 10.67%
- ---------
(1) Figures shown include the Virginia Portfolios from March 20, 1998 and
do not include the Wells Portfolio.
Currently, cardholders must make a monthly minimum payment equal to the
greater of (i) 1/48th of the statement balance plus past due amounts and
(ii) a stated minimum payment (generally $10) plus past due amounts. There
can be no assurance that the cardholder monthly payment rates in the future
will be similar to the historical experience set forth above. In addition,
the amount of collections of Receivables may vary from month to month due
to seasonal variations, general economic conditions and payment habits of
individual cardholders. There can be no assurance that collections of
Principal Receivables with respect to the Trust I Portfolio will be similar
to the historical experience set forth above or that deposits into the
Principal Funding Account or the Distribution Account, as applicable, will
be made in accordance with the applicable Controlled Accumulation Amount.
If a Pay Out Event occurs, the average life of the Class A Certificates
could be significantly reduced or increased. Because there may be a
slowdown in the payment rate below the payment rates used to determine the
Controlled Accumulation Amounts, or a Pay Out Event may occur which would
initiate the Rapid Amortization Period, there can be no assurance that the
actual number of months elapsed from the date of issuance of the Class A
Certificates and the Class B Certificates to their respective final
Distribution Dates will equal the expected number of months. As described
in this supplement under "Description of the Certificates--Postponement of
Controlled Accumulation Period," the Servicer may shorten the Controlled
Accumulation Period and, in such event, there can be no assurance that
there will be sufficient time to accumulate all amounts necessary to pay
the Class A Investor Interest and the Class B Investor Interest on the
Class A Scheduled Payment Date and the Class B Scheduled Payment Date,
respectively. See "Maturity Considerations" in this supplement
RECEIVABLE YIELD CONSIDERATIONS
The gross revenues from finance charges and fees billed to accounts in
the Bank Portfolio for each of the three calendar years contained in the
period ended December 31, [ ] as well as the[ ] months in the period ended
_______, 1999 year are set forth in the following table. The historical
yield figures in the following table are calculated on an accrual basis.
Collections of Receivables included in Trust I will be on a cash basis and
may not reflect the historical yield experience in the table. During
periods of increasing delinquencies or periodic payment deferral programs,
accrual yields may exceed cash amounts accrued and billed to cardholders.
Conversely, cash yields may exceed accrual yields as amounts collected in a
current period may include amounts accrued during prior periods. However,
the Transferor believes that during the three calendar years contained in
the period ended December 31, [ ] and the [ ] months in the period ended
_______, 1999, the yield on an accrual basis closely approximated the yield
on a cash basis. The yield on both an accrual and a cash basis will be
affected by numerous factors, including the monthly periodic finance
charges on the Receivables, the amount of the annual membership fees and
other fees, changes in the delinquency rate on the Receivables and the
percentage of cardholders who pay their balances in full each month and do
not incur monthly periodic finance charges.
BANK PORTFOLIO YIELD
___ MONTHS YEAR ENDED DECEMBER 31,
ENDED _____ ------------------------------------------------
1999(1) 1998(1) 1997(1) 1996(1)
------------ -------------- -------------- --------------
Average Receivables
Outstanding(2)................ $[ ] $5,885,303,622 $5,398,461,407 $4,818,808,813
Total Finance Charges........... $[ ] $ 971,637,089 $ 855,676,589 $ 718,469,769
Total Finance Charges as a
Percentage of Average
Receivables Outstanding....... [ ]% 16.51% 15.85% 14.91%
- -------------
(1) Figures shown include the Virginia Portfolios from March 20, 1998 and
do not include the Wells Portfolio.
(2) Average Receivables Outstanding is the average of the monthly
receivable balance during the period indicated.
The revenue for the Bank Portfolio of credit card accounts shown in the
above table is comprised of monthly periodic finance charges, credit card
fees and Interchange. These revenues vary for each account based on the
type and volume of activity for each account. Because the Trust I Portfolio
is only a portion of the Bank Portfolio, actual yield with respect to
Receivables may be different from that set forth above for the Bank
Portfolio. See "Wachovia's Credit Card Portfolio" in this supplement and
"Wachovia's Credit Card Activities" in the attached prospectus.
WACHOVIA AND WACHOVIA CORPORATION
Wachovia, a wholly-owned subsidiary of the Corporation, is a national
banking association located in New Castle, Delaware, which conducts
nationwide consumer lending programs principally comprised of credit card
related activities. WBNA, a wholly-owned subsidiary of the Corporation, is
a national banking association located in Winston-Salem, North Carolina.
The Corporation is a bank holding company registered under the Bank Holding
Company Act of 1956, as amended, maintaining dual headquarters in Atlanta,
Georgia and Winston-Salem, North Carolina. As of [ ], Wachovia had
assets of $[ ] and shareholder's equity of $[ ]. As of [ ], WBNA
had assets of $[ ] and shareholder's equity of $[ ]. As of [ ],
the Corporation had assets of $[ ] and shareholders' equity of $[ ].
DESCRIPTION OF THE CERTIFICATES
The Offered Certificates will be issued pursuant to the Agreement and
the Series 1999-_ Supplement. Pursuant to the Agreement, the Transferor and
the Trustee may execute further series supplements in order to issue
additional Series. The following summary of the Offered Certificates does
not purport to be complete and is subject to, and is qualified in its
entirety by reference to, all of the provisions of the Agreement and the
Series 1999-_ Supplement. See "Description of the Certificates" in the
attached prospectus for additional information concerning the Offered
Certificates and the Agreement.
GENERAL
The Class A Certificates will represent the right to receive certain
payments from the assets of Trust I, including the right to the applicable
allocation percentage of all cardholder payments on the Receivables in
Trust I to the extent necessary to pay principal and interest on the Class
A Certificates. Trust I's assets will be allocated among the Class A
Certificateholders (the "CLASS A INVESTOR INTEREST"), the Class B
Certificateholders (the "CLASS B INVESTOR INTEREST"), the Collateral
Interest Holder (the Collateral Interest together with the Class A Investor
Interest and the Class B Investor Interest, the "INVESTOR INTEREST"), the
interest of the holders of other undivided interests in Trust I issued
pursuant to the Agreement and applicable Series Supplements and the
interest of the Transferor (the "TRANSFEROR INTEREST"), as described below.
The Class B Certificates and the Collateral Interest in the initial amount
of $[ ] (which amount represents [ ]% of the amount of the initial Investor
Interest) constitute Credit Enhancement for the Class A Certificates.
Allocations will be made to the Collateral Interest, and the Collateral
Interest Holder will have voting and certain other rights, as if the
Collateral Interest were a subordinated class of certificates. The
Transferor Interest will represent the right to the assets of Trust I not
allocated to the Class A Investor Interest, the Class B Investor Interest,
the Collateral Interest or the holders of other undivided interests in
Trust I. The principal amount of the Transferor Interest (the "TRANSFEROR
AMOUNT") will fluctuate as the amount of Receivables in Trust I changes
from time to time.
Each Class A Certificate represents the right to receive interest at the
Class A Certificate Rate on the principal amount of the Class A
Certificates for the related Interest Period and payments of principal on
the Class A Scheduled Payment Date or, to the extent of the Class A
Investor Interest, on each Distribution Date during the Rapid Amortization
Period, funded from collections of Finance Charge Receivables and Principal
Receivables, respectively, allocated to the Class A Investor Interest and
certain other available amounts. Each Class B Certificate represents the
right to receive payments of interest at the applicable Class B Certificate
Rate on the principal amount of the Class B Certificates for the related
Interest Period, and payments of principal on the Class B Scheduled Payment
Date or, to the extent of the Class B Investor Interest, on each
Distribution Date during the Rapid Amortization Period after the Class A
Certificates have been paid in full, funded from collections of Finance
Charge Receivables and Principal Receivables, respectively, allocated to
the Class B Investor Interest and certain other available amounts. Amounts
payable to the Class A Certificateholders may be paid from collections of
Finance Charge Receivables and Principal Receivables, Excess Spread, funds
on deposit in the Principal Funding Account and the Reserve Account and
certain investment earnings thereon, Reallocated Principal Collections (as
defined herein) and Shared Principal Collections (as defined herein) and
certain other available amounts (including, under certain circumstances,
amounts on deposit in the Excess Funding Account). Amounts payable to the
Class B Certificateholders may be paid from collections of Finance Charge
Receivables and Principal Receivables, Excess Spread, Reallocated
Collateral Principal Collections and Shared Principal Collections and
certain other available amounts (including, under certain circumstances,
amounts on deposit in the Excess Funding Account). Payments of interest and
principal will be made, to the extent of funds available therefor, on each
Distribution Date on which such amounts are due to Class A
Certificateholders in whose names the Class A Certificates were registered
on the last business day of the calendar month preceding such Distribution
Date (each, a "RECORD DATE").
The Transferor initially will own the Transferor Certificate. WBNA will
own a participation interest (initially 95%, but subject to change) in the
Transferor Certificate (the "TRANSFEROR PARTICIPATION"). The Transferor
Certificate will represent the right to receive certain payments from the
assets of Trust I, including the right to a percentage (the "TRANSFEROR
PERCENTAGE") of all cardholder payments on the Receivables in Trust I equal
to 100% minus the sum of the applicable Investor Percentages for all Series
of certificates then outstanding. The Transferor Certificate may be
transferred in whole or in part subject to certain limitations and
conditions set forth in the Agreement. See "Description of the
Certificates--Certain Matters Regarding the Transferor and the Servicer" in
the attached prospectus.
The Class A Certificates initially will be represented by certificates
registered in the name of Cede, as nominee of DTC. Unless and until
Definitive Class A Certificates are issued, all references herein to
actions by Class A Certificateholders shall refer to actions taken by DTC
upon instructions from DTC Participants and all references herein to
distributions, notices, reports and statements to Class A
Certificateholders shall refer to distributions, notices, reports and
statements to DTC or Cede, as the registered holder of the Class A
Certificates for distribution to Certificate Owners in accordance with DTC
procedures. Class A Certificateholders may hold their Class A Certificates
through DTC (in the United States) or Cedelbank or Euroclear (in Europe) if
they are participants of such systems, or indirectly through organizations
that are participants in such systems. Cede, as nominee for DTC, will hold
the global Class A Certificates. Cedelbank and Euroclear will hold omnibus
positions on behalf of the Cedelbank Customers and the Euroclear
Participants, respectively, through customers' securities accounts in
Cedelbank's and Euroclear's names on the books of their respective
Depositories which in turn will hold such positions in customers'
securities accounts in the Depositories' names on the books of DTC. See
"Description of the Certificates--General," "--Book-Entry Registration" and
"--Definitive Certificates" in the attached prospectus.
EXCHANGES
The Transferor Certificate is transferable only as provided in the
Agreement. The Agreement also provides that the holder of the Transferor
Certificate may tender the Transferor Certificate to the Trustee in
exchange for one or more new Series and a reissued Transferor Certificate
as described under "Description of the Certificates--Exchanges" in the
attached prospectus.
INTEREST PAYMENTS
Interest will accrue on the Class A Certificates at the Class A
Certificate Rate and on the Class B Certificates at the Class B Certificate
Rate from [ ] (the "CLOSING DATE"). Interest will be distributed to
Class A Certificateholders on [ ] and on the [ ]th day of each month
thereafter or, if such [ ]th day is not a business day, the next
succeeding business day (each, a "DISTRIBUTION DATE") in an amount equal to
(i) with respect to the Class A Certificates, the product of (a) the actual
number of days in the related Interest Period divided by 360 and (b) the
Class A Certificate Rate and (c) the outstanding principal balance of the
Class A Certificates as of the preceding Record Date (or in the case of the
first Distribution Date, an amount equal to the sum of (i) the product of
(a) the outstanding principal amount of the Class A Certificates and (b)
[ ] divided by 360 and (c) the Class A Certificate Rate determined on
[ ] and (ii) the product of (a) the outstanding principal amount of the
Class A Certificates and (b) [ ] divided by 360 and (c) the Class A
Certificate Rate determined on [ ]) and (ii) with respect to the Class B
Certificates, the product of (a) the actual number of days in the related
Interest Period divided by 360 and (b) the Class B Certificate Rate and (c)
the outstanding principal balance of the Class B certificates as of the
preceding Record Date (or in the case of the first Distribution Date, an
amount equal to the sum of (i) the product of (a) the outstanding principal
amount of the Class B Certificates and (b) [ ] divided by 360 and (c) the
Class B Certificate Rate determined on [ ] and (ii) the product of (a)
the outstanding principal amount of the Class B Certificates and (b) [ ]
divided by 360 and (c) the Class B Certificate Rate determined on [ ]).
Interest due on the Class A Certificates and the Class B Certificates but
not paid on any Distribution Date will be payable on the next succeeding
Distribution Date together with additional interest on such amount at the
applicable Certificate Rate plus 2% per annum (such amount with respect to
the Class A Certificates, the "CLASS A ADDITIONAL INTEREST," and such
amount with respect to the Class B Certificates, the "CLASS B ADDITIONAL
INTEREST"). Additional Interest shall accrue on the same basis as interest
on the Class A Certificates, and shall accrue from the Distribution Date on
which such overdue interest first became due, to but excluding the
Distribution Date on which such Additional Interest is paid. Interest
payments on the Class A Certificates on any Distribution Date will be paid
from Class A Available Funds for the related Monthly Period, and to the
extent such Class A Available Funds are insufficient to pay such interest,
from Excess Spread, Excess Finance Charge Collections from other Series and
Reallocated Principal Collections (to the extent available) for such
Monthly Period. Interest payments on the Class B Certificates on any
Distribution Date will be paid from Class B Available Funds for the related
Monthly Period, and to the extent such Class B Available Funds are
insufficient to pay such interest, from Excess Spread, Excess Finance
Charge Collections from other Series and Reallocated Collateral Principal
Collections (to the extent available) remaining after certain other
payments have been made with respect to the Class A Certificates. The
"INTEREST PERIOD" with respect to any Distribution Date will be the period
from the previous Distribution Date through the day preceding such
Distribution Date, except that the initial Interest Period will be the
period from the Closing Date through the day preceding the initial
Distribution Date.
"CLASS A AVAILABLE FUNDS" means, with respect to any Monthly Period, an
amount equal to the sum of (a) the Class A Floating Allocation of
collections of Finance Charge Receivables allocated to the Investor
Interest with respect to such Monthly Period (excluding the portion of
collections of Finance Charge Receivables attributable to Interchange that
is allocable to Servicer Interchange), (b) Principal Funding Investment
Proceeds, if any, with respect to the related Transfer Date and (c)
amounts, if any, to be withdrawn from the Reserve Account which are
required to be included in Class A Available Funds pursuant to the Series
1999-_ Supplement with respect to such Transfer Date. "CLASS B AVAILABLE
FUNDS" means, with respect to any Monthly Period, an amount equal to the
Class B Floating Allocation of collections of Finance Charge Receivables
allocated to the Investor Interest with respect to such Monthly Period
(excluding the portion of collections of Finance Charge Receivables
attributable to Interchange that is allocable to Servicer Interchange). If,
for any Transfer Date, the Principal Funding Investment Proceeds are less
than the product of (a) a fraction, the numerator of which is the actual
number of days in the related Interest Period and the denominator of which
is 360, (b) the Class A Certificate Rate in effect with respect to the
related Interest Period and (c) the Principal Funding Account Balance as of
the Record Date preceding such Transfer Date, a draw shall be made in the
amount of such difference (the "RESERVE ACCOUNT DRAW") from the Reserve
Account, to the extent of funds on deposit therein.
The Class A Certificates will bear interest at the rate of [ ]% above
LIBOR determined as set forth below from the Closing Date through [ ],
from [ ] through [ ], and with respect to each Interest Period
thereafter (the "CLASS A CERTIFICATE RATE"). The Class B Certificates will
bear interest at the rate of [ ]% above LIBOR determined as set forth
below from the Closing Date through [ ], from [ ] through [ ] and
with respect to each Interest Period thereafter (the "CLASS B CERTIFICATE
RATE").
The Trustee will determine two business days prior to the Closing Date
for the period from the Closing Date through [ ], on [ ] for the
period from [ ] through [ ], and for each Interest Period thereafter,
on the second business day prior to the Distribution Date on which such
Interest Period commences (each, a "LIBOR DETERMINATION DATE"). For purposes
of calculating LIBOR, a business day is any business day on which dealings
in deposits in United States dollars are transacted in the London interbank
market. "LIBOR" means, as of any LIBOR Determination Date, the rate for
deposits in United States dollars for a period equal to the relevant
Interest Period which appears on Telerate Page 3750 as of 11:00 a.m.,
London time, on such date. If such rate does not appear on Telerate Page
3750, the rate for that LIBOR Determination Date will be determined on the
basis of the rates at which deposits in United States dollars are offered
by the Reference Banks at approximately 11:00 a.m., London time, on that
day to prime banks in the London interbank market for a period equal to the
relevant Interest Period. The Trustee will request the principal London
office of each of the Reference Banks to provide a quotation of its rate.
If at least two such quotations are provided, the rate for that LIBOR
Determination Date will be the arithmetic mean of the quotations. If fewer
than two quotations are provided as requested, the rate for that LIBOR
Determination Date will be the arithmetic mean of the rates quoted by major
banks in New York City, selected by 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 a period equal to the relevant Interest Period.
"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).
"REFERENCE BANKS" means four major banks in the London interbank market
selected by the Servicer.
The Class A Certificate Rate applicable to the current and immediately
preceding Interest Period may be obtained by telephoning the Trustee at
(212) 815-5368. Interest on the Class A Certificates will be calculated on
the basis of the actual number of days in the Interest Period and a 360-day
year.
PRINCIPAL PAYMENTS
The aggregate principal amount of the Class A Investor Interest and the
Class B Investor Interest will, except as otherwise provided herein, remain
fixed at $[ ] and $[ ], respectively. The Class A Investor Interest
will decline in certain circumstances if the Default Amounts allocated to
the Class A Certificates exceed funds allocable thereto as described herein
and the Class B Investor Interest and the Collateral Interest are zero. The
Class B Investor Interest will decline in certain circumstances as a result
of (a) the reallocation of collections of Principal Receivables otherwise
allocable to the Class B Investor Interest to fund certain payments in
respect of the Class A Certificates and (b) the allocation to the Class B
Investor Interest of certain Default Amounts, including such amounts
otherwise allocable to the Class A Investor Interest when the Collateral
Interest is zero. During the Controlled Accumulation Period, for the sole
purpose of allocating collections of Finance Charge Receivables and Default
Amounts with respect to each Monthly Period, an amount equal to the amount
on deposit in the Principal Funding Account from time to time will be
subtracted from the Class A Investor Interest (as so reduced, the "CLASS A
ADJUSTED INVESTOR INTEREST" and together with the Class B Investor Interest
and the Collateral Interest, the "ADJUSTED INVESTOR INTEREST").
On each Transfer Date relating to the period from and including the
Closing Date and ending at the commencement of the Controlled Accumulation
Period or, if earlier, the Rapid Amortization Period (the "REVOLVING
PERIOD"), collections of Principal Receivables allocable to the Investor
Interest will, subject to certain limitations, including the allocation of
any Reallocated Principal Collections with respect to the related Monthly
Period to pay the Class A Required Amount and the Class B Required Amount,
be treated as Shared Principal Collections, paid to the holder of the
Transferor Certificate, deposited into the Excess Funding Account or paid
to the Collateral Interest Holder, and will not be available to Class A
Certificateholders.
On each Transfer Date relating to the Controlled Accumulation Period,
the Trustee will deposit in the Principal Funding Account an amount equal
to the least of (a) Available Investor Principal Collections with respect
to such Transfer Date, (b) the applicable Controlled Deposit Amount and (c)
the Class A Adjusted Investor Interest prior to any deposits on such date.
Amounts in the Principal Funding Account will be paid to the Class A
Certificateholders on the Class A Scheduled Payment Date. After the Class A
Investor Interest has been paid in full, on each Transfer Date during the
Controlled Accumulation Period, amounts equal to the lesser of (a)
Available Investor Principal Collections with respect to such Transfer Date
and (b) the Class B Investor Interest will be deposited in the Distribution
Account for distribution to the Class B Certificateholders until the Class
B Investor Interest has been paid in full. Such amounts in the Distribution
Account will be paid to the Class B Certificateholders on the Class B
Scheduled Payment Date. During the Controlled Accumulation Period until the
final principal payment to the Class B Certificateholders, the portion of
Available Investor Principal Collections not applied to Class A Monthly
Principal, Class B Monthly Principal or Collateral Monthly Principal on a
Transfer Date will be treated as Shared Principal Collections, paid to the
holder of the Transferor Certificate, deposited into the Excess Funding
Account or paid to the Collateral Interest Holder, and will not be
available to Class A Certificateholders. "AVAILABLE INVESTOR PRINCIPAL
COLLECTIONS" means, with respect to any Monthly Period, an amount equal to
the sum of (a) (i) collections of Principal Receivables received during
such Monthly Period and certain other amounts allocable to the Investor
Interest, minus (ii) the amount of Reallocated Principal Collections with
respect to such Monthly Period used to fund the Required Amounts (as
defined herein), plus (b) any Shared Principal Collections with respect to
other Series that are allocated to Series 1999-_. On each Distribution Date
during the Rapid Amortization Period, the Class A Certificateholders will
be entitled to receive Available Investor Principal Collections for the
related Monthly Period in an amount up to the Class A Investor Interest
until the earlier of the date the Class A Certificates are paid in full and
the Series 1999-_ Termination Date. The "SERIES 1999-_ TERMINATION DATE" is
the earliest to occur of (a) the Distribution Date on which Investor
Interest is paid in full, (b) the [ ] Distribution Date and (c) the Trust
Termination Date. After payment in full of the Class A Investor Interest,
the Class B Certificateholders will be entitled to receive on each
Distribution Date during the Rapid Amortization Period Available Investor
Principal Collections until the earlier of the date the Class B
Certificates are paid in full and the Series 1999-_ Termination Date. After
payment in full of the Class B Investor Interest, the Collateral Interest
Holder will be entitled to receive on each Transfer Date (other than the
Transfer Date prior to the Series 1999-_ Termination Date) and on the
Series 1999-_ Termination Date, Available Investor Principal Collections
until the earlier of the date the Collateral Interest is paid in full and
the Series 1999-_ Termination Date. See "--Pay Out Events" below for a
discussion of events which might lead to the commencement of the Rapid
Amortization Period.
POSTPONEMENT OF CONTROLLED ACCUMULATION PERIOD
Upon written notice to the Trustee, the Transferor may elect to postpone
the commencement of the Controlled Accumulation Period, and extend the
length of the Revolving Period, subject to certain conditions including
those set forth below. The Transferor may make such election only if the
Accumulation Period Length (determined as described below) is less than
twelve months. On the [ ] Determination Date and on each Determination Date
thereafter, until the Controlled Accumulation Period begins, the Servicer
will determine the "ACCUMULATION PERIOD LENGTH," which is the number of
whole months expected to be required to fund the Principal Funding Account
up to the initial outstanding principal amount of the Class A Certificates
no later than the Class A Scheduled Payment Date, based on (a) the expected
monthly collections of Principal Receivables expected to be distributable
to the certificateholders of all Series (excluding certain other Series),
assuming a principal payment rate no greater than the lowest monthly
principal payment rate on the Receivables for the preceding twelve months
and (b) the amount of principal expected to be distributable to
certificateholders of all Series (excluding certain other Series) which are
not expected to be in their revolving periods during the Controlled
Accumulation Period. If the Accumulation Period Length is less than twelve
months, the Servicer may, at its option, postpone the commencement of the
Controlled Accumulation Period such that the number of months included in
the Controlled Accumulation Period will be equal to or exceed the
Accumulation Period Length. The effect of the foregoing calculation is to
permit the reduction of the length of the Controlled Accumulation Period
based on the investor interest of certain other Series which are scheduled
to be in their revolving periods during the Controlled Accumulation Period
and on increases in the principal payment rate occurring after the Closing
Date. The length of the Controlled Accumulation Period will not be
determined to be less than one month.
SUBORDINATION OF THE CLASS B CERTIFICATES
The Class B Investor Interest will be subordinated to the extent
necessary to fund payments with respect to the Class A Certificates. To the
extent the Class B Investor Interest is reduced, the percentage of
collections of Finance Charge Receivables allocated to the Class B
Certificateholders in subsequent Monthly Periods will be reduced. Moreover,
to the extent the amount of such reduction in the Class B Investor Interest
is not reimbursed, the amount of principal distributable to the Class B
Certificateholders will be reduced. No principal will be paid to the Class
B Certificateholders until the Class A Investor Interest is paid in full.
If collections of Finance Charge Receivables allocable to the Class A
Investor Interest for any Monthly Period are insufficient to pay Class A
Monthly Interest, any overdue Class A Monthly Interest (with default
interest thereon), the Class A Investor Default Amount for such Monthly
Period, and the Class A Servicing Fee and any overdue Class A Servicing Fee
for such Monthly Period, then Excess Spread will be applied to fund the
amount of such deficiency. If Excess Spread available with respect to such
Monthly Period is less than the Class A Required Amount, Reallocated
Principal Collections will be applied to fund the remaining Class A
Required Amount and the Collateral Interest will be reduced until the
Collateral Interest is equal to zero and then the Class B Investor Interest
will be reduced by the amount of Reallocated Class B Principal Collections
so used.
If Reallocated Principal Collections available with respect to such
Monthly Period are insufficient to fund the remaining Class A Required
Amount and the Collateral Interest is reduced to zero, then a portion of
the Class B Investor Interest equal to such insufficiency (but not in
excess of the lesser of the Class A Investor Default Amount for such
Monthly Period and the Class B Investor Interest) will be allocated to the
Class A Certificates to avoid a reduction in the Class A Investor Interest,
and the Class B Investor Interest will be reduced by the amount so
allocated. Such reductions of the Class B Investor Interest will thereafter
be reimbursed and the Class B Investor Interest increased on each
Distribution Date by the amount, if any, of Excess Spread for such
Distribution Date allocated and available for such purpose. See
"--Application of Collections--Excess Spread" and "--Reallocated Principal
Collections" herein.
ALLOCATION PERCENTAGES
Pursuant to the Agreement, with respect to each Monthly Period the
Servicer will allocate among the Investor Interest, the investor interest
for all other Series issued and outstanding and the Transferor Interest,
all amounts collected on Finance Charge Receivables, all amounts collected
on Principal Receivables and all Default Amounts with respect to such
Monthly Period.
Collections of Finance Charge Receivables and Default Amounts at any
time and collections of Principal Receivables during the Revolving Period
will be allocated to the Investor Interest based on the Floating Investor
Percentage. The "FLOATING INVESTOR PERCENTAGE" means, with respect to any
Monthly Period, the percentage equivalent of a fraction, the numerator of
which is the Adjusted Investor Interest as of the close of business on the
last day of the preceding Monthly Period (or with respect to the first
Monthly Period, the initial Investor Interest) and the denominator of which
is the greater of (x) the sum of (A) the aggregate amount of Principal
Receivables as of the close of business on the last day of the preceding
Monthly Period (or with respect to the first Monthly Period, the aggregate
amount of Principal Receivables as of the opening of business on the
Closing Date) and (B) the principal amount on deposit in the Excess Funding
Account as of the close of business on such day and (y) the sum of the
numerators used to calculate the Investor Percentages for allocations with
respect to Finance Charge Receivables, Default Amounts or Principal
Receivables, as applicable, for all outstanding Series on such date of
determination; provided, however, that with respect to any Monthly Period
in which Additional Accounts are added on a specified date (an "ADDITION
DATE") or in which Accounts are removed on a specified date (a "REMOVAL
DATE"), the amount in clause (x)(A) above shall be (i) the aggregate amount
of Principal Receivables in Trust I as of the close of business on the last
day of the prior Monthly Period for the period from and including the first
day of such Monthly Period to but excluding the related Addition Date or
Removal Date and (ii) the aggregate amount of Principal Receivables in
Trust I as of the beginning of the day on the related Addition Date or
Removal Date after adjusting for the aggregate amount of Principal
Receivables added to or removed from Trust I on the related Addition Date
or Removal Date, as the case may be, for the period from and including the
related Addition Date or Removal Date to and including the last day of such
Monthly Period. The amounts so allocated will be further allocated between
the Class A Certificateholders, Class B Certificateholders and the
Collateral Interest Holder based on the Class A Floating Allocation, the
Class B Floating Allocation and the Collateral Floating Allocation,
respectively. The "CLASS A FLOATING ALLOCATION" means, with respect to any
Monthly Period, the percentage equivalent (which percentage shall never
exceed 100%) of a fraction, the numerator of which is equal to the Class A
Adjusted Investor Interest as of the close of business on the last day of
the preceding Monthly Period (or with respect to the first Monthly Period,
as of the Closing Date) and the denominator of which is equal to the
Adjusted Investor Interest as of the close of business on such day. The
"CLASS B FLOATING ALLOCATION" means, with respect to any Monthly Period,
the percentage equivalent (which percentage shall never exceed 100%) of a
fraction, the numerator of which is equal to the Class B Investor Interest
as of the close of business on the last day of the preceding Monthly Period
(or with respect to the first Monthly Period, as of the Closing Date) and
the denominator of which is equal to the Adjusted Investor Interest as of
the close of business on such day. The "COLLATERAL FLOATING ALLOCATION"
means, with respect to any Monthly Period, the percentage equivalent (which
percentage shall never exceed 100%) of a fraction, the numerator of which
is equal to the Collateral Interest as of the close of business on the last
day of the preceding Monthly Period (or with respect to the first Monthly
Period, as of the Closing Date) and the denominator of which is equal to
the Adjusted Investor Interest as of the close of business on such day.
Collections of Principal Receivables during the Controlled Accumulation
Period and Rapid Amortization Period will be allocated to the Investor
Interest based on the Fixed Investor Percentage. The "FIXED INVESTOR
PERCENTAGE" means, with respect to any Monthly Period, the percentage
equivalent of a fraction, the numerator of which is the Investor Interest
as of the close of business on the last day of the Revolving Period and the
denominator of which is the greater of (x) the sum of (A) the aggregate
amount of Principal Receivables as of the close of business on the last day
of the prior Monthly Period and (B) the principal amount on deposit in the
Excess Funding Account as of the close of business on such day and (y) the
sum of the numerators used to calculate the Investor Percentages for
allocations with respect to Principal Receivables for all outstanding
Series for such Monthly Period; provided, however, that with respect to any
Monthly Period in which an Addition Date occurs or in which a Removal Date
occurs, the amount in clause (x)(A) above shall be (i) the aggregate amount
of Principal Receivables in Trust I as of the close of business on the last
day of the prior Monthly Period for the period from and including the first
day of such Monthly Period to but excluding the related Addition Date or
Removal Date and (ii) the aggregate amount of Principal Receivables in
Trust I at the beginning of the day on the related Addition Date or Removal
Date after adjusting for the aggregate amount of Principal Receivables
added to or removed from Trust I on the related Addition Date or Removal
Date, as the case may be, for the period from and including the related
Addition Date or Removal Date to and including the last day of such Monthly
Period. The amounts so allocated will be further allocated between the
Class A Certificateholders, the Class B Certificateholders and the
Collateral Interest Holder based on the Class A Fixed Allocation, the Class
B Fixed Allocation and the Collateral Fixed Allocation, respectively. The
"CLASS A FIXED ALLOCATION" means, with respect to any Monthly Period, the
percentage equivalent (which percentage shall never exceed 100%) of a
fraction, the numerator of which is equal to the Class A Investor Interest
as of the close of business on the last day of the Revolving Period, and
the denominator of which is equal to the Investor Interest as of the close
of business on the last day of the Revolving Period. The "CLASS B FIXED
ALLOCATION" means, with respect to any Monthly Period, the percentage
equivalent (which percentage shall never exceed 100%) of a fraction, the
numerator of which is equal to the Class B Investor Interest as of the
close of business on the last day of the Revolving Period, and the
denominator of which is equal to the Investor Interest as of the close of
business on the last day of the Revolving Period. The "COLLATERAL FIXED
ALLOCATION" means, with respect to any Monthly Period, the percentage
equivalent (which percentage shall never exceed 100%) of a fraction, the
numerator of which is equal to the Collateral Interest as of the close of
business on the last day of the Revolving Period, and the denominator of
which is equal to the Investor Interest as of the close of business on the
last day of the Revolving Period.
"CLASS A INVESTOR INTEREST" for any date means an amount equal to (a)
the aggregate initial principal amount of the Class A Certificates, minus
(b) the aggregate amount of principal payments made to Class A
Certificateholders prior to such date, minus (c) the excess, if any, of the
aggregate amount of Class A Investor Charge-Offs for all Transfer Dates
preceding such date over the aggregate amount of any reimbursements of
Class A Investor Charge-Offs for all Transfer Dates preceding such date;
provided, however, that the Class A Investor Interest may not be reduced
below zero.
"CLASS B INVESTOR INTEREST" for any date means an amount equal to (a)
the aggregate initial principal amount of the Class B Certificates, minus
(b) the aggregate amount of principal payments made to Class B
Certificateholders prior to such date, minus (c) the aggregate amount of
Class B Investor Charge-Offs for all prior Transfer Dates, minus (d) the
aggregate amount of Reallocated Class B Principal Collections for all prior
Transfer Dates for which the Collateral Interest has not been reduced,
minus (e) an amount equal to the aggregate amount by which the Class B
Investor Interest has been reduced to fund the Class A Investor Default
Amount on all prior Transfer Dates as described under "--Defaulted
Receivables; Investor Charge Offs," plus (f) the aggregate amount of Excess
Spread allocated and available on all prior Transfer Dates for the purpose
of reimbursing amounts deducted pursuant to the foregoing clauses (c), (d)
and (e); provided, however, that the Class B Investor Interest may not be
reduced below zero.
"COLLATERAL INTEREST" for any date means an amount equal to (a) the
Initial Collateral Interest, minus (b) the aggregate amount of principal
payments made to the Collateral Interest Holder prior to such date, minus
(c) the aggregate amount of Collateral Charge-Offs for all prior Transfer
Dates, minus (d) the aggregate amount of Reallocated Principal Collections
for all prior Transfer Dates, minus (e) an amount equal to the aggregate
amount by which the Collateral Interest has been reduced to fund the Class
A Investor Default Amount and the Class B Investor Default Amount on all
prior Transfer Dates as described under "--Defaulted Receivables; Investor
Charge-Offs," plus (f) the aggregate amount of Excess Spread allocated and
available on all prior Transfer Dates for the purpose of reimbursing
amounts deducted pursuant to the foregoing clauses (c), (d) and (e);
provided, however, that the Collateral Interest may not be reduced below
zero.
REALLOCATION OF CASH FLOWS
With respect to each Transfer Date, the Servicer will determine the
amount (the "CLASS A REQUIRED AMOUNT"), which will be equal to the amount,
if any, by which the sum of (a) Class A Monthly Interest due on the related
Distribution Date and overdue Class A Monthly Interest and Class A
Additional Interest thereon, if any, (b) the Class A Servicing Fee for the
related Monthly Period and overdue Class A Servicing Fee, if any, and (c)
the Class A Investor Default Amount, if any, for the related Monthly Period
exceeds the Class A Available Funds for the related Monthly Period. If the
Class A Required Amount is greater than zero, Excess Spread allocated to
Series 1999-_ and available for such purpose will be used to fund the Class
A Required Amount with respect to such Transfer Date. If such Excess Spread
is insufficient to fund the Class A Required Amount first, Reallocated
Collateral Principal Collections and, then, Reallocated Class B Principal
Collections will be used to fund the remaining Class A Required Amount. If
Reallocated Principal Collections with respect to the related Monthly
Period, together with Excess Spread, are insufficient to fund the remaining
Class A Required Amount for such related Monthly Period, then the
Collateral Interest (after giving effect to reductions for any Collateral
Charge-Offs and Reallocated Principal Collections on such Transfer Date)
will be reduced by the amount of such excess (but not by more than the
Class A Investor Default Amount for such Monthly Period). In the event that
such reduction would cause the Collateral Interest to be a negative number,
the Collateral Interest will be reduced to zero, and the Class B Investor
Interest (after giving effect to reductions for any Class B Investor
Charge-Offs and any Reallocated Class B Principal Collections for which the
Collateral Interest was not reduced on such Transfer Date) will be reduced
by the amount by which the Collateral Interest would have been reduced
below zero (but not by more than the excess of the Class A Investor Default
Amount, if any, for such Monthly Period over the amount of such reduction,
if any, of the Collateral Interest with respect to such Monthly Period). In
the event that such reduction would cause the Class B Investor Interest to
be a negative number, the Class B Investor Interest will be reduced to zero
and the Class A Investor Interest will be reduced by the amount by which
the Class B Investor Interest would have been reduced below zero (but not
by more than the excess, if any, of the Class A Investor Default Amount for
such Monthly Period over the amount of the reductions, if any, of the
Collateral Interest and the Class B Investor Interest with respect to such
Monthly Period). Any such reduction in the Class A Investor Interest will
have the effect of slowing or reducing the return of principal and interest
to the Class A Certificateholders. In such case, the Class A
Certificateholders will bear directly the credit and other risks associated
with their interests in Trust I. See "--Defaulted Receivables; Investor
Charge-Offs."
With respect to each Transfer Date, the Servicer will determine the
amount (the "CLASS B REQUIRED AMOUNT"; together with the Class A Required
Amount, the "REQUIRED AMOUNTS"), which will be equal to the sum of (a) the
amount, if any, by which the sum of (i) Class B Monthly Interest due on the
related Distribution Date and overdue Class B Monthly Interest and Class B
Additional Interest thereon, if any, and (ii) the Class B Servicing Fee for
the related Monthly Period and overdue Class B Servicing Fee, if any,
exceeds the Class B Available Funds for the related Monthly Period and (b)
the Class B Investor Default Amount, if any, for the related Monthly
Period. If the Class B Required Amount is greater than zero, Excess Spread
allocated to Series 1999-_ not required to pay the Class A Required Amount
or reimburse Class A Investor Charge-Offs will be used to fund the Class B
Required Amount with respect to such Transfer Date. If such Excess Spread
is insufficient to fund the Class B Required Amount, Reallocated Collateral
Principal Collections not required to fund the Class A Required Amount for
the related Monthly Period will be used to fund the remaining Class B
Required Amount. If such Reallocated Collateral Principal Collections with
respect to the related Monthly Period are insufficient to fund the
remaining Class B Required Amount, then the Collateral Interest (after
giving effect to reductions for any Collateral Charge-Offs and Reallocated
Principal Collections on such Transfer Date and after any adjustments made
thereto for the benefit of the Class A Certificateholders) will be reduced
by the amount of such deficiency (but not by more than the Class B Investor
Default Amount for such Monthly Period). In the event that such a reduction
would cause the Collateral Interest to be a negative number, the Collateral
Interest will be reduced to zero, and the Class B Investor Interest will be
reduced by the amount by which the Collateral Interest would have been
reduced below zero (but not by more than the excess of the Class B Investor
Default Amount for such Monthly Period over the amount of such reduction of
the Collateral Interest), and the Class B Certificateholders will bear
directly the credit and other risks associated with their interests in
Trust I. See "--Defaulted Receivables; Investor Charge-Offs." Reductions of
the Class A Investor Interest or Class B Investor Interest described above
shall be reimbursed by, and the Class A Investor Interest or Class B
Investor Interest increased to the extent of, Excess Spread available for
such purposes on each Transfer Date. See "--Application of
Collections--Excess Spread." When such reductions of the Class A Investor
Interest and Class B Investor Interest have been fully reimbursed,
reductions of the Collateral Interest shall be reimbursed until reimbursed
in full in a similar manner.
"REALLOCATED CLASS B PRINCIPAL COLLECTIONS" for any Monthly Period means
collections of Principal Receivables allocable to the Class B Investor
Interest for the related Monthly Period in an amount not to exceed the
amount applied to fund the Class A Required Amount, if any; provided,
however, that such amount will not exceed the Class B Investor Interest
after giving effect to any Class B Investor Charge-Offs for the related
Transfer Date. "REALLOCATED COLLATERAL PRINCIPAL COLLECTIONS" for any
Monthly Period means collections of Principal Receivables allocable to the
Collateral Interest for the related Monthly Period in an amount not to
exceed the amount applied to fund the Class A Required Amount and the Class
B Required Amount, if any; provided, however, that such amount will not
exceed the Collateral Interest after giving effect to any Collateral
Charge-Offs for the related Transfer Date. "REALLOCATED PRINCIPAL
COLLECTIONS" for any Monthly Period means the sum of (a) the Reallocated
Class B Principal Collections for such Monthly Period, if any, and (b) the
Reallocated Collateral Principal Collections for such Monthly Period, if
any.
APPLICATION OF COLLECTIONS
AllocatioExcept as otherwise provided below, the Servicer will deposit
into the Collection Account, no later than the second business day
following the date of processing, any payment collected by the Servicer on
the Receivables. On the same day as any such deposit is made, the Servicer
will make the deposits and payments to the accounts and parties as
indicated below; provided, however, that for as long as Wachovia remains
the Servicer under the Agreement and (a) (i) the Servicer provides to the
Trustee a letter of credit or other credit enhancement covering the risk of
collection of the Servicer acceptable to each Rating Agency and (ii) the
Transferor shall not have received a notice from any Rating Agency that
reliance on such letter of credit or other credit enhancement would result
in the lowering of such Rating Agency's then-existing rating of any Series
then outstanding or (b) the Servicer or the Corporation has and maintains a
certificate of deposit or commercial paper rating of P-1 by Moody's and of
A-1 by Standard & Poor's or makes other arrangements satisfactory to each
Rating Agency rating any Series then outstanding, then the Servicer may
make such deposits and payments on the business day immediately prior to
the Distribution Date (the "TRANSFER DATE") in an amount equal to the net
amount of such deposits and payments which would have been made had the
conditions of this proviso not applied.
With respect to the Class A Certificates and Class B Certificates and
any Monthly Period, and notwithstanding anything in the Agreement to the
contrary, whether the Servicer is required to make monthly or daily
deposits from the Collection Account into the Finance Charge Account or the
Principal Account, (i) the Servicer will only be required to deposit
Collections from the Collection Account into the Finance Charge Account or
the Principal Account up to the required amount to be deposited into any
such deposit account or, without duplication, distributed on or prior to
the related Distribution Date to Class A Certificateholders, Class B
Certificateholders or to the Collateral Interest Holder and (ii) if at any
time prior to such Distribution Date the amount of collections deposited in
the Collection Account exceeds the amount required to be deposited pursuant
to clause (i) above, the Servicer will be permitted to withdraw the excess
from the Collection Account.
Payment of Interest, Fees and Other Items. On each Transfer Date, the
Trustee, acting pursuant to the Servicer's instructions, will apply the
Class A Available Funds, Class B Available Funds and Collateral Available
Funds in the Finance Charge Account in the following manner:
(a) On each Transfer Date, an amount equal to the Class A Available
Funds will be distributed in the following priority:
(i) an amount equal to Class A Monthly Interest for the related
Distribution Date, plus the amount of any overdue Class A Monthly
Interest and Class A Additional Interest thereon, if any, will be
deposited into the Distribution Account for distribution to Class A
Certificateholders on such Distribution Date;
(ii) an amount equal to the Class A Servicing Fee for the related
Monthly Period, plus the amount of any overdue Class A Servicing Fee,
will be paid to the Servicer;
(iii) an amount equal to the Class A Investor Default Amount, if
any, for the related Monthly Period will be treated as a portion of
Available Investor Principal Collections and deposited into the
Principal Account for such Transfer Date; and
(iv) the balance, if any, will constitute a portion of Excess
Spread and will be allocated and distributed as described under
"--Excess Spread."
(b) On each Transfer Date, an amount equal to the Class B Available
Funds will be distributed in the following priority:
(i) an amount equal to Class B Monthly Interest for the related
Distribution Date, plus the amount of any overdue Class B Monthly
Interest and Class B Additional Interest thereon, if any, will be
deposited into the Distribution Account for distribution to Class B
Certificateholders on such Distribution Date;
(ii) an amount equal to the Class B Servicing Fee for the related
Monthly Period, plus the amount of any overdue Class B Servicing Fee,
will be paid to the Servicer; and
(iii) the balance, if any, will constitute a portion of Excess
Spread and will be allocated and distributed as described under
"--Excess Spread."
(c) On each Transfer Date, an amount equal to the Collateral
Available Funds will be distributed in the following priority:
(i) if Wachovia or The Bank of New York (Delaware) is no longer
the Servicer, an amount equal to the Collateral Interest Servicing
Fee for the related Monthly Period, plus the amount of any overdue
Collateral Interest Servicing Fee, will be paid to the Servicer; and
(ii) the balance, if any, will constitute a portion of Excess
Spread and will be allocated and distributed as described under
"--Excess Spread."
"CLASS A MONTHLY INTEREST" with respect to any Distribution Date will
equal the product of (i) the Class A Certificate Rate for the related
Interest Period, (ii) the actual number of days in such Interest Period
divided by 360 and (iii) the outstanding principal balance of the Class A
Certificates as of the related Record Date; provided, however, with respect
to the first Distribution Date, Class A Monthly Interest will be equal to
the interest accrued on the initial outstanding principal balance of the
Class A Certificates at the applicable Class A Certificate Rate for the
period from the Closing Date through [ ].
"CLASS B MONTHLY INTEREST" with respect to any Distribution Date will
equal the product of (i) the Class B Certificate Rate for the related
Interest Period, (ii) the actual number of days in such Interest Period
divided by 360 and (iii) the outstanding principal balance of the Class B
Certificates as of the related Record Date; provided, however, with respect
to the first Distribution Date, Class B Monthly Interest will be equal to
the interest accrued on the initial outstanding principal balance of the
Class B Certificates at the applicable Class B Certificate Rate for the
period from the Closing Date through [ ].
"COLLATERAL AVAILABLE FUNDS" means, with respect to any Monthly Period,
an amount equal to the Collateral Floating Allocation of collections of
Finance Charge Receivables allocated to the Investor Interest with respect
to such Monthly Period (excluding the portion of collections of Finance
Charge Receivables attributable to Interchange that is allocable to
Servicer Interchange).
"EXCESS SPREAD" means, with respect to any Transfer Date, an amount
equal to the sum of the amounts described in clause (a) (iv), clause (b)
(iii) and clause (c) (ii) above. To the extent such amounts are
insufficient to make the distributions required by subparagraphs (a)
through (j) below under "--Excess Spread," Excess Spread shall also be
deemed to include any Excess Finance Charge Collections allocable to other
Series available to Series 1999-_ in accordance with the Agreement.
Excess Spread. On each Transfer Date, the Trustee, acting pursuant to
the Servicer's instructions, will apply Excess Spread with respect to the
related Monthly Period, to make the following distributions in the
following priority:
(a) an amount equal to the Class A Required Amount, if any, with
respect to such Transfer Date will be used to fund the Class A Required
Amount; provided, that in the event the Class A Required Amount for such
Transfer Date exceeds the amount of Excess Spread, such Excess Spread
shall be applied first to pay amounts due with respect to such Transfer
Date pursuant to clause (a) (i) above under "--Payment of Interest, Fees
and Other Items," second to pay amounts due with respect to such
Transfer Date pursuant to clause (a) (ii) above under "--Payment of
Interest, Fees and Other Items" and third to pay amounts due with
respect to such Transfer Date pursuant to clause (a) (iii) above under
"--Payment of Interest, Fees and Other Items";
(b) an amount equal to the aggregate amount of Class A Investor
Charge-Offs which have not been previously reimbursed (after giving
effect to the allocation on such Transfer Date of certain other amounts
applied for that purpose) will be deposited into the Principal Account
and treated as a portion of Available Investor Principal Collections for
such Transfer Date as described under "--Payments of Principal" below;
(c) an amount equal to the Class B Required Amount, if any, with
respect to such Transfer Date will be used to fund the Class B Required
Amount and will be applied first to pay amounts due with respect to such
Transfer Date pursuant to clause (b) (i) above under "--Payment of
Interest, Fees and Other Items," second to pay amounts due with respect
to such Transfer Date pursuant to clause (b) (ii) above under "--Payment
of Interest, Fees and Other Items" and third, the amount remaining, up
to the Class B Investor Default Amount, will be deposited into the
Principal Account and treated as a portion of Available Investor
Principal Collections for such Transfer Date as described under
"--Payments of Principal" below;
(d) an amount equal to the aggregate amount by which the Class B
Investor Interest has been reduced below the initial Class B Investor
Interest for reasons other than the payment of principal to the Class B
Certificateholders (but not in excess of the aggregate amount of such
reductions which have not been previously reimbursed) will be deposited
into the Principal Account and treated as a portion of Available
Investor Principal Collections for such Transfer Date as described under
"--Payments of Principal" below;
(e) an amount equal to the Collateral Monthly Interest for such
Transfer Date, plus the amount of any Collateral Monthly Interest
previously due but not distributed to the Collateral Interest Holder on
a prior Transfer Date, will be distributed to the Collateral Interest
Holder for distribution in accordance with the loan agreement to be
dated the Closing Date, among the Trustee, the Transferor, the Servicer,
the Collateral Interest Holders and the agent acting on their behalf
(the "LOAN AGREEMENT");
(f) if Wachovia or The Bank of New York (Delaware) is the Servicer,
an amount equal to the Collateral Interest Servicing Fee for the related
Monthly Period, plus the amount of any overdue Collateral Interest
Servicing Fee, will be paid to the Servicer;
(g) an amount equal to the aggregate Collateral Default Amount, if
any, for such Transfer Date will be deposited into the Principal Account
and treated as a portion of Available Investor Principal Collections for
such Transfer Date as described under "--Payments of Principal" below;
(h) an amount equal to the aggregate amount by which the Collateral
Interest has been reduced below the Required Collateral Interest for
reasons other than the payment of principal to the Collateral Interest
Holder (but not in excess of the aggregate amount of such reductions
which have not been previously reimbursed) will be deposited into the
Principal Account and treated as a portion of Available Investor
Principal Collections for such Transfer Date as described under
"--Payments of Principal" below;
(i) on each Transfer Date from and after the Reserve Account Funding
Date, but prior to the date on which the Reserve Account terminates as
described under "--Reserve Account," an amount up to the excess, if any,
of the Required Reserve Account Amount over the Available Reserve
Account Amount will be deposited into the Reserve Account;
(j) an amount equal to the aggregate of any other amounts then due
to the Collateral Interest Holder pursuant to the Loan Agreement or
otherwise required to be applied in accordance with the Loan Agreement
will be distributed for application in accordance with the Loan
Agreement; and
(k) the balance, if any, after giving effect to the payments made
pursuant to subparagraphs (a) through (j) above, first will be treated
as "EXCESS FINANCE CHARGE COLLECTIONS" to be applied to cover
shortfalls, if any, with respect to amounts payable from collections of
Finance Charge Receivables with respect to other Series in accordance
with the Agreement, and then the balance, if any, remaining after such
sharing will be paid to the holder of the Transferor Certificate.
"COLLATERAL MONTHLY INTEREST" with respect to any Transfer Date will
equal the product of (a) an amount equal to LIBOR plus [ ]% per annum, or
such lesser amount as may be designated in the Loan Agreement (the
"COLLATERAL RATE"), (b) the actual number of days in the related Interest
Period divided by 360 and (c) the Collateral Interest as of the related
Record Date or, with respect to the first Transfer Date, the Initial
Collateral Interest.
Payments of Principal. On each Transfer Date, the Trustee, acting
pursuant to the Servicer's instructions, will distribute Available Investor
Principal Collections (see "--Principal Payments" above) on deposit in the
Principal Account in the following manner:
(a) on each Transfer Date with respect to the Revolving Period, all
such Available Investor Principal Collections will be distributed or
deposited in the following priority:
(i) an amount equal to the Collateral Monthly Principal will be
paid to the Collateral Interest Holder in accordance with the Loan
Agreement; and
(ii) the balance will be treated as Shared Principal Collections
and applied as described under "Description of the Certificates--Shared
Principal Collections" herein and in the attached prospectus;
(b) on each Transfer Date with respect to the Controlled Accumulation
Period or the Rapid Amortization Period, all such Available Investor
Principal Collections will be distributed or deposited in the following
priority:
(i) an amount equal to Class A Monthly Principal will be deposited
in the Principal Funding Account (during the Controlled Accumulation
Period) or distributed to the Class A Certificateholders (during the
Rapid Amortization Period); and
(ii) for each Transfer Date after the Class A Investor Interest
has been paid in full (after taking into account payments to be made
on the related Distribution Date), an amount equal to the Class B
Monthly Principal for such Transfer Date will be distributed to the
Class B Certificateholders;
(c) on each Transfer Date with respect to the Controlled Accumulation
Period and the Rapid Amortization Period in which a reduction in the
Required Collateral Interest has occurred, Available Investor Principal
Collections not applied to Class A Monthly Principal or Class B Monthly
Principal will be applied to reduce the Collateral Interest until the
sum of the Collateral Interest equals the Required Collateral Interest;
and
(d) on each Transfer Date with respect to the Controlled Accumulation
Period and the Rapid Amortization Period, the balance of Available
Investor Principal Collections not applied pursuant to (b) and (c)
above, if any, will be treated as Shared Principal Collections and
applied as described under "Description of the Certificates--Shared
Principal Collections" herein and in the attached prospectus.
"CLASS A MONTHLY PRINCIPAL" with respect to any Transfer Date relating
to the Controlled Accumulation Period or the Rapid Amortization Period,
prior to the payment in full of the Class A Investor Interest, will equal
the least of (i) the Available Investor Principal Collections on deposit in
the Principal Account with respect to such Transfer Date, (ii) for each
Transfer Date with respect to the Controlled Accumulation Period, prior to
the payment in full of the Class A Investor Interest, and on or prior to
the Class A Scheduled Payment Date, the applicable Controlled Deposit
Amount for such Transfer Date and (iii) the Class A Adjusted Investor
Interest prior to any deposits on such Transfer Date.
"CLASS B MONTHLY PRINCIPAL" with respect to any Transfer Date relating
to the Controlled Accumulation Period or the Rapid Amortization Period,
after the Class A Certificates have been paid in full (after taking into
account payments to be made on the related Distribution Date), will equal
the lesser of (i) the Available Investor Principal Collections on deposit
in the Principal Account with respect to such Transfer Date (minus the
portion of such Available Investor Principal Collections applied to Class A
Monthly Principal on such Transfer Date) and (ii) the Class B Investor
Interest for such Transfer Date.
"COLLATERAL MONTHLY PRINCIPAL" means (a) with respect to any Transfer
Date relating to the Revolving Period an amount equal to the lesser of (i)
the excess, if any, of the sum of the Collateral Interest (after giving
effect to reductions for any Collateral Charge-Offs and Reallocated
Principal Collections on such Transfer Date and after giving effect to any
adjustments thereto for the benefit of the Class A Certificateholders and
the Class B Certificateholders on such Transfer Date) over the Required
Collateral Interest on such Transfer Date, and (ii) the Available Investor
Principal Collections on such Transfer Date or (b) with respect to any
Transfer Date relating to the Controlled Accumulation Period or Rapid
Amortization Period an amount equal to the lesser of (i) the excess, if
any, of the sum of the Collateral Interest (after giving effect to
reductions for any Collateral Charge-Offs and Reallocated Principal
Collections on such Transfer Date and after giving effect to any
adjustments thereto for the benefit of the Class A Certificateholders and
the Class B Certificateholders on such Transfer Date) over the Required
Collateral Interest on such Transfer Date, and (ii) the excess, if any, of
(A) the Available Investor Principal Collections on such Transfer Date over
(B) the sum of the Class A Monthly Principal and the Class B Monthly
Principal for such Transfer Date.
"CONTROLLED ACCUMULATION AMOUNT" means (a) for any Transfer Date with
respect to the Controlled Accumulation Period, prior to the payment in full
of the Class A Investor Interest, $[ ]; provided, however, that if the
commencement of the Controlled Accumulation Period is delayed as described
above under "--Postponement of Controlled Accumulation Period," the
Controlled Accumulation Amount may be higher than the amount stated above
for each Transfer Date with respect to the Controlled Accumulation Period
and will be determined by the Servicer in accordance with the Agreement
based on the principal payment rates for the Accounts and on the investor
interest of other Series (other than certain excluded Series) which are
scheduled to be in their revolving periods and then scheduled to create
Shared Principal Collections during the Controlled Accumulation Period, (b)
for any Transfer Date with respect to the Controlled Accumulation Period
after the payment in full of the Class A Investor Interest and prior to the
payment in full of the Class B Investor Interest, an amount equal to the
Class B Investor Interest on such Transfer Date and (c) for any Transfer
Date with respect to the Controlled Accumulation Period after the payment
in full of the Class B Investor Interest, an amount equal to the Collateral
Interest on such Transfer Date.
"ACCUMULATION SHORTFALL" means (a) on the first Transfer Date with
respect to the Controlled Accumulation Period, the excess, if any, of the
Controlled Accumulation Amount for such Transfer Date over the amount
distributed from the Principal Account as Class A Monthly Principal for
such Transfer Date and (b) on each subsequent Transfer Date with respect to
the Controlled Accumulation Period, the excess, if any, of the applicable
Controlled Accumulation Amount for such subsequent Transfer Date plus any
Accumulation Shortfall for the prior Transfer Date over the amount
distributed from the Principal Account as Class A Monthly Principal for
such subsequent Transfer Date.
SHARED EXCESS FINANCE CHARGE COLLECTIONS
To the extent that collections of Finance Charge Receivables allocated
to the Investor Interest (and any other amounts that are to be treated as
collections of Finance Charge Receivables allocated to the Investor
Interest) are not needed to make payments in respect of the Investor
Interest as described above under "--Application of Collections--Payment of
Interest, Fees and Other Items" and "--Excess Spread," such Excess Finance
Charge Collections will be applied to make payments in respect of other
Series entitled to share therein in accordance with the Agreement. In
addition, Excess Finance Charge Collections with respect to certain other
Series, to the extent not required to make payments in respect of such
Series, may be applied to cover shortfalls in amounts payable from Excess
Spread as described above under "--Application of Collections--Excess
Spread" (as well as shortfalls experienced by other Series).
SHARED PRINCIPAL COLLECTIONS
Collections of Principal Receivables for any Monthly Period allocated to
the Investor Interest will first be used to cover, with respect to any
Monthly Period during the Controlled Accumulation Period, deposits of the
applicable Controlled Deposit Amount to the Principal Funding Account or
the Distribution Account, and during the Rapid Amortization Period,
payments to the Class A Certificateholders and Class B Certificateholders
and then under certain circumstances payments to the Collateral Interest
Holder. The Servicer will determine the amount of collections of Principal
Receivables for any Monthly Period allocated to the Investor Interest
remaining after covering required payments to the Class A
Certificateholders and Class B Certificateholders and any similar amount
remaining for any other Series ("SHARED PRINCIPAL COLLECTIONS"). The
Servicer will allocate the Shared Principal Collections to cover any
scheduled or permitted principal distributions to certificateholders and
deposits to principal funding accounts, if any, for any Series entitled
thereto which have not been covered out of the collections of Principal
Receivables allocable to such Series and certain other amounts for such
Series ("PRINCIPAL Shortfalls"). Shared Principal Collections will not be
used to cover investor charge-offs for any Series. If Principal Shortfalls
exceed Shared Principal Collections for any Monthly Period, Shared
Principal Collections will be allocated pro rata among the applicable
Series based on the relative amounts of Principal Shortfalls. To the extent
that Shared Principal Collections exceed Principal Shortfalls, the balance
will be paid to the holder of the Transferor Certificate or, under certain
circumstances, deposited into the Excess Funding Account.
REQUIRED COLLATERAL INTEREST
The "REQUIRED COLLATERAL INTEREST" means (i) initially $[ ] (the
"INITIAL COLLATERAL INTEREST") and (ii) thereafter on each Transfer Date,
an amount equal to [ ]% of the sum of (x) the Class A Adjusted Investor
Interest and the Class B Investor Interest on such Transfer Date, after
taking into account deposits into the Principal Funding Account on such
Transfer Date and payments to be made on the related Distribution Date, and
(y) the Collateral Interest on the prior Transfer Date after any
adjustments made on such Transfer Date, but not less than $[ ]; provided,
however, (1) that if certain reductions in the Collateral Interest are made
or if a Pay Out Event occurs, the Required Collateral Interest for such
Transfer Date shall equal the Required Collateral Interest for the Transfer
Date immediately preceding the occurrence of such reduction or Pay Out
Event, (2) in no event shall the Required Collateral Interest exceed the
sum of the unpaid principal amount of the Class A Certificates and the
Class B Certificates as of the last day of the Monthly Period preceding
such Transfer Date after taking into account payments to be made on the
related Distribution Date and (3) the Required Collateral Interest may be
reduced to a lesser amount at any time if the Rating Agency Condition is
satisfied.
"RATING AGENCY CONDITION" means the notification in writing by each
Rating Agency that a proposed action will not result in such Rating Agency
reducing or withdrawing its then existing rating of the investor
certificates of any outstanding Series or Class with respect to which it is
a Rating Agency.
With respect to any Transfer Date, if the Collateral Interest is less
than the Required Collateral Interest, certain Excess Spread, if available,
will be allocated to increase the Collateral Interest to the extent of
certain unreimbursed reductions thereof. Any of such Excess Spread not
required to be so allocated or deposited into the Reserve Account with
respect to any Transfer Date will be applied in accordance with the Loan
Agreement. See "--Application of Collections--Excess Spread."
DEFAULTED RECEIVABLES; INVESTOR CHARGE-OFFS
On or before each Transfer Date, the Servicer will calculate the
Investor Default Amount for the preceding Monthly Period. The term
"INVESTOR DEFAULT AMOUNT" means, for any Monthly Period, the product of (a)
the Floating Investor Percentage with respect to such Monthly Period and
(b) the aggregate amount of Receivables in Defaulted Accounts (the "DEFAULT
AMOUNT") for such Monthly Period. A portion of the Investor Default Amount
will be allocated to the Class A Certificateholders (the "CLASS A INVESTOR
DEFAULT AMOUNT") on each Transfer Date in an amount equal to the product of
the Class A Floating Allocation applicable during the related Monthly
Period and the Investor Default Amount for such Monthly Period. A portion
of the Investor Default Amount will be allocated to the Class B
Certificateholders (the "CLASS B INVESTOR DEFAULT AMOUNT") on each Transfer
Date in an amount equal to the product of the Class B Floating Allocation
applicable during the related Monthly Period and the Investor Default
Amount for such Monthly Period. A portion of the Investor Default Amount
will be allocated to the Collateral Interest Holder (the "COLLATERAL
DEFAULT AMOUNT") on each Transfer Date in an amount equal to the product of
the Collateral Floating Allocation applicable during the related Monthly
Period and the Investor Default Amount for such Monthly Period.
On each Transfer Date, if the Class A Investor Default Amount for such
Transfer Date exceeds the amount of Excess Spread and Reallocated Principal
Collections available to fund such amount with respect to the Monthly
Period immediately preceding such Transfer Date, the Collateral Interest
(after giving effect to reductions for any Collateral Charge-Offs and any
Reallocated Principal Collections on such Transfer Date) will be reduced by
the amount of such excess, but not more than the lesser of the Class A
Investor Default Amount and the Collateral Interest (after giving effect to
reductions for any Collateral Charge-Offs and any Reallocated Principal
Collections on such Transfer Date) for such Transfer Date. In the event
that such reduction would cause the Collateral Interest to be a negative
number, the Collateral Interest will be reduced to zero, and the Class B
Investor Interest (after giving effect to reductions for any Class B
Investor Charge-Offs and any Reallocated Class B Principal Collections on
such Transfer Date) will be reduced by the amount by which the Collateral
Interest would have been reduced below zero. In the event that such
reduction would cause the Class B Investor Interest to be a negative
number, the Class B Investor Interest will be reduced to zero, and the
Class A Investor Interest will be reduced by the amount by which the Class
B Investor Interest would have been reduced below zero, but not more than
the Class A Investor Default Amount for such Transfer Date (a "CLASS A
INVESTOR CHARGE-OFF"), which will have the effect of slowing or reducing
the return of principal and interest to the Class A Certificateholders. If
the Class A Investor Interest has been reduced by the amount of any Class A
Investor Charge-Offs, it will be reimbursed on any Transfer Date (but not
by an amount in excess of the aggregate Class A Investor Charge-Offs) by
the amount of Excess Spread allocated and available for such purpose as
described under "--Application of Collections--Excess Spread."
On each Transfer Date, if the Class B Investor Default Amount for such
Transfer Date exceeds the amount of Excess Spread and Reallocated
Collateral Principal Collections which are allocated and available to fund
such amount with respect to the Monthly Period preceding such Transfer
Date, the Collateral Interest (after giving effect to reductions for any
Collateral Charge-Offs and any Reallocated Principal Collections on such
Transfer Date and after giving effect to any adjustments with respect
thereto as described in the preceding paragraph) will be reduced by the
amount of such excess, but not more than the lesser of the Class B Investor
Default Amount and the Collateral Interest (after giving effect to
reductions for any Collateral Charge-Offs and any Reallocated Principal
Collections on such Transfer Date and after giving effect to any
adjustments with respect thereto as described in the preceding paragraph)
for such Transfer Date. In the event that such reduction would cause the
Collateral Interest to be a negative number, the Collateral Interest will
be reduced to zero, and the Class B Investor Interest will be reduced by
the amount by which the Collateral Interest would have been reduced below
zero, but not more than the Class B Investor Default Amount for such
Transfer Date (a "CLASS B INVESTOR CHARGE-OFF"). The Class B Investor
Interest will also be reduced by the amount of Reallocated Class B
Principal Collections in excess of the Collateral Interest (after giving
effect to reductions for any Collateral Charge-Offs and any Reallocated
Collateral Principal Collections on such Transfer Date) and the amount of
any portion of the Class B Investor Interest allocated to the Class A
Certificates to avoid a reduction in the Class A Investor Interest. The
Class B Investor Interest will thereafter be reimbursed (but not in excess
of the unpaid principal balance of the Class B Certificates) on any
Transfer Date by the amount of Excess Spread allocated and available for
that purpose as described under "--Application of Collections--Excess
Spread."
On each Transfer Date, if the Collateral Default Amount for such
Transfer Date exceeds the amount of Excess Spread which is allocated and
available to fund such amount as described under "--Application of
Collections--Excess Spread," the Collateral Interest will be reduced by the
amount of such excess but not more than the lesser of the Collateral
Default Amount and the Collateral Interest for such Transfer Date (a
"COLLATERAL CHARGE-OFF"). The Collateral Interest will also be reduced by
the amount of Reallocated Principal Collections and the amount of any
portion of the Collateral Interest allocated to the Class A Certificates to
avoid a reduction in the Class A Investor Interest or to the Class B
Certificates to avoid a reduction in the Class B Investor Interest. The
Collateral Interest will thereafter be reimbursed on any Transfer Date by
the amount of Excess Spread allocated and available for that purpose as
described under "--Application of Collections--Excess Spread."
PRINCIPAL FUNDING ACCOUNT
Pursuant to the Series 1999-_ Supplement, the Trustee will establish and
maintain with a Qualified Institution a segregated trust account held for
the benefit of the Class A Certificateholders (the "PRINCIPAL FUNDING
ACCOUNT"). During the Controlled Accumulation Period, the Trustee, at the
direction of the Servicer, will transfer collections in respect of
Principal Receivables (other than Reallocated Principal Collections) and
Shared Principal Collections from other Series, if any, allocated to Series
1999-_ from the Principal Account to the Principal Funding Account as
described under "--Application of Collections." Such collections will be
retained in the Principal Funding Account and ultimately used to pay
principal of the Class A Certificates on the Class A Scheduled Payment Date
or the first Distribution Date with respect to the Rapid Amortization
Period, whichever occurs earlier.
Funds on deposit in the Principal Funding Account will be invested to
the following Transfer Date by the Trustee at the direction of the Servicer
in Permitted Investments. Investment earnings (net of investment losses and
expenses) on funds on deposit in the Principal Funding Account (the
"PRINCIPAL FUNDING INVESTMENT PROCEEDS") will be applied on each Transfer
Date as Class A Available Funds.
RESERVE ACCOUNT
Pursuant to the Series 1999-_ Supplement, the Trustee will establish and
maintain with a Qualified Institution a segregated trust account held for
the benefit of the Class A Certificateholders (the "RESERVE ACCOUNT"). The
Reserve Account is established to assist with the subsequent distribution
of interest on the Class A Certificates during the Controlled Accumulation
Period. On each Transfer Date from and after the Reserve Account Funding
Date, but prior to the termination of the Reserve Account, the Trustee,
acting pursuant to the Servicer's instructions, will apply Excess Spread
allocated to the Class A Certificates (to the extent described above under
"--Application of Collections--Excess Spread") to increase the amount on
deposit in the Reserve Account (to the extent such amount is less than the
Required Reserve Account Amount). The "RESERVE ACCOUNT FUNDING DATE" will
be the Transfer Date with respect to the Monthly Period which commences no
later than three months prior to the commencement of the Controlled
Accumulation Period, or such earlier date as the Servicer may determine.
The "REQUIRED RESERVE ACCOUNT AMOUNT" for any Transfer Date on or after the
Reserve Account Funding Date will be equal to (a) [ ]% of the outstanding
principal balance of the Class A Certificates or (b) any other amount
designated by the Transferor; provided, however, that if such designation
is of a lesser amount, the Transferor shall have provided the Servicer, the
Collateral Interest Holder and the Trustee with evidence that the Rating
Agency Condition has been satisfied and the Transferor shall have delivered
to the Trustee a certificate of an authorized officer to the effect that,
based on the facts known to such officer at such time, in the reasonable
belief of the Transferor, such designation will not cause a Pay Out Event
or an event that, after the giving of notice or the lapse of time, would
cause a Pay Out Event to occur with respect to Series 1999-_. On each
Transfer Date, after giving effect to any deposit to be made to, and any
withdrawal to be made from, the Reserve Account on such Transfer Date, the
Trustee will withdraw from the Reserve Account an amount equal to the
excess, if any, of the amount on deposit in the Reserve Account over the
Required Reserve Account Amount and distribute such excess to the
Collateral Interest Holder for application in accordance with the terms of
the Loan Agreement.
Provided that the Reserve Account has not terminated as described below,
all amounts on deposit in the Reserve Account on any Transfer Date (after
giving effect to any deposits to, or withdrawals from, the Reserve Account
to be made on such Transfer Date) will be invested to the following
Transfer Date by the Trustee at the direction of the Servicer in Permitted
Investments. The interest and other investment income (net of investment
expenses and losses) earned on such investments will be retained in the
Reserve Account (to the extent the amount on deposit is less than the
Required Reserve Account Amount) or deposited in the Finance Charge Account
and treated as Class A Available Funds.
On or before each Transfer Date with respect to the Controlled
Accumulation Period and on the first Transfer Date with respect to the
Rapid Amortization Period, a withdrawal will be made from the Reserve
Account, and the amount of such withdrawal will be deposited in the Finance
Charge Account and included in collections of Finance Charge Receivables to
be applied to the payment of the Class A Monthly Interest for such Transfer
Date in an amount equal to the lesser of (a) the Available Reserve Account
Amount with respect to such Transfer Date and (b) the Reserve Account Draw
with respect to such Transfer Date; provided, that the amount of such
withdrawal shall be reduced to the extent that funds otherwise would be
available to be deposited in the Reserve Account on such Transfer Date. On
each Transfer Date, the amount available to be withdrawn from the Reserve
Account (the "AVAILABLE RESERVE ACCOUNT AMOUNT") will be equal to the
lesser of the amount on deposit in the Reserve Account (before giving
effect to any deposit to be made to the Reserve Account on such Transfer
Date) and the Required Reserve Account Amount for such Transfer Date.
The Reserve Account will be terminated upon the earlier to occur of (a)
the termination of Trust I pursuant to the Pooling and Servicing Agreement
and (b) if the Controlled Accumulation Period has not commenced, the first
Transfer Date with respect to the Rapid Amortization Period or, if the
Controlled Accumulation Period has commenced, the earlier to occur of (i)
the first Transfer Date with respect to the Rapid Amortization Period and
(ii) the Transfer Date immediately preceding the Class A Scheduled Payment
Date. Upon the termination of the Reserve Account, all amounts on deposit
therein (after giving effect to any withdrawal from the Reserve Account on
such date as described above) will be distributed to the Collateral
Interest Holder for application in accordance with the terms of the Loan
Agreement. Any amounts withdrawn from the Reserve Account and distributed
to the Collateral Interest Holder as described above will not be available
for distribution to the Class A Certificateholders.
PAY OUT EVENTS
As described above, the Revolving Period will continue through [ ]
(unless such date is postponed as described under "--Postponement of
Controlled Accumulation Period"), unless a Pay Out Event occurs prior to
such date. A "PAY OUT EVENT" refers to any of the following events:
(a) failure on the part of the Transferor (i) to make any payment or
deposit on the date required under the Agreement (or within the
applicable grace period which shall not exceed five days) or (ii) to
observe or perform in any material respect any other covenants or
agreements of the Transferor set forth in the Agreement or the Series
1999-_ Supplement, which failure has a material adverse effect on the
Investor Certificateholders (which determination shall be made without
regard to the existence of the Collateral Interest) and which continues
unremedied for a period of 60 days after written notice and continues to
materially and adversely affect the interests of the Investor
Certificateholders (which determination shall be made without regard to
the existence of the Collateral Interest) for such period;
(b) any representation or warranty made by the Transferor in the
Agreement or the Series 1999-_ Supplement, or any information required
to be given by the Transferor to the Trustee to identify the Accounts
proves to have been incorrect in any material respect when made and
which continues to be incorrect in any material respect for a period of
60 days after written notice and as a result of which the interests of
the Investor Certificateholders are materially and adversely affected
(which determination shall be made without regard to the existence of
the Collateral Interest) and continue to be materially and adversely
affected for such period; provided, however, that a Pay Out Event
pursuant to this clause (b) shall not be deemed to occur thereunder if
the Transferor has accepted reassignment of the related Receivable or
all such Receivables, if applicable, during such period (or such longer
period as the Trustee may specify) in accordance with the provisions of
the Agreement;
(c) any reduction of the average of the Portfolio Yields for any three
consecutive Monthly Periods to a rate which is less than the average of
the Base Rates for such period;
(d) a failure by the Transferor to convey Receivables arising under
Additional Accounts, or Participations, to Trust I when required by the
Agreement;
(e) any Servicer Default occurs which would have a material adverse
effect on the Investor Certificateholders;
(f) insufficient moneys in the Distribution Account to pay the Class
A Investor Interest on the Class A Scheduled Payment Date or the Class B
Investor Interest on the Class B Scheduled Payment Date;
(g) certain events of insolvency, conservatorship, receivership or
bankruptcy relating to the Transferor or any holder of an interest in
the Transferor Certificate (including the Transferor Participation);
(h) the Transferor becomes unable for any reason to transfer
Receivables to Trust I in accordance with the provisions of the
Agreement; or
(i) Trust I becomes subject to regulation as an "investment company"
within the meaning of the Investment Company Act of 1940, as amended.
In the case of any event described in clause (a), (b) or (e) above, a
Pay Out Event will be deemed to have occurred with respect to the Investor
Certificates only if, after any applicable grace period, either the Trustee
or Investor Certificateholders evidencing undivided interests aggregating
more than 50% of the Investor Interest, by written notice to the Transferor
and the Servicer (and to the Trustee if given by the Investor
Certificateholders) declare that a Pay Out Event has occurred with respect
to the Investor Certificates as of the date of such notice. In the case of
any event described in clause (g), (h) or (i), a Pay Out Event with respect
to all Series then outstanding, and in the case of any event described in
clause (c), (d) or (f), a Pay Out Event with respect to only the Investor
Certificates, will be deemed to have occurred without any notice or other
action on the part of the Trustee or the Investor Certificateholders or all
certificateholders, as appropriate, immediately upon the occurrence of such
event. On the date on which a Pay Out Event is deemed to have occurred, the
Rapid Amortization Period will commence. In such event, distributions of
principal to the Class A Certificateholders will begin on the first
Distribution Date following the month in which such Pay Out Event occurred.
If, because of the occurrence of a Pay Out Event, the Rapid Amortization
Period begins earlier than the Monthly Period preceding the month in which
the Class A Scheduled Payment Date occurs, Class A Certificateholders will
begin receiving distributions of principal earlier than they otherwise
would have, which may shorten the average life of the Class A Certificates.
See "Description of the Certificates--Pay Out Events" in the attached
prospectus for an additional discussion of the consequences of an
insolvency, conservatorship or receivership of the Transferor.
DEFEASANCE
On the date that the following conditions shall have been satisfied: (i)
the Transferor shall have deposited (x) in the Principal Funding Account an
amount equal to the sum of the outstanding principal balance of the Class A
Certificates, the Class B Certificates and the Collateral Interest which
amount shall be invested in Permitted Investments and (y) in the Reserve
Account an amount equal to or greater than the amount of interest to accrue
on the Class A Certificates, the Class B Certificates and the Collateral
Interest, as estimated by the Transferor, for the period from the date of
the deposit to the Principal Funding Account through the expected final
payment date for the Collateral Interest; (ii) the Transferor shall have
delivered to the Trustee an opinion of counsel to the effect that such
deposit and termination of obligations will not result in the Trust being
required to register as an "investment company" within the meaning of the
Investment Company Act of 1940, as amended and an opinion of counsel to the
effect that following such deposit none of Trust I, the Reserve Account or
the Principal Funding Account will be deemed to be an association (or
publicly traded partnership) taxable as a corporation; (iii) the Transferor
shall have delivered to the Trustee a certificate of an officer of the
Transferor stating that the Transferor reasonably believes that such
deposit and termination of its obligations will not constitute a Pay Out
Event or any event that, with the giving of notice or the lapse of time,
would cause a Pay Out Event to occur; and (iv) the Rating Agency Condition
will be satisfied with respect to such event; then, the Class A
Certificates will no longer be entitled to the security interest of Trust I
in the Receivables and, except those set forth in clause (i) above, other
Trust assets, and the percentages applicable to the allocation to the
Investor Certificates of collections on Principal Receivables and Finance
Charge Receivables and Defaulted Accounts will be reduced to zero.
SERVICING COMPENSATION AND PAYMENT OF EXPENSES
The share of the Servicing Fee (as defined herein) allocable to the
Investor Interest with respect to any Transfer Date (the "INVESTOR
SERVICING FEE") shall be equal to one-twelfth of the product of (a) [ ]%
and (b) the Adjusted Investor Interest as of the last day of the Monthly
Period preceding such Transfer Date. On each Transfer Date, but only if
Wachovia or The Bank of New York (Delaware) is the Servicer, Servicer
Interchange with respect to the related Monthly Period that is on deposit
in the Finance Charge Account will be withdrawn from the Finance Charge
Account and paid to the Servicer in payment of a portion of the Investor
Servicing Fee with respect to such Monthly Period. The "SERVICER
INTERCHANGE" for any Monthly Period for which Wachovia or The Bank of New
York (Delaware) is the Servicer will be an amount equal to the portion of
collections of Finance Charge Receivables allocated to the Investor
Interest with respect to such Monthly Period that is attributable to
Interchange; provided, however, that Servicer Interchange for a Monthly
Period shall not exceed one-twelfth of the product of (i) the Adjusted
Investor Interest, as of the last day of such Monthly Period and (ii) [ ]%.
In the case of any insufficiency of Servicer Interchange on deposit in the
Finance Charge Account, a portion of the Investor Servicing Fee with
respect to such Monthly Period will not be paid to the extent of such
insufficiency and in no event shall Trust I, the Trustee or the Investor
Certificateholders be liable for the share of the Servicing Fee to be paid
out of Servicer Interchange.
The share of the Investor Servicing Fee allocable to the Class A
Certificateholders with respect to any Transfer Date (the "CLASS A
SERVICING FEE") shall be equal to one-twelfth of the product of (a) the
Class A Floating Allocation, (b) [ ]%, or if Wachovia or The Bank of New
York (Delaware) is not the Servicer, [ ]% (the "NET SERVICING FEE RATE")
and (c) the Adjusted Investor Interest as of the last day of the Monthly
Period preceding such Transfer Date. The share of the Investor Servicing
Fee allocable to the Class B Certificateholders with respect to any
Transfer Date (the "CLASS B SERVICING FEE") shall be equal to one-twelfth
of the product of (a) the Class B Floating Allocation, (b) the Net
Servicing Fee Rate and (c) the Adjusted Investor Interest as of the last
day of the Monthly Period preceding such Transfer Date. The share of the
Investor Servicing Fee allocable to the Collateral Interest Holder with
respect to any Transfer Date (the "COLLATERAL INTEREST SERVICING FEE";
together with the Class A Servicing Fee and Class B Servicing Fee, the
"SERVICING FEE") shall be equal to one-twelfth of the product of (a) the
Collateral Floating Allocation, (b) the Net Servicing Fee Rate and (c) the
Adjusted Investor Interest as of the last day of the Monthly Period
preceding such Transfer Date. The remainder of the Servicing Fee shall be
paid by the holder of the Transferor Certificate or other Series (as
provided in the related Series Supplements) or, to the extent of any
insufficiency of Servicer Interchange as described above, not be paid. In
no event shall Trust I, the Trustee or the Investor Certificateholders be
liable for the share of the Servicing Fee to be paid out of Servicer
Interchange. The Class A Servicing Fee and the Class B Servicing Fee shall
be payable to the Servicer solely to the extent amounts are available for
distribution in respect thereof as described under "--Application of
Collections."
The Servicer will pay from its servicing compensation certain expenses
incurred in connection with servicing the Receivables including, without
limitation, payment of the fees and disbursements of the Trustee and
independent certified public accountants and other fees which are not
expressly stated in the Agreement to be payable by Trust I or the Investor
Certificateholders other than Federal, state and local income and franchise
taxes, if any, of Trust I.
REPORTS TO CLASS A CERTIFICATEHOLDERS
On each Transfer Date, the Trustee will forward to each Class A
Certificateholder of record, a statement prepared by the Servicer setting
forth the items described in "Description of the Certificates--Reports to
Certificateholders" in the attached prospectus. In addition, such statement
will include (a) the amount, if any, withdrawn from the Principal Funding
Account for such Transfer Date, and (b) the Collateral Interest, if any,
for such Transfer Date.
ERISA CONSIDERATIONS
Section 406 of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA") and Section 4975 of the Code prohibit certain pension,
profit sharing or other employee benefit plans, individual retirement
accounts or annuities and employee annuity plans and Keogh plans
(collectively, "PLANS") from engaging in certain transactions involving
"plan assets" with persons that are "parties in interest" under ERISA or
"disqualified persons" under the Code (collectively, "PARTIES IN INTEREST")
with respect to the Plan. A violation of these "prohibited transaction"
rules may generate excise tax and other liabilities under ERISA and Section
4975 of the Code for such persons, unless a statutory, regulatory or
administrative exemption is available. Plans that are governmental plans
(as defined in section 3(32) of ERISA) and certain church plans (as defined
in section 3(33) of ERISA) are not subject to ERISA requirements.
CLASS A CERTIFICATES
A violation of the prohibited transaction rules could occur if the Class
A Certificates were to be purchased with assets of any Plan if the
Transferor, the Trustee, any underwriters of such Series or any of their
affiliates were a Party in Interest with respect to such Plan, unless a
statutory, regulatory or administrative exemption is available or an
exception applies under a regulation (the "PLAN ASSET REGULATION") issued
by the Department of Labor ("DOL"). The Transferor, the Trustee, any
underwriters of a Series and their affiliates are likely to be Parties in
Interest with respect to many Plans. Before purchasing the Class A
Certificates, a Plan fiduciary or other Plan investor should consider
whether a prohibited transaction might arise by reason of the relationship
between the Plan and the Transferor, the Trustee, any underwriters of such
Series or any of their affiliates and consult their counsel regarding the
purchase in light of the considerations described below and in the attached
prospectus.
Under certain circumstances, the Plan Asset Regulation treats the assets
of an entity in which a Plan holds an equity interest as "plan assets" of
such Plan. Because the Class A Certificates will represent beneficial
interests in Trust I, and despite the agreement of the Transferor and the
Certificate Owners to treat the Class A Certificates as debt instruments,
the Class A Certificates are likely to be considered equity interests in
the Trust for purposes of the Plan Asset Regulation, with the result that
the assets of Trust I are likely to be treated as "plan assets" of the
investing Plans for purposes of ERISA and Section 4975 of the Code, unless
the exception for "publicly-offered securities" is applicable as described
in the attached prospectus. The Underwriters anticipate that the Class A
Certificates will be held by at least 100 independent persons. Wachovia
expects the other requirements will be met so that the Class A certificates
will be considered, "publicly-offered securities" as described in the
attached prospectus. No restrictions will be imposed on the transfer of the
Class A Certificates. It is expected that the Class A Certificates will be
held by at least 100 or more investors who were independent of the issuer
and of one another ("INDEPENDENT INVESTORS") at the conclusion of the
initial public offering although no assurance can be given, and no
monitoring or other measures will be taken to ensure, that such condition
is met. The Class A Certificates will be sold as part of an offering
pursuant to an effective registration statement under the Securities Act
and then will be timely registered under the Exchange Act.
If the foregoing exception under the Plan Asset Regulation were not
satisfied, transactions involving Trust I and Parties in Interest with
respect to a Plan that purchases or holds Class A Certificates might be
prohibited under Section 406 of ERISA and/or Section 4975 of the Code and
result in excise tax and other liabilities under ERISA and Section 4975 of
the Code unless an exemption were available. The five DOL class exemptions
described in the attached prospectus may not provide relief for all
transactions involving the assets of the Trust even if they would otherwise
apply to the purchase of a Class A Certificate by a Plan.
CLASS B CERTIFICATES
The Underwriter currently does not expect that the Class B Certificates
will be held by at least 100 Independent Investors and, therefore, does not
expect that such Class B Certificates will qualify as "publicly-offered
securities" under the regulation referred to in the preceding paragraph.
Accordingly, the Class B Certificates may not be acquired or held by (a)
any employee benefit plan that is subject to ERISA, (b) any plan or other
arrangement (including an individual retirement account or Keogh plan) that
is subject to Section 4975 of the Code, or (c) any entity whose underlying
assets include "plan assets" under the regulation by reason of any such
plan's investment in the entity. By its acceptance of a Class B
Certificate, each Class B Certificateholder will be deemed to have
represented and warranted that it is not and will not be subject to the
foregoing limitation.
CONSULTATION WITH COUNSEL
In light of the foregoing, fiduciaries or other persons contemplating
purchasing the Class A Certificates on behalf or with "plan assets" of any
Plan should consult their own counsel regarding whether the Trust assets
represented by the Class A Certificates would be considered "plan assets,"
the consequences that would apply if the Trust's assets were considered
"plan assets," and the possibility of exemptive relief from the prohibited
transaction rules.
Finally, Plan fiduciaries and other Plan investors should consider the
fiduciary standards under ERISA or other applicable law in the context of
the Plan's particular circumstances before authorizing an investment of a
portion of the Plan's assets in the Class A Certificates. Accordingly,
among other factors, Plan fiduciaries and other Plan investors should
consider whether the investment (i) satisfies the diversification
requirement of ERISA or other applicable law, (ii) is in accordance with
the Plan's governing instruments, and (iii) is prudent in light of the
"Risk Factors" and other factors discussed in this prospectus supplement.
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting
Agreement dated [ ] (the "UNDERWRITING AGREEMENT") between Wachovia and the
underwriters named below (the "UNDERWRITERS"), Wachovia has agreed to sell
to the Underwriters and the Underwriters have agreed to purchase, the
principal amount of the Offered Certificates offered hereby if any of the
Offered Certificates are purchased.
PRINCIPAL PRINCIPAL
AMOUNT OF AMOUNT OF
CLASS A CLASS B
UNDERWRITERS CERTIFICATES CERTIFICATES
------------ ------------
[ ].......................... $ $
[ ]..........................
[ ]..........................
[ ]..........................
[ ]..........................
----------- ------------
Total.......................................... $ $
=========== ============
The price to public, Underwriters' discounts and commissions, the
concessions that the Underwriters may allow to certain dealers, and the
discounts that such dealers may reallow to certain other dealers, each
expressed as a percentage of the principal amount of the Class A
Certificates and the Class B Certificates, shall be as follows:
Underwriting
Price to discount and
public commissions
--------- ------------
Class A Certificates.......................... % %
Class B Certificates.......................... % %
After the offering is completed, Wachovia will receive the proceeds,
after deduction of the underwriting and other expenses, listed below:
Proceeds to Transferor
Proceeds (as % of the principal Underwriting
to amount of the discounts and
Transferor Class A Certificates) commissions
---------- ---------------------- -------------
Class A Certificates.......$ % $
Class B Certificates.......$ % $
After the public offering, the public offering price and other selling
terms may be changed by the Underwriters. Additional offering expenses are
estimated to be $________.
The Underwriters may engage in over-allotment transactions, stabilizing
transactions, syndicate covering transactions and penalty bids with respect
to the Offered Certificates in accordance with Regulation M under the
Exchange Act. Over-allotment transactions involve syndicate sales in excess
of the offering size, which create a syndicate short position. Stabilizing
transactions permit bids to purchase the Offered Certificates so long as
the stabilizing bids do not exceed a specified maximum. Syndicate covering
transactions involve purchases of the Offered Certificates in the open
market after the distribution has been completed in order to cover
syndicate short positions. Penalty bids permit the Underwriters to reclaim
a selling concession from a syndicate member when the Offered Certificates
originally sold by such syndicate member are purchased in a syndicate
covering transaction to cover syndicate short positions. Such
over-allotment transactions, stabilizing transactions, syndicate covering
transactions and penalty bids may cause the price of the Offered
Certificates to be higher than it would otherwise be in the absence of such
transactions. Neither the Transferor nor the Underwriters represent that
the Underwriters will engage in any such transactions or that such
transactions, once commenced, will not be discontinued without notice at
any time.
The Transferor has been advised by each Underwriter that it proposes
initially to offer the Class A Certificates to the public at the price set
forth on the cover page hereof and to certain dealers at such price less
concessions not in excess of [ ]% of the principal amount of the Class A
Certificates. Each Underwriter may allow, and such dealers may reallow,
concessions not in excess of [ ]% of the principal amount of the Class A
Certificates to certain brokers and dealers. The Transferor has been
advised by each Underwriter that it proposes initially to offer the Class B
Certificates to the public at the price set forth on the cover page hereof
and to certain dealers at such price less concessions not in excess of [ ]%
of the principal amount of the Class B Certificates. Each Underwriter may
allow, and such dealers may reallow, concessions not in excess of [ ]% of
the principal amount of the Class B Certificates to certain brokers and
dealers.
Each Underwriter has represented and agreed that (a) it has only issued
or passed on and will only issue or pass on in the United Kingdom any
document received by it in connection with the issue of the Class A
Certificates to a person who is of a kind described in Article 11(3) of the
Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order
1996 (as amended) or who is a person to whom the document may otherwise
lawfully be issued or passed on, (b) it has complied and will comply with
all applicable provisions of the Financial Services Act 1986 and other
applicable laws and regulations with respect to anything done by it in
relation to the Class A Certificates in, from or otherwise involving the
United Kingdom and (c) if the Underwriter is an authorized person under the
Financial Services Act 1986, it has only promoted and will only promote (as
that term is defined in Regulation 1.02 of the Financial Services
(Promotion of Unregulated Schemes) Regulations 1991) to any person in the
United Kingdom the scheme described herein if that person is of a kind
described either in Section 76(2) of the Financial Services Act 1986 or in
Regulation 1.04 of the Financial Services (Promotion of Unregulated
Schemes) Regulations 1991.
The Transferor will indemnify each Underwriter against certain
liabilities, including liabilities under the Securities Act or contribute
to payments the Underwriter may be required to make in respect thereof.
Each Underwriter has agreed to reimburse the Transferor for certain
expenses incurred in connection with the issuance and distribution of the
Offered Certificates.
In the ordinary course of business, each Underwriter and its affiliates
have engaged and may engage in investment banking and/or commercial banking
transactions with the Transferor, its affiliates and the Trust. In
addition, each Underwriter may from time to time take positions in the
Offered Certificates and other certificates issued by the Trust.
Wachovia Securities, Inc. ("WSI") is an affiliate of the Transferor. Any
obligations of WSI are the sole obligations of WSI and do not create any
obligations on the part of any of its affiliates.
WSI may from time to time purchase or acquire a position in the Offered
Certificates and may, at its option, hold or resell such Offered
Certificates. WSI expects to offer and sell previously issued Offered
Certificates in the course of its business as a broker-dealer. WSI may act
as a principal or agent in such transactions. This supplement and the
attached prospectus may be used by WSI and its successors in connection
with such transactions. Such sales, if any, will be made at varying prices
related to prevailing market prices at the time of sale.
INDEX OF TERMS FOR PROSPECTUS SUPPLEMENT
Accounts...............................................................S-15
Accumulation Period Length.............................................S-30
Accumulation Shortfall.................................................S-39
Addition Cut-Off Date..................................................S-19
Addition Date..........................................................S-31
Adjusted Investor Interest.............................................S-29
Agreement..............................................................S-15
Available Investor Principal Collections...............................S-30
Available Reserve Account Amount.......................................S-43
Bank...................................................................S-15
Bank Portfolio.........................................................S-15
Base Rate..............................................................S-24
Class A Additional Interest............................................S-28
Class A Adjusted Investor Interest.....................................S-29
Class A Available Funds................................................S-28
Class A Certificate Rate...............................................S-28
Class A Certificateholders.............................................S-15
Class A Certificates...................................................S-15
Class A Fixed Allocation...............................................S-32
Class A Floating Allocation............................................S-32
Class A Investor Charge-Off............................................S-41
Class A Investor Default Amount........................................S-40
Class A Investor Interest........................................S-26, S-32
Class A Monthly Interest...............................................S-36
Class A Monthly Principal..............................................S-38
Class A Required Amount................................................S-33
Class A Scheduled Payment Date.........................................S-23
Class A Servicing Fee..................................................S-45
Class B Additional Interest............................................S-28
Class B Available Funds................................................S-28
Class B Certificate Rate...............................................S-28
Class B Certificateholders.............................................S-15
Class B Certificates...................................................S-15
Class B Fixed Allocation...............................................S-32
Class B Floating Allocation............................................S-32
Class B Investor Charge-Off............................................S-41
Class B Investor Default Amount........................................S-41
Class B Investor Interest........................................S-26, S-33
Class B Monthly Interest...............................................S-36
Class B Monthly Principal..............................................S-38
Class B Required Amount................................................S-34
Class B Scheduled Payment Date.........................................S-23
Class B Servicing Fee..................................................S-45
Closing Date...........................................................S-27
Collateral Available Funds.............................................S-36
Collateral Default Amount..............................................S-41
Collateral Fixed Allocation............................................S-32
Collateral Floating Allocation.........................................S-32
Collateral Interest..............................................S-15, S-33
Collateral Interest Holders............................................S-15
Collateral Interest Servicing Fee......................................S-45
Collateral Monthly Interest............................................S-37
Collateral Monthly Principal...........................................S-39
Collateral Rate........................................................S-37
Controlled Accumulation Amount.........................................S-39
Controlled Deposit Amount..............................................S-23
Default Amount.........................................................S-40
Distribution Date......................................................S-28
DOL....................................................................S-46
ERISA..................................................................S-46
Excess Finance Charge Collections......................................S-37
Excess Spread..........................................................S-36
FFIEC..................................................................S-17
FFIEC Uniform Policy...................................................S-17
Floating Investor Percentage...........................................S-31
Independent Investors..................................................S-46
Initial Collateral Interest............................................S-40
Interest Period........................................................S-28
Investor Certificateholders............................................S-15
Investor Certificates..................................................S-15
Investor Default Amount................................................S-40
Investor Interest......................................................S-26
Investor Servicing Fee.................................................S-45
LIBOR..................................................................S-29
LIBOR Determination Date...............................................S-29
Loan Agreement.........................................................S-37
Minimum Aggregate Principal Receivables................................S-19
Minimum Transferor Amount..............................................S-19
Monthly Period.........................................................S-19
Net Servicing Fee Rate.................................................S-45
Offered Certificates...................................................S-15
Parties in Interest....................................................S-46
Pay Out Event....................................................S-24, S-43
Plan Asset Regulation..................................................S-46
Plans..................................................................S-46
Pooling and Servicing Agreement........................................S-15
Portfolio Yield........................................................S-24
Principal Funding Account..............................................S-42
Principal Funding Account Balance......................................S-23
Principal Funding Investment Proceeds..................................S-42
Principal Shortfalls...................................................S-40
Rapid Amortization Period..............................................S-23
Rating Agency Condition................................................S-40
Reallocated Class B Principal Collections..............................S-34
Reallocated Collateral Principal Collections...........................S-34
Reallocated Principal Collections......................................S-34
Receivables............................................................S-15
Record Date............................................................S-27
Reference Banks........................................................S-29
Removal Date...........................................................S-31
Required Collateral Interest...........................................S-40
Required Reserve Account Amount........................................S-42
Reserve Account........................................................S-42
Reserve Account Draw...................................................S-28
Reserve Account Funding Date...........................................S-42
Revolving Period.......................................................S-29
Series 1999-1 Supplement...............................................S-15
Series 1999-1 Termination Date.........................................S-30
Servicer...............................................................S-15
Servicer Interchange...................................................S-45
Servicing Fee..........................................................S-45
Shared Principal Collections...........................................S-40
Telerate Page 3750.....................................................S-29
Transfer Date..........................................................S-35
Transferor.............................................................S-15
Transferor Interest....................................................S-26
Transferor Participation...............................................S-27
Transferor Percentage..................................................S-27
Trust I................................................................S-15
Trust I Portfolio......................................................S-19
Trustee................................................................S-15
Underwriters...........................................................S-48
Underwriting Agreement.................................................S-48
Virginia Banks.........................................................S-16
Virginia Portfolios....................................................S-16
Wachovia...............................................................S-15
WCM....................................................................S-49
Wells Portfolio........................................................S-16
WOSC...................................................................S-15
ANNEX I
OTHER SERIES
The Trust has previously issued two other Series that the Transferor
anticipates will remain outstanding on the Closing Date. The table below
sets forth the principal characteristics of such Series: Series 1995-1 and
Series 1999-1. For more specific information with respect to any Series,
any prospective investor should contact the Servicer at (336) 732-7729. The
Servicer will provide, without charge, to any prospective purchaser of the
Offered Certificates, a copy of the Disclosure Documents for any previous
publicly issued Series.
SERIES 1995-1
1. CLASS A CERTIFICATES
INITIAL INVESTED AMOUNT.................. $446,250,000
CERTIFICATE RATE......................... ONE MONTH LIBOR + 0.170%
CONTROLLED ACCUMULATION AMOUNT
(SUBJECT TO ADJUSTMENT)................ $37,187,500
COMMENCEMENT OF CONTROLLED ACCUMULATION
PERIOD (SUBJECT TO ADJUSTMENT)........ SEPTEMBER 30, 1999
ANNUAL SERVICING FEE PERCENTAGE.......... 2.0%
INITIAL COLLATERAL INVESTED AMOUNT....... $10,000,000
OTHER ENHANCEMENT........................ CASH COLLATERAL ACCOUNT AND
SUBORDINATION OF CLASS B
CERTIFICATES AND COLLATERAL
INTEREST
EXPECTED FINAL PAYMENT DATE.............. OCTOBER 2000
SCHEDULED SERIES TERMINATION DATE........ MARCH 2003
SERIES ISSUANCE DATE..................... OCTOBER 17, 1995
2. CLASS B CERTIFICATES
INITIAL INVESTED AMOUNT.................. $26,250,000
CERTIFICATE RATE......................... ONE MONTH LIBOR + 0.275%
ANNUAL SERVICING FEE PERCENTAGE.......... SAME AS ABOVE FOR CLASS A
CERTIFICATES
INITIAL COLLATERAL INVESTED AMOUNT....... SAME AS ABOVE FOR CLASS A
CERTIFICATES
OTHER ENHANCEMENT........................ CASH COLLATERAL ACCOUNT AND
SUBORDINATION OF THE
COLLATERAL INTEREST
EXPECTED FINAL PAYMENT DATE.............. NOVEMBER 2000
SCHEDULED SERIES TERMINATION DATE........ SAME AS ABOVE FOR CLASS A
CERTIFICATES
SERIES ISSUANCE DATE..................... SAME AS ABOVE FOR CLASS A
CERTIFICATES
SERIES 1999-1
1. CLASS A CERTIFICATES
INITIAL INVESTED AMOUNT.................. $775,000,000
CERTIFICATE RATE......................... ONE MONTH LIBOR + 0.15%
CONTROLLED ACCUMULATION AMOUNT
(SUBJECT TO ADJUSTMENT)................ $64,583,333.33
COMMENCEMENT OF CONTROLLED ACCUMULATION
PERIOD (SUBJECT TO ADJUSTMENT)......... FEBRUARY 28, 2003
ANNUAL SERVICING FEE PERCENTAGE.......... 2.0%
INITIAL COLLATERAL INTEREST.............. $67,169,550
OTHER ENHANCEMENT........................ SUBORDINATION OF CLASS B
CERTIFICATES AND
COLLATERAL INTEREST
SCHEDULED PAYMENT DATE................... MARCH 2004
STATED SERIES TERMINATION DATE........... AUGUST 2006
SERIES ISSUANCE DATE..................... MARCH 24, 1999
2. CLASS B CERTIFICATES
INITIAL INVESTED AMOUNT................... $53,757,250
CERTIFICATE RATE.......................... ONE MONTH LIBOR + 0.40%
ANNUAL SERVICING FEE PERCENTAGE........... SAME AS ABOVE FOR CLASS A
CERTIFICATES
INITIAL COLLATERAL INTEREST............... SAME AS ABOVE FOR CLASS A
CERTIFICATES
OTHER ENHANCEMENT......................... SUBORDINATION OF THE
COLLATERAL INTEREST
SCHEDULED PAYMENT DATE.................... APRIL 2004
STATED SERIES TERMINATION DATE............ AUGUST 2006
SERIES ISSUANCE DATE...................... MARCH 24, 1999
[BOX]
A certificate is not a deposit and neither the certificates nor the
underlying accounts or receiv ables are insured or guaranteed by the
Federal Deposit Insurance Corporation or any other gov ernmental agency.
The certificates will represent interests in the trust only and will not
represent interests in or obligations of The First National Bank of Atlanta
d/b/a Wachovia Bank Card Services, the servicer or any of its affiliates.
This prospectus may be used to offer and sell any series of certif icates
only if accompanied by the prospectus supplement for that series.
[FLAG]
The information in this prospectus is not complete and may be changed. We
cannot sell these securities until the registration statement filed with
the Securities and Exchange Commission is effective.
This prospectus is not an offer to sell these securities and it is not
soliciting an offer to buy these securities in any state where the offer or
sale is not permitted.
SUBJECT TO COMPLETION, DATED JULY 12, 1999
Prospectus
WACHOVIA CREDIT CARD MASTER TRUST
Issuer
THE FIRST NATIONAL BANK OF ATLANTA D/B/A WACHOVIA BANK
CARD SERVICES
Transferor and Servicer
ASSET BACKED CERTIFICATES
THE TRUST--
o may periodically issue asset backed certificates in one or more series
with one or more classes; and
o will own--
o receivables in a portfolio of consumer revolving credit card
accounts;
o payments due on those receivables; and o other property described
in this prospectus and in the prospectus supplement.
THE CERTIFICATES--
o will represent interests in a trust and will be paid only from the
assets of the trust;
o offered by this prospectus will be rated in one of the four highest
rating categories by at least one nationally recognized rating
organization;
o may have one or more forms of enhancement; and
o will be issued as part of a designated series which may include one or
more classes of certificates and enhancement.
THE CERTIFICATEHOLDERS--
o will receive interest and principal payments from a varying percentage
of credit card account collections.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED
WHETHER THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is , 1999
TABLE OF CONTENTS
PROSPECTUS
IMPORTANT NOTICE ABOUT INFORMATION PRESENTED IN THIS
PROSPECTUS AND THE PROSPECTUS SUPPLEMENT................................3
THE TRUSTS.................................................................4
WACHOVIA'S CREDIT CARD ACTIVITIES..........................................4
General..................................................................4
Acquisition and Use of Credit Card Accounts..............................4
Description of Wachovia Operational Services Corporation ................5
Interchange..............................................................5
Recoveries...............................................................5
THE RECEIVABLES............................................................6
MATURITY CONSIDERATIONS....................................................6
USE OF PROCEEDS............................................................7
WACHOVIA AND WACHOVIA CORPORATION..........................................7
General..................................................................7
Year 2000 Compliance.....................................................7
DESCRIPTION OF THE CERTIFICATES............................................8
General..................................................................9
Book-Entry Registration.................................................10
Definitive Certificates.................................................13
Interest Payments.......................................................13
Principal Payments......................................................14
Controlled Amortization Period..........................................14
Principal Amortization Period...........................................14
Controlled Accumulation Period..........................................15
Rapid Accumulation Period...............................................15
Rapid Amortization Period...............................................15
Transfer and Assignment of Receivables..................................16
Exchanges...............................................................16
Representations and Warranties..........................................17
Addition of Trust Assets................................................19
Removal of Accounts.....................................................20
Collection and Other Servicing Procedures...............................20
Discount Option.........................................................21
Trust Accounts..........................................................21
Funding Period..........................................................21
Investor Percentage and Transferor Percentage...........................22
Application of Collections..............................................22
Shared Excess Finance Charge Collections................................23
Excess Funding Account..................................................24
Shared Principal Collections............................................24
Paired Series ..........................................................24
Defaulted Receivables; Rebates and Fraudulent Charges;
Investor Charge-Offs..................................................24
Defeasance..............................................................25
Final Payment of Principal; Termination.................................25
Pay Out Events..........................................................26
Servicing Compensation and Payment of Expenses..........................26
Certain Matters Regarding the Transferor and the Servicer...............27
Servicer Default........................................................28
Reports to Certificateholders...........................................28
Evidence as to Compliance...............................................29
Amendments..............................................................29
List of Certificateholders..............................................30
The Trustee.............................................................30
CREDIT ENHANCEMENT........................................................30
General.................................................................30
Subordination...........................................................31
Cash Collateral Guaranty or Account.....................................31
Collateral Interest.....................................................31
Letter of Credit........................................................32
Surety Bond or Insurance Policy.........................................32
Spread Account..........................................................32
Reserve Account.........................................................32
CERTIFICATE RATINGS.......................................................32
CERTAIN LEGAL ASPECTS OF THE RECEIVABLES..................................33
Transfer of Receivables.................................................33
Certain Matters Relating to Receivership................................33
Consumer Protection Laws................................................34
Industry Litigation.....................................................35
CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES..............................35
General.................................................................35
Characterization of the Certificates as Indebtedness....................36
Taxation of Interest Income of Certificateholders.......................36
Sale or Other Disposition of a Certificate..............................37
Tax Characterization of the Trust.......................................37
FASIT Legislation.......................................................38
Foreign Investors.......................................................39
STATE AND LOCAL TAXATION..................................................40
EMPLOYEE BENEFIT PLAN CONSIDERATIONS......................................40
PLAN OF DISTRIBUTION......................................................42
LEGAL MATTERS.............................................................42
REPORTS TO CERTIFICATEHOLDERS.............................................43
WHERE YOU CAN FIND MORE INFORMATION.......................................43
INDEX OF TERMS FOR PROSPECTUS.............................................44
ANNEX I: GLOBAL CLEARANCE, SETTLEMENT AND TAX
DOCUMENTATION PROCEDURES...............................................A-1
Initial Settlement.....................................................A-1
Secondary Market Trading...............................................A-1
Certain U.S. Federal Income Tax Documentation Requirements.............A-2
IMPORTANT NOTICE ABOUT INFORMATION PRESENTED IN THIS
PROSPECTUS AND THE PROSPECTUS SUPPLEMENT
We provide information to you about the certificates in two separate
documents that progressively provide more detail: (a) this prospectus,
which provides general information, some of which may not apply to a
particular series of certificates, including your series, and (b) the
prospectus supplement, which will describe the specific terms of your
series of certificates, including:
o the timing and amount of interest and principal payments;
o information about the receivables;
o information about credit enhancement for each offered class;
o credit ratings; and
o the method for selling the certificates.
WHENEVER INFORMATION IN THE PROSPECTUS SUPPLEMENT IS MORE SPECIFIC THAN
THE INFORMATION IN THIS PROSPECTUS, YOU SHOULD RELY ON THE INFORMATION IN
THE PROSPECTUS SUPPLEMENT.
You should rely only on the information provided in this prospectus and
the prospectus supplement, including the information incorporated by
reference. We have not authorized anyone to provide you with different
information.
We include cross-references in this prospectus and in the prospectus
supplement to captions in these materials where you can find further
related discussions. The preceding table of contents and the table of
contents included in the prospectus supplement provide the pages on which
these captions are located.
You can find a listing of the pages where capitalized terms are defined
under the caption "Index of Terms for Prospectus" beginning on page 44 in
this prospectus.
--------------------
THE TRUSTS
The Wachovia Credit Card Master Trust ("TRUST I") has been formed in
accordance with the laws of the State of Delaware pursuant to a pooling and
servicing agreement (the "POOLING AND SERVICING AGREEMENT") between The
First National Bank of Atlanta d/b/a Wachovia Bank Card Services
("WACHOVIA" or the "BANK"), as transferor (in such capacity, the
"TRANSFEROR") and servicer (in such capacity, the "SERVICER"), and The Bank
of New York (Delaware), as trustee. Additional Trusts (each such Trust, a
"NEW TRUST") may be formed from time to time, each pursuant to a pooling
and servicing agreement (each such agreement, a "NEW AGREEMENT," and each
New Agreement and the Pooling and Servicing Agreement, an "AGREEMENT") to
be entered into between the Bank, as transferor and servicer, and a trustee
to be identified in the Prospectus Supplement relating to the Series of
Certificates representing interests in such Trust (each trustee under an
Agreement, a "TRUSTEE"). Trust I and each New Trust will be created as a
master trust under which one or more Series will be issued pursuant to a
series supplement to the related Agreement (a "SERIES SUPPLEMENT"). A
Series issued by a Trust may be offered pursuant to this Prospectus, or may
be offered pursuant to another disclosure document in a transaction exempt
from the registration requirements of the Securities Act of 1933, as
amended (the "SECURITIES ACT"). Each Prospectus Supplement identifies the
related Trust and all Series previously issued by such Trust.
No Trust will engage in any business activity other than as described
herein and in the related supplement to this Prospectus (the "PROSPECTUS
SUPPLEMENT"). Each Trust will hold the Receivables, issue asset backed
certificates (the "CERTIFICATES") evidencing an undivided interest in the
assets of a Wachovia Credit Card Master Trust (each, a "Trust") which may
be issued from time to time in one or more series (each, a "SERIES") which
will consist of one or more classes of Certificates (each, a "CLASS") and
the related Transferor Certificate, make payments thereon and engage in
related activities (including, with respect to any Series, obtaining any
Enhancement (as defined herein) and entering into an Enhancement agreement
relating thereto). As a consequence, no Trust is expected to have any need
for additional capital resources other than the assets of such Trust and
there is no reasonable potential for such need to develop. Furthermore, no
such additional capital resources will be available.
WACHOVIA'S CREDIT CARD ACTIVITIES
GENERAL
With respect to each Series of Certificates, the Receivables conveyed or
to be conveyed to a Trust by the Bank pursuant to the related Agreement
have been or will be generated from transactions made by holders of
selected MasterCard(R) and VISA(R)(1) credit card accounts (the "ACCOUNTS"),
including premium accounts and standard accounts, from the portfolio of
accounts owned by the Bank (the "BANK PORTFOLIO"). Generally, both premium
and standard accounts undergo the same credit analysis, but premium
accounts generally carry higher credit limits and offer a wider variety of
services to the cardholders. The Bank currently services the Bank Portfolio
in the manner described in the related Prospectus Supplement. Certain data
processing and administrative functions associated with the servicing of
the Bank Portfolio are performed on behalf of the Bank by Wachovia
Operational Services Corporation. See "--Description of Wachovia
Operational Services Corporation."
- ------------
(1) MasterCard(R) and VISA(R) are registered trademarks of MasterCard
International Incorporated and VISA USA Incorporated, respectively.
ACQUISITION AND USE OF CREDIT CARD ACCOUNTS
Wachovia primarily relies on nationally targeted direct marketing in the
acquisition of new credit card accounts. Normally marketing campaigns are
based on product pricing and targeted individuals that are more likely to
be revolvers as opposed to convenience users. Wachovia also targets
existing customer base of the Wachovia Bank, N.A. ("WBNA") in the states in
which WBNA operates through branch promotions and cross-selling campaigns.
Credit applications are processed by an automated application processing
system that utilizes credit scorecards and specific credit policy rules and
fraud detection criteria. Those applications that are not decisioned by the
automated application processing system are reviewed by a Wachovia credit
analyst who makes a credit and limit assignment decision based on a review
of (i) the information contained in the application, (ii) a credit report
obtained through an independent credit reporting agency, and (iii) an
analysis of the applicant's capacity to repay. For some programs, Wachovia
uses a pre-screening method to acquire new accounts. These applications are
also processed by an automated application processing system that utilizes
a credit report obtained through an independent credit reporting agency and
specific credit policy rules and fraud detection criteria. Those
pre-screened applications that are not decisioned by the automated
application processing system are reviewed by a Wachovia credit analyst who
makes a credit and limit assignment decision based on a review of (i) the
information contained in the application, (ii) the credit report obtained
through an independent credit reporting agency, and (iii) an analysis of
the applicant's capacity to repay. Certain applications, selected on the
basis of management reports, are independently reviewed by loan
administration officials to ensure quality and consistency.
Credit card accounts that have been purchased by the Transferor were
originally opened using criteria established by institutions other than
Wachovia and may not have been subject to the same level of credit review
as accounts originally established by Wachovia. From time to time the
Transferor may add to the Trust receivables from portfolios of credit card
accounts purchased by the Transferor from other credit card issuers.
Each cardholder is subject to an agreement with Wachovia governing the
terms and conditions of the related MasterCard or VISA account. Pursuant to
each such agreement, Wachovia reserves the right, upon advance notice to
the cardholders, to add or to change any terms, conditions, services or
features of its MasterCard or VISA accounts at any time, including
increasing or decreasing periodic finance charges, other charges or minimum
payment terms. The agreement with each cardholder provides that Wachovia
may apply such changes, when applicable, to current outstanding balances as
well as to future transactions. The cardholder can avoid certain changes in
terms by giving timely written notification to Wachovia and by not using
the account.
A cardholder may use the credit card for two types of transactions:
purchases and cash advances. Cardholders make purchases when using the
credit card to buy goods or services. A cash advance is made when a credit
card is used to obtain cash from a financial institution or an automated
teller machine ("ATM"). Cardholders may use special cash advance checks
issued by Wachovia to draw against their MasterCard or VISA credit lines.
Cardholders may also draw against their credit lines issued by Wachovia by
transferring balances owed to other creditors to such accounts.
The Bank has made portfolio acquisitions in the past and such
acquisitions are possible in the future. See "Wachovia and Wachovia
Corporation--General." Prior to acquiring a portfolio, the Bank reviews the
historical performance and seasoning of the portfolio and the policies and
practices of the selling institution, but individual accounts are not
requalified by the Bank. There can be no assurance that accounts so
acquired were originated in a manner consistent with the Bank's policies or
that the underwriting and qualification of such accounts conformed to any
given standards. Such accounts and any accounts acquired in the future may
become Additional Accounts provided that, at such time, they constitute
Eligible Accounts (as defined herein). See "The Receivables," "Description
of the Certificates--Transfer and Assignment of Receivables" and
"--Representations and Warranties."
DESCRIPTION OF WACHOVIA OPERATIONAL SERVICES CORPORATION
Credit card processing services performed by Wachovia Operational
Services Corporation ("WOSC"), a wholly-owned subsidiary of the
Corporation, include data processing and network services. WOSC's data
network provides an interface to MasterCard International Incorporated and
VISA USA, Inc. for performing authorizations and funds transfers.
INTERCHANGE
Creditors participating in the VISA and MasterCard associations receive
Interchange as partial compensation for taking credit risk, absorbing fraud
losses and funding receivables for a limited period prior to initial
billing. "INTERCHANGE" consists of certain fees received by the Bank from
VISA and MasterCard as partial compensation for taking credit risk,
absorbing fraud losses and funding receivables for a limited period prior
to initial billing. Under the VISA and MasterCard systems, a portion of
this Interchange in connection with cardholder charges for goods and
services is passed from banks which clear the transactions for merchants to
credit card issuing banks. Interchange fees are set annually by MasterCard
and VISA and are based on the number of credit card transactions and the
amount charged per transaction. The Transferor may be required, as
described in the related Prospectus Supplement, to transfer to a Trust a
percentage of the Interchange attributed to cardholder charges for goods
and services in the related Accounts. If so required to be transferred,
Interchange arising under the Accounts will be allocated to the related
Certificates of any Series in the manner provided in the related Prospectus
Supplement, and, unless otherwise provided in the related Prospectus
Supplement, will be treated as collections of Finance Charge Receivables
(as defined herein) and will be used to pay required monthly payments
including interest on the related Series of Certificates, and, in some
cases, to pay all or a portion of the Servicing Fee (as defined herein) to
the Servicer.
RECOVERIES
The Transferor and the Servicer will be required, pursuant to the terms
of the Pooling and Servicing Agreement, to transfer to the Trust all
amounts received by the Transferor or the Servicer with respect to
Receivables in Defaulted Accounts, including amounts received by the
Transferor or the Servicer from the purchaser or transferee with respect to
the sale or other disposition of Receivables in Defaulted Accounts
("RECOVERIES"). In the event of any such sale or other disposition of
Receivables, Recoveries will not include amounts received by the purchaser
or transferee of such Receivables but will be limited to amounts received
by the Transferor or the Servicer from the purchaser or transferee.
THE RECEIVABLES
The assets of Trust I and each New Trust will include receivables (the
"RECEIVABLES") conveyed to each such Trust arising in Accounts selected
from the Bank Portfolio (the "TRUST PORTFOLIO") on the basis of criteria
set forth in the related Agreement as applied on the relevant date (the
"CUT OFF DATE") specified in the related Prospectus Supplement and, with
respect to Additional Accounts (as defined herein), as of the related date
of their selection to be added to the Trust (the "ADDITION CUT OFF DATE").
The Receivables will consist of amounts charged by cardholders for goods
and services and cash advances (the "PRINCIPAL RECEIVABLES"), plus the
related periodic finance charges and amounts charged to the Accounts in
respect of certain credit card fees (the "FINANCE CHARGE RECEIVABLES");
provided, however, that if the Transferor exercises the Discount Option (as
defined herein) with respect to a Trust, an amount equal to the product of
the Discount Percentage (as defined herein) and the amount of Receivables
arising in the related Accounts on and after the date such option is
exercised that otherwise would be Principal Receivables will be treated as
Finance Charge Receivables. See "Description of the Certificates--Discount
Option." In addition, if so specified in the related Prospectus Supplement,
certain amounts of Interchange attributed to cardholder charges for goods
and services in the Accounts may be allocated to the Certificates of a
Series or any Class thereof and treated as collections of Finance Charge
Receivables for purposes of such Series or Class thereof or may be applied
in some other manner as described in the related Prospectus Supplement. See
"Wachovia's Credit Card Activities--Interchange."
During the term of each Trust, all new Receivables arising in the
Accounts relating to such Trust will be transferred automatically to such
Trust by the Transferor. The total amount of Receivables in any Trust will
fluctuate from day to day, because the amount of new Receivables arising in
the Accounts and the amount of payments collected on existing Receivables
usually differ each day. It will not be required or anticipated that the
Trustee will make any initial or periodic general examination of the
Receivables or any records relating to the Receivables for the presence or
absence of defects, compliance with the Transferor's representations and
warranties or for any other purpose.
The Transferor will have the right (subject to certain limitations and
conditions set forth in the related Agreement), and in some circumstances,
such as the maintenance of the Transferor Amount at a specified minimum
level (the "MINIMUM TRANSFEROR AMOUNT"), will be obligated, to designate
from time to time "ADDITIONAL ACCOUNTS" and to transfer to the related
Trust all Receivables of such Additional Accounts, whether such Receivables
are then existing or thereafter created, or to transfer Participations in
lieu of such Receivables or in addition thereto. Any Additional Accounts
designated pursuant to an Agreement must be Eligible Accounts as of the
date the Transferor designates such accounts to be included as Additional
Accounts. The Transferor will also have the right to designate Eligible
Accounts to be included automatically as Accounts upon their creation
("AUTOMATIC ADDITIONAL ACCOUNTS"), subject to certain limitations set forth
in the Agreement. The Transferor may discontinue the inclusion of Automatic
Additional Accounts at any time, at its sole discretion. Furthermore,
pursuant to each Agreement, the Transferor has the right (subject to
certain limitations and conditions) to designate certain Accounts as
Removed Accounts and to require the Trustee to reconvey all receivables in
such Accounts (the "REMOVED ACCOUNTS") to the Transferor, whether such
Receivables are then existing or thereafter created. Throughout the term of
each Trust, the related Accounts from which the Receivables arise will be
the Accounts designated by the Transferor on the relevant Cut Off Date,
plus any Additional Accounts and Automatic Additional Accounts minus any
Removed Accounts. With respect to each Series of Certificates, the
Transferor will represent and warrant to the related Trust that, as of the
date the Receivables are selected to be added to the Trust or as of the
date of creation of new Receivables, such Receivables meet certain
eligibility requirements. See "Description of the
Certificates--Representations and Warranties," "--Addition of Trust Assets"
and "--Removal of Accounts."
The Prospectus Supplement relating to each Series of Certificates will
provide certain information about the related Trust Portfolio as of the
date specified. Such information will include, but not be limited to, the
amount of Principal Receivables, the amount of Finance Charge Receivables,
the range of principal balances of the Accounts and the average thereof,
the range of credit limits of the Accounts and the average thereof, the
range of ages of the Accounts and the average thereof, the geographic
distribution of the Accounts, the types of Accounts and delinquency
statistics relating to the Accounts.
MATURITY CONSIDERATIONS
For each Series, following the Revolving Period (as defined herein),
collections of Principal Receivables are expected to be distributed to the
Certificateholders of such Series or any specified Class thereof on each
specified Distribution Date (as defined herein) during the amortization
period (the "CONTROLLED AMORTIZATION PERIOD") or the Principal Amortization
Period (as defined herein), or are expected to be accumulated for payment
to Certificateholders of such Series or any specified Class thereof during
an Accumulation Period and distributed on a Scheduled Payment Date;
provided, however, that, if the Rapid Amortization Period commences,
collections of Principal Receivables will be paid to Certificateholders in
the manner described herein and in the related Prospectus Supplement. The
related Prospectus Supplement specifies when the Controlled Amortization
Period, the Principal Amortization Period or an Accumulation Period, as
applicable, will commence, the principal payments expected or available to
be received or accumulated during such Controlled Amortization Period,
Principal Amortization Period or Accumulation Period, or on the Scheduled
Payment Date, as applicable, the manner and priority of principal
accumulations and payments among the Classes of a Series of Certificates,
the payment rate assumptions on which such expected principal accumulations
and payments are based and the Pay Out Events which, if any were to occur,
would lead to the commencement of a Rapid Amortization Period or, if so
specified in the related Prospectus Supplement, a Rapid Accumulation
Period.
USE OF PROCEEDS
Unless otherwise specified in the related Prospectus Supplement, the net
proceeds from the sale of each Series of Certificates offered hereby will
be paid to the Transferor. The Transferor will use such proceeds for its
general corporate purposes or for such other purpose specified in the
Prospectus Supplement.
WACHOVIA AND WACHOVIA CORPORATION
GENERAL
Wachovia, a wholly-owned subsidiary of Wachovia Corporation (the
"CORPORATION"), is a national banking association located in New Castle,
Delaware which conducts nationwide consumer lending programs principally
comprised of credit card related activities. WBNA, a wholly-owned
subsidiary of the Corporation, is a national banking association located in
Winston-Salem, North Carolina. The principal executive offices of the Bank
are located at New Castle, Delaware, telephone number (302) 323-2395. The
Corporation is a bank holding company registered under the Bank Holding
Company Act of 1956, as amended, maintaining dual headquarters in Atlanta,
Georgia and Winston-Salem, North Carolina. The Prospectus Supplement for
each Series of Certificates contains additional information, including
financial information, relating to Wachovia, Wachovia's credit card
activities, WBNA and the Corporation.
YEAR 2000 COMPLIANCE
The change in date to the year 2000 from 1999 will cause data
recognition problems in computers, software and facility operations
dependent on computer chip devices due to programming standards that
historically limited data date fields to two digits. In late 1995, the
Corporation initiated a formal evaluation of Year 2000 issues, establishing
in the early months of 1996 a full-time project team to assess and address
both internal and external risks associated with the change in date event.
The project team is in the latter stages of completing a Year 2000
readiness plan consisting of five phases: problem awareness; identification
of affected systems, functions and facilities; conversion or replacement of
identified areas to Year 2000 compliant standards; testing; and
implementation.
The Corporation's readiness plan encompasses both information technology
systems and computer chip embedded functions, such as those operating
facilities including elevators, security systems and building heating and
cooling. In 1996, the Corporation completed its awareness and
identification phases, extending and completing the processes in 1997 and
1998 for recent merger partners. As of March 31, 1999, virtually all of the
Corporation's information technology systems, including all of those
designated as mission critical, had been converted, tested and implemented.
While regulatory guidelines require conversion only of mission critical
systems, the Corporation's approach has been to address all of its
information technology systems. For computer chip embedded functions, the
Corporation has replaced and tested noncompliant functions essential to
business operations.
In-house testing of internal and external mission critical systems was
100 percent complete as of March 31, 1999. Testing of the Corporation's
entire application portfolio was 96 percent complete as of the same date.
Management expects to finish testing of its remaining systems by April 30,
1999. Testing is done in both a 21st century and 20th century date
environment before systems are returned to production to ensure data
accuracy and consistency. All exceptions to testing results are resolved
before further testing is permitted. Management has chosen to implement
converted systems back into production as systems are tested to permit
greater flexibility in the event of future system flaws or failures. The
percentage of systems implemented, therefore, closely approximates the
percentage tested.
The Corporation also is working to address Year 2000 readiness on the
part of external entities, particularly critical vendors and significant
credit customers. Identification and monitoring of external entities began
in 1996 and includes surveys with follow-up reviews and contacts.
Substantially all of the Corporation's vendors have responded to
management's surveys regarding Year 2000 readiness, with approximately 81
percent indicating that they are compliant as of March 31, 1999. The
project team is continuing to monitor the progress of remaining
noncompliant vendors as well as the status of large corporate borrowers
identified as potentially at risk. The Corporation began external entity
testing in 1998 and has continued this testing in 1999. All external entity
testing is on schedule to be completed on June 30, 1999.
Management estimates that total Year 2000 project costs will be
approximately $80 million, with $72 million having been spent through March
31, 1999 including $6 million in the first quarter of 1999. The
Corporation's remaining Year 2000 project costs are not expected to have a
material impact on the Corporation's results of operations, liquidity or
capital resources.
The Corporation faces a number of risks related to the year 2000 date
change event including project management risks, legal risks and financial
risks. Project management risks refer primarily to the failure to
adequately assess Year 2000 planning and resource needs, resulting in
under- or over-allotment of resources assigned to complete the project
work, missed deadlines and estimation errors. Legal risks include the
failure to meet contractual service agreements, leading to possible
punitive actions including those of a regulatory nature. Financial risks
concern the possibility of lost revenues, asset quality deterioration or
even business failure. The Corporation conducted a project management risk
assessment in early 1997 and is in the process of addressing its legal and
financial risks.
Management of the date change event entails additional risks separate
from those of project management. Major risks associated with the date
change event include a shutdown of voice and data communication systems due
to failure by switching systems, satellites or telephone companies;
excessive cash withdrawal activity; cash couriers delayed or not available;
ATM failures; problems with international accounts or offices, including
inaccurate or delayed information or inaccessibility to account data; and
government offices or facilities not opening or operating.
The Corporation has identified 60 risks associated with the date change
event and has completed development of formal contingency plans for each
major risk. Management views contingency planning as part of an overall
strategy for managing the date change event and post-event risks and
considers pre-implementation mitigating actions as critical components to
successful contingency planning. In the event of a voice and data
communication system shutdown, contingency plans include deploying cellular
and field phones to communicate between established command posts. To
reduce expected cash withdrawal demands while simultaneously preparing for
higher fund withdrawal activity, the Corporation is sponsoring public
awareness programs on appropriate cash reserve levels, applying for
increased borrowing limits from the Federal Reserve, and broadening its
regular liquidity management reviews. Standing agreements with cash courier
services are being reviewed to identify and resolve potential courier
service problems prior to the date change event.
To minimize ATM failures, the Corporation has upgraded its entire
network of ATMs, including their primary and backup computer processors.
Alternate cash access plans include using existing communication channels
to direct customers to working ATMs in the event of localized ATM failures
and extending branch office hours where needed. To reduce potential
problems in international offices, the Corporation has converted and tested
the information systems of its Sao Paulo, Brazil office, and will complete
testing for its London, England office by April 30. Separate contingency
plans have been developed by each foreign office to assist independent
operations. In addition to its contingency planning, management has mapped
all information systems to its core business processes as part of its
pre-implementation mitigating action plan. This will enable the Corporation
to identify affected business processes should data information problems
occur during the changeover to calendar year 2000 and in the time period
immediately following.
The Corporation believes the actions it is taking should reduce the
risks posed by Year 2000 challenges to its own systems. Management
recognizes, however, that unforeseen circumstances could arise both within
its own systems and with the systems of external entities and can give no
assurances that, if such circumstances arose, they would not adversely
affect the Corporation's Year 2000 compliance efforts. Further, management
cannot determine the impact that any adverse effect might have on the
Corporation's operations, financial position or cash flows.
DESCRIPTION OF THE CERTIFICATES
The Certificates will be issued in Series. Each Series will represent an
interest in the specified Trust other than the interests represented by any
other Series of Certificates issued by such Trust (which may include Series
offered pursuant to this Prospectus) and the Transferor Certificate. Each
Series will be issued pursuant to an Agreement entered into by the Bank and
the Trustee named in the related Prospectus Supplement, a copy of the form
of which is filed as an exhibit to the Registration Statement of which this
Prospectus is a part, and a Series Supplement to the Agreement. The
Prospectus Supplement for each Series describes any provisions of the
particular Agreement relating to such Series which may differ materially
from the Agreement filed as an exhibit to the Registration Statement. The
following summaries describe certain provisions common to each Series of
Certificates. The summaries do not purport to be complete and are subject
to, and are qualified in their entirety by reference to, all of the
provisions of the related Agreement and Series Supplement.
GENERAL
Each Series of Certificates will represent an undivided interest in the
assets of the related Trust, including the right to the applicable Investor
Percentage of all cardholder payments on the Receivables in such Trust.
Each Certificate of a Series will represent the right to receive payments
of (i) interest at the specified rate or rates per annum (each, a
"CERTIFICATE RATE"), which may be a fixed, floating or other type of rate
and (ii) principal during the Controlled Amortization Period, the Principal
Amortization Period, or, under certain limited circumstances, the Rapid
Amortization Period (each, as defined herein, an "AMORTIZATION PERIOD"), or
on Scheduled Payment Dates (as defined herein), in which case such Series
will have a Controlled Accumulation Period and, under certain limited
circumstances if so specified in the related Prospectus Supplement, a Rapid
Accumulation Period (each, an "ACCUMULATION PERIOD"), as well as, under
certain limited circumstances, a Rapid Amortization Period, all as
specified in the related Prospectus Supplement.
The Investor Interest for each Series of Certificates on any date will
be equal to the initial Investor Interest as of the related Closing Date
for such Series (increased by the principal balance of any Certificates of
such Series issued after the Closing Date for such Series) minus the amount
of principal paid to the related Certificateholders prior to such date and
minus the amount of unreimbursed Investor Charge-Offs with respect to such
Certificates prior to such date. If so specified in the Prospectus
Supplement relating to any Series of Certificates, under certain
circumstances the Investor Interest may be further adjusted by the amount
of principal allocated to Certificateholders, the funds on deposit in any
specified account, and any other amount specified in the related Prospectus
Supplement.
Each Series of Certificates will consist of one or more Classes, one or
more of which may be senior Certificates ("SENIOR CERTIFICATES") and one or
more of which may be subordinated Certificates ("SUBORDINATED
CERTIFICATES"). Each Class of a Series may evidence the right to receive a
specified portion of each distribution of principal or interest or both.
The Certificates of a Class may also differ from Certificates of other
Classes of the same Series in, among other things, the amounts allocated to
principal payments, priority of payments, payment dates, maturity, interest
rates, interest rate computation and availability and form of Enhancement
(as defined herein).
The Certificateholders of each Series will have the right to receive
(but only to the extent needed to make required payments under the related
Agreement and the related Series Supplement and subject to any reallocation
of collections if the related Series Supplement so provides) varying
percentages of the collections of Finance Charge Receivables and Principal
Receivables for each month and will be allocated a varying percentage of
the amount of Receivables in Accounts which were written off as
uncollectible by the Servicer ("DEFAULTED ACCOUNTS") for such month (each
such percentage, an "INVESTOR PERCENTAGE"). The related Prospectus
Supplement specifies the Investor Percentages that apply with respect to
the allocation of collections of Principal Receivables, Finance Charge
Receivables and Receivables in Defaulted Accounts during the Revolving
Period (as defined herein), any Amortization Period and any Accumulation
Period, as applicable. If the Certificates of a Series offered hereby
include more than one Class of Certificates, the assets of the related
Trust allocable to the Certificates of such Series may be further allocated
among each Class in such Series as described in the related Prospectus
Supplement. See "--Investor Percentage and Transferor Percentage."
For each Series of Certificates, payments of interest and principal will
be made on Distribution Dates specified in the related Prospectus
Supplement to holders of Certificates in whose names the Certificates were
registered ("CERTIFICATEHOLDERS") on the record dates (each, a "RECORD
DATE") specified in the related Prospectus Supplement. Interest will be
distributed to Certificateholders in the amounts, for the periods and on
the dates specified in the related Prospectus Supplement.
For each Series of Certificates, the Transferor initially will own the
Transferor Certificate. The Transferor Certificate will represent the
undivided interest in each Trust not represented by the Certificates issued
and outstanding under such Trust or the rights, if any, of any Credit
Enhancement Providers to receive payments from each Trust. The holder of
the Transferor Certificate will have the right to a percentage (the
"TRANSFEROR PERCENTAGE") of all cardholder payments from the Receivables in
the Trust. If provided in the related Agreement, the Transferor Certificate
may be transferred in whole or in part subject to the limitations and
conditions set forth therein. The ability to transfer the Transferor
Certificate or an interest therein is intended to allow the Transferor to
assign a portion of its interest in a Trust and property of such Trust
(including the Receivables) to another entity. The Transferor intends to
transfer an interest in the Transferor Certificate only to its affiliates
in privately negotiated transactions pursuant to a contract between the
Transferor and any such affiliate. Certificateholders will not incur any
costs, direct or indirect, associated with any such transfer. On the
initial Closing Date for Trust I, the Transferor sold a participation
interest in the Trust I Transferor Certificate (the "TRANSFEROR
PARTICIPATION") to its affiliate, WBNA, a wholly-owned subsidiary of the
Corporation. Such interest represents the right to receive 95% of the
amounts payable to the Transferor as holder of the Transferor Certificate.
See "--Certain Matters Regarding the Transferor and the Servicer."
The assets of each Trust will be allocated among the Certificateholders
of each Series of such Trust and the holder of the Transferor Certificate
of such Trust and, in certain circumstances, the related Credit Enhancement
Provider. With respect to a Trust, the aggregate principal amount of the
interest of the Certificateholders of a Series in such Trust is referred to
herein as the "INVESTOR INTEREST" and is based on the aggregate amount of
the Principal Receivables in such Trust allocated to such Series. If
specified in any Prospectus Supplement, the term Investor Interest with
respect to the related Series includes the Collateral Interest with respect
to such Series. The aggregate principal amount of the interest represented
by the Transferor Certificate in a Trust is referred to herein as the
"TRANSFEROR AMOUNT" and is based on the sum of the aggregate amount of
Principal Receivables in such Trust not allocated to the Certificateholders
or any Credit Enhancement Provider with respect to such Trust and the
principal amount, if any, on deposit in the Excess Funding Account for such
Trust.
Unless otherwise specified in the related Prospectus Supplement, during
the Revolving Period, the amount of the Investor Interest with respect to
each Series of Certificates will remain constant except under certain
limited circumstances. See "--Defaulted Receivables; Rebates and Fraudulent
Charges; Investor Charge-Offs." The amount of Principal Receivables in each
Trust, however, will vary each day as new Principal Receivables are created
and others are paid. The amount of the Transferor Amount will fluctuate
each day, to reflect the changes in the amount of the Principal Receivables
in the Trust (and amounts, if any, on deposit in the Excess Funding
Account). When a Series is amortizing, the Investor Interest of such Series
will decline as customer payments of Principal Receivables are collected
and distributed to or accumulated for distribution to the
Certificateholders. As a result, the Transferor Amount will generally
increase to reflect reductions in the Investor Interest for such Series and
will also change to reflect the variations in the amount of Principal
Receivables in the related Trust. The Transferor Amount in each Trust may
also be reduced as the result of an Exchange. See "--Exchanges."
Unless otherwise specified in the related Prospectus Supplement,
Certificates of each Series initially will be represented by certificates
registered in the name of the nominee of DTC (together with any successor
depository selected by the Transferor, the "DEPOSITORY"), except as set
forth below. Unless otherwise specified in the related Prospectus
Supplement, with respect to each Series of Certificates, beneficial
interests in the Certificates will be available for purchase in minimum
denominations of $1,000 and integral multiples thereof in book-entry form
only. The Transferor has been informed by DTC that DTC's nominee will be
Cede. Accordingly, Cede is expected to be the holder of record of each
Series of Certificates. No Certificate Owner acquiring an interest in the
Certificates will be entitled to receive a certificate representing such
person's interest in the Certificates. Unless and until Definitive
Certificates are issued for any Series under the limited circumstances
described herein, all references herein to actions by Certificateholders
shall refer to actions taken by DTC upon instructions from DTC Participants
(as defined below), and all references herein to distributions, notices,
reports and statements to Certificateholders shall refer to distributions,
notices, reports and statements to DTC or Cede, as the registered holder of
the Certificates, as the case may be, for distribution to Certificate
Owners in accordance with DTC procedures. See "--Book-Entry Registration"
and "--Definitive Certificates."
If so specified in the Prospectus Supplement relating to a Series,
application will be made to list the Certificates of such Series, or all or
a portion of any Class thereof, on the Luxembourg Stock Exchange or any
other specified exchange.
BOOK-ENTRY REGISTRATION
Unless otherwise specified in the related Prospectus Supplement, with
respect to each Series of Certificates in book-entry form,
Certificateholders may hold their Certificates through DTC (in the United
States) or Cedelbank or Euroclear (in Europe) which in turn hold through
DTC, if they are participants of such systems, or indirectly through
organizations that are participants in such systems.
Cede, as nominee for DTC, will hold the global Certificates. Cedelbank
and Euroclear will hold omnibus positions on behalf of the Cedelbank
Customers and the Euroclear Participants, respectively, through customers'
securities accounts in Cedelbank's and Euroclear's names on the books of
their respective depositories (collectively, the "DEPOSITORIES") which in
turn will hold such positions in customers' securities accounts in the
Depositories' names on the books of DTC.
DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code and
a "clearing agency" registered pursuant to the provisions of Section 17A of
the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT "). DTC
holds securities that its participating organizations ("DTC PARTICIPANTS")
deposit with DTC. DTC also facilitates the clearance and settlement among
DTC Participants of securities transactions, such as transfers and pledges,
in deposited securities through electronic book-entry changes in DTC
Participants' accounts, thereby eliminating the need for physical movement
of securities certificates. DTC Participants include securities brokers and
dealers, banks, trust companies and clearing corporations and may include
certain other organizations. DTC is owned by a number of its DTC
Participants and the New York Stock Exchange, Inc., the American Stock
Exchange, Inc. and the National Association of Securities Dealers, Inc.
Indirect access to the DTC system is also available to others such as
securities brokers and dealers, banks, and trust companies that clear
through or maintain a custodial relationship with a DTC Participant, either
directly or indirectly ("INDIRECT PARTICIPANTS"). The rules applicable to
DTC and DTC Participants are on file with the Securities and Exchange
Commission (the "SEC").
DTC management is aware that some computer applications and systems used
for processing data were written using two digits rather than four to
define the applicable year, and therefore may not recognize a date using
"00" as the year 2000. This could result in the inability of these systems
to properly process transactions with dates in the year 2000 and
thereafter. DTC has developed and is implementing a program to address this
problem so that its applications and systems as the same relate to the
timely payment of distributions (including principal and interest payments)
to security holders, book-entry deliveries and settlement of trades within
DTC continue to function properly. This program includes a technical
assessment and a remediation plan, each of which is complete. Additionally,
DTC plans to implement a testing phase of this program which is expected to
be completed within appropriate time frames.
In addition, DTC is contacting (and will continue to contact) third
party vendors that provide services to DTC to determine the extent of their
year 2000 compliance, and DTC will develop contingency plans as it deems
appropriate to address failures in year 2000 compliance on the part of
third party vendors. However, there can be no assurance that the systems of
third party vendors will be timely converted and will not adversely affect
the proper functioning of DTC's services.
The information set forth in the preceding two paragraphs has been
provided by DTC for informational purposes only and is not intended to
serve as a representation, warranty or contract modification of any kind.
The Transferor makes no representations as to the accuracy or completeness
of such information.
Transfers between DTC Participants will occur in accordance with DTC
rules. Transfers between Cedelbank Customers and Euroclear Participants
will occur in the ordinary way in accordance with their applicable rules
and operating procedures.
Cross-market transfers between persons holding directly or indirectly
through DTC in the United States, on the one hand, and directly or
indirectly through Cedelbank Customers or Euroclear Participants, on the
other, will be effected in DTC in accordance with DTC rules on behalf of
the relevant European international clearing system by its Depository;
however, such cross-market transactions will require delivery of
instructions to the relevant European international clearing system by the
counterparty in such system in accordance with its rules and procedures and
within its established deadlines (European time). The relevant European
international clearing system will, if the transaction meets its settlement
requirements, deliver instructions to its Depository to take action to
effect final settlement on its behalf by delivering or receiving securities
in DTC, and making or receiving payment in accordance with normal
procedures for same-day funds settlement applicable to DTC. Cedelbank
Customers and Euroclear Participants may not deliver instructions directly
to the Depositories.
Because of time-zone differences, credits of securities in Cedelbank or
Euroclear as a result of a transaction with a DTC Participant will be made
during the subsequent securities settlement processing, dated the business
day following the DTC settlement date, and such credits or any transactions
in such securities settled during such processing will be reported to the
relevant Cedelbank Customer or Euroclear Participant on such business day.
Cash received in Cedelbank or Euroclear as a result of sales of securities
by or through a Cedelbank Customer or a Euroclear Participant will be
received with value on the DTC settlement date but will be available in the
relevant Cedelbank or Euroclear cash account only as of the business day
following settlement in DTC.
Certificate Owners that are not DTC Participants or Indirect
Participants but desire to purchase, sell or otherwise transfer ownership
of, or other interests in, Certificates may do so only through DTC
Participants and Indirect Participants. In addition, Certificate Owners
will receive all distributions of principal and interest on the
Certificates from the Trustee through DTC Participants who in turn will
receive them from DTC. Under a book-entry format, Certificate Owners may
experience some delay in their receipt of payments, since such payments
will be forwarded by the Trustee to Cede, as nominee for DTC. DTC will
forward such payments to DTC Participants which thereafter will forward
them to Indirect Participants or Certificate Owners. It is anticipated that
the only Certificateholders of Certificates in book-entry form will be
Cede, as nominee of DTC. Certificate Owners will not be recognized by the
Trustee as Certificateholders, as such term is used in the Agreement, and
Certificate Owners will only be permitted to exercise the rights of
Certificateholders indirectly through DTC Participants who in turn will
exercise the rights of Certificateholders through DTC.
Under the rules, regulations and procedures creating and affecting DTC
and its operations, DTC is required to make book-entry transfers among DTC
Participants on whose behalf it acts with respect to the Certificates and
is required to receive and transmit distributions of principal of and
interest on the Certificates. DTC Participants and Indirect Participants
with which Certificate Owners have accounts with respect to the
Certificates similarly are required to make book-entry transfers and
receive and transmit such payments on behalf of their respective
Certificate Owners. Accordingly, although Certificate Owners will not
possess Certificates, Certificate Owners will receive payments and will be
able to transfer their interests.
Because DTC can only act on behalf of DTC Participants, who in turn act
on behalf of Indirect Participants and certain banks, the ability of a
Certificate Owner to pledge Certificates to persons or entities that do not
participate in the DTC system, or otherwise take actions in respect of such
Certificates, may be limited due to the lack of a physical certificate for
such Certificates.
DTC has advised the Transferor that it will take any action permitted to
be taken by a Certificateholder under the Agreement only at the direction
of one or more DTC Participants to whose account with DTC the Certificates
are credited. Additionally, DTC has advised the Transferor that it will
take such actions with respect to specified percentages of the Investor
Interest only at the direction of and on behalf of DTC Participants whose
holdings include undivided interests that satisfy such specified
percentages. DTC may take conflicting actions with respect to other
undivided interests to the extent that such actions are taken on behalf of
DTC Participants whose holdings include such undivided interests.
Cedelbank, societe anonyme ("CEDELBANK") is incorporated under the laws
of Luxembourg as a professional depository. Cedelbank holds securities for
its participating organizations ("CEDELBANK CUSTOMERS") and facilitates the
clearance and settlement of securities transactions between Cedelbank
Customers through electronic book-entry changes in accounts of Cedelbank
Customers, thereby eliminating the need for physical movement of
securities. Transactions may be settled in Cedelbank in any of 36
currencies, including United States dollars. Cedelbank provides to its
Cedelbank Customers, among other things, services for safekeeping,
administration, clearance and settlement of internationally traded
securities and securities lending and borrowing. Cedelbank deals with
domestic securities markets in over 30 countries through established
depository and custodial relationships. Cedelbank has established an
electronic bridge with Morgan Guaranty Trust as the Operator of the
Euroclear System ("MGT/EOC") in Brussels to facilitate settlement of trades
between Cedelbank and MGT/EOC. Cedelbank currently accepts over 110,000
securities issues on its books. As a professional depository, Cedelbank is
subject to regulation by the Luxembourg Commission for the Supervision of
the Financial Sector, which supervises Luxembourg banks. Cedelbank
Customers are recognized financial institutions around the world, including
underwriters, securities brokers and dealers, banks, trust companies,
clearing corporations and certain other organizations and may include the
underwriters of any Series of Certificates. Cedelbank Customers in the
United States are limited to securities brokers and dealers and banks.
Currently, Cedelbank has approximately 2,000 customers located in over 80
countries, including all major European countries, Canada and the United
States. Indirect access to Cedelbank is also available to others, such as
banks, brokers, dealers and trust companies that clear through or maintain
a custodial relationship with a Cedelbank Customer, either directly or
indirectly.
The Euroclear System (the "EUROCLEAR SYSTEM") was created in 1968 to
hold securities for participants of the Euroclear System ("EUROCLEAR
PARTICIPANTS") and to clear and settle transactions between Euroclear
Participants through simultaneous electronic book-entry delivery against
payment, thereby eliminating the need for physical movement of securities
and any risk from lack of simultaneous transfers of securities and cash.
Transactions may now be settled in any of 34 currencies, including United
States dollars. The Euroclear System includes various other services,
including securities lending and borrowing and interfaces with domestic
markets in several countries generally similar to the arrangements for
cross-market transfers with DTC described above. The Euroclear System is
operated by Morgan Guaranty Trust Company of New York's Brussels, Belgium
office (the "EUROCLEAR OPERATOR" or "EUROCLEAR"), under contract with
Euroclear Clearance System, S.C., a Belgian cooperative corporation (the
"COOPERATIVE"). All operations are conducted by the Euroclear Operator, and
all Euroclear securities clearance accounts and Euroclear cash accounts are
accounts with the Euroclear Operator, not the Cooperative. The Cooperative
establishes policy for the Euroclear System on behalf of Euroclear
Participants. Euroclear Participants include banks (including central
banks), securities brokers and dealers and other professional financial
intermediaries and may include the underwriters of any Series of
Certificates. Indirect access to the Euroclear System is also available to
other firms that clear through or maintain a custodial relationship with a
Euroclear Participant, either directly or indirectly.
The Euroclear Operator is the Belgian branch of a New York banking
corporation which is a member bank of the Federal Reserve System. As such,
it is regulated and examined by the Board of Governors of the Federal
Reserve System and the New York State Banking Department, as well as the
Belgian Banking Commission.
Securities clearance accounts and cash accounts with the Euroclear
Operator are governed by the Terms and Conditions Governing Use of
Euroclear and the related Operating Procedures of the Euroclear System and
applicable Belgian law (collectively, the "TERMS AND CONDITIONS"). The
Terms and Conditions govern transfers of securities and cash within the
Euroclear System, withdrawal of securities and cash from the Euroclear
System, and receipts of payments with respect to securities in the
Euroclear System. All securities in the Euroclear System are held on a
fungible basis without attribution of specific certificates to specific
securities clearance accounts. The Euroclear Operator acts under the Terms
and Conditions only on behalf of Euroclear Participants and has no record
of or relationship with persons holding through Euroclear Participants.
Distributions with respect to Certificates held through Cedelbank or
Euroclear will be credited to the cash accounts of Cedelbank Customers or
Euroclear Participants in accordance with the relevant system's rules and
procedures, to the extent received by its Depository. Such distributions
will be subject to tax reporting in accordance with relevant United States
tax laws and regulations. See "Certain U.S. Federal Income Tax
Consequences." Cedelbank or the Euroclear Operator, as the case may be,
will take any other action permitted to be taken by a Certificateholder
under the Agreement on behalf of a Cedelbank Customer or Euroclear
Participant only in accordance with its relevant rules and procedures and
subject to its Depository's ability to effect such actions on its behalf
through DTC.
Although DTC, Cedelbank and Euroclear have agreed to the foregoing
procedures in order to facilitate transfers of Certificates among
participants of DTC and Euroclear and Cedelbank Customers, they are under
no obligation to perform or continue to perform such procedures and such
procedures may be discontinued at any time.
DEFINITIVE CERTIFICATES
Unless otherwise specified in the related Prospectus Supplement, the
Certificates of each Series will be issued as definitive certificates in
fully registered, certificated form ("DEFINITIVE Certificates") to
Certificate Owners or their nominees rather than to DTC or its nominee,
only if (i) the Transferor advises the Trustee for such Series in writing
that DTC is no longer willing or able to discharge properly its
responsibilities as Depository with respect to such Series of Certificates,
and the Trustee or the Transferor is unable to locate a qualified
successor, (ii) the Transferor, at its option, advises the Trustee in
writing that it elects to terminate the book-entry system through DTC or
(iii) after the occurrence of a Servicer Default, Certificate Owners
representing not less than 50% (or such other percentage specified in the
related Prospectus Supplement) of the Investor Interest advise the Trustee
and DTC through DTC Participants in writing that the continuation of a
book-entry system through DTC (or a successor thereto) is no longer in the
best interest of the Certificate Owners.
Upon the occurrence of any of the events described in the immediately
preceding paragraph, DTC is required to notify all DTC Participants of the
availability through DTC of Definitive Certificates. Upon surrender by DTC
of the definitive certificate representing the Certificates and
instructions for reregistration, the Trustee will issue the Certificates as
Definitive Certificates, and thereafter the Trustee will recognize the
holders of such Definitive Certificates as holders under the Agreement
("HOLDERS").
Distribution of principal and interest on the Certificates will be made
by the Trustee directly to Holders of Definitive Certificates in accordance
with the procedures set forth herein and in the Agreement.
Interest payments and any principal payments on each Distribution Date will
be made to Holders in whose names the Definitive Certificates were
registered at the close of business on the related Record Date.
Distributions will be made by check mailed to the address of such Holder as
it appears on the register maintained by the Trustee or, if such Holder
holds more than an aggregate principal amount of such Definitive
Certificates specified in the related Series Supplement, by wire transfer
to such Holder's account. The final payment on any Certificate (whether
Definitive Certificates or the Certificates registered in the name of Cede
representing the Certificates), will be made only upon presentation and
surrender of such Certificate at the office or agency specified in the
notice of final distribution to Certificateholders. The Trustee will
provide such notice to registered Certificateholders not later than the
fifth day of the month of such final distribution.
Definitive Certificates will be transferable and exchangeable at the
offices of the Transfer Agent and Registrar, which shall initially be the
Trustee. No service charge will be imposed for any registration of transfer
or exchange, but the Transfer Agent and Registrar may require payment of a
sum sufficient to cover any tax or other governmental charge imposed in
connection therewith. The Transfer Agent and Registrar shall not be
required to register the transfer or exchange of Definitive Certificates
for a period of fifteen days preceding the due date for any payment with
respect to such Definitive Certificates.
INTEREST PAYMENTS
Interest on each Series of Certificates or Class thereof for each
accrual period (each, an "INTEREST PERIOD") specified in the related
Prospectus Supplement will be distributed in the amounts and on the dates
(which may be monthly, quarterly, semi-annually or otherwise as specified
in the related Prospectus Supplement) (each, a "DISTRIBUTION DATE")
specified in the related Prospectus Supplement. Interest will accrue on the
applicable Investor Interest at the applicable Certificate Rate, which may
be a fixed, floating or other type of rate as specified in the related
Prospectus Supplement. Interest will be distributed to Certificateholders
on the Distribution Dates specified in the related Prospectus Supplement.
Interest payments on each Distribution Date will be funded from collections
of Finance Charge Receivables allocated to the Investor Interest during the
preceding monthly period or periods (each, a "MONTHLY PERIOD"), as
described in the related Prospectus Supplement, and may be funded from
certain investment earnings on funds in certain accounts of the related
Trust and from any applicable Enhancement, if necessary, or certain other
amounts as specified in the related Prospectus Supplement. If the
Distribution Dates for payment of interest for a Series or Class occur less
frequently than monthly, such collections or other amounts (or the portion
thereof allocable to such Class) may be deposited in one or more trust
accounts (each, an "INTEREST FUNDING ACCOUNT") pending distribution to the
Certificateholders of such Series or Class, as described in the related
Prospectus Supplement. If a Series has more than one Class of Certificates,
each such Class may have a separate Interest Funding Account. The
Prospectus Supplement relating to each Series of Certificates describes the
amounts and sources of interest payments to be made; the Certificate Rate
for each Class thereof; for a Series or Class thereof bearing interest at a
floating Certificate Rate, the initial Certificate Rate, the dates and the
manner for determining subsequent Certificate Rates, and the formula, index
or other method by which such Certificate Rates are determined and any
limitations on any such Certificate Rate.
PRINCIPAL PAYMENTS
Except in the circumstances specified in the related Prospectus
Supplement, during the Revolving Period for each Series of Certificates
(which begins on the related Closing Date and ends on the day before an
Amortization Period or Accumulation Period begins), no principal payments
will be made to the Certificateholders of such Series. During the
Controlled Amortization Period or Principal Amortization Period, as
applicable, which will be scheduled to begin on the date specified in, or
determined in the manner specified in, the related Prospectus Supplement
(the "PRINCIPAL COMMENCEMENT DATE"), and during the Rapid Amortization
Period, which will begin upon the occurrence of a Pay Out Event or, if so
specified in the Prospectus Supplement, following the Rapid Accumulation
Period, principal will be paid to the Certificateholders in the amounts and
on Distribution Dates specified in the related Prospectus Supplement.
During an Accumulation Period, principal will be accumulated in a Principal
Funding Account for later distribution to Certificateholders on the
expected date specified in, or determined in the manner specified in, the
related Prospectus Supplement (the "SCHEDULED PAYMENT DATE") in the amounts
specified in the related Prospectus Supplement. Principal payments for any
Series or Class thereof will be funded from collections of Principal
Receivables received during the related Monthly Period or Periods as
specified in the related Prospectus Supplement and allocated to such Series
or Class, in certain circumstances from amounts on deposit in the Excess
Funding Account and from certain other sources specified in the related
Prospectus Supplement. In the case of a Series with more than one Class of
Certificates, the Certificateholders of one or more Classes may receive
payments of principal at different times. The related Prospectus Supplement
describes the manner, timing and priority of payments of principal to
Certificateholders of each Class.
Funds on deposit in any Principal Funding Account applicable to a Series
may be subject to a guaranteed rate agreement or investment contract or
other arrangement specified in the related Prospectus Supplement intended
to assure a minimum rate of return on the investment of such funds. In
order to enhance the likelihood of the payment in full of the principal
amount of a Series of Certificates or Class thereof at the end of an
Accumulation Period, such Series of Certificates or Class thereof may be
subject to a principal payment guaranty or other similar arrangement
specified in the related Prospectus Supplement.
CONTROLLED AMORTIZATION PERIOD
If the Prospectus Supplement relating to a Series so specifies, unless a
Rapid Amortization Period with respect to such Series commences, the
Certificates of such Series or any Class thereof will have an amortization
period (the "CONTROLLED AMORTIZATION PERIOD") during which collections of
Principal Receivables allocable to the Investor Interest of such Series
(and certain other amounts if so specified in the related Prospectus
Supplement) will be used on each Distribution Date to make principal
distributions in scheduled amounts to the Certificateholders of such Series
or any Class of such Series then scheduled to receive such distributions.
The amount to be distributed on any Distribution Date during the Controlled
Amortization Period will be limited to an amount (the "CONTROLLED
DISTRIBUTION AMOUNT") equal to an amount specified in the related
Prospectus Supplement (the "CONTROLLED AMORTIZATION AMOUNT") plus any
existing deficit Controlled Amortization Amount arising from prior
Distribution Dates. If a Series has more than one Class of Certificates,
each Class may have a separate Controlled Amortization Amount. In addition,
the related Prospectus Supplement may describe certain priorities among
such Classes with respect to such distributions. The Controlled
Amortization Period will commence at the close of business on a date
specified in the related Prospectus Supplement and continue until the
earliest of (a) the commencement of the Rapid Amortization Period, (b)
payment in full of the Investor Interest of the Certificates of such Series
or Class and, if so specified in the related Prospectus Supplement, of the
Collateral Interest (as defined herein), if any, with respect to such
Series and (c) the Series Termination Date (as defined herein) with respect
to such Series.
PRINCIPAL AMORTIZATION PERIOD
If the Prospectus Supplement relating to a Series so specifies, unless a
Rapid Amortization Period with respect to such Series commences, the
Certificates of such Series or any Class thereof will have an amortization
period (the "PRINCIPAL AMORTIZATION PERIOD") during which collections of
Principal Receivables allocable to the Investor Interest of such Series
(and certain other amounts if so specified in the related Prospectus
Supplement) will be used on each Distribution Date to make principal
distributions to the Certificateholders of such Series or any Class of such
Series then scheduled to receive such distributions. If a Series has more
than one Class of Certificates, the related Prospectus Supplement may
describe certain priorities among such Classes with respect to such
distributions. The Principal Amortization Period will commence at the close
of business on a date specified in the related Prospectus Supplement and
continue until the earliest of (a) the commencement of the Rapid
Amortization Period, (b) payment in full of the Investor Interest of the
Certificates of such Series or Class and, if so specified in the related
Prospectus Supplement, of the Collateral Interest, if any, with respect to
such Series and (c) the Series Termination Date with respect to such
Series.
CONTROLLED ACCUMULATION PERIOD
If the Prospectus Supplement relating to a Series so specifies, unless a
Rapid Amortization Period or, if so specified in the related Prospectus
Supplement, a Rapid Accumulation Period with respect to such Series
commences, the Certificates of such Series or any Class thereof will have
an accumulation period (the "CONTROLLED ACCUMULATION PERIOD") during which
collections of Principal Receivables allocable to the Investor Interest of
such Series (and certain other amounts if so specified in the related
Prospectus Supplement) will be deposited on the business day immediately
prior to each Distribution Date or other business day specified in the
related Prospectus Supplement (each, a "TRANSFER DATE") in a trust account
established for the benefit of the Certificateholders of such Series or
Class (a "PRINCIPAL FUNDING ACCOUNT") and used to make distributions of
principal to the Certificateholders of such Series or Class on the
Scheduled Payment Date. The amount to be deposited in the Principal Funding
Account on any Transfer Date will be limited to an amount (the "CONTROLLED
DEPOSIT AMOUNT") equal to an amount specified in the related Prospectus
Supplement (the "CONTROLLED ACCUMULATION AMOUNT") plus any deficit
Controlled Accumulation Amount arising from prior Distribution Dates. If a
Series has more than one Class of Certificates, each Class may have a
separate Principal Funding Account and Controlled Accumulation Amount. In
addition, the related Prospectus Supplement may describe certain priorities
among such Classes with respect to deposits of principal into such
Principal Funding Accounts. The Controlled Accumulation Period will
commence at the close of business on a date specified in or determined in
the manner specified in the related Prospectus Supplement and continue
until the earliest of (a) the commencement of the Rapid Amortization Period
or, if so specified in the related Prospectus Supplement, the Rapid
Accumulation Period, (b) payment in full of the Investor Interest of the
Certificates of such Series or Class and, if so specified in the related
Prospectus Supplement, of the Collateral Interest, if any, with respect to
such Series and (c) the Series Termination Date with respect to such
Series.
Funds on deposit in any Principal Funding Account may be invested in
Permitted Investments or subject to a guaranteed rate or investment
contract or other arrangement intended to assure a minimum rate of return
on the investment of such funds. Investment earnings on such funds may be
applied to pay interest on the related Series of Certificates. In order to
enhance the likelihood of payment in full of principal at the end of an
Accumulation Period with respect to a Series of Certificates, such Series
or any Class thereof may be subject to a principal payment guaranty or
other similar arrangement.
RAPID ACCUMULATION PERIOD
If so specified and under the conditions set forth in the Prospectus
Supplement relating to a Series having a Controlled Accumulation Period,
during the period from the day on which a Pay Out Event has occurred until
the earliest of (a) the commencement of the Rapid Amortization Period, (b)
payment in full of the Investor Interest of the Certificates of such Series
and, if so specified in the related Prospectus Supplement, of the
Collateral Interest, if any, with respect to such Series and (c) the Series
Termination Date (the "RAPID ACCUMULATION PERIOD"), collections of
Principal Receivables allocable to the Investor Interest of such Series
(and certain other amounts if so specified in the related Prospectus
Supplement) will be deposited on each Transfer Date in the Principal
Funding Account and used to make distributions of principal to the
Certificateholders of such Series or Class on the Scheduled Payment Date.
The amount to be deposited in the Principal Funding Account during the
Rapid Accumulation Period will not be limited to the Controlled Deposit
Amount. The Rapid Accumulation Period is intended to result in the fastest
possible accumulation of funds available to make principal distributions to
Certificateholders of a Series following a Pay Out Event with respect to
such Series in order to better assure the repayment of principal to such
Certificateholders. The term "PAY OUT EVENT" with respect to a Series of
Certificates issued by a Trust means any of the events identified as such
in the related Prospectus Supplement and any of the following: (a) certain
events of insolvency, receivership or bankruptcy relating to the Transferor
and any other holder of an interest in the Transferor Certificate
(including any Transferor Participation), (b) the Transferor being unable
for any reason to transfer Receivables to such Trust in accordance with the
provisions of the related Agreement or (c) such Trust becoming subject to
regulation as an "investment company" within the meaning of the Investment
Company Act of 1940, as amended. See "--Pay Out Events" for a discussion of
the events which might lead to commencement of a Rapid Accumulation Period.
During the Rapid Accumulation Period, funds on deposit in any Principal
Funding Account may be invested in Permitted Investments or subject to a
guaranteed rate or investment contract or other arrangement intended to
assure a minimum return on the investment of such funds. Investment
earnings on such funds may be applied to pay interest on the related Series
of Certificates or make other payments as specified in the related
Prospectus Supplement. In order to enhance the likelihood of payment in
full of principal at the end of the Rapid Accumulation Period with respect
to a Series of Certificates, such Series or any Class thereof may be
subject to a principal payment guaranty or other similar arrangement.
RAPID AMORTIZATION PERIOD
During the period from the day on which a Pay Out Event has occurred
with respect to a Series or, if so specified in the Prospectus Supplement
relating to a Series with a Controlled Accumulation Period, from such time
specified in the related Prospectus Supplement after a Pay Out Event has
occurred and the Rapid Accumulation Period has commenced, to the earlier of
(a) the date on which the Investor Interest of the Certificates of such
Series and the Collateral Interest or the Enhancement Invested Amount (as
defined herein), if any, with respect to such Series have been paid in full
and (b) the Series Termination Date (the "RAPID AMORTIZATION PERIOD"),
collections of Principal Receivables allocable to the Investor Interest of
such Series (and certain other amounts if so specified in the related
Prospectus Supplement) will be distributed as principal payments to the
Certificateholders of such Series and, in certain circumstances, to the
Credit Enhancement Provider (as defined herein), monthly on each
Distribution Date with respect to such Series in the manner and order of
priority set forth in the related Prospectus Supplement. During the Rapid
Amortization Period with respect to a Series, distributions of principal
will not be limited by any Controlled Deposit Amount or Controlled
Distribution Amount. In addition, upon the commencement of the Rapid
Amortization Period with respect to a Series, any funds on deposit in a
Principal Funding Account with respect to such Series or any Class thereof
will be paid to the Certificateholders of such Series or Class on the first
Distribution Date in the Rapid Amortization Period. The Rapid Amortization
Period is intended to result in the fastest possible distribution of
principal to Certificateholders of a Series following a Pay Out Event with
respect to such Series in order to better assure the repayment of principal
to such Certificateholders. See "--Pay Out Events" for a discussion of the
events which might lead to commencement of a Rapid Amortization Period.
TRANSFER AND ASSIGNMENT OF RECEIVABLES
With respect to Trust I and with respect to any New Trust, the
Transferor will transfer and assign at the time of formation of each such
Trust all of its right, title and interest in and to the Receivables in the
related Accounts and all Receivables thereafter created in such Accounts,
except for the interest of the Transferor as holder of the Transferor
Certificate.
In connection with each transfer of Receivables to a Trust, the
Transferor will indicate in its computer files that the related Receivables
have been conveyed to such Trust. In addition, the Transferor will provide
to the Trustee, with respect to Trust I and each New Trust, computer files
or microfiche lists, containing a true and complete list showing each
related Account, identified by account number and by total outstanding
balance on the date of transfer. The Transferor will not deliver to the
related Trustee any other records or agreements relating to the Accounts or
the Receivables, except in connection with additions or removals of
Accounts. Except as stated above, the records and agreements relating to
the Accounts and the Receivables maintained by the Transferor or the
Servicer are not and will not be segregated by the Transferor or the
Servicer from other documents and agreements relating to other credit card
accounts and receivables and are not and will not be stamped or marked to
reflect the transfer of the Receivables to a Trust, but the computer
records of the Transferor are and will be required to be marked to evidence
such transfer. The Transferor will file with respect to Trust I and each
New Trust Uniform Commercial Code financing statements with respect to the
Receivables meeting the requirements of Delaware state law. See "Certain
Legal Aspects of the Receivables--Transferor of Receivables."
EXCHANGES
For each Series of Certificates, the related Agreement will provide for
the related Trustee to issue two types of certificates: (i) one or more
Series of Certificates that are transferable and have the characteristics
described below and (ii) a certificate (the "TRANSFEROR CERTIFICATE") that
evidences the Transferor's interest in the related Trust (the "TRANSFEROR
INTEREST"), which initially will be held by the Transferor and will be
transferable only as provided in the related Agreement. The related
Agreement will also provide that, pursuant to any one or more Series
Supplements, the holder of the Transferor Certificate may tender such
Transferor Certificate, or the Transferor Certificate and the Certificates
evidencing any Series of Certificates issued by such Trust, to the related
Trustee in exchange for one or more new Series (which may include Series
offered pursuant to this Prospectus) and a reissued Transferor Certificate
(any such tender, an "EXCHANGE"). This exchange feature permits the
creation of new Series to be issued from an already existing trust.
Pursuant to each Agreement, the holder of the Transferor Certificate may
define, with respect to any newly issued Series, all Principal Terms of
such new Series. Upon the issuance of an additional Series of Certificates,
none of the Transferor, the Servicer, the Trustee or the related Trust will
be required or will intend to obtain the consent of any Certificateholder
of any other Series previously issued by such Trust. However, as a
condition of an Exchange, the holder of the Transferor Certificate will
deliver to the Trustee written confirmation that the Exchange will not
result in the reduction or withdrawal by any Rating Agency of its rating of
any outstanding Series. The Transferor may offer any Series under a
prospectus or other disclosure document (a "DISCLOSURE DOCUMENT") in
offerings pursuant to this Prospectus or in transactions either registered
under the Securities Act or exempt from registration thereunder directly,
through one or more other underwriters or placement agents, in fixed-price
offerings or in negotiated transactions or otherwise.
The holder of the Transferor Certificate may perform Exchanges and
define Principal Terms such that each Series issued under a Trust has a
period during which amortization or accumulation of the principal amount
thereof is intended to occur which may have a different length and begin on
a different date than such period for any other Series. Further, one or
more Series may be in their amortization or accumulation periods while
other Series are not. Moreover, each Series may have the benefit of a
Credit Enhancement which is available only to such Series. Under the
related Agreement, the Trustee shall hold any such form of Credit
Enhancement only on behalf of the Series to which it relates. The holder of
the Transferor Certificate may deliver a different form of Credit
Enhancement agreement with respect to any Series. The holder of the
Transferor Certificate may specify different certificate rates and monthly
servicing fees with respect to each Series (or a particular Class within
such Series). The holder of the Transferor Certificate will also have the
option under the related Agreement to vary between Series the terms upon
which a Series (or a particular Class within such Series) may be
repurchased by the Transferor or remarketed to other investors. There will
be no limit to the number of Exchanges that may be performed under a
related Agreement.
An Exchange may only occur upon the satisfaction of certain conditions
provided in the related Agreement. Under each Agreement, the holder of the
Transferor Certificate may perform an Exchange by notifying the Trustee at
least five days in advance of the date upon which the Exchange is to occur
stating the Series to be issued on the date of the Exchange and, with
respect to each such Series (and, if applicable, each Class thereof): (i)
its initial principal amount (or method for calculating such amount), (ii)
its certificate rate (or method of calculating such rate) and (iii) the
"Credit Enhancement Provider," if any, which is expected to provide support
with respect to it. Each Agreement will provide that on the date of the
Exchange the Trustee will authenticate any such Series only upon delivery
to it of the following, among others, (i) a Series Supplement specifying
the principal terms of such Series (the "PRINCIPAL TERMS"), (ii) (a) an
opinion of counsel to the effect that, unless otherwise stated in the
related Series Supplement, the certificates of such Series will be
characterized as indebtedness for Federal income tax purposes and (b) an
opinion of counsel to the effect that, for federal income tax purposes, (1)
such issuance will not adversely affect the Federal income tax
characterization as debt of Certificates of any outstanding Series or Class
that were characterized as debt at the time of their issuance, (2)
following such issuance the Trust will not be deemed to be an association
(or publicly traded partnership) taxable as a corporation for Federal
income tax purposes and (3) such issuance will not cause or constitute an
event in which gain or loss would be recognized by any Certificateholder
(an opinion of counsel with respect to any matter to the effect referred to
in clause (b) with respect to any action is referred to herein as a "TAX
OPINION"), (iii) if required by the related Series Supplement, the form of
Credit Enhancement, (iv) if Credit Enhancement is required by the Series
Supplement, an appropriate Credit Enhancement agreement executed by the
Transferor and the issuer of the Credit Enhancement, (v) written
confirmation from each Rating Agency that the Exchange will not result in
such Rating Agency's reducing or withdrawing its rating on any then
outstanding Series rated by it, (vi) an officer's certificate of the
Transferor to the effect that after giving effect to the Exchange the
Transferor would not be required to add Additional Accounts pursuant to the
related Agreement and the Transferor Amount would be at least equal to the
Minimum Transferor Amount and (vii) the existing Transferor Certificate
and, if applicable, the certificates representing the Series to be
exchanged. Upon satisfaction of such conditions, the Trustee will cancel
the existing Transferor Certificate and the certificates of the exchanged
Series, if applicable, and authenticate the new Series and a new Transferor
Certificate.
REPRESENTATIONS AND WARRANTIES
The Transferor will make in the Agreement and each New Agreement certain
representations and warranties to the Trust to the effect that, among other
things, (a) as of the Closing Date, the Transferor was duly incorporated
and in good standing and that it has the authority to consummate the
transactions contemplated by the related Agreement and (b) as of the
relevant Cut Off Date (or as of the date of the designation of Additional
Accounts or the creation of Automatic Additional Accounts), each Account
was an Eligible Account (as defined below). If so provided in the related
Prospectus Supplement, if (i) any of these representations and warranties
proves to have been incorrect in any material respect when made, and
continues to be incorrect for 60 days after notice to the Transferor by the
related Trustee or to the Transferor and the related Trustee by the
Certificateholders holding more than 50% of the Investor Interest of the
related Series, and (ii) as a result the interests of the
Certificateholders are materially and adversely affected, and continue to
be materially and adversely affected during such period, then the Trustee
or Certificateholders holding more than 50% of the Investor Interest may
give notice to the Transferor (and to the related Trustee in the latter
instance) declaring that a Pay Out Event has occurred, thereby commencing
the Rapid Amortization Period or, if so specified in the related Prospectus
Supplement, the Rapid Accumulation Period.
The Transferor will make in the Agreement and each New Agreement
representations and warranties to the related Trust relating to the
Receivables in such Trust to the effect, among other things, that (a) as of
the Closing Date of the initial Series of Certificates issued by such
Trust, each of the Receivables then existing is an Eligible Receivable (as
defined below) and (b) as of the date of creation of any new Receivable,
such Receivable is an Eligible Receivable and the representation and
warranty set forth in clause (b) in the immediately following paragraph is
true and correct with respect to such Receivable. In the event (i) of a
breach of any representation and warranty set forth in this paragraph,
within 60 days, or such longer period as may be agreed to by the Trustee,
of the earlier to occur of the discovery of such breach by the Transferor
or Servicer or receipt by the Transferor of written notice of such breach
given by the Trustee, or, with respect to certain breaches relating to
prior liens, immediately upon the earlier to occur of such discovery or
notice and (ii) that as a result of such breach, the Receivables in the
related Accounts are charged off as uncollectible, the Trust's rights in,
to or under the Receivables or its proceeds are impaired or the proceeds of
such Receivables are not available for any reason to the Trust free and
clear of any lien, the Transferor shall accept reassignment of each
Principal Receivable as to which such breach relates (an "INELIGIBLE
RECEIVABLE") on the terms and conditions set forth below; provided,
however, that no such reassignment shall be required to be made with
respect to such Ineligible Receivable if, on any day within the applicable
period (or such longer period as may be agreed to by the Trustee), the
representations and warranties with respect to such Ineligible Receivable
shall then be true and correct in all material respects. The Transferor
shall accept reassignment of each such Ineligible Receivable by directing
the Servicer to deduct the amount of each such Ineligible Receivable from
the aggregate amount of Principal Receivables used to calculate the
Transferor Amount. In the event that the exclusion of an Ineligible
Receivable from the calculation of the Transferor Amount would cause the
Transferor Amount to be a negative number, on the date of reassignment of
such Ineligible Receivable the Transferor shall make a deposit in the
Excess Funding Account in immediately available funds in an amount equal to
the amount by which the Transferor Amount would be reduced below zero. Any
such deduction or deposit shall be considered a repayment in full of the
Ineligible Receivable. The obligation of the Transferor to accept
reassignment of any Ineligible Receivable is the sole remedy respecting any
breach of the representations and warranties set forth in this paragraph
with respect to such Receivable available to the Certificateholders or the
Trustee on behalf of Certificateholders. Certificateholders will not incur
any costs, direct or indirect, related to any such reassignment to the
Transferor.
The Transferor will make in the Agreement and each New Agreement
representations and warranties to the related Trust to the effect, among
other things, that as of the Closing Date of the initial Series of
Certificates issued by such Trust (a) the related Agreement will constitute
a legal, valid and binding obligation of the Transferor and (b) the
transfer of Receivables by it to the Trust under the Agreement will
constitute either a valid transfer and assignment to the Trust of all
right, title and interest of the Transferor in and to the Receivables
(other than Receivables in Additional Accounts), whether then existing or
thereafter created and the proceeds thereof (including amounts in any of
the accounts established for the benefit of Certificateholders) or the
grant of a first priority perfected security interest in such Receivables
(except for certain tax liens) and the proceeds thereof (including amounts
in any of the accounts established for the benefit of Certificateholders),
which is effective as to each such Receivable upon the creation thereof. In
the event of a breach of any of the representations and warranties
described in this paragraph, either the Trustee or the Holders of
Certificates evidencing undivided interests in the Trust aggregating more
than 50% of the aggregate Investor Interest of all Series outstanding under
such Trust may direct the Transferor to accept reassignment of the Trust
Portfolio within 60 days of such notice, or within such longer period
specified in such notice. The Transferor will be obligated to accept
reassignment of such Receivables on a Distribution Date occurring within
such applicable period. Such reassignment will not be required to be made,
however, if at any time during such applicable period, or such longer
period, the representations and warranties shall then be true and correct
in all material respects. The deposit amount for such reassignment will be
equal to the Investor Interest and Enhancement Invested Amount, if any, for
each Series outstanding under such Trust on the last day of the Monthly
Period preceding the Distribution Date on which the reassignment is
scheduled to be made less the amount, if any, previously allocated for
payment of principal to such Certificateholders or such holders of the
Enhancement Invested Amount or the Collateral Interest, if any, on such
Distribution Date, plus an amount equal to all accrued and the unpaid
interest less the amount, if any, previously allocated for payment of such
interest on such Distribution Date. The payment of the reassignment deposit
amount and the transfer of all other amounts deposited for the preceding
month in the Distribution Account will be considered a payment in full of
the Investor Interest and the Enhancement Invested Amount, if any, for each
such Series required to be repurchased and will be distributed upon
presentation and surrender of the Certificates for each such Series. The
obligation of the Transferor to make any such deposit will constitute the
sole remedy respecting a breach of the representations and warranties
available to the Trustee or Certificateholders. The Certificateholders will
not incur any costs, direct or indirect, related to the reassignment of the
Trust Portfolio to the Transferor.
An "ELIGIBLE ACCOUNT" means, as of the relevant Cut Off Date (or, with
respect to Additional Accounts, as of the relevant Addition Cut Off Date,
or with respect to Automatic Additional Accounts, as of their date of
creation), each Account owned by the Transferor (a) which was in existence
and maintained with the Transferor, (b) which is payable in United States
dollars, (c) the customer of which has provided, as his most recent billing
address, an address located in the United States or its territories or
possessions, (d) which has not been classified by the Transferor as
cancelled, counterfeit, deleted, fraudulent, stolen or lost and (e) which
has either been originated by the Transferor or acquired by the Transferor
from other institutions. Under the Agreement and each New Agreement, the
definition of Eligible Account may be changed by amendment to such
Agreement without the consent of the related Certificateholders if (i) the
Transferor delivers to the Trustee a certificate of an authorized officer
to the effect that, in the reasonable belief of the Transferor, such
amendment will not as of the date of such amendment adversely affect in any
material respect the interest of such Certificateholders, and (ii) such
amendment will not result in a withdrawal or reduction of the rating of any
outstanding Series under the related Trust.
An "ELIGIBLE RECEIVABLE" means each Receivable (a) which has arisen
under an Eligible Account, (b) which was created in compliance, in all
material respects, with all requirements of law applicable to the
Transferor, and pursuant to a credit card agreement which complies in all
material respects with all requirements of law applicable to the
Transferor, (c) with respect to which all consents, licenses or
authorizations of, or registrations with, any governmental authority
required to be obtained or given by the Transferor in connection with the
creation of such Receivable or the execution, delivery, creation and
performance by the Transferor of the related credit card agreement have
been duly obtained or given and are in full force and effect as of the date
of the creation of such Receivable, (d) as to which, at the time of its
creation, the Transferor or the related Trust had good and marketable title
free and clear of all liens and security interests arising under or through
the Transferor (other than certain tax liens for taxes not then due or
which the Transferor is contesting), (e) which is the legal, valid and
binding payment obligation of the obligor thereon, legally enforceable
against such obligor in accordance with its terms (with certain
bankruptcy-related exceptions) and (f) which constitutes an "account" under
Article 9 of the Uniform Commercial Code as then in effect in the State of
Delaware.
Unless otherwise specified in the Prospectus Supplement relating to a
Series of Certificates, the Trustee will not make any initial or periodic
general examination of the Receivables or any records relating to the
Receivables for the purpose of establishing the presence or absence of
defects, compliance with the Transferor's representations and warranties or
for any other purpose. The Servicer, however, will deliver to the Trustee
on or before October 31 of each year (or such other date specified in the
related Prospectus Supplement) an opinion of counsel with respect to the
validity of the security interest of the Trust in and to the Receivables
and certain other components of the Trust.
ADDITION OF TRUST ASSETS
As described above under "The Receivables," the Transferor will have the
right to designate for each Trust, from time to time, additional eligible
revolving credit card accounts to be included as Accounts (the "ADDITIONAL
ACCOUNTS") with respect to such Trust. In addition, the Transferor will be
required to designate Additional Accounts under the circumstances and in
the amounts specified in the related Prospectus Supplement. The Transferor
will convey to the related Trust its interest in all Receivables of such
Additional Accounts, whether such Receivables are then existing or
thereafter created. This feature permits the Transferor to increase the
amount of Principal Receivables in a Trust over the amount that would
otherwise be included, thereby permitting the issuance of additional Series
or avoiding the occurrence of certain Pay Out Events with respect to
existing Series. Certificateholders will not incur any costs, direct or
indirect, as a result of the exercise of this feature.
Each Additional Account must be an Eligible Account at the time of its
designation. However, Additional Accounts may not be of the same credit
quality as the initial Accounts. Additional Accounts may have been
originated by the Transferor using credit criteria different from those
which were applied by the Transferor to the initial Accounts or may have
been acquired by the Transferor from an institution which may have had
different credit criteria.
In addition to or in lieu of Additional Accounts, the Transferor under
the Agreement and each New Agreement will be permitted to add to the
related Trust participations representing undivided interests in a pool of
assets primarily consisting of receivables arising under consumer revolving
credit card accounts and collections thereon ("PARTICIPATIONS"). Each
Participation must (a) have been (i) previously registered under the
Securities Act or (ii) held for the holding period required under Rule
144(k) under the Securities Act and (b) be acquired in a bona fide
secondary market transaction and not from the Transferor or an affiliate
thereof, in each case to the extent required by the Securities Act.
Participations may be evidenced by one or more certificates of ownership
issued under a separate pooling and servicing agreement or similar
agreement (a "PARTICIPATION AGREEMENT") which entitles the
Certificateholder to receive percentages of collections generated by the
pool of assets subject to such Participation Agreement from time to time
and to certain other rights and remedies specified therein. Participations
may have their own credit enhancement, pay out events, servicing
obligations and servicer defaults, all of which are likely to be
enforceable by a separate trustee under the Participation Agreement and may
be different from those specified herein. The rights and remedies of the
related Trust as the holder of a Participation (and therefore the
Certificateholders) will be subject to all the terms and provisions of the
related Participation Agreement. The Agreement and each New Agreement may
be amended to permit the addition of a Participation in a Trust without the
consent of the related Certificateholders if (i) the Transferor delivers to
the Trustee a certificate of an authorized officer to the effect that, in
the reasonable belief of the Transferor, such amendment will not as of the
date of such amendment adversely affect in any material respect the
interest of such Certificateholders, and (ii) such amendment will not
result in a withdrawal or reduction of the rating of any outstanding Series
under the related Trust.
A conveyance by the Transferor to a Trust of Receivables in Additional
Accounts or Participations is subject to the following conditions, among
others: (i) the Transferor shall give the Trustee, each Rating Agency and
the Servicer written notice that such Additional Accounts or Participations
will be included, which notice shall specify the approximate aggregate
amount of the Receivables or interests therein to be transferred; (ii) the
Transferor shall have delivered to the Trustee a written assignment
(including an acceptance by the Trustee on behalf of the Trust for the
benefit of the Certificateholders) as provided in the Agreement relating to
such Additional Accounts or Participations (the "ASSIGNMENT") and, the
Transferor shall have delivered to the Trustee a computer file or
microfiche list, dated the date of such Assignment, containing a true and
complete list of such Additional Accounts or Participations; (iii) the
Transferor shall represent and warrant that (x) each Additional Account is,
as of the Addition Cut Off Date", an Eligible Account, and each Receivable
in such Additional Account is, as of the Addition Cut Off Date, an Eligible
Receivable, (y) no selection procedures believed by the Transferor to be
materially adverse to the interests of the Certificateholders were utilized
in selecting the Additional Accounts from the available Eligible Accounts
from the Bank Portfolio, and (z) as of the Addition Date, the Transferor is
not insolvent; (iv) the Transferor shall deliver certain opinions of
counsel with respect to the transfer of the Receivables in the Additional
Accounts or the Participations to the Trust; and (v) under certain
circumstances with respect to Additional Accounts, and in all cases with
respect to Participations, each Rating Agency then rating any Series of
Certificates outstanding under such Trust shall have consented to the
addition of such Additional Accounts or Participations.
The Transferor may from time to time, at its sole discretion, designate
Eligible Accounts to be included as Accounts ("AUTOMATIC ADDITIONAL
ACCOUNTS"), subject to the limitations specified in this paragraph and in
the applicable Agreement. Unless each Rating Agency otherwise consents, the
number of Automatic Additional Accounts shall not either (i) with respect
to any three consecutive Monthly Periods, exceed 15% of the number of
Accounts as of the end of the ninth Monthly Period preceding the
commencement of such three Monthly Periods (or, the Cut Off Date, whichever
is later) and (ii) with respect to any twelve Monthly Periods, exceed 20%
of the number of Accounts as of the first day of such twelve Monthly
Periods (or, the Cut Off Date, whichever is later) (the "AGGREGATE ADDITION
LIMIT"). On a semi-annual basis, or more frequently if required by any
Rating Agency, the Transferor shall have delivered to the Trustee, each
Rating Agency and certain providers of Credit Enhancement an opinion of
counsel with respect to the Automatic Additional Accounts included as
Accounts during the preceding three-month period confirming the validity
and perfection of the transfer of the Receivables of such Automatic
Additional Accounts. Such opinion of counsel shall be provided by outside
counsel. If such opinion of counsel with respect to any Automatic
Additional Accounts is not so received, the ability of the Bank to
designate Automatic Additional Accounts will be suspended until such time
as each Rating Agency otherwise consents in writing or affected Accounts
are removed from the Trust. The Transferor may discontinue the inclusion of
Automatic Additional Accounts at any time, at its sole discretion.
In addition to the periodic reports otherwise required to be filed by
the Servicer with the SEC pursuant to the Exchange Act, the Servicer
intends to file, on behalf of each Trust, a Report on Form 8-K with respect
to any addition to a Trust of Receivables in Additional Accounts or
Participations that would have a material effect on the composition of the
assets of such Trust.
REMOVAL OF ACCOUNTS
Subject to the conditions set forth in the next succeeding sentence, the
Transferor may, but shall not be obligated to, designate from time to time
certain Accounts to be Removed Accounts, all Receivables in which shall be
subject to deletion and removal from the related Trust. This feature is
intended to permit the Transferor to obtain unencumbered ownership of
Receivables not needed to support any Series of Certificates.
Certificateholders will not incur any cost, direct or indirect, as a result
of the exercise of this feature. The Transferor will be permitted to
designate and require reassignment to it of the Receivables from Removed
Accounts only upon satisfaction of the following conditions: (i) the
removal of any Receivables of any Removed Accounts shall not, in the
reasonable belief of the Transferor, cause a Pay Out Event to occur; (ii)
the Transferor shall have delivered to the related Trustee for execution a
written assignment and a computer file or microfiche list containing a true
and complete list of all Removed Accounts identified by account number and
the aggregate amount of the Receivables in such Removed Accounts; (iii) the
Transferor shall represent and warrant that no selection procedures
believed by the Transferor to be materially adverse to the interests of the
holders of any Series of Certificates outstanding under such Trust were
utilized in selecting the Removed Accounts to be removed from such Trust;
(iv) the Transferor shall have received notice from each such Rating Agency
that such proposed removal will not result in a downgrade of its then
current rating for any such Series; (v) the Principal Receivables of the
Removed Accounts shall not equal or exceed the percentage specified in the
related Prospectus Supplement of the aggregate amount of the Principal
Receivables in such Trust at such time; provided, that if any Series has
been paid in full, the Principal Receivables in such Removed Accounts may
equal or approximately equal the initial Investor Interest or Full Investor
Interest, as applicable, of such Series; (vi) such other conditions as are
specified in the related Prospectus Supplement; and (vii) the Transferor
shall have delivered to the Trustee an officer's certificate confirming the
items set forth in clauses (i) through (vi) above. Notwithstanding the
above, the Transferor will be permitted to designate as a Removed Account
without the consent of the related Trustee, Certificateholders or Rating
Agencies any Account that has a zero balance and which the Transferor will
remove from its computer file.
COLLECTION AND OTHER SERVICING PROCEDURES
For each Series of Certificates, the Servicer will be responsible for
servicing and administering the Receivables in accordance with the
Servicer's policies and procedures for servicing credit card receivables
comparable to the Receivables. The Servicer will be required to maintain or
cause to be maintained fidelity bond coverage insuring against losses
through wrongdoing of its officers and employees who are involved in the
servicing of credit card receivables covering such actions and in such
amounts as the Servicer believes to be reasonable from time to time. Except
in circumstances specified in the related Prospectus Supplement, the
Servicer will deposit all collections of Receivables in an account required
to be established for such purpose by the related Agreement (the
"COLLECTION ACCOUNT"). All amounts deposited in the Collection Account with
respect to a Trust will be allocated by the Servicer between amounts
collected on Principal Receivables and amounts collected on Finance Charge
Receivables.
DISCOUNT OPTION
The Transferor may at any time designate a specified fixed or variable
percentage as specified in the related Prospectus Supplement (the "DISCOUNT
PERCENTAGE") of the amount of Receivables arising in the Accounts with
respect to the related Trust on and after the date such option is exercised
(the "DISCOUNT OPTION") that otherwise would have been treated as Principal
Receivables to be treated as Finance Charge Receivables. Such designation
will become effective upon satisfaction of the requirements set forth in
the related Agreement, including written confirmation by each Rating Agency
in writing of its then current rating on each outstanding Series of the
related Trust. On the date of processing of any collections, the product of
the Discount Percentage and collections of Receivables that arise in the
Accounts on such day on or after the date such option is exercised that
otherwise would be Principal Receivables will be deemed collections of
Finance Charge Receivables and will be applied accordingly, unless
otherwise provided in the related Prospectus Supplement. Such feature is
intended to permit the Transferor to increase the portfolio yield and
thereby decrease the risk of the occurrence of a Pay Out Event.
Certificateholders will not incur any cost, direct or indirect, as a result
of the exercise of this feature.
TRUST ACCOUNTS
The related Trustee will establish and maintain in the name of the Trust
two separate accounts in a segregated trust account, a "FINANCE CHARGE
ACCOUNT" and a "PRINCIPAL ACCOUNT," for the benefit of the
Certificateholders of all related Series, including any Series offered
pursuant to this Prospectus. Each Agreement will provide that the Trustee
shall have the power to establish series accounts in Series Supplements,
including an Interest Funding Account, a Principal Funding Account, a
Pre-Funding Account or such other account specified in the related Series
Supplement, each of which series accounts shall be held for the benefit of
the Certificateholders of the related Series and for the purposes set forth
in the related Prospectus Supplement. The Trustee will also establish a
"DISTRIBUTION ACCOUNT," which shall be a non-interest bearing segregated
demand deposit account established with a Qualified Institution other than
the Transferor. The Servicer will establish and maintain, in the name of
the Trust, for the benefit of Certificateholders of all Series issued
thereby including any Series offered pursuant to this Prospectus, a
Collection Account, which will be a non-interest bearing segregated account
established and maintained with the Servicer or with a "QUALIFIED
INSTITUTION," defined as a depository institution or trust company, which
may include the related Trustee, organized under the laws of the United
States or any one of the states thereof, which at all times has a
short-term unsecured debt rating of P-1 by Moody's Investors Service, Inc.
("MOODY'S") and of A-l+ by Standard & Poor's Ratings Services ("STANDARD &
POOR'S"), or a depository institution, which may include the Trustee, which
is acceptable to the Rating Agency. The Servicer will also establish and
maintain, with respect to each Trust, the Excess Funding Account, as more
fully described herein. Funds in the Principal Account and the Finance
Charge Account for each Trust will be invested, at the direction of the
Servicer, in (i) obligations fully guaranteed by the United States of
America, (ii) demand deposits, time deposits or certificates of deposit of
depository institutions or trust companies, the certificates of deposit of
which have the highest rating from Moody's and Standard & Poor's, (iii)
commercial paper having, at the time of the Trust's investment, a rating in
the highest rating category from Moody's and Standard & Poor's, (iv)
bankers' acceptances issued by any depository institution or trust company
described in clause (ii) above, (v) certain repurchase agreements
transacted with either (a) an entity subject to the United States federal
bankruptcy code or (b) a financial institution insured by the FDIC or any
broker-dealer with "retail customers" that is under the jurisdiction of the
Securities Investors Protection Corp. and (vi) any other investment if the
Rating Agency confirms in writing that such investment will not adversely
affect its then current rating or ratings of the Certificates, provided
that such investment will not cause the Trust to be treated as an
investment company within the meaning of the Investment Company Act of
1940, as amended (such investments, "PERMITTED INVESTMENTS"). Any earnings
(net of losses and investment expenses) on funds in the Finance Charge
Account or the Principal Account will be paid to the Transferor, or used
for another purpose if specified in the related Prospectus Supplement.
Funds in any other series account established by a Series Supplement may be
invested in Permitted Investments or otherwise as provided in the related
Prospectus Supplement. The Servicer will have the revocable power to
withdraw funds from the Collection Account and to instruct the Trustee to
make withdrawals and payments from the Finance Charge Account and the
Principal Account for the purpose of carrying out the Servicer's duties
under the Agreement. The Trustee will be the paying agent and will have the
revocable power to withdraw funds from the Distribution Account for the
purpose of making distributions to the Certificateholders.
FUNDING PERIOD
The Prospectus Supplement relating to a Series of Certificates may
specify that for a period beginning on the Closing Date and ending on a
specified date before the commencement of an Amortization Period or
Accumulation Period with respect to such Series (the "FUNDING PERIOD"),
which period is expected to be less than a year, the aggregate amount of
Principal Receivables in the related Trust allocable to such Series may be
less than the aggregate principal amount of the Certificates of such Series
and that the amount of such deficiency (the "PRE-FUNDING AMOUNT") will be
held in a trust account established with the related Trustee for the
benefit of Certificateholders of such Series (the "PRE-FUNDING ACCOUNT")
pending the transfer of additional Principal Receivables to the Trust or
pending the reduction of the Investor Interests of other Series issued by
the related Trust. The Pre-Funded Amount may be up to 100% of the principal
amount of the Certificates of a Series. The related Prospectus Supplement
specifies the initial Investor Interest on the Closing Date with respect to
such a Series, the aggregate principal amount of the Certificates of such
Series (the "FULL INVESTOR INTEREST") and the date by which the Investor
Interest is expected to equal the Full Investor Interest. The Investor
Interest will increase as Principal Receivables are added to the related
Trust or as the Investor Interests of other Series of the related Trust are
reduced. See "--Addition of Trust Assets." This feature is intended to
permit the Transferor to issue a new Series of Certificates at an opportune
time, if the Investor Interest of existing Series are expected to be
reduced or additional Principal Receivables are expected to be included in
a Trust at a subsequent time. Certificateholders will not incur any costs,
direct or indirect, as a result of the exercise of this feature. If the
Investor Interest does not equal the Full Investor Interest by the end of
the Funding Period, Certificateholders of the affected Series will receive
principal repayments prior to the expected date of receipt. Any designation
of Additional Accounts (or Participations) or Automatic Additional Accounts
during the Funding Period will be subject to the same conditions and
protections applicable at any other time.
During the Funding Period, funds on deposit in the Pre-Funding Account
for a Series of Certificates will be withdrawn and paid to the holder of
the Transferor Certificate to the extent of any increases in the Investor
Interest. In the event that the Investor Interest does not for any reason
equal the Full Investor Interest by the end of the Funding Period, any
amount remaining in the Pre-Funding Account will be payable to the
Certificateholders of such Series in the manner and at such time as set
forth in the related Prospectus Supplement. Such payment will reduce the
aggregate principal amount of such Certificates. In addition, if so
specified in the related Prospectus Supplement, a prepayment premium or
penalty or similar amount may be payable to the Certificateholders of such
Series.
Monies in the Pre-Funding Account will be invested by the Trustee in
Permitted Investments and, if so specified in the related Prospectus
Supplement, will be subject to a guaranteed rate or investment agreement or
other similar arrangement, and, in connection with each Distribution Date
during the Funding Period, investment earnings on funds in the Pre-Funding
Account during the related Monthly Period will be withdrawn from the
Pre-Funding Account and deposited, together with any applicable payment
under a guaranteed rate or investment agreement or other similar
arrangement, into the Finance Charge Account for distribution in respect of
interest on the Certificates of the related Series in the manner specified
in the related Prospectus Supplement.
INVESTOR PERCENTAGE AND TRANSFEROR PERCENTAGE
For each Trust, the Servicer will allocate between the Investor Interest
of each Series issued by such Trust (and between each Class of each Series)
and the Transferor Interest, and, in certain circumstances, the interest of
certain Credit Enhancement Providers, all amounts collected on Finance
Charge Receivables, all amounts collected on Principal Receivables and all
Receivables in Defaulted Accounts. The Servicer will make each allocation
by reference to the applicable Investor Percentage of each Series and the
Transferor Percentage, and, in certain circumstances, the percentage
interest of certain providers of Enhancement (the "CREDIT ENHANCEMENT
PERCENTAGE") with respect to such Series. The Prospectus Supplement
relating to a Series specifies the Investor Percentage and, if applicable,
the Credit Enhancement Percentage (or the method of calculating such
percentages) with respect to the allocations of collections of Principal
Receivables, Finance Charge Receivables and Receivables in Defaulted
Accounts during the Revolving Period, any Amortization Period and any
Accumulation Period, as applicable. In addition, for each Series of
Certificates having more than one Class, the related Prospectus Supplement
specifies the method of allocation between each Class.
The Transferor Percentage will, in all cases, be equal to 100% minus the
aggregate Investor Percentages and, if applicable, the Credit Enhancement
Percentages, for all Series then outstanding.
APPLICATION OF COLLECTIONS
Except as otherwise provided below, the Servicer will deposit into the
Collection Account for the related Trust no later than the second business
day (or such other day specified in the related Prospectus Supplement)
following the date of processing, any payment collected by the Servicer on
the Receivables. On the same day as any such deposit is made, the Servicer
will make the deposits and payments to the accounts and parties as
indicated below; provided, however, that for as long as the Bank or an
affiliate thereof remains the Servicer under the related Agreement, and (a)
the Servicer provides to the Trustee a letter of credit or other credit
support acceptable to each Rating Agency or (b) the Servicer or the
Corporation has and maintains a certificate of deposit or commercial paper
rating of P-1 by Moody's and of A-1 by Standard & Poor's, then the Servicer
may make such deposits and payments on a monthly or other periodic basis on
the Transfer Date in an amount equal to the net amount of such deposits and
payments which would have been made.
Notwithstanding anything in the related Agreement to the contrary,
whether the Servicer is required to make monthly or daily deposits from the
Collection Account into the Finance Charge Account or the Principal
Account, with respect to any Monthly Period, (i) the Servicer will only be
required to deposit collections from the Collection Account into the
Finance Charge Account, the Principal Account or any series account
established by a related Series Supplement up to the required amount to be
deposited into any such account or, without duplication, distributed on or
prior to the related Distribution Date to Certificateholders or to the
provider of Enhancement and (ii) if at any time prior to such Distribution
Date the amount of collections deposited in the Collection Account exceeds
the amount required to be deposited pursuant to clause (i) above, the
Servicer will be permitted to withdraw the excess from the Collection
Account.
The Servicer will withdraw the following amounts from the Collection
Account for application as indicated:
(a) an amount equal to the Transferor Percentage of the aggregate
amount of such deposits in respect of Principal Receivables and Finance
Charge Receivables, respectively, will be paid or held for payment to
the holder of the Transferor Certificate (or, in certain limited
circumstances, deposited in the Excess Funding Account);
(b) an amount equal to the applicable Investor Percentage of the
aggregate amount of such deposits in respect of Finance Charge
Receivables will be deposited into the Finance Charge Account for
allocation and distribution as described in the related Prospectus
Supplement;
(c) during the Revolving Period, an amount equal to the applicable
Investor Percentage of the aggregate amount of such deposits in respect
of Principal Receivables will be paid or held for payment to the holder
of the Transferor Certificate, provided that if after giving effect to
the inclusion in the related Trust of all Receivables on or prior to
such date of processing and the application of payments referred to in
paragraph (a) above the Transferor Amount is less than the Minimum
Transferor Amount, the excess will be deposited in the Excess Funding
Account or other specified account and will be used as described in the
related Prospectus Supplement, including for payment to other Series of
Certificates issued by the related Trust;
(d) during the Controlled Amortization Period, Controlled
Accumulation Period or Rapid Accumulation Period, as applicable, an
amount equal to the applicable Investor Percentage of such deposits in
respect of Principal Receivables up to the amount, if any, as specified
in the related Prospectus Supplement will be deposited in the Principal
Account or Principal Funding Account, as applicable, for allocation and
distribution to Certificateholders as described in the related
Prospectus Supplement, provided that if collections of Principal
Receivables exceed the principal payments that may be allocated or
distributed to Certificateholders, the amount of such excess will be
paid to the holder of the Transferor Certificate until the Transferor
Amount is reduced to the Minimum Transferor Amount, and thereafter will
be deposited in the Excess Funding Account or other specified account
and will be used as described in the related Prospectus Supplement,
including for payment to other Series of Certificates issued by the
related Trust; and
(e) during the Principal Amortization Period, if applicable, and
the Rapid Amortization Period, an amount equal to the applicable
Investor Percentage of such deposits in respect of Principal
Receivables will be deposited into the Principal Account for
application and distribution as provided in the related Prospectus
Supplement.
In the case of a Series of Certificates having more than one Class,
the amounts in the Collection Account will be allocated and applied to each
Class in the manner and order of priority described in the related
Prospectus Supplement.
SHARED EXCESS FINANCE CHARGE COLLECTIONS
Any Series offered hereby may be included in a group of Series (a
"GROUP"). The Prospectus Supplement relating to a Series specifies whether
such Series will be included in a Group and identifies any previously
issued Series included in such Group. If so specified in the related
Prospectus Supplement, the Certificateholders of a Series within a Group or
any Class thereof may be entitled to receive all or a portion of Excess
Finance Charge Collections with respect to another Series or Class thereof
within such Group to cover any shortfalls with respect to amounts payable
from collections of Finance Charge Receivables allocable to such Series or
Class. With respect to any Series, "EXCESS FINANCE CHARGE COLLECTIONS" for
any Monthly Period will equal the excess of collections of Finance Charge
Receivables, and certain other amounts allocated to the Investor Interest
of such Series or Class over the sum of (i) interest accrued for the
current month ("MONTHLY INTEREST") and overdue Monthly Interest on the
Certificates of such Series or Class (together with, if applicable,
interest on overdue Monthly Interest at the rate specified in the related
Prospectus Supplement, ("ADDITIONAL INTEREST")), (ii) accrued and unpaid
Investor Servicing Fees with respect to such Series or Class payable from
collections of Finance Charge Receivables, (iii) the Investor Default
Amount with respect to such Series or Class, (iv) unreimbursed Investor
Charge-Offs with respect to such Series or Class and (v) other amounts
specified in the related Prospectus Supplement. The term "INVESTOR
SERVICING FEE" for any Series of Certificates or Class thereof means the
Servicing Fee allocable to the Investor Interest with respect to such
Series or Class, as specified in the related Prospectus Supplement. The
term "INVESTOR DEFAULT AMOUNT" means, for any Monthly Period and for any
Series or Class thereof, the aggregate amount of the applicable Investor
Percentage of Receivables in Defaulted Accounts. The term "INVESTOR
CHARGE-OFF" means, for any Monthly Period and for any Series or Class
thereof, the amount by which (a) the related Monthly Interest and overdue
Monthly Interest (together with, if applicable, Additional Interest),
accrued and unpaid Investor Servicing Fees payable from collections of
Finance Charge Receivables, the Investor Default Amount and any required
fees exceeds (b) amounts available to pay such amounts out of collections
of Finance Charge Receivables, available Credit Enhancement amounts, if
any, and other sources specified in the related Prospectus Supplement, but
not more than such Investor Default Amount. This feature permits amounts
that would otherwise be payable to the holder of the Transferor Certificate
to be used for the benefit of Series of Certificates that would otherwise
experience shortfalls in amounts payable from collections of Finance Charge
Receivables or from Credit Enhancement. See "--Application of Collections"
and "--Defaulted Receivables; Rebates and Fraudulent Charges; Investor
Charge-Offs."
EXCESS FUNDING ACCOUNT
If on any date the Transferor Amount would be less than the Minimum
Transferor Amount (after giving effect to any addition of Principal
Receivables to the applicable Trust) if the Servicer were to distribute to
the holder of the Transferor Certificate any collections of Principal
Receivables that otherwise would be distributed to the holder of the
Transferor Certificate, the Servicer will not distribute such amounts, but
shall instead deposit such funds in a segregated account established and
maintained by the Servicer, in the name of the Trust, for the benefit of
Certificateholders of all Series issued by such Trust, with the Servicer or
with a Qualified Institution (the "EXCESS FUNDING ACCOUNT"). Funds on
deposit in the Excess Funding Account will be withdrawn and paid to the
holder of the Transferor Certificate on any date to the extent that the
Transferor Amount exceeds the Minimum Transferor Amount on such date;
provided, however, that if a Controlled Accumulation Period, Controlled
Amortization Period, Principal Amortization Period, Rapid Amortization
Period or Rapid Accumulation Period commences with respect to any Series in
a Group entitled to the benefits of Shared Principal Collections, any funds
on deposit in the Excess Funding Account not released to the holder of the
Transferor Certificate will be treated as Shared Principal Collections to
the extent needed to cover principal payments due to or for the benefit of
such Series, if the Series Supplement with respect to such Series so
provides. This feature is intended to avoid or forestall the occurrence of
a Pay Out Event (and thus certain unexpected prepayments of the
Certificates) at a time when adequate Principal Receivables are not being
generated in the Accounts in a Trust by retaining collections of Principal
Receivables in the Trust for the benefit of Certificateholders.
Certificateholders will not incur any costs, direct or indirect, as a
result of the inclusion of this feature.
Funds on deposit in the Excess Funding Account will be invested by
the Trustee, at the direction of the Servicer, in Permitted Investments.
Any earnings (net of losses and investment expenses) earned on amounts on
deposit in the Excess Funding Account during any Monthly Period will be
withdrawn from the Excess Funding Account and treated as collections of
Finance Charge Receivables with respect to such Monthly Period for the
applicable Trust.
SHARED PRINCIPAL COLLECTIONS
If so specified in the related Prospectus Supplement, to the extent
that collections of Principal Receivables and certain other amounts that
are allocated to the Investor Interest of any Series are not needed to make
payments or deposits with respect to such Series, such collections will
constitute "SHARED PRINCIPAL COLLECTIONS" and will be applied to cover
principal payments due to or for the benefit of Certificateholders of other
Series. If so specified in the related Prospectus Supplement, the
allocation of Shared Principal Collections may be among Series within a
Group. Any such reallocation will not result in a reduction in the Investor
Interest of the Series to which such collections were initially allocated.
This feature permits amounts that would otherwise be payable to the holder
of the Transferor Certificate to be used for the benefit of Series of
Certificates that would otherwise experience a shortfall or delay in the
payment of principal thereon.
PAIRED SERIES
If specified in the Prospectus Supplement relating to a Series, such
Series may be paired with another Series (each, a "PAIRED SERIES") , such
that a reduction in the Investor Interest of one such Series results in an
increase in the Investor Interest of the other such Series. The effects of
this feature are discussed in the related Prospectus Supplements of the
Paired Series.
DEFAULTED RECEIVABLES; REBATES AND FRAUDULENT CHARGES; INVESTOR CHARGE-OFFS
For each Series of Certificates, on the business day preceding each
Transfer Date (the "DETERMINATION DATE"), the Servicer will calculate the
aggregate Investor Default Amount for the preceding Monthly Period, which
will be equal to the aggregate amount of the Investor Percentage of
Receivables in Defaulted Accounts; that is, Accounts which in such Monthly
Period were written off as uncollectible in accordance with the Servicer's
policies and procedures for servicing credit card receivables comparable to
the Receivables. In the case of a Series of Certificates having more than
one Class, the Investor Default Amount will be allocated among the Classes
in the manner described in the related Prospectus Supplement. If so
provided in the related Prospectus Supplement, an amount equal to the
Investor Default Amount for any Monthly Period may be paid from other
amounts, including collections in the Finance Charge Account or from Credit
Enhancement, and applied to pay principal to Certificateholders or the
holder of the Transferor Certificate, as appropriate. In the case of a
Series of Certificates having one or more Classes of Subordinated
Certificates, the related Prospectus Supplement may provide that all or a
portion of amounts otherwise allocable to such Subordinated Certificates
may be paid to the holders of Senior Certificates to make up any Investor
Default Amount allocable to such holders of Senior Certificates.
With respect to each Series of Certificates, the Investor Interest
with respect to such Series will be reduced by the amount of Investor
Charge-Offs for any Monthly Period. Investor Charge-Offs will be reimbursed
on any Distribution Date to the extent amounts on deposit in the Finance
Charge Account and otherwise available therefor exceed such interest, fees
and any aggregate Investor Default Amount payable on such date. Such
reimbursement of Investor Charge-Offs will result in an increase in the
Investor Interest with respect to such Series. In the case of a Series of
Certificates having more than one Class, the related Prospectus Supplement
describes the manner and priority of allocating Investor Charge-Offs and
reimbursements thereof among the Investor Interests of the several Classes.
If the Servicer adjusts the amount of any Principal Receivable
because of transactions occurring in respect of a rebate or refund to a
cardholder, or because such Principal Receivable was created in respect of
merchandise which was refused or returned by a cardholder, then the amount
of the Transferor Amount in the related Trust will be reduced, on a net
basis, by the amount of the adjustment. In addition, the Transferor Amount
in such Trust will be reduced, on a net basis, as a result of transactions
in respect of any Principal Receivable which was discovered as having been
created through a fraudulent or counterfeit charge. Furthermore, in the
event that the exclusion of such Receivables from the calculation of the
Transferor Amount at such time would cause the Transferor Amount to be less
than the Minimum Transferor Amount, the Transferor shall be required to pay
an amount equal to such deficiency into the Excess Funding Account.
DEFEASANCE
If so specified in the Prospectus Supplement relating to a Series,
the Transferor may terminate its substantive obligations in respect of such
Series or the related Trust by depositing with the Trustee, from amounts
representing, or acquired with, collections of Receivables, money or
Permitted Investments sufficient to make all remaining scheduled interest
and principal payments on such Series or all outstanding Series of
Certificates of such Trust, as the case may be, on the dates scheduled for
such payments and to pay all amounts owing to any Credit Enhancement
Provider with respect to such Series or all outstanding Series, as the case
may be, if such action would not result in a Pay Out Event for any Series.
Prior to its first exercise of its right to substitute money or Permitted
Investments for Receivables, the Transferor will deliver to the Trustee (i)
an opinion of counsel to the effect that such deposit and termination of
obligations will not result in the related Trust being required to register
as an "investment company" within the meaning of the Investment Company Act
of 1940, as amended, and (ii) a Tax Opinion.
FINAL PAYMENT OF PRINCIPAL; TERMINATION
With respect to each Series, the Certificates will be subject to
optional repurchase by the Transferor on any Distribution Date after the
total Investor Interest of such Series and the Enhancement Invested Amount,
if any, with respect to such Series, is reduced to an amount less than or
equal to 5% of the initial Investor Interest (or such other amount
specified in the related Prospectus Supplement), if certain conditions set
forth in the related Agreement are met. The repurchase price will be equal
to the total Investor Interest of such Series (less the amount, if any, on
deposit in any Principal Funding Account with respect to such Series), plus
the Enhancement Invested Amount, if any, with respect to such Series, plus
accrued and unpaid interest on the Certificates and interest or other
amounts payable on the Enhancement Invested Amount or the Collateral
Interest, if any, through the day preceding the Distribution Date on which
the repurchase occurs.
The Certificates of each Series will be retired on the day following
the Distribution Date on which the final payment of principal is scheduled
to be made to the Certificateholders, whether as a result of optional
reassignment to the Transferor or otherwise. Each Prospectus Supplement
specifies the final date on which principal and interest with respect to
the related Series of Certificates will be scheduled to be distributed (the
"SERIES TERMINATION DATE"); provided, however, that the Certificates may be
subject to prior termination as provided above. If the Investor Interest is
greater than zero on the Series Termination Date, the Trustee or Servicer
may be required to sell or cause to be sold certain Receivables in the
manner provided in the related Agreement and Series Supplement and to pay
the net proceeds of such sale and any collections on the Receivables, in an
amount at least equal to the sum of the Investor Interest and the
Enhancement Invested Amount, if any, with respect to such Series plus
accrued interest due thereon.
Unless the Servicer and the holder of the Transferor Certificate
instruct the Trustee otherwise, each Trust will terminate on the earlier of
(a) the day after the Distribution Date on which the aggregate Investor
Interest and Enhancement Invested Amount or Collateral Interest, if any,
with respect to each Series outstanding is zero, (b) October 26, 2045, or
(c) if the Receivables are sold, disposed of or liquidated following the
occurrence of an Insolvency Event, immediately following such sale,
disposition or liquidation (such date, the "TRUST TERMINATION DATE"). Upon
the termination of each Trust and the surrender of the Transferor
Certificate, the Trustee shall convey to the holder of the Transferor
Certificate all right, title and interest of the Trust in and to the
Receivables and other funds of the Trust.
PAY OUT EVENTS
Unless otherwise specified in the related Prospectus Supplement, with
respect to each Series and any Class thereof, no principal will be payable
to Certificateholders until the Principal Commencement Date or the
Scheduled Payment Date with respect to such Series or Class. The "REVOLVING
PERIOD," beginning on the date of issuance of the related Series (the
"CLOSING DATE") and ending with the commencement of an Amortization Period
or an Accumulation Period, will continue through the date specified in the
related Prospectus Supplement unless a Pay Out Event occurs prior to such
date. A Pay Out Event occurs with respect to all Series issued by a Trust
upon the occurrence of any of the following events:
(a) certain events of insolvency, receivership or bankruptcy
relating to the Transferor or any holder of an interest in the
Transferor Certificate, as defined in the Agreement (an "INSOLVENCY
Event") (including the Transferor Participation);
(b) the Transferor is unable for any reason to transfer
Receivables to such Trust in accordance with the provisions of the
related Agreement; or
(c) such Trust becomes subject to regulation as an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended.
In addition, a Pay Out Event may occur with respect to any Series
upon the occurrence of any other event specified in the related Prospectus
Supplement. On the date on which a Pay Out Event is deemed to have
occurred, the Rapid Amortization Period or, if so specified in the related
Prospectus Supplement, the Rapid Accumulation Period will commence. If,
because of the occurrence of a Pay Out Event, the Rapid Amortization Period
begins earlier than the scheduled commencement of a Controlled Amortization
Period or prior to a Scheduled Payment Date, Certificateholders will begin
receiving distributions of principal earlier than they otherwise would
have, which may shorten the average life of the Certificates.
In addition to the consequences of a Pay Out Event discussed above,
unless otherwise specified in the related Prospectus Supplement, if an
Insolvency Event occurs with respect to the Transferor or any holder of an
interest in the Transferor Certificate (including the Transferor
Participation), on the day of such event (the "APPOINTMENT DATE") the
Transferor will immediately cease to transfer Principal Receivables to the
Trust and promptly give notice to the Trustee of such event. If such event
occurs while any of the Series 1995-1 Certificates remain outstanding,
within 15 days, the Trustee will publish a notice of the liquidation or the
appointment stating that the Trustee intends to sell, dispose of, or
otherwise liquidate the Receivables in a commercially reasonable manner.
Unless otherwise instructed within a specified period by Certificateholders
representing undivided interests aggregating more than 50% of the Investor
Interest of each Series (or if any Series has more than one Class, of each
Class, and any holder of the Transferor Certificate (including any
Transferor Participation) with respect to which the Insolvency Event has
not occurred, each provider of Enhancement, if any, and any other person
entitled to give such instructions pursuant to any Series Supplement)
issued and outstanding, the Trustee will sell, dispose of, or otherwise
liquidate the Receivables in a commercially reasonable manner and on
commercially reasonable terms. If the Trustee is instructed not to
liquidate the Receivables as described in the preceding sentence, the
Trustee will retain the Receivables and apply collections thereon in
accordance with the Agreement; provided, however, that the Trustee shall
nevertheless liquidate any remaining Receivables no later than three years
after the Appointment Date. The proceeds from the sale, disposition or
liquidation of the Receivables will be treated as collections of the
Receivables and applied as specified above in "--Application of
Collections" and in the related Prospectus Supplement.
If the only Pay Out Event to occur is either the insolvency of the
Transferor or the appointment of a conservator or receiver for the
Transferor, the conservator or receiver may have the power to prevent the
early sale, liquidation or disposition of the Receivables and the
commencement of a Rapid Amortization Period or, if applicable with respect
to a Series as specified in the related Prospectus Supplement, a Rapid
Accumulation Period. In addition, a conservator or receiver may have the
power to cause the early sale of the Receivables and the early retirement
of the Certificates. See "Certain Legal Aspects of the Receivables--Certain
Matters Relating to Receivership."
SERVICING COMPENSATION AND PAYMENT OF EXPENSES
For each Series of Certificates, the Servicer's compensation for its
servicing activities and reimbursement for its expenses will take the form
of the payment to it of the fee payable at the times and in the amounts
specified in the related Prospectus Supplement (the "SERVICING FEE"). The
Investor Servicing Fee will be funded from collections of Finance Charge
Receivables allocated to the Investor Interest and will be paid each month,
or on such other specified periodic basis, from amounts so allocated and on
deposit in the Finance Charge Account (which, if so specified in the
related Prospectus Supplement, may include all or a portion of the
Interchange arising from the Accounts) or, in certain limited
circumstances, from amounts available from Enhancement and other sources,
if any. The remainder of the Servicing Fee for each Trust will be allocable
to the Transferor Interest, the Investor Interests of any other Series
issued by such Trust and the interest represented by the Collateral
Interest or the Enhancement Invested Amount, if any, with respect to such
Series, as described in the related Prospectus Supplement. Neither the
Trust nor the Certificateholders will have any obligation to pay the
portion of the Servicing Fee allocable to the Transferor Interest.
The Servicer will pay from its servicing compensation certain
expenses incurred in connection with servicing the Receivables including,
without limitation, payment of the fees and disbursements of the Trustee
and independent certified public accountants and other fees which are not
expressly stated in the Agreement to be payable by the related Trust or the
Certificateholders other than federal, state and local income and franchise
taxes, if any, of the Trust.
CERTAIN MATTERS REGARDING THE TRANSFEROR AND THE SERVICER
With respect to each Series of Certificates, the Servicer may not
resign from its obligations and duties under the related Agreement, except
upon determination that performance of its duties is no longer permissible
under applicable law. No such resignation will become effective until the
Trustee or a successor to the Servicer has assumed the Servicer's
responsibilities and obligations under the related Agreement (the Bank, or
any such successor servicer, is referred to herein as the "SERVICER"). The
Bank, as initial Servicer, intends to delegate some of its servicing duties
to WOSC; however, such delegation will not relieve it of its obligation to
perform such duties in accordance with the related Agreement.
The Agreement and each New Agreement will provide that the Servicer
will indemnify the related Trust and Trustee from and against any
reasonable loss, liability, expense, damage or injury suffered or sustained
by reason of any acts or omissions or alleged acts or omissions of the
Servicer with respect to the activities of the Trust or the Trustee;
provided, however, that the Servicer shall not indemnify (a) the Trustee
for liabilities imposed by reason of fraud, negligence, or willful
misconduct by the Trustee in the performance of its duties under the
Agreement, (b) the Trust, the Certificateholders or the Certificate Owners
for liabilities arising from actions taken by the Trustee at the request of
Certificateholders, (c) the Trust, the Certificateholders or the
Certificate Owners for any losses, claims, damages or liabilities incurred
by any of them in their capacities as investors, including without
limitation, losses incurred as a result of defaulted Receivables or
Receivables which are written off as uncollectible, or (d) the Trust, the
Certificateholders or the Certificate Owners for any liabilities, costs or
expenses of the Trust, the Certificateholders or the Certificate Owners
arising under any tax law, including without limitation, any federal, state
or local income or franchise tax or any other tax imposed on or measured by
income (or any interest or penalties with respect thereto or arising from a
failure to comply therewith) required to be paid by the Trust, the
Certificateholders or the Certificate Owners in connection with the
Agreement to any taxing authority.
In addition, the Agreement and each New Agreement will provide that,
subject to certain exceptions, the Transferor and any holder of an interest
in the Transferor Certificate (including any Transferor Participation) will
indemnify an injured party for any losses, claims, damages or liabilities
(other than those incurred by a Certificateholder as an investor in the
Certificates) arising out of or based upon the arrangement created by the
Agreement as though the Agreement created a partnership under the Delaware
Uniform Partnership Law in which the Transferor and any such holder of an
interest in the Transferor Certificate (including any Transferor
Participation) are general partners.
The Agreement and each New Agreement will provide that neither the
Transferor nor the Servicer nor any of their respective directors,
officers, employees or agents will be under any other liability to the
related Trust, Trustee, Certificateholders or any other person for any
action taken, or for refraining from taking any action, in good faith
pursuant to the Agreement. Neither the Transferor, the Servicer, nor any of
their respective directors, officers, employees or agents will be protected
against any liability which would otherwise be imposed by reason of willful
misfeasance, bad faith or gross negligence of the Transferor, the Servicer
or any such person in the performance of its duties or by reason of
reckless disregard of obligations and duties thereunder. In addition, the
Agreement and each New Agreement will provide that the Servicer is not
under any obligation to appear in, prosecute or defend any legal action
which is not incidental to its servicing responsibilities under the
Agreement and which in its opinion may expose it to any expense or
liability.
The Agreement and each New Agreement will provide that, in addition
to Exchanges, if applicable, the Transferor may transfer its interest in
all or a portion of the Transferor Certificate, provided that prior to any
such transfer (a) the Trustee receives written notification from each
Rating Agency that such transfer will not result in a lowering of its
then-existing rating of the Certificates of each outstanding Series rated
by it and (b) the Trustee receives a Tax Opinion.
Any person into which, in accordance with each Agreement, the
Transferor or the Servicer may be merged or consolidated or any person
resulting from any merger or consolidation to which the Transferor or the
Servicer is a party, or any person succeeding to the business of the
Transferor or the Servicer will, upon compliance with the applicable
provisions of the Agreement, be the successor to the Transferor or the
Servicer, as the case may be, under the Agreement.
SERVICER DEFAULT
In the event of any Servicer Default (as defined below), either the
Trustee or Certificateholders representing undivided interests aggregating
more than 50% of the Investor Interests for all Series of Certificates of
the related Trust, by written notice to the Servicer (and to the Trustee if
given by the Certificateholders), may terminate all of the rights and
obligations of the Servicer as servicer under the Agreement and in and to
the Receivables and the proceeds thereof and the Trustee may appoint a new
Servicer (a "SERVICE TRANSFER"). The rights and interest of the Transferor
under the related Agreement and in the Transferor Interest will not be
affected by such termination. The related Trustee shall as promptly as
possible appoint a successor Servicer. If no such Servicer has been
appointed and has accepted such appointment by the time the Servicer ceases
to act as Servicer, all authority, power and obligations of the Servicer
under the Agreement shall pass to and be vested in the Trustee. If the
Trustee is unable to obtain any bids from eligible servicers and the
Servicer delivers an officer's certificate to the effect that it cannot in
good faith cure the Servicer Default which gave rise to a transfer of
servicing, and if the Trustee is legally unable to act as successor
Servicer, then the Trustee shall give the Transferor the right of first
refusal to purchase the Receivables on terms equivalent to the best
purchase offer as determined by the Trustee.
"SERVICER DEFAULT" under any Agreement refers to any of the following
events:
(a) failure by the Servicer to make any payment, transfer or
deposit, or to give instructions to the Trustee to make certain
payments, transfers or deposits, on the date the Servicer is required
to do so under the related Agreement or any Series Supplement (or
within the applicable grace period, which shall not exceed 10 business
days);
(b) failure on the part of the Servicer duly to observe or perform
in any respect any other covenants or agreements of the Servicer which
has a material adverse effect on the Certificateholders of any Series
issued and outstanding under such Trust and which continues unremedied
for a period of 60 days after written notice and continues to have a
material adverse effect on such Certificateholders; or the delegation
by the Servicer of its duties under the Agreement, except as
specifically permitted thereunder;
(c) Any representation, warranty or certification made by the
Servicer in the Agreement, or in any certificate delivered pursuant to
the Agreement, proves to have been incorrect when made which has a
material adverse effect on the Certificateholders of any Series issued
and outstanding under such Trust, and which continues to be incorrect
in any material respect for a period of 60 days after written notice
and continues to have a material adverse effect on such
Certificateholders;
(d) the occurrence of certain events of bankruptcy, insolvency or
receivership of the Servicer; or
(e) such other event specified in the related Prospectus Supplement.
Unless otherwise stated in the related Prospectus Supplement,
notwithstanding the foregoing, a delay in or failure of performance
referred to in clause (a) above for a period of 10 business days, or
referred to under clause (b) or (c) for a period of 60 business days, shall
not constitute a Servicer Default if such delay or failure could not be
prevented by the exercise of reasonable diligence by the Servicer and such
delay or failure was caused by an act of God or other similar occurrence.
Upon the occurrence of any such event, the Servicer shall not be relieved
from using its best efforts to perform its obligations in a timely manner
in accordance with the terms of the Agreement, and the Servicer shall
provide the Trustee, any provider of Enhancement, the Transferor and the
holders of Certificates of each Series issued and outstanding under the
related Trust prompt notice of such failure or delay by it, together with a
description of the cause of such failure or delay and its efforts to
perform its obligations.
In the event of a Servicer Default, if a conservator or receiver is
appointed for the Servicer and no Servicer Default other than such
conservatorship or receivership or the insolvency of the Servicer exists,
the conservator or receiver may have the power to prevent either the
Trustee or the majority of the Certificateholders from effecting a Service
Transfer.
REPORTS TO CERTIFICATEHOLDERS
Unless otherwise specified in the related Prospectus Supplement, for
each Series of Certificates, on each Distribution Date, or as soon
thereafter as is practicable, as specified in the related Prospectus
Supplement, the Trustee as the paying agent (the "PAYING AGENT") will
forward to each Certificateholder of record a statement prepared by the
Servicer setting forth, among other things: (a) the total amount
distributed, (b) the amount of the distribution on such Distribution Date
allocable to principal on the Certificates, (c) the amount of such
distribution allocable to interest on the Certificates, (d) the amount of
collections of Principal Receivables processed during the preceding month
or months since the last Distribution Date and allocated in respect of the
Certificates, (e) the aggregate amount of Principal Receivables, the
Investor Interest and the Investor Interest as a percentage of the
aggregate amount of the Principal Receivables in the Trust as of the end of
the last day of the preceding Monthly Period or Periods since the last
Distribution Date, (f) the aggregate outstanding balance of Accounts which
are 30-59, 60-89 and 90 or more days delinquent (or a similar
classification of delinquency) as of the end of the last day of the
preceding Monthly Period or Periods since the last Distribution Date, (g)
the aggregate Investor Default Amount for the preceding Monthly Period or
Periods since the last Distribution Date, (h) the amount of Investor
Charge-Offs for the preceding Monthly Period or Periods since the last
Distribution Date and the amount of reimbursements of previous Investor
Charge-Offs for the preceding Monthly Period or Periods since the last
Distribution Date, (i) the amount of the Investor Servicing Fee for the
preceding Monthly Period or Periods since the last Distribution Date, (j)
the amount available under any Enhancement and Credit Enhancement, if any,
as of the close of business on such Distribution Date, (k) the "pool
factor" as of the end of the related Record Date (consisting of a
seven-digit decimal expressing the ratio of the Investor Interest to the
initial Investor Interest), (1) the aggregate amount of collections on
Finance Charge Receivables and annual membership fees processed during the
preceding Monthly Period or Periods since the last Distribution Date, (m)
the portfolio yield for the preceding Monthly Period or Periods since the
last Distribution Date, and (n) certain information relating to the
floating or variable Certificate Rates, if applicable, for the Monthly
Period or Periods ending on such Distribution Date. In the case of a Series
of Certificates having more than one Class, the statements forwarded to
Certificateholders will provide information as to each Class of
Certificates, as appropriate.
On or before January 31 of each calendar year or such other date as
specified in the related Prospectus Supplement, the Paying Agent will
furnish to each person who at any time during the preceding calendar year
was a Certificateholder of record, a statement prepared by the Servicer
containing the information required to be contained in the regular monthly
report to Certificateholders, as set forth in clauses (a), (b) and (c)
above aggregated for such calendar year or the applicable portion thereof
during which such person was a Certificateholder, together with such other
customary information (consistent with the treatment of the Certificates as
debt) as the Trustee or the Servicer deems necessary or desirable to enable
the Certificateholders to prepare their United States tax returns.
EVIDENCE AS TO COMPLIANCE
The Agreement and each New Agreement will provide that on or before
October 31 of each calendar year or such other date as specified in the
related Prospectus Supplement, the Servicer will cause a firm of
independent certified public accountants to furnish a report to the effect
that such accounting firm has made a study and evaluation of the Servicer's
internal accounting controls relative to the servicing of the Accounts and
that, on the basis of such examination, such firm is of the opinion that,
assuming the accuracy of reports by the Servicer's third party agents, the
system of internal accounting controls in effect on the date of such
statement relating to servicing procedures performed by the Servicer, taken
as a whole, was sufficient for the prevention and detection of errors and
irregularities in amounts that would be material to the financial
statements of the Servicer and that such servicing was conducted in
compliance with the sections of the related Agreement during the period
covered by such report (which shall be the period from October 1 (or for
the initial period, the relevant Closing Date) of the preceding calendar
year to and including September 30 of such calendar year), except for such
exceptions or errors as such firm shall believe to be immaterial and such
other exceptions as shall be set forth in such statement.
The Agreement and each New Agreement will provide for delivery to the
Trustee on or before October 31 of each calendar year or such other date as
specified in the related Prospectus Supplement, of an annual statement
signed by an officer of the Servicer to the effect that the Servicer has
fully performed its obligations under the Agreement throughout the
preceding year, or, if there has been a default in the performance of any
such obligation, specifying the nature and status of the default.
AMENDMENTS
Each Agreement and any Series Supplement may be amended by the
Transferor, the Servicer and the related Trustee, without the consent of
Certificateholders of any Series then outstanding, for any purpose,
provided that (i) the Transferor delivers to the Trustee a certificate of
an authorized officer of the Transferor to the effect that such amendment
will not adversely affect in any material respect the interest of such
Certificateholders, (ii) the Transferor delivers a Tax Opinion to the
Trustee and (iii) such amendment will not result in a withdrawal or
reduction of the rating of any outstanding Series under the related Trust
by any Rating Agency. Such an amendment may be entered into in order to
comply with or obtain the benefits of certain recent and future tax
legislation (such as legislation creating FASITs), as described below under
"Certain U.S. Federal Income Tax Consequences--FASIT Legislation."
Each Agreement and the related Series Supplement may be amended by
the Transferor, the Servicer and the related Trustee with the consent of
the holders of Certificates evidencing undivided interests aggregating not
less than 662/3% (or such other percentage specified in the related
Prospectus Supplement) of the Investor Interests for all Series of the
related Trust, for the purpose of adding any provisions to, changing in any
manner or eliminating any of the provisions of the Agreement or the related
Series Supplement or of modifying in any manner the rights of
Certificateholders of any outstanding Series of the Trust. No such
amendment, however, may (a) reduce in any manner the amount of, or delay
the timing of, distributions required to be made on the related Series or
any Series, (b) change the definition of or the manner of calculating the
interest of any Certificateholder of such Series or any Certificateholder
of any other Series issued by the Trust or (c) reduce the aforesaid
percentage of undivided interests the holders of which are required to
consent to any such amendment, in each case without the consent of all
Certificateholders of the related Series and Certificateholders of all
Series adversely affected. Promptly following the execution of any
amendment to the Agreement, the Trustee will furnish written notice of the
substance of such amendment to each Certificateholder. Any Series
Supplement and any amendments regarding the addition or removal of
Receivables or Participations from the Trust will not be considered an
amendment requiring Certificateholder consent under the provisions of the
related Agreement and any Series Supplement.
LIST OF CERTIFICATEHOLDERS
With respect to each Series of Certificates, upon written request of
Certificateholders of record representing undivided interests in the Trust
aggregating not less than 10% (or such other percentage specified in the
related Prospectus Supplement) of the Investor Interest, the Trustee after
having been adequately indemnified by such Certificateholders for its costs
and expenses, and having given the Servicer notice that such request has
been made, will afford such Certificateholders access during business hours
to the current list of Certificateholders of the Trust for purposes of
communicating with other Certificateholders with respect to their rights
under the Agreement. See "--Book-Entry Registration" and "--Definitive
Certificates" above.
THE TRUSTEE
The Prospectus Supplement for each Series specifies the Trustee under
the related Agreement. The Transferor, the Servicer and their respective
affiliates may, from time to time, enter into normal banking and trustee
relationships with the Trustee and its affiliates. The Trustee, the
Transferor, the Servicer and any of their respective affiliates may hold
Certificates in their own names. In addition, for purposes of meeting the
legal requirements of certain local jurisdictions, the Trustee shall have
the power to appoint a co-trustee or separate trustees of all or any part
of the Trust. In the event of such appointment, all rights, powers, duties
and obligations conferred or imposed upon the Trustee by the Agreement
shall be conferred or imposed upon the Trustee and such separate trustee or
co-trustee jointly, or, in any jurisdiction in which the Trustee shall be
incompetent or unqualified to perform certain acts, singly upon such
separate trustee or co-trustee who shall exercise and perform such rights,
powers, duties and obligations solely at the direction of the Trustee.
The Trustee may resign at any time, in which event the Transferor
will be obligated to appoint a successor Trustee. The Transferor may also
remove the Trustee if the Trustee ceases to be eligible to continue as such
under the Agreement or if the Trustee becomes insolvent. In such
circumstances, the Transferor will be obligated to appoint a successor
Trustee. Any resignation or removal of the Trustee and appointment of a
successor Trustee does not become effective until acceptance of the
appointment by the successor Trustee.
CREDIT ENHANCEMENT
GENERAL
For any Series, Credit Enhancement may be provided with respect to
one or more Classes thereof. Credit Enhancement may be in the form of the
subordination of one or more Classes of the Certificates of such Series,
the establishment of a cash collateral guaranty or account, a collateral
interest, a letter of credit, a surety bond, an insurance policy, a spread
account, a reserve account, the use of cross-support features or another
method of Credit Enhancement described in the related Prospectus
Supplement, or any combination of the foregoing. If so specified in the
related Prospectus Supplement, any form of Credit Enhancement may be
structured so as to be drawn upon by more than one Class to the extent
described therein. The term "ENHANCEMENT" means, with respect to any Series
or Class thereof, any Credit Enhancement, guaranteed rate agreement,
maturity liquidity facility, interest rate cap agreement, interest rate
swap agreement or other similar arrangement for the benefit of the
Certificateholders of such Series or Class. The term "CREDIT ENHANCEMENT"
means, with respect to any Series or Class thereof, any cash collateral
guaranty or account, collateral interest, letter of credit, surety bond,
insurance policy, spread account, reserve account or other similar
arrangement for the benefit of the Certificateholders of such Series or
Class. Credit Enhancement may also take the form of subordination of one or
more Classes of a Series to any other Class or Classes of a Series or a
cross-support feature which requires collections on Receivables of one
Series to be paid as principal and/or interest with respect to another
Series.
Unless otherwise specified in the related Prospectus Supplement for a
Series, the Credit Enhancement will not provide protection against all
risks of loss and will not guarantee repayment of the entire principal
balance of the Certificates and interest thereon. If losses occur which
exceed the amount covered by the Credit Enhancement or which are not
covered by the Credit Enhancement, Certificateholders will bear their
allocable share of deficiencies.
If Credit Enhancement is provided with respect to a Series, the
related Prospectus Supplement includes a description of (a) the amount
payable under such Credit Enhancement, (b) any conditions to payment
thereunder not otherwise described herein, (c) the conditions (if any)
under which the amount payable under such Credit Enhancement may be reduced
and under which such Credit Enhancement may be terminated or replaced and
(d) any material provision of any agreement relating to such Credit
Enhancement. Additionally, the related Prospectus Supplement may set forth
certain information with respect to any provider of Credit Enhancement (a
"CREDIT ENHANCEMENT PROVIDER"), including (i) a brief description of its
principal business activities, (ii) its principal place of business, place
of incorporation and the jurisdiction under which it is chartered or
licensed to do business, (iii) if applicable, the identity of regulatory
agencies which exercise primary jurisdiction over the conduct of its
business and (iv) its total assets, and its stockholders' or policy
holders' surplus, if applicable, and other appropriate financial
information as of the date specified in the Prospectus Supplement. If so
specified in the related Prospectus Supplement, Credit Enhancement with
respect to a Series may be available to pay principal of the Certificates
of such Series following the occurrence of certain Pay Out Events with
respect to such Series. In such event, the Credit Enhancement Provider may
have an interest in certain cash flows in respect of the Receivables to the
extent described in such Prospectus Supplement (the "ENHANCEMENT INVESTED
AMOUNT").
SUBORDINATION
If so specified in the related Prospectus Supplement, one or more
Classes of any Series will be subordinated as described in the related
Prospectus Supplement to the extent necessary to fund payments with respect
to the Senior Certificates. The rights of the holders of any such
Subordinated Certificates to receive distributions of principal and/or
interest on any Distribution Date for such Series will be subordinate in
right and priority to the rights of the holders of Senior Certificates, but
only to the extent set forth in the related Prospectus Supplement. If so
specified in the related Prospectus Supplement, subordination may apply
only in the event of certain types of losses not covered by another Credit
Enhancement. The related Prospectus Supplement also sets forth any
applicable information concerning the amount of subordination of a Class or
Classes of Subordinated Certificates in a Series, the circumstances in
which such subordination will be applicable, the manner, if any, in which
the amount of subordination will decrease over time, and the conditions
under which amounts available from payments that would otherwise be made to
holders of such Subordinated Certificates will be distributed to holders of
Senior Certificates. If collections of Receivables otherwise distributable
to holders of a subordinated Class of a Series will be used as support for
a Class of another Series, the related Prospectus Supplement specifies the
manner and conditions for applying such a cross-support feature.
CASH COLLATERAL GUARANTY OR ACCOUNT
If so specified in the related Prospectus Supplement, support for a
Series or one or more Classes thereof will be provided by a guaranty (the
"CASH COLLATERAL GUARANTY") secured by the deposit of cash or certain
permitted investments in an account (the "CASH COLLATERAL ACCOUNT")
reserved for the beneficiaries of the Cash Collateral Guaranty or by a Cash
Collateral Account alone. The amount available pursuant to the Cash
Collateral Guaranty or the Cash Collateral Account will be the lesser of
amounts on deposit in the Cash Collateral Account and an amount specified
in the related Prospectus Supplement. The related Prospectus Supplement
sets forth the circumstances under which payments are made to beneficiaries
of the Cash Collateral Guaranty from the Cash Collateral Account or from
the Cash Collateral Account directly.
COLLATERAL INTEREST
If so specified in the related Prospectus Supplement, support for a
Series or one or more Classes thereof will be provided initially by an
undivided interest in the Trust (the "COLLATERAL INTEREST") in an amount
initially equal to a percentage of the Certificates of such Series as
specified in the Prospectus Supplement. Such Series may also have the
benefit of a Cash Collateral Guaranty or Cash Collateral Account with an
initial amount on deposit therein, if any, as specified in the related
Prospectus Supplement which will be increased (i) to the extent the
Transferor elects, subject to certain conditions specified in such
Prospectus Supplement, to apply collections of Principal Receivables
allocable to the Collateral Interest to decrease the Collateral Interest,
(ii) to the extent collections of Principal Receivables allocable to the
Collateral Interest are required to be deposited into the Cash Collateral
Account as specified in such Prospectus Supplement and (iii) to the extent
excess collections of Finance Charge Receivables are required to be
deposited into the Cash Collateral Account as specified in such Prospectus
Supplement. The total amount of the Credit Enhancement available pursuant
to the Collateral Interest and, if applicable, the Cash Collateral Guaranty
or Cash Collateral Account will be the lesser of the sum of the Collateral
Interest and the amount on deposit in the Cash Collateral Account and an
amount specified in the related Prospectus Supplement. The related
Prospectus Supplement sets forth the circumstances under which payments
which otherwise would be made to holders of the Collateral Interest will be
distributed to holders of Certificates and, if applicable, the
circumstances under which payment will be made under the Cash Collateral
Guaranty or under the Cash Collateral Account.
LETTER OF CREDIT
If so specified in the related Prospectus Supplement, support for a
Series or one or more Classes thereof will be provided by one or more
letters of credit. A letter of credit may provide limited protection
against certain losses in addition to or in lieu of other Credit
Enhancement. The issuer of the letter of credit will be obligated to honor
demands with respect to such letter of credit, to the extent of the amount
available thereunder, to provide funds under the circumstances and subject
to such conditions as are specified in the related Prospectus Supplement.
The maximum liability of the issuer of the letter of credit under
such letter of credit will generally be an amount equal to a percentage
specified in the related Prospectus Supplement of the initial Investor
Interest of a Series or a Class of such Series. The maximum amount
available at any time to be paid under a letter of credit will be
determined in the manner specified therein and in the related Prospectus
Supplement.
SURETY BOND OR INSURANCE POLICY
If so specified in the related Prospectus Supplement, insurance with
respect to a Series or one or more Classes thereof will be provided by one
or more insurance companies. Such insurance will guarantee, with respect to
one or more Classes of the related Series, distributions of interest or
principal in the manner and amount specified in the related Prospectus
Supplement. If so specified in the related Prospectus Supplement, a surety
bond will be purchased for the benefit of the holders of any Series or
Class of such Series to assure distributions of interest or principal with
respect to such Series or Class of Certificates in the manner and amount
specified in the related Prospectus Supplement.
SPREAD ACCOUNT
If so specified in the related Prospectus Supplement, support for a
Series or one or more Classes thereof will be provided by the periodic
deposit of certain available excess cash flow from the Trust assets into an
account (the "SPREAD ACCOUNT") intended to assist with subsequent
distribution of interest and principal on the Certificates of such Class or
Series in the manner specified in the related Prospectus Supplement.
RESERVE ACCOUNT
If so specified in the related Prospectus Supplement, support for a
Series or one or more Classes thereof or any Enhancement related thereto
will be provided by the establishment of a reserve account (the "RESERVE
ACCOUNT"). The Reserve Account may be funded, to the extent provided in the
related Prospectus Supplement, by an initial cash deposit, the retention of
certain periodic distributions of principal or interest or both otherwise
payable to one or more Classes of Certificates, including the Subordinated
Certificates, or the provision of a letter of credit, guaranty, insurance
policy or other form of credit or any combination thereof. The Reserve
Account will be established to assist with the subsequent distribution of
principal or interest on the Certificates of such Series or Class thereof
or such other amount owing on any Enhancement thereto in the manner
provided in the related Prospectus Supplement.
CERTIFICATE RATINGS
Any rating of the Certificates by a Rating Agency will indicate:
o its view on the likelihood that Certificateholders will receive
required interest and principal payments; and
o its evaluation of the Receivables and the availability of any
Enhancement for the Certificates.
Among the things a rating will not indicate are:
o the likelihood that principal payments will be made on a
scheduled payment date;
o the likelihood that a Pay Out Event will occur;
o the likelihood that a United States withholding tax will be
imposed on non-U.S. Certificateholders;
o the marketability of the Certificates;
o the market price of the Certificates; or
o whether the Certificates are an appropriate investment for any
purchaser.
A rating will not be a recommendation to buy, sell or hold the
Certificates. A rating may be lowered or withdrawn at any time by a Rating
Agency.
The Transferor will request a rating of the Certificates offered by
this Prospectus and the related Prospectus Supplement from at least one
Rating Agency. It will be a condition to the issuance of the Certificates
of each Series or Class offered pursuant to this Prospectus and the related
Prospectus Supplement (including each Series that includes a Pre-Funding
Account) that they be rated in one of the four highest rating categories by
at least one nationally recognized rating organization (each such rating
agency selected by the Transferor to rate any Series, a "RATING AGENCY").
The rating or ratings applicable to the Certificates of each Series or
Class offered hereby will be set forth in the related Prospectus
Supplement. Rating agencies other than those requested could assign a
rating to the Certificates and such a rating could be lower than any rating
assigned by a Rating Agency chosen by the Transferor.
CERTAIN LEGAL ASPECTS OF THE RECEIVABLES
TRANSFER OF RECEIVABLES
The Transferor will represent and warrant in the Agreement and each
New Agreement that the transfer of Receivables by it to the related Trust
is either a valid transfer and assignment to such Trust of all right, title
and interest of the Transferor in and to the related Receivables, except
for the interest of the Transferor as holder of the Transferor Certificate,
or the grant to the Trust of a security interest in such Receivables. The
Transferor also will represent and warrant in the Agreement and each New
Agreement that, in the event the transfer of Receivables by the Transferor
to the related Trust is deemed to create a security interest under the
Uniform Commercial Code, as in effect in the State of Delaware (the "UCC"),
there will exist a valid, subsisting and enforceable first priority
perfected security interest in such Receivables created thereafter in favor
of such Trust on and after their creation, except for certain tax and other
governmental liens. For a discussion of the Trust's rights arising from a
breach of these warranties, see "Description of the
Certificates--Representations and Warranties."
The Transferor will represent as to Receivables to be conveyed that
the Receivables are "accounts" for purposes of the UCC. Both the transfer
and assignment of accounts and the transfer of accounts as security for an
obligation are treated under Article 9 of the UCC as creating a security
interest therein and are subject to its provisions, and the filing of an
appropriate financing statement is required to perfect the security
interest of the related Trust. Financing statements covering the
Receivables have been and will be filed with the appropriate governmental
authority to protect the interests of the related Trust in the Receivables.
There are certain limited circumstances under the UCC in which a
prior or subsequent transferee of Receivables coming into existence after a
Closing Date could have an interest in such Receivables with priority over
such Trust's interest. Under the Agreement and each New Agreement, however,
the Transferor will represent and warrant that it transferred the
Receivables to the Trust free and clear of the lien of any third party. In
addition, the Transferor will covenant that it will not sell, pledge,
assign, transfer or grant any lien on any Receivable (or any interest
therein) other than to the Trust. A tax or government lien or other
nonconsensual lien on property of the Transferor arising prior to the time
a Receivable comes into existence may also have priority over the interest
of the Trust in such Receivable. In addition, if the FDIC were appointed as
receiver of the Transferor, certain administrative expenses of the receiver
may also have priority over the interest of the Trust in such Receivable.
CERTAIN MATTERS RELATING TO RECEIVERSHIP
The Federal Deposit Insurance Act ("FDIA"), as amended by the
Financial Institutions Reform, Recovery and Enforcement Act of 1989
("FIRREA"), sets forth certain powers that the Federal Deposit Insurance
Corporation ("FDIC") could exercise if it were appointed as conservator or
receiver of the Transferor or the Servicer. Among other things, the FDIA
grants such a conservator or receiver the power to repudiate contracts of,
and to request a stay of up to 90 days of any judicial action or proceeding
involving, the Transferor or the Servicer.
To the extent that (i) the Transferor granted a security interest in
the Receivables to the Trust, (ii) the interest was validly perfected
before the Transferor's insolvency, (iii) the interest was not taken or
granted in contemplation of the Transferor's insolvency or with the intent
to hinder, delay or defraud the Transferor or its creditors, (iv) the
Agreement is continuously a record of the Bank, and (v) the Agreement
represents a bona fide and arm's length transaction undertaken for adequate
consideration in the ordinary course of business and that the Trustee is
the secured party and is not an insider or affiliate of the Transferor,
such valid perfected security interest of the Trustee should be enforceable
(to the extent of the Trust's "actual direct compensatory damages")
notwithstanding the insolvency of, or the appointment of a receiver or
conservator for, the Transferor and payments to the Trust with respect to
the Receivables (up to the amount of such damages) should not be subject to
an automatic stay of payment or to recovery by the FDIC as conservator or
receiver of the Transferor. If, however, the FDIC were to assert that the
security interest was unperfected or unenforceable or were to require the
Trustee to establish its right to those payments by submitting to and
completing the statutory administrative claims procedure established under
FIRREA or the FDIC as conservator or receiver were to request a stay of
proceedings with respect to the Transferor as provided under FIRREA, delays
in payments on the Certificates and possible reductions in the amount of
those payments could occur. The FDIA does not define the term "actual
direct compensatory damages." The FDIC has stated that a claim for "actual
direct compensatory damages" is limited to such damages determined as of
the date of appointment of the FDIC as conservator or receiver. Since the
FDIC may delay repudiation or disaffirmation for up to 180 days following
such appointment, investors may not have a claim for interest accrued
during this 180 day period. On December 18, 1998, the FDIC proposed a
statement of policy regarding the treatment of asset-backed securitization
transactions in the event of conservatorship or receivership. In addition,
in one case involving the repudiation by the Resolution Trust Corporation
of certain secured zero-coupon bonds issued by a savings association, a
United States federal district court held that "actual direct compensatory
damages" in the case of a marketable security meant the market value of the
repudiated bonds as of the date of repudiation. If that court's view were
applied to determine the Trust's "actual direct compensatory damages" in
the event the FDIC repudiated the Transferor's obligations under the
Agreement, the amount paid to Certificateholders could, depending upon
circumstances existing on the date of the repudiation, be less than the
principal of the Certificates and the interest accrued thereon to the date
of payment.
The Agreement provides that, upon the appointment of a conservator or
receiver or upon a voluntary liquidation with respect to the Transferor,
the Transferor will promptly give notice thereof to the Trustee and a Pay
Out Event will occur with respect to all Series then outstanding. Pursuant
to the Agreement, newly created Principal Receivables would not be
transferred to the Trust on and after any such appointment or voluntary
liquidation, and the Trustee would proceed to sell, dispose of or otherwise
liquidate the Receivables in a commercially reasonable manner and on
commercially reasonable terms, unless otherwise instructed within a
specified period by holders of certificates representing undivided
interests aggregating more than 50% of the investor interest of each
outstanding Series (or with respect to each Series with two or more
Classes, 50% of each Class), or unless otherwise required by the FDIC as
receiver or conservator of the Transferor. Under the Agreement, the
proceeds from the sale of the Receivables allocable to the Certificates
would be treated as collections of the Receivables and would be distributed
to the Certificateholders. This procedure could be delayed, as described
above. If the only Pay Out Event to occur is either the insolvency of the
Transferor or the appointment of a conservator or receiver for the
Transferor, the FDIC as conservator or receiver may have the power to
prevent the early sale, liquidation or disposition of the Receivables and
the commencement of the Rapid Amortization Period. See "Description of the
Certificates--Pay Out Events."
If, upon the insolvency of the Servicer, the Servicer were to be
placed into conservatorship or receivership, the FDIC as conservator or
receiver would have the power to repudiate and refuse to perform any
obligations, including servicing obligations, of the Servicer under the
Agreement or any other contract, and to request a stay of up to 90 days of
any judicial action or proceeding involving the Servicer. In the event of a
Servicer Default, if the FDIC were appointed as conservator or receiver for
the Servicer, and no Servicer Default other than such conservatorship or
receivership or insolvency of the Servicer exists, the FDIC may have the
power to prevent a transfer of servicing to a successor Servicer or to
appoint a successor Servicer chosen by the FDIC.
In Octagon Gas Systems, Inc. v. Rimmer, 995 F.2d 948 (10th Cir.
1993), cert. denied, 114 S. Ct. 554 (1993) ("OCTAGON"), the United States
Court of Appeals for the 10th Circuit suggested that even where a transfer
of accounts from a seller to a buyer constitutes a "true sale," the
accounts would nevertheless constitute property of the seller's bankruptcy
estate in a bankruptcy of the seller. If the Transferor were to be placed
into receivership and a court were to follow the Octagon court's reasoning,
Certificateholders might experience delays in payment or possibly losses in
their investment in the Certificates. Counsel has advised the Transferor
that the facts of the Octagon case are distinguishable from those in the
sale transactions between the Transferor and the Trust and that the
reasoning of the Octagon case appears to be inconsistent with established
precedent and the UCC. In addition, because the Transferor, the Trust and
the transactions governed by the Agreement do not have any particular link
to the 10th Circuit, it is unlikely that the Transferor would be subject to
a receivership proceeding in the 10th Circuit. Accordingly, the Octagon
case should not be binding precedent on a court in a receivership
proceeding.
CONSUMER PROTECTION LAWS
The relationship of the cardholder and credit card issuer is
extensively regulated by Federal and state consumer protection laws. With
respect to credit cards issued by the Bank, the most significant of these
laws include the Federal Truth in Lending Act, Equal Credit Opportunity
Act, Fair Debt Collection Practices Act, Fair Credit Reporting Act and
Electronic Funds Transfer Act. These statutes impose disclosure
requirements when a credit card account is advertised, when it is opened,
at the end of monthly billing cycles, upon account renewal for accounts on
which annual fees are assessed, and at year end and, in addition, limit
cardholder liability for unauthorized use, prohibit certain discriminatory
practices in extending credit, and impose certain limitations on the type
of account-related charges that may be assessed. Federal legislation
requires credit card issuers to disclose to consumers the interest rates,
annual cardholder fees, grace periods, balance calculation methods, and
other features associated with their credit card accounts. Cardholders are
entitled under current law to have payments and credits applied to the
credit card account promptly, to receive prescribed notices and to have
billing errors resolved promptly.
The Trust may be liable for certain violations of consumer protection
laws that apply to the Receivables, either as assignee of the Transferor
with respect to obligations arising before transfer of the Receivables to
the Trust or as a party directly responsible for obligations arising after
the transfer. In addition, a cardholder may be entitled to assert such
violations by way of set-off against his obligation to pay the amount of
Receivables owing. The Transferor covenants in the Agreement to accept the
transfer of all Receivables in an Account if any Receivable in such Account
has not been created in compliance with the requirements of such laws. The
Bank has also agreed in the Agreement to indemnify the Trust for, among
other things, any liability arising from such violations. See "Description
of the Certificates--Representations and Warranties."
Various proposed laws and amendments to existing laws have from time
to time been introduced in Congress and certain state and local
legislatures that, if enacted, would further regulate the credit card
industry, certain of which would, among other things, impose a ceiling on
the rate at which a financial institution may assess finance charges and
fees on credit card accounts that would be substantially below the rates of
the finance charges and fees the Bank currently assesses on its accounts.
In particular, on May 5, 1999 an amendment to the Federal Truth-in-Lending
Act was passed by the House of Representatives as a part of the bankruptcy
reform bill and referred to the Senate. This amendment, among other things,
requires (i) disclosure as to the time it would take a consumer to repay a
balance in the consumer makes only the minimum payments, (ii) disclosure as
to when any introductory rate will expire, as well as the rate that will
then apply and (iii) disclose in internet based solicitations identical to
that contained in direct mail solicitations. In addition, on May 4, 1999,
President Clinton proposed similar legislation to require additional
disclosure in credit cards bills and solicitations.
The potential effect of any legislation which limits the amount of
finance charges and fees that may be charged on credit cards could be to
reduce the portfolio yield on the Accounts. If such portfolio yield is
reduced, a Pay Out Event may occur and the Rapid Amortization Period would
commence.
The Soldiers' and Sailors' Civil Relief Act of 1940 allows
individuals on active duty in the military to cap the interest rate on
debts incurred before the call to active duty to 6% per annum. In addition,
subject to judicial discretion, any action or court proceeding in which an
individual in military service is involved may be stayed if the
individual's rights would be prejudiced by denial of such stay.
Application of Federal and state bankruptcy and debtor relief laws
would affect the interests of the Certificateholders if such laws result in
any Receivables being written off as uncollectible when the applicable
Enhancement is equal to zero. See "Description of the
Certificates--Defaulted Receivables; Rebates and Fraudulent Charges;
Investor
Charge-Offs."
INDUSTRY LITIGATION
In October 1998, the United States Department of Justice (the "DOJ")
filed an antitrust lawsuit in federal court in New York City against VISA
U.S.A., Inc., VISA International Inc. (together, "VISA") and MasterCard
International Incorporated ("MASTERCARD INTERNATIONAL") alleging that the
two credit card associations restrain competition and limit consumer
choice. The DOJ in such lawsuit challenges, among other things, the control
of both VISA and MasterCard International by the same set of banks, the
ability of banks to issue both MasterCard and VISA cards as well as the
rules adopted by the two associations prohibiting members from offering
credit cards of certain competitors. In public statements, both VISA and
MasterCard International have contested the DOJ's allegations. The Bank is
unable to predict the effect of such lawsuit on the Bank's credit card
business. A final adverse decision against VISA and MasterCard
International, or a similar settlement with the DOJ by the two
associations, could result in changes in the current associations and the
Bank's ability to issue both MasterCard and VISA cards as well as cards of
certain other competitors.
CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES
GENERAL
The following discussion, summarizing certain anticipated U.S.
Federal income tax aspects of the purchase, ownership and disposition of
the Certificates of a Series, is based upon the provisions of the Internal
Revenue Code of 1986, as amended (the "CODE"), proposed, temporary and
final Treasury regulations thereunder, and published rulings and court
decisions in effect as of the date hereof, all of which are subject to
change, possibly retroactively. This discussion does not address every
aspect of the Federal income tax laws that may be relevant to Certificate
Owners of a Series in light of their personal investment circumstances or
to certain types of Certificate Owners of a Series subject to special
treatment under the U.S. Federal income tax laws (for example, banks and
life insurance companies). Each prospective Certificate Owner is urged to
consult its own tax advisor in determining the Federal, state, local and
foreign income and any other tax consequence of the purchase, ownership and
disposition of a Certificate.
CHARACTERIZATION OF THE CERTIFICATES AS INDEBTEDNESS
Unless otherwise specified in the related Prospectus Supplement,
special tax counsel to the Bank ("SPECIAL TAX COUNSEL") will, upon issuance
of a Series of Certificates, advise the Bank based on the assumptions and
qualifications set forth in the opinion that the Certificates of such
Series that are offered pursuant to a Prospectus Supplement (the "OFFERED
CERTIFICATES;" and for purposes of this section "Certain U.S. Federal
Income Tax Consequences," the term "CERTIFICATE OWNER" refers to a holder
of a beneficial interest in an Offered Certificate) will be treated as
indebtedness for Federal income tax purposes. However, opinions of counsel
are not binding on the Internal Revenue Service (the "IRS") and there can
be no assurance that the IRS could not successfully challenge this
conclusion.
The Transferor expresses in the Agreement its intent that for
Federal, state and local income or franchise tax purposes, the Offered
Certificates of each Series will be indebtedness secured by the
Receivables. The Transferor agrees and each Certificateholder and
Certificate Owner, by acquiring an interest in an Offered Certificate,
agrees or will be deemed to agree to treat the Offered Certificates of such
Series as indebtedness for Federal, state and local income or franchise tax
purposes. However, because different criteria are used to determine the
non-tax accounting characterization of the transactions contemplated by the
Agreement, the Transferor expects to treat such transaction, for regulatory
and financial accounting purposes, as a sale of an ownership interest in
the Receivables and not as a secured loan.
In general, whether for Federal income tax purposes a transaction
constitutes a sale of property or a loan, the repayment of which is secured
by the property, is a question of fact, the resolution of which is based
upon the economic substance of the transaction rather than its form or the
manner in which it is labeled. While the IRS and the courts have set forth
several factors to be taken into account in determining whether the
substance of a transaction is a sale of property or a secured loan for
Federal income tax purposes, the primary factor in making this
determination is whether the transferee has assumed the risk of loss or
other economic burdens relating to the property and has obtained the
benefits of ownership thereof. Unless otherwise set forth in a Prospectus
Supplement, it is expected that, as set forth in its opinion, Special Tax
Counsel will analyze and rely on several factors in reaching its opinion
that the weight of the benefits and burdens of ownership of the Receivables
has not been transferred to the Certificate Owners.
In some instances, courts have held that a taxpayer is bound by a
particular form it has chosen for a transaction, even if the substance of
the transaction does not accord with its form. Unless otherwise specified
in a Prospectus Supplement, it is expected that Special Tax Counsel will
advise that the rationale of those cases will not apply to the transaction
evidenced by a Series of Certificates, because the form of the transaction,
as reflected in the operative provisions of the documents, either is not
inconsistent with the characterization of the Offered Certificates of such
Series as debt for Federal income tax purposes or otherwise makes the
rationale of those cases inapplicable to this situation.
President Clinton's Fiscal Year 2000 Budget Proposal includes a
provision that would preclude a corporate taxpayer (but not the IRS) from
taking any position that the Federal income tax treatment of a transaction
is different from that dictated by its "form" if a "tax indifferent person"
has a direct or indirect interest in such transaction, unless the taxpayer
discloses the inconsistent position on its tax return. The statutory
language of the provision has not been drafted, and accordingly it is
unclear to what extent, if any, the provision would apply to the
Certificates. As drafted, however, the provision would apply only to
transactions entered into after the date of first "committee" action in
Congress.
TAXATION OF INTEREST INCOME OF CERTIFICATEHOLDERS
As set forth above, it is expected that, unless otherwise specified
in a Prospectus Supplement, Special Tax Counsel will advise the Bank that
the Offered Certificates will constitute indebtedness for Federal income
tax purposes, and accordingly, interest thereon will be includible in
income by Certificate Owners as ordinary income in accordance with their
respective methods of tax accounting. Interest received on the Offered
Certificates may also constitute "investment income" for purposes of
certain limitations of the Code concerning the deductibility of investment
interest expense.
While it is not anticipated that the Offered Certificates will be
issued at a greater than de minimis discount, under applicable Treasury
regulations (the "REGULATIONS") the Offered Certificates may nevertheless
be deemed to have been issued with original issue discount ("OID"). This
could be the case, for example, if interest payments for a Series are not
treated as "qualified stated interest" because the IRS determines that (i)
no reasonable legal remedies exist to compel timely payment and (ii) the
Offered Certificates do not have terms and conditions that make the
likelihood of late payment (other than a late payment that occurs within a
reasonable grace period) or nonpayment a remote contingency. Applicable
regulations provide that, for purposes of the foregoing test, the
possibility of nonpayment due to default, insolvency, or similar
circumstances, is ignored. Although this provision does not directly apply
to the Offered Certificates (because they have no actual default
provisions) the Transferor intends to take the position that, because
nonpayment can occur only as a result of events beyond its control
(principally, loss rates and payment delays on the Receivables
substantially in excess of those anticipated), nonpayment is a remote
contingency. Based on the foregoing, and on the fact that generally
interest will accrue on the Offered Certificates at a "qualified floating
rate," the Transferor intends to take the position that interest payments
on the Offered Certificates constitute qualified stated interest. If,
however, interest payments for a Series were not classified as "qualified
stated interest," all of the taxable income to be recognized with respect
to the Offered Certificates would be includible in income as OID but would
not be includible again when the interest is actually received.
If the Offered Certificates are in fact issued at a greater than de
minimis discount or are treated as having been issued with OID under the
Regulations, the following rules will apply. The excess of the "stated
redemption price at maturity" of an Offered Certificate over the original
issue price (in this case, the initial offering price at which a
substantial amount of the Offered Certificates are sold to the public) will
constitute OID. A Certificate Owner must include OID in income as interest
over the term of the Offered Certificate under a constant yield method. In
general, OID must be included in income in advance of the receipt of cash
representing that income. In the case of a debt instrument as to which the
repayment of principal may be accelerated as a result of the prepayment of
other obligations securing the debt instrument (a "PREPAYABLE INSTRUMENT"),
the periodic accrual of OID is determined by taking into account both the
prepayment assumptions used in pricing the debt instrument and the
prepayment experience. If this provision applies to a Class of Certificates
(which is unlikely, but not entirely free from doubt), the amount of OID
which will accrue in any given "accrual period" may either increase or
decrease depending upon the actual prepayment rate. Accordingly, each
Certificate Owner should consult its own tax advisor regarding the impact
to it of the OID rules if the Offered Certificates are issued with OID.
Under the Regulations, a holder of a Certificate issued with de minimis OID
must include such OID in income proportionately as principal payments are
made on a Class of Certificates.
A Certificate Owner who purchases an Offered Certificate at a
discount from its adjusted issue price may be subject to the "market
discount" rules of the Code. These rules provide, in part, for the
treatment of gain attributable to accrued market discount as ordinary
income upon the receipt of partial principal payments or on the sale or
other disposition of the Offered Certificate, and for the deferral of
interest deductions with respect to debt incurred to acquire or carry the
market discount Offered Certificate.
A Certificate Owner who purchases an Offered Certificate for an
amount in excess of the sum of all amounts payable on such Certificate
after the purchase date other than payment of qualified stated interest
(the "REMAINING REDEMPTION AMOUNT") shall be considered to have purchased
the Certificate at a premium. Such Certificate Owner may generally elect to
amortize such premium (as an offset to interest income), using a constant
yield method, over the remaining term of the Certificate.
A Certificate Owner who purchases an Offered Certificate that was
issued with OID for an amount less than or equal to the Remaining
Redemption Amount but in excess of the Certificate adjusted issue price
(any such excess being "ACQUISITION PREMIUM") generally is permitted to
reduce the daily portion of OID otherwise includible in such Certificate
Owner's taxable income.
SALE OR OTHER DISPOSITION OF A CERTIFICATE
In general, a Certificate Owner will recognize gain or loss upon the
sale, exchange, redemption, or other taxable disposition of an Offered
Certificate measured by the difference between (i) the amount of cash and
the fair market value of any property received (other than amounts
attributable to, and taxable as, accrued interest) and (ii) the Certificate
Owner's tax basis in the Offered Certificate (which is equal, in general,
to the purchase price of the Certificate increased by any OID or market
discount previously included in income by the holder and decreased by any
deductions previously allowed for amortizable bond premium and by any
payments reflecting principal or OID received with respect to such
Certificate). Subject to the market discount rules discussed above and to
the one-year holding requirement for long-term capital gain treatment, any
such gain or loss generally will be long-term capital gain, provided that
the Offered Certificate was held as a capital asset and provided, further,
that if the rules applicable to Prepayable Instruments apply, any OID not
previously accrued will be treated as ordinary income. The maximum ordinary
income rate for individuals, estates, and trusts exceeds the maximum
long-term capital gains rate for such taxpayers. In addition, capital
losses generally may be used only to offset capital gains.
TAX CHARACTERIZATION OF THE TRUST
The Agreement permits the issuance of Classes of Certificates that
are treated for Federal income tax purposes either as indebtedness or as an
interest in a partnership. Accordingly, a Trust could be characterized
either as (i) a security device to hold Receivables securing the repayment
of the Certificates of all Series or (ii) a partnership in which the
Transferor and holders of certain Classes of Certificates are partners, and
which has issued debt represented by other Classes of Certificates
(including, unless otherwise specified in a Series Supplement, the Offered
Certificates). In connection with the issuance of Certificates of any
Series, Special Tax Counsel will render an opinion to the Bank, based on
the assumptions and qualifications set forth therein, that under then
current law, the issuance of the Certificates of such Series will not cause
the applicable Trust to be characterized for Federal income tax purposes as
an association (or publicly traded partnership) taxable as a corporation.
The assumptions and qualifications set forth in such opinion will include
the qualification that the opinion is limited to the issuance of the
Certificates of such Series by such Trust and an assumption that any
secondary transactions entered into with respect to any Class of
Certificates (such as the deposit of Certificates into a second trust and
the issuance of securities out of that trust) will not adversely affect the
Federal income tax status of such Trust.
The opinion of Special Tax Counsel with respect to Offered
Certificates and a Trust will not be binding on the courts or the IRS. It
is possible that the IRS could assert that, for purposes of the Code, the
transaction contemplated by this Prospectus and a Prospectus Supplement
constitutes a sale of the Receivables (or an interest therein) to the
Certificate Owners of one or more Series or Classes and that the proper
classification of the legal relationship between the Bank and some or all
of the Certificate Owners or Certificateholders of one or more Series
resulting from the transaction is that of a partnership or a publicly
traded partnership taxable as a corporation. The Transferor currently does
not intend to comply with the Federal income tax reporting requirements
that would apply if any Classes of Certificates were treated as interests
in a partnership (unless, as is permitted by the Agreement, an interest in
the applicable Trust which is issued or sold is intended to be classified
as an interest in a partnership).
If a Trust were treated in whole or in part as a partnership in which
some or all Certificate Owners of one or more Series were partners, that
partnership could be classified as a publicly traded partnership taxable as
a corporation. A partnership will be classified as a publicly traded
partnership taxable as a corporation if equity interests therein are traded
on an "established securities market," or are "readily tradeable" on a
"secondary market" or its "substantial equivalent" unless certain
exceptions apply. One such exception would apply if the Trust is not
engaged in a "financial business" and 90% or more of its income consists of
interest and certain other types of passive income. Because Treasury
regulations do not clarify the meaning of a "financial business" for this
purpose, it is unclear whether this exception applies. The Transferor has
taken and intends to take measures designed to reduce the risk that a Trust
could be classified as a publicly traded partnership taxable as a
corporation by reason of trading of interests in such Trust other than the
Offered Certificates and other certificates with respect to which an
opinion is rendered that such certificates constitute debt for Federal
income tax purposes. However, there can be no assurance that a Trust could
not become a publicly traded partnership, because certain of the actions
necessary to comply with such exceptions are not fully within the control
of the Transferor.
If a transaction were treated as creating a partnership between the
Transferor and the Certificate Owners of one or more Series, the
partnership itself would not be subject to Federal income tax (unless it
were to be characterized as a publicly traded partnership taxable as a
corporation); rather, the partners of such partnership, including the
Certificate Owners of such Series, would be taxed individually on their
respective distributive shares of the partnership's income, gain, loss,
deductions and credits. The amount and timing of items of income and
deductions of a Certificate Owner could differ if the Offered Certificates
were held to constitute partnership interests, rather than indebtedness.
Moreover, unless the partnership were treated as engaged in a trade or
business, an individual's share of expenses of the partnership would be
miscellaneous itemized deductions that, in the aggregate, are allowed as
deductions only to the extent they exceed two percent of the individual's
adjusted gross income, and would be subject to reduction under Section 68
of the Code if the individual's adjusted gross income exceeded certain
limits. As a result, the individual might be taxed on a greater amount of
income than the stated rate on the Offered Certificates. Finally, if the
partnership were a publicly traded partnership that qualifies for exemption
from taxation as a corporation, all or a portion of any taxable income
allocated to a Certificate Owner that is a pension, profit sharing or
employee benefit plan or other tax-exempt entity (including an individual
retirement account) may, under certain circumstances, constitute "unrelated
business taxable income" which generally would be taxable to the holder.
Partnership characterization also may have adverse state and local income
or franchise tax consequences for a Certificate Owner.
If it were determined that a transaction created an entity classified
as an association or as a publicly traded partnership taxable as a
corporation, a Trust would be subject to Federal income tax at corporate
income tax rates on the income it derives from the Receivables, which would
reduce the amounts available for distribution to the Certificate Owners,
possibly including Certificate Owners of a Class that is treated as
indebtedness. Such classification may also have adverse state and local tax
consequences that would reduce amounts available for distribution to
Certificate Owners. Cash distributions to the Certificate Owners (except
any Class not recharacterized as an equity interest in an association)
generally would be treated as dividends for tax purposes to the extent of
such deemed corporation's earnings and profits.
FASIT LEGISLATION
Certain provisions of the Code provide for the creation of a new type
of entity for Federal income tax purposes, the "financial asset
securitization investment trust" ("FASIT"). However, although these
provisions were effective September 1, 1997, many technical issues
concerning FASITs must be addressed by Treasury regulations which have not
yet been issued. Although transition rules permit an entity in existence on
August 31, 1997, to elect FASIT status, at the present time it is not clear
how outstanding interests of such an entity would be treated subsequent to
such an election. An Agreement may be amended in accordance with the
provisions thereof to provide that the Transferor may cause a FASIT
election to be made for the related Trust if the Transferor delivers to the
Trustee an opinion of counsel to the effect that, for Federal income tax
purposes, (i) the issuance of FASIT regular interests will not adversely
affect the tax characterization as debt of Certificates of any outstanding
Series or Class that were characterized as debt at the time of their
issuance, (ii) following such issuance the applicable Trust will not be
deemed to be a publicly traded partnership taxable as a corporation and
(iii) such issuance will not cause or constitute an event in which gain or
loss would be recognized by any Certificateholder or such Trust.
FOREIGN INVESTORS
As set forth above, it is expected that Special Tax Counsel will
render an opinion, upon issuance, that the Offered Certificates will be
treated as debt for U.S. Federal income tax purposes. The following
information describes the U.S. Federal income tax treatment of investors
that are not U.S. persons ("FOREIGN INVESTORS") if the Offered Certificates
are treated as debt. The term "Foreign Investor" means any person other
than (i) a citizen or resident of the United States, (ii) a corporation,
partnership or other entity organized in or under the laws of the United
States or any political subdivision thereof, (iii) an estate the income of
which is includible in gross income for U.S. Federal income tax purposes,
regardless of its source or (iv) a trust if a U.S. court is able to
exercise primary supervision over the administration of such trust and one
or more U.S. persons have the authority to control all substantial
decisions of such trust.
Interest, including OID, paid to a Foreign Investor will be subject
to U.S. withholding taxes at a rate of 30% unless (x) the income is
"effectively connected" with the conduct by such Foreign Investor of a
trade or business in the United States or (y) the Foreign Investor and each
securities clearing organization, bank, or other financial institution that
holds the Offered Certificates on behalf of the customer in the ordinary
course of its trade or business, in the chain between the Certificate Owner
and the U.S. person otherwise required to withhold the U.S. tax, complies
with applicable identification requirements and, in addition (i) the
non-U.S. Certificate Owner does not actually or constructively own 10% or
more of the total combined voting power of all classes of stock of the
Transferor entitled to vote (or of a profits or capital interest of a trust
characterized as a partnership), (ii) the non-U.S. Certificate Owner is not
a controlled foreign corporation that is related to the Transferor (or a
trust treated as a partnership) through stock ownership, (iii) the non-U.S.
Certificate Owner is not a bank receiving interest described in Code
Section 881(c)(3)(A), (iv) such interest is not contingent interest
described in Code Section 871(h)(4), and (v) the non-U.S. Certificate Owner
does not bear certain relationships to any holder of the Transferor
Certificate other than the Transferor or any holder of the Certificates of
any Series not properly characterized as debt. Applicable identification
requirements generally will be satisfied if there is delivered to a
securities clearing organization (i) IRS Form W-8 signed under penalties of
perjury by the Certificate Owner, stating that the Certificate Owner is not
a U.S. person and providing such Certificate Owner's name and address, (ii)
IRS Form 1001, signed by the Certificate Owner or such Certificate Owner's
agent, claiming exemption from withholding under an applicable tax treaty,
or (iii) IRS Form 4224 signed by the Certificate Owner or such owner's
agent, claiming exemption from withholding of tax on income effectively
connected with the conduct of a trade or business in the United States;
provided that in any such case (x) the applicable form is delivered
pursuant to applicable procedures and is properly transmitted to the United
States entity otherwise required to withhold tax and (y) none of the
entities receiving the form has actual knowledge that the Certificate Owner
is a U.S. person.
On October 6, 1997, the Department of the Treasury issued new
regulations (the "NEW REGULATIONS") which make certain modifications to the
withholding, backup withholding and information reporting rules described
above. The New Regulations attempt to unify certification requirements and
modify reliance standards. The New Regulations will generally be effective
for payments made after December 31, 2000, subject to certain transition
rules. Prospective investors are urged to consult their own tax advisors
regarding the New Regulations.
A Certificate Owner that is a nonresident alien or foreign
corporation will not be subject to U.S. Federal income tax on gain realized
upon the sale, exchange, or redemption of an Offered Certificate, provided
that (i) such gain is not effectively connected with the conduct of a trade
or business in the United States, (ii) in the case of a Certificate Owner
that is an individual, such Certificate Owner is not present in the United
States for 183 days or more during the taxable year in which such sale,
exchange, or redemption occurs, and (iii) in the case of gain representing
accrued interest, the conditions described in the second preceding
paragraph are satisfied.
If the interests of the Certificate Owners of a Series were
reclassified as interests in a partnership (not taxable as a corporation),
such recharacterization could cause a Foreign Investor to be treated as
engaged in a trade or business in the United States. In such event the
Certificate Owner of such Series would be required to file a Federal income
tax return and, in general, would be subject to Federal income tax,
including branch profits tax in the case of a Certificateholder that is a
corporation, on its net income from the partnership. Further, the
partnership would be required, on a quarterly basis, to pay withholding tax
equal to the sum, for each foreign partner, of such foreign partner's
distributive share of "effectively connected" income of the partnership
multiplied by the highest rate of tax applicable to that foreign partner.
The tax withheld from each foreign partner would be credited against such
foreign partner's U.S.
Federal income tax liability.
If a Trust were taxable as a corporation, distributions to foreign
persons, to the extent treated as dividends, would generally be subject to
withholding at the rate of 30%, unless such rate were reduced by an
applicable tax treaty.
STATE AND LOCAL TAXATION
The Trustee is located in the State of Delaware and servicing of the
Receivables will take place in Delaware. Unless otherwise specified in the
Prospectus Supplement, Special Tax Counsel will render its opinion that the
Offered Certificates will be treated as indebtedness for Delaware income
tax purposes and Certificate Owners not otherwise subject to taxation in
Delaware will not become subject to taxation in Delaware solely because of
any such Certificate Owner's ownership of an Offered Certificate. Assuming
that the Trust is not subject to Federal income taxes at the entity level,
the Trust will not be subject to Delaware income tax at the entity level.
THE DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL INFORMATION
ONLY AND DOES NOT PURPORT TO ADDRESS THE APPLICABILITY OF STATE TAX LAWS
OTHER THAN THE TREATMENT OF THE OFFERED CERTIFICATES AND THE CERTIFICATE
OWNERS UNDER THE LAWS OF DELAWARE AND MAY NOT BE APPLICABLE DEPENDING UPON
A PARTICULAR CERTIFICATE OWNER'S TAX SITUATION. PROSPECTIVE INVESTORS ARE
URGED TO CONSULT THEIR TAX ADVISORS REGARDING STATE AND LOCAL TAX TREATMENT
OF THE TRUST AND THE CERTIFICATES OF ANY SERIES, AND THE CONSEQUENCES OF
PURCHASE, OWNERSHIP OR DISPOSITION OF THE CERTIFICATES OF ANY SERIES UNDER
ANY STATE OR LOCAL TAX LAW.
EMPLOYEE BENEFIT PLAN CONSIDERATIONS
Section 406 of ERISA and Section 4975 of the Code prohibit a pension,
profit sharing or other employee benefit plan from engaging in certain
transactions involving "plan assets" with persons that are "parties in
interest" under the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), or "disqualified persons" under the Code with respect to
the plan. ERISA also imposes certain duties on persons who are fiduciaries
of plans subject to ERISA and prohibits certain transactions between a plan
and parties in interest with respect to such plans. Under ERISA, any person
who exercises any authority or control respecting the management or
disposition of the assets of a plan is considered to be a fiduciary of such
plan (subject to certain exceptions not here relevant). A violation of
these "prohibited transaction" rules may generate excise tax and other
liabilities under ERISA and the Code for such persons.
Plan fiduciaries must determine whether the acquisition and holding
of the Certificates of a Series and the operations of the Trust would
result in direct or indirect prohibited transactions under ERISA and the
Code. The operations of the Trust could result in prohibited transactions
if Benefit Plans that purchase the Certificates of a Series are deemed to
own an interest in the underlying assets of the Trust. There may also be an
improper delegation of the responsibility to manage Benefit Plan assets if
Benefit Plans that purchase the Certificates are deemed to own an interest
in the underlying assets of the Trust.
Pursuant to a regulation (the "PLAN ASSET REGULATION") issued by the
Department of Labor ("DOL") concerning the definition of what constitutes
the "plan assets" of an employee benefit plan subject to ERISA or the Code,
or an individual retirement account ("IRA") (collectively referred to as
"BENEFIT PLANS"), the assets and properties of certain entities in which a
Benefit Plan makes an equity investment could be deemed to be assets of the
Benefit Plan in certain circumstances. Accordingly, if Benefit Plans
purchase Certificates of a Series, the Trust could be deemed to hold plan
assets unless one of the exceptions under the Plan Asset Regulation is
applicable to the Trust.
The Plan Asset Regulation only applies to the purchase by a Benefit
Plan of an "equity interest" in an entity. Assuming that interests in
Certificates of a Series are equity interests, the Plan Asset Regulation
contains an exception that provides that if a Benefit Plan acquires a
"publicly-offered security," the issuer of the security is not deemed to
hold plan assets. A publicly-offered security is a security that is (i)
freely transferable, (ii) part of a class of securities that is owned by
100 or more investors independent of the issuer and of one another and
(iii) either (A) part of a class of securities registered under Section
12(b) or 12(g) of the Exchange Act or (B) sold to the plan as part of an
offering of securities to the public pursuant to an effective registration
statement under the Securities Act and the class of securities of which
such security is a part is registered under the Exchange Act within 120
days (or such later time as may be allowed by the SEC) after the end of the
fiscal year of the issuer during which the offering of such securities to
the public occurred. In addition, the Plan Asset Regulation provides that
if a Benefit Plan invests in an "equity interest" of an entity that is
neither a "publicly-offered security" nor a security issued by an
investment company registered under the Investment Company Act of 1940, as
amended, the Benefit Plan's assets include both the equity interest and an
undivided interest in each of the entity's underlying assets, unless it is
established that equity participation by "benefit plan investors" is not
"significant" or that another exception applies.
Under the Plan Asset Regulation, equity participation in an entity by
"benefit plan investors" is "significant" on any date if, immediately after
the most recent acquisition of any equity interest in the entity (other
than a publicly-offered class of equity), 25% or more of the value of any
class of equity interests in the entity (other than a publicly-offered
class) is held by "benefit plan investors." For purposes of this
determination, the value of equity interests held by a person (other than a
benefit plan investor) that has discretionary authority or control with
respect to the assets of the entity or that provides investment advice for
a fee with respect to such assets (or any affiliate of such person) is
disregarded. The term "benefit plan investor" is defined in the Plan Asset
Regulation as (a) any employee benefit plan (as defined in Section 3(3) of
ERISA), whether or not it is subject to the provisions of Title I of ERISA,
(b) any plan described in Section 4975(e)(1) of the Code and (c) any entity
whose underlying assets include plan assets by reason of a plan's
investment in the entity.
Unless otherwise specified in the related Prospectus Supplement, it
is anticipated that interests in the Certificates of a Series will meet the
criteria of publicly-offered securities as set forth above. Unless
otherwise specified in the related Prospectus Supplement, the underwriters
expect (although no assurances can be given) that interests in each Class
of Certificates of each Series offered hereby will be held by at least 100
independent investors at the conclusion of the offering for such Series;
there are no restrictions imposed on the transfer of interests in the
Certificates of such Series; and interests in the Certificates of such
Series will be sold as part of an offering pursuant to an effective
registration statement under the Securities Act and then will be timely
registered under the Exchange Act.
If interests in the Certificates of a Series fail to meet the
criteria of publicly-offered securities or investment by benefit plan
investors becomes significant and the Trust's assets are deemed to include
assets of Benefit Plans that are Certificateholders, transactions involving
the Trust and "parties in interest" or "disqualified persons" with respect
to such plans might be prohibited under Section 406 of ERISA and Section
4975 of the Code. In addition, the Transferor or any underwriter of such
Series may be considered to be a party in interest, disqualified person or
fiduciary with respect to an investing Benefit Plan. Accordingly, an
investment by a Benefit Plan in Certificates may be a prohibited
transaction under ERISA and the Code. Thus, for example, if a participant
in any Benefit Plan is a cardholder of one of the Accounts, under DOL
interpretations the purchase of interests in Certificates by such plan
could constitute a prohibited transaction. Such transferors may now be
subject to certain statutory or administrative exemptions from the
penalties normally associated with prohibited transactions. Five class
exemptions issued by the DOL that could apply in such event are DOL
Prohibited Transaction Exemption ("PTE") 84-14 (Class Exemption for Plan
Asset Transactions Determined by Independent Qualified Professional Asset
Managers), 91-38 (Class Exemption for Certain Transactions Involving Bank
Collective Investment Funds), 90-1 (Class Exemption for Certain
Transactions Involving Insurance Company Pooled Separate Accounts), 95-60
(Class Exemption for Certain Transactions Involving Insurance Company
General Accounts) and 96-23 (Class Exemption for Plan Asset Transactions
Determined by In-House Asset Managers). There is no assurance that these
exemptions, even if all of the conditions specified therein are satisfied,
or any other exemption will apply to all transactions involving the Trust's
assets.
IN LIGHT OF THE FOREGOING, FIDUCIARIES OF A BENEFIT PLAN CONSIDERING
THE PURCHASE OF INTERESTS IN CERTIFICATES OF ANY SERIES SHOULD CONSULT
THEIR OWN COUNSEL AS TO WHETHER THE ASSETS OF THE TRUST WHICH ARE
REPRESENTED BY SUCH INTERESTS WOULD BE CONSIDERED PLAN ASSETS, AND WHETHER,
UNDER THE GENERAL FIDUCIARY STANDARDS OF INVESTMENT PRUDENCE AND
DIVERSIFICATION, AN INVESTMENT IN CERTIFICATES OF ANY SERIES IS APPROPRIATE
FOR THE BENEFIT PLAN TAKING INTO ACCOUNT THE OVERALL INVESTMENT POLICY OF
THE BENEFIT PLAN AND THE COMPOSITION OF THE BENEFIT PLAN'S INVESTMENT
PORTFOLIO. In addition, fiduciaries should consider the consequences that
would apply if the Trust's assets were considered plan assets, the
applicability of exemptive relief from the prohibited transaction rules and
whether all conditions for such exemptive relief would be satisfied.
In particular, insurance companies considering the purchase of
Certificates of any Series should consult their own employee benefits
counsel or other appropriate counsel with respect to the United States
Supreme Court's decision in John Hancock Mutual Life Insurance Co. v.
Harris Trust & Savings Bank, 114 S. Ct. 517 (1993) ("JOHN HANCOCK") and the
applicability of PTE 95-60. In John Hancock, the Supreme Court held that
assets held in an insurance company's general account may be deemed to be
"plan assets" under certain circumstances; however, PTE 95-60 may exempt
some or all of the transactions that could occur as the result of the
acquisition and holding of the Certificates of a Series by an insurance
company general account from the penalties normally associated with
prohibited transactions. Accordingly, investors should analyze whether John
Hancock and PTE 95-60 or any other exemption may have an impact with
respect to their purchase of the Certificates of any Series.
In addition, insurance companies considering the purchase of
Certificates using assets of a general account should consult their own
employee benefits counsel or other appropriate counsel with respect to the
effect of the Small Business Job Protection Act of 1996, which added a new
Section 401(c) of ERISA relating to the status of the assets of insurance
company general accounts under ERISA and Section 4975 of the Code. Pursuant
to Section 401(c), the DOL is required to issue final regulations (the
"GENERAL ACCOUNT REGULATIONS") with respect to insurance policies issued on
or before December 31, 1998 that are supported by an insurer's general
account. The General Account Regulations are intended to provide guidance
on which assets held by the insurer constitute "plan assets" for purposes
of the fiduciary responsibility provisions of ERISA and Section 4975 of the
Code. Section 401(c) also provides that, except in the case of avoidance of
the General Account Regulations and actions brought by the Secretary of
Labor relating to certain breaches of fiduciary duties that also constitute
breaches of state or Federal criminal law, until the date that is 18 months
after the General Account Regulations become final, no liability under the
fiduciary responsibility and prohibited transaction provisions of ERISA and
Section 4975 of the Code may result on the basis of a claim that the assets
of the general account of an insurance company constitute the plan assets
of any Benefit Plan. The DOL has recently issued proposed regulations under
Section 401(c). It should be noted that if the General Account Regulations
are adopted substantially in the form in which proposed, the General
Account Regulations may not exempt the assets of insurance company general
accounts from treatment as "plan assets" after December 31, 1998. The plan
asset status of insurance company separate accounts is unaffected by new
Section 401(c) of ERISA, and separate account assets continue to be treated
as the plan assets of any Benefit Plan invested in a separate account. Plan
investors considering the purchase of Certificates of any Series on behalf
of an insurance company general account should consult their legal advisors
regarding the effect of the General Account Regulations on such purchase.
PLAN OF DISTRIBUTION
The Transferor may sell Certificates (i) through underwriters or
dealers, (ii) directly to one or more purchasers or (iii) through agents.
The related Prospectus Supplement in respect of a Series offered hereby
sets forth the terms of the offering of such Certificates, including the
name or names of any underwriters, the purchase price of such Certificates
and the proceeds to the Transferor from such sale, any underwriting
discounts and other items constituting underwriters' compensation, any
initial offering price and any discounts or concessions allowed or
reallowed or paid to dealers. Only underwriters so named in such Prospectus
Supplement shall be deemed to be underwriters in connection with the
Certificates offered thereby.
Subject to the terms and conditions set forth in an underwriting
agreement (an "UNDERWRITING AGREEMENT") to be entered into with respect to
each series of Certificates, the Transferor will agree to sell to each of
the underwriters named therein and in the related Prospectus Supplement,
and each of such underwriters will severally agree to purchase from the
Transferor, the principal amount of Certificates set forth therein and in
the related Prospectus Supplement (subject to proportional adjustment on
the terms and conditions set forth in the related Underwriting Agreement in
the event of an increase or decrease in the aggregate amount of
Certificates offered hereby and by the related Prospectus Supplement).
In each Underwriting Agreement, the several underwriters will agree,
subject to the terms and conditions set forth therein, to purchase all the
Certificates offered hereby and by the related Prospectus Supplement if any
of such Certificates are purchased. In the event of a default by any
underwriter, each Underwriting Agreement will provide that, in certain
circumstances, purchase commitments of the nondefaulting underwriters may
be increased or the Underwriting Agreement may be terminated.
Each Underwriting Agreement will provide that the Transferor will
indemnify the related underwriters against certain liabilities, including
liabilities under the Securities Act of 1933, as amended.
The place and time of delivery for any Series of Certificates in
respect of which this Prospectus is delivered are set forth in the
accompanying Prospectus Supplement.
LEGAL MATTERS
Certain legal matters relating to the issuance of the Certificates
will be passed upon for the Transferor by Richards, Layton & Finger,
Wilmington, Delaware. Certain legal matters relating to the issuance of the
Certificates will be passed upon by Richards, Layton & Finger. Martin I.
Lubaroff, a member of Richards, Layton & Finger, is a member of the Board
of Directors of The First National Bank of Atlanta and owns 100 shares of
the Corporation's common stock. Certain other legal matters relating to the
issuance of the Certificates and certain legal matters relating to the
Federal tax consequences of the issuance of the Certificates will be passed
upon for the Transferor by Skadden, Arps, Slate, Meagher & Flom LLP, New
York, New York, special counsel to the Transferor. Certain legal matters
relating to the issuance of the Certificates will be passed upon for the
underwriters by Skadden, Arps, Slate, Meagher & Flom LLP, New York, New
York.
REPORTS TO CERTIFICATEHOLDERS
Unless and until Definitive Certificates are issued, monthly and
annual reports, containing information concerning the Trust and prepared by
the Servicer, will be sent on behalf of the Trust to Cede & Co. ("CEDE") as
nominee of The Depository Trust Company ("DTC") and registered holder of
the related Certificates, pursuant to the Agreement. See "Description of
the Certificates--Book-Entry Registration," "--Reports to
Certificateholders" and "--Evidence as to Compliance." Such reports will
not constitute financial statements prepared in accordance with generally
accepted accounting principles. The Transferor does not intend to send any
financial reports of the Bank to Certificateholders or to the owners of
beneficial interests in the Certificates (the "CERTIFICATE OWNERS"). The
Servicer will file with the SEC such periodic reports with respect to the
Trust as are required under the Exchange Act and the rules and regulations
of the SEC thereunder.
WHERE YOU CAN FIND MORE INFORMATION
We filed a registration statement relating to the Certificates with
the SEC. This Prospectus is part of the registration statement, but the
registration statement includes additional information.
The Servicer will file with the SEC all required annual, monthly and
special SEC reports and other information about the Trust.
You may read and copy any reports, statements or other information we
file at the SEC's public reference room at 450 Fifth Street, N.W.,
Washington, D.C. 20549. You may request copies of these documents, upon
payment of a duplicating fee, by writing to the SEC. Please call the SEC at
(800) SEC-0330 for further information on the operation of the public
reference rooms. Our SEC filings are also available to the public on the
SEC Internet site (http://www.sec.gov).
The SEC allows us to "incorporate by reference" information we file
with it, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference
is considered to be part of this Prospectus. Information that we file later
with the SEC will automatically update the information in this Prospectus.
In all cases, you should rely on the later information over different
information included in this Prospectus or the related Prospectus
Supplement. We incorporate by reference any future annual, monthly and
special SEC reports and proxy materials filed by or on behalf of the Trust
until we terminate our offering of the Certificates.
As a recipient of this Prospectus, you may request a copy of any
document we incorporate by reference, except exhibits to the
documents (unless the exhibits are specifically incorporated by reference),
at no cost, by writing or calling us at: Investor Relations,
Wachovia Corporation, 100 North Main Street, Winston-Salem, North Carolina
27150-3099, telephone number (336) 732-6520.
INDEX OF TERMS FOR PROSPECTUS
Accounts...................................................................4
Accumulation Period........................................................9
acquisition premium.......................................................37
Addition Cut-Off Date......................................................6
Addition Date.............................................................19
Additional Accounts....................................................6, 19
Additional Interest.......................................................23
Aggregate Addition Limit..................................................20
Agreement..................................................................4
Amortization Period........................................................9
Appointment Date..........................................................26
Assignment................................................................19
ATM........................................................................5
Automatic Additional Accounts..........................................6, 20
Bank.......................................................................4
Bank Portfolio.............................................................4
Benefit Plans.............................................................40
Cash Collateral Account...................................................31
Cash Collateral Guaranty..................................................31
Cede......................................................................43
Cedelbank.................................................................12
Cedelbank Customers.......................................................12
Certificate Owner.........................................................36
Certificate Owners........................................................43
Certificate Rate...........................................................9
Certificateholders.........................................................9
Certificates...............................................................4
Class......................................................................4
Closing Date..............................................................26
Code......................................................................35
Collateral Interest.......................................................31
Collection Account........................................................20
Controlled Accumulation Amount............................................15
Controlled Accumulation Period............................................15
Controlled Amortization Amount............................................14
Controlled Amortization Period.........................................6, 14
Controlled Deposit Amount.................................................15
Controlled Distribution Amount............................................14
Cooperative...............................................................12
Corporation................................................................7
Credit Enhancement........................................................30
Credit Enhancement Percentage.............................................22
Credit Enhancement Provider...............................................31
Cut-Off Date...............................................................6
Defaulted Accounts.........................................................9
Definitive Certificates...................................................13
Depositories..............................................................10
Depository................................................................10
Determination Date........................................................24
Disclosure Document.......................................................16
Discount Option...........................................................21
Discount Percentage.......................................................21
Distribution Account......................................................21
Distribution Date.........................................................13
DOJ.......................................................................35
DOL.......................................................................40
DTC.......................................................................43
DTC Participants..........................................................10
Eligible Account..........................................................18
Eligible Receivable.......................................................18
Enhancement...............................................................30
Enhancement Invested Amount...............................................31
ERISA.....................................................................40
Euroclear.................................................................12
Euroclear Operator........................................................12
Euroclear Participants....................................................12
Euroclear System..........................................................12
Excess Finance Charge Collections.........................................23
Excess Funding Account....................................................24
Exchange..................................................................16
Exchange Act..............................................................10
FASIT.....................................................................38
FDIA......................................................................33
FDIC......................................................................33
Finance Charge Account....................................................21
Finance Charge Receivables.................................................6
FIRREA....................................................................33
Foreign Investors.........................................................39
Full Investor Interest....................................................22
Funding Period............................................................21
General Account Regulations...............................................42
Global Securities........................................................A-1
Group.....................................................................23
Holders...................................................................13
Indirect Participants.....................................................10
Ineligible Receivable.....................................................17
Insolvency Event..........................................................26
Interchange................................................................5
Interest Funding Account..................................................13
Interest Period...........................................................13
Investor Charge-Off.......................................................23
Investor Default Amount...................................................23
Investor Interest..........................................................9
Investor Percentage........................................................9
Investor Servicing Fee....................................................23
IRA.......................................................................40
IRS.......................................................................36
John Hancock..............................................................41
MasterCard International..................................................35
MGT/EOC...................................................................12
Minimum Transferor Amount..................................................6
Monthly Interest..........................................................23
Monthly Period............................................................13
Moody's...................................................................21
New Agreement..............................................................4
New Regulations...........................................................39
New Trust..................................................................4
Octagon...................................................................34
Offered Certificates......................................................36
OID.......................................................................36
Paired Series.............................................................24
Participation Agreement...................................................19
Participations............................................................19
Pay Out Event.............................................................15
Paying Agent..............................................................28
Permitted Investments.....................................................21
Plan Asset Regulation.....................................................40
Pre-Funding Account.......................................................21
Pre-Funding Amount........................................................21
Prepayable Instrument.....................................................37
Principal Account.........................................................21
Principal Amortization Period.............................................14
Principal Commencement Date...............................................14
Principal Funding Account.................................................15
Principal Receivables......................................................6
Principal Terms...........................................................17
Prospectus Supplement......................................................4
PTE.......................................................................41
Qualified Institution.....................................................21
Rapid Accumulation Period.................................................15
Rapid Amortization Period.................................................16
Rating Agency.............................................................33
Receivables................................................................6
Record Date................................................................9
Recoveries.................................................................5
Regulations...............................................................36
Remaining Redemption Amount...............................................37
Removed Accounts...........................................................6
Reserve Account...........................................................32
Revolving Period..........................................................26
Scheduled Payment Date....................................................14
SEC.......................................................................10
Securities Act.............................................................4
Senior Certificates........................................................9
Series................................................................4, A-1
Series Supplement..........................................................4
Series Termination Date...................................................25
Service Transfer..........................................................28
Servicer...............................................................4, 27
Servicer Default..........................................................28
Servicing Fee.............................................................26
Shared Principal Collections..............................................24
Special Tax Counsel.......................................................36
Spread Account............................................................32
Standard & Poor's.........................................................21
Subordinated Certificates..................................................9
Tax Opinion...............................................................17
Terms and Conditions......................................................12
Transfer Date.............................................................15
Transferor.................................................................4
Transferor Amount.........................................................10
Transferor Certificate....................................................16
Transferor Interest.......................................................16
Transferor Participation...................................................9
Transferor Percentage......................................................9
Trust......................................................................4
Trust I....................................................................4
Trust Portfolio............................................................6
Trust Termination Date....................................................25
Trustee....................................................................4
U.S. Person..............................................................A-3
UCC.......................................................................33
Underwriting Agreement....................................................42
VISA......................................................................35
Wachovia...................................................................4
WBNA....................................................................4, 9
WOSC.......................................................................5
ANNEX I
GLOBAL CLEARANCE, SETTLEMENT AND TAX DOCUMENTATION PROCEDURES
Except in certain limited circumstances, the globally offered
Wachovia Credit Card Master Trust Asset Backed Certificates (the "GLOBAL
SECURITIES") to be issued in series from time to time (each, a "Series")
will be available only in book-entry form. Investors in the Global
Securities may hold such Global Securities through any of DTC, Cedelbank or
Euroclear. The Global Securities will be tradeable as home market
instruments in both the European and U.S. domestic markets. Initial
settlement and all secondary trades will settle in same-day funds.
Secondary market trading between investors holding Global Securities
through Cedelbank and Euroclear will be conducted in the ordinary way in
accordance with their normal rules and operating procedures and in
accordance with conventional eurobond practice.
Secondary market trading between investors holding Global Securities
through DTC will be conducted according to the rules and procedures
applicable to U.S. corporate debt obligations.
Secondary cross-market trading between Cedelbank or Euroclear and DTC
Participants holding Certificates will be effected on a
delivery-against-payment basis through the respective Depositories of
Cedelbank and Euroclear (in such capacity) and as DTC Participants.
Non-U.S. holders (as described below) of Global Securities will be
subject to U.S. withholding taxes unless such holders meet
certain requirements and deliver appropriate U.S. tax documents to the
securities clearing organizations or their participants.
INITIAL SETTLEMENT
All Global Securities will be held in book-entry form by DTC in the
name of Cede & Co. as nominee of DTC. Investors' interests in the Global
Securities will be represented through financial institutions acting on
their behalf as direct and indirect participants in DTC. As a result,
Cedelbank and Euroclear will hold positions on behalf of their customers or
participants through their respective Depositories, which in turn will hold
such positions in accounts as DTC Participants.
Investors electing to hold their Global Securities through DTC will
follow the settlement practices applicable to U.S. corporate debt
obligations. Investor securities custody accounts will be credited with
their holdings against payment in same-day funds on the settlement date.
Investors electing to hold their Global Securities through Cedelbank
or Euroclear accounts will follow the settlement procedures applicable to
conventional eurobonds, except that there will be no temporary global
security and no "lock-up" or restricted period. Global Securities will be
credited to the securities custody accounts on the settlement date against
payment in same-day funds.
SECONDARY MARKET TRADING
Since the purchaser determines the place of delivery, it is important
to establish at the time of the trade where both the purchaser's and
seller's accounts are located to ensure that settlement can be made on the
desired value date.
Trading Between DTC Participants. Secondary market trading between
DTC Participants will be settled using the procedures applicable to U.S.
corporate debt obligations in same-day funds.
Trading Between Cedelbank Customers and/or Euroclear Participants.
Secondary market trading between Cedelbank Customers or Euroclear
Participants will be settled using the procedures applicable to
conventional eurobonds in same-day funds.
Trading Between DTC Seller and Cedelbank or Euroclear Purchaser. When
Global Securities are to be transferred from the account of a DTC
Participant to the account of a Cedelbank Customer or a Euroclear
Participant, the purchaser will send instructions to Cedelbank or Euroclear
through a Cedelbank Customer or Euroclear Participant at least one business
day prior to settlement. Cedelbank or Euroclear will instruct the
respective Depository, as the case may be, to receive the Global Securities
against payment. Payment will include interest accrued on the Global
Securities from and including the last coupon payment date to and excluding
the settlement date. Payment will then be made by the respective Depository
to the DTC Participant's account against delivery of the Global Securities.
After settlement has been completed, the Global Securities will be credited
to the respective clearing system and by the clearing system, in accordance
with its usual procedures, to the Cedelbank Customer's or Euroclear
Participant's account. The Global Securities credit will appear the next
day (European time) and the cash debit will be back-valued to, and the
interest on the Global Securities will accrue from, the value date (which
would be the preceding day when settlement occurred in New York). If
settlement is not completed on the intended value date (i.e., the trade
fails), the Cedelbank or Euroclear cash debit will be valued instead as of
the actual settlement date.
Cedelbank Customers and Euroclear Participants will need to make
available to the respective clearing systems the funds necessary to process
same-day funds settlement. The most direct means of doing so is to
pre-position funds for settlement, either from cash on hand or existing
lines of credit, as they would for any settlement occurring within
Cedelbank or Euroclear. Under this approach, they may take on credit
exposure to Cedelbank or Euroclear until the Global Securities are credited
to their accounts one day later.
As an alternative, if Cedelbank or Euroclear has extended a line of
credit to them, Cedelbank Customers or Euroclear Participants can elect not
to pre-position funds and allow that credit line to be drawn upon the
finance settlement. Under this procedure, Cedelbank Customers or Euroclear
Participants purchasing Global Securities would incur overdraft charges for
one day, assuming they cleared the overdraft when the Global Securities
were credited to their accounts. However, interest on the Global Securities
would accrue from the value date. Therefore, in many cases the investment
income on the Global Securities earned during that one-day period may
substantially reduce or offset the amount of such overdraft charges,
although this result will depend on each Cedelbank Customer's or Euroclear
Participant's particular cost of funds.
Since the settlement is taking place during New York business hours,
DTC Participants can employ their usual procedures for sending Global
Securities to the respective Depository for the benefit of Cedelbank
Customers or Euroclear Participants. The sale proceeds will be available to
the DTC seller on the settlement date. Thus, to the DTC Participant a
cross-market transaction will settle no differently than a trade between
two DTC Participants.
Trading Between Cedelbank or Euroclear Seller and DTC Purchaser. Due
to time zone differences in their favor, Cedelbank Customers and Euroclear
Participants may employ their customary procedures for transactions in
which Global Securities are to be transferred by the respective clearing
system, through the respective Depository, to a DTC Participant. The seller
will send instructions to Cedelbank or Euroclear through a Cedelbank
Customer or Euroclear Participant at least one business day prior to
settlement. In these cases, Cedelbank or Euroclear will instruct the
respective Depository, as appropriate, to deliver the bonds to the DTC
Participant's account against payment. Payment will include interest
accrued on the Global Securities from and including the last coupon payment
date to and excluding the settlement date. The payment will then be
reflected in the account of the Cedelbank Customer or Euroclear Participant
the following day, and receipt of the cash proceeds in the Cedelbank
Customer's or Euroclear Participant's account would be back-valued to the
value date (which would be the preceding day, when settlement occurred in
New York). Should the Cedelbank Customer or Euroclear Participant have a
line of credit with its respective clearing system and elect to be in debit
in anticipation of receipt of the sale proceeds in its account, the
back-valuation will extinguish any overdraft charges incurred over that
one-day period. If settlement is not completed on the intended value date
(i.e., the trade fails), receipt of the cash proceeds in the Cedelbank
Customer's or Euroclear Participant's account would instead be valued as of
the actual settlement date. Finally, day traders that use Cedelbank or
Euroclear and that purchase Global Securities from DTC Participants for
delivery to Cedelbank Customers or Euroclear Participants should note that
these trades would automatically fail on the sale side unless affirmative
action were taken. At least three techniques should be readily available to
eliminate this potential problem:
(a) borrowing through Cedelbank or Euroclear for one day (until the
purchase side of the day trade is reflected in their Cedelbank or
Euroclear accounts) in accordance with the clearing system's customary
procedures;
(b) borrowing the Global Securities in the U.S. from a DTC
Participant no later than one day prior to settlement, which would give
the Global Securities sufficient time to be reflected in their
Cedelbank or Euroclear account in order to settle the sale side of the
trade; or
(c) staggering the value dates for the buy and sell sides of the
trade so that the value date for the purchase from the DTC Participant
is at least one day prior to the value date for the sale to the
Cedelbank Customer or Euroclear Participant.
CERTAIN U.S. FEDERAL INCOME TAX DOCUMENTATION REQUIREMENTS
A beneficial owner of Global Securities holding securities through
Cedelbank or Euroclear (or through DTC if the holder has an address outside
the U.S.) will be subject to the 30% U.S. withholding tax that generally
applies to payments of interest (including original issue discount) on
registered debt issued by U.S. Persons, unless (i) each clearing system,
bank or other financial institution that holds customers' securities in the
ordinary course of its trade or business in the chain of intermediaries
between such beneficial owner and the U.S. entity required to withhold tax
complies with applicable certification requirements and (ii) such
beneficial owner takes one of the following steps to obtain an exemption or
reduced tax rate:
Exemption for Non-U.S. Persons (Form W-8). Beneficial owners of
Certificates that are non-U.S. Persons can obtain a complete exemption from
the withholding tax by filing a signed Form W-8 (Certificate of Foreign
Status). If the information shown on Form W-8 changes, a new Form W-8 must
be filed within 30 days of such change.
Exemption for Non-U.S. Persons with Effectively Connected Income
(Form 4224). A non-U.S. Person, including a non-U.S. corporation or bank
with a U.S. branch, for which the interest income is effectively connected
with its conduct of a trade or business in the United States, can obtain an
exemption from the withholding tax by filing Form 4224 (Exemption from
Withholding of Tax on Income Effectively Connected with the Conduct of a
Trade or Business in the United States).
Exemption or Reduced Rate for Non-U.S. Persons Resident in Treaty
Countries (Form 1001). Non-U.S. Persons that are Certificate Owners
residing in a country that has a tax treaty with the United States can
obtain an exemption or reduced tax rate (depending on the treaty terms) by
filing Form 1001 (Ownership, Exemption or Reduced Rate Certificate). If the
treaty provides only for a reduced rate, withholding tax will be imposed at
that rate unless the filer alternatively files Form W-8. Form 1001 may be
filed by the Certificate Owner or his agent.
Exemption for U.S. Persons (Form W-9). U.S. Persons can obtain a
complete exemption from the withholding tax by filing Form
W-9 (Payer's Request for Taxpayer Identification Number and Certification).
U.S. Federal Income Tax Reporting Procedure. The Certificate Owner of
a Global Security or in the case of a Form 1001 or a Form 4224 filer, his
agent, files by submitting the appropriate form to the person through whom
it holds (the clearing agency, in the case of persons holding directly on
the books of the clearing agency). Form W-8 and Form 1001 are effective for
three calendar years and Form 4224 is effective for one calendar year.
The term "U.S. PERSON" means (i) a citizen or resident of the United
States, (ii) a corporation or partnership organized in or under the laws of
the United States or any political subdivision thereof, (iii) an estate the
income of which is includible in gross income for United States tax
purposes, regardless of its source or (iv) a trust if a U.S. court is able
to exercise primary supervision over the administration of such trust and
one or more U.S. persons have the authority to control all substantial
decisions of such trust. This summary does not deal with all aspects of
U.S. Federal income tax withholding that may be relevant to foreign holders
of the Global Securities. Investors are advised to consult their own tax
advisors for specific tax advice concerning their holding and disposing of
the Global Securities.
- ------------------------------------------------------------------------------
$[ ]
WACHOVIA CREDIT CARD MASTER TRUST
$______ Class A Floating Rate Asset Backed Certificates,
Series 1999 -__
$______ Class B Floating Rate Asset Backed Certificates,
Series 1999 -__
THE FIRST NATIONAL BANK OF ATLANTA D/B/A WACHOVIA BANK CARD SERVICES
Transferor and Servicer
PROSPECTUS SUPPLEMENT
[ ], [ ]
[Names of Underwriters]
You should rely only on the information contained or incorporated by
reference in this prospectus supplement and the attached prospectus. We
have not authorized anyone to provide you with different information.
We are not offering the certificates in any state where the offer is not
permitted.
We do not claim the accuracy of the information in this prospectus
supplement and the prospectus as of any date other than the dates stated on
their respective covers.
Dealers will deliver a prospectus supplement and prospectus when acting as
underwriters of the Class A Certificates and the Class B Certificates with
respect to their unsold allotments or subscriptions. In addition, all
dealers selling the certificates will deliver a prospectus supplement and
prospectus until [ ].
- ------------------------------------------------------------------------------
PART II
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following is an itemized list of the estimated expenses to be
incurred in connection with the offering of the securities being offered
hereunder other than underwriting discounts and commissions.
Registration Fee.....................................$ 556,000.00
Printing and Engraving............................... 40,000.00
Trustee's Fees....................................... 4,500.00
Legal Fees and Expenses.............................. 140,000.00
Blue Sky Fees and Expenses........................... 15,000.00
Accountants' Fees and Expenses....................... 20,000.00
Rating Agency Fees................................... 335,000.00
Miscellaneous Fees................................... 10,000.00
Total....................................... 1,120,500.00
- -------------------
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article Tenth of the Articles of Association of the registrant
provides as follows:
Any person, his heirs, executors, or administrators, may be
indemnified or reimbursed by the Association for reasonable expenses
actually incurred in connection with any action, suit or proceeding, civil
or criminal, to which he or they shall be made a party by reason of this
being or having been a director, officer of employee of the Association, or
of any firm, corporation or organization which he served in any such
capacity at the request of the Association: Provided, however, that no
person shall be so indemnified or reimbursed in relation to any matter in
such action, suit or proceeding as to which he shall finally be adjudged to
have been guilty of or liable for gross negligence, willful misconduct or
criminal acts in the performance of duties to the Association: And,
provided, further, that no person shall be so indemnified or reimbursed in
relation to any matter in such action, suit or proceeding which has been
made the subject of a compromise settlement except with the approval of a
court of competent jurisdiction, or the holders of record of a majority of
the outstanding shares of the Association, or the Board of Directors,
acting by vote of directors not parties to the same action, suit or
proceeding, constituting a majority of the whole number of directors. The
foregoing right of indemnification or reimbursement shall not be exclusive
of the rights to which such person, his heirs, executors of administrators,
may be entitled as a matter of law.
The Association may, upon the affirmative vote of a majority of its
Board of Directors, purchase insurance for the purpose of indemnifying its
directors, officers and other employees to the extent that such
indemnification is allowed in the preceding paragraph. Such insurance may,
but need not, be for the benefit of all directors, officers or employees.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENTS
(a) Exhibits
1.1 -- Form of Underwriting Agreement.*
3.1 -- Articles of Association.*
3.2 -- By-Laws.*
4.1 -- Amended and Restated Pooling and Servicing Agreement.
4.2 -- Form of Series Supplement (including form of
Certificate).
5.1 -- Opinion of Richards, Layton & Finger with respect to
legality.
8.1 -- Opinion of Skadden, Arps, Slate, Meagher & Flom LLP
with respect to tax matters.
23.1-- Consent of Richards, Layton & Finger (included in
opinion filed as Exhibit 5.1).
23.2-- Consent of Skadden, Arps, Slate, Meagher & Flom
(included in opinion filed as Exhibit 8.1).
24.1-- Power of Attorney.**
* Incorporated herein by reference to Registration Statement on Form S-3
(File No. 33-95714) of The First National Bank of Atlanta.
** Previously filed.
(b) Financial Statements
All financial statements, schedules and historical financial
information have been omitted as they are not applicable.
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(a) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement; (i) to
include any prospectus required by Section 10(a)(3) of the Securities Act
of 1933; (ii) to reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement; (iii) to include any material information with
respect to the plan of distribution not previously disclosed in the
registration statement or any material change to such information in the
registration statement; provided, however, that (a)(i) and (a)(ii) will not
apply if the information required to be included in a post-effective
amendment thereby is contained in periodic reports filed pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in this registration statement.
(b) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(c) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(d) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the registrant's annual report
pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934
(and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Securities Exchange Act of 1934)
that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(e) To provide to the underwriters at the closing specified in the
underwriting agreements certificates in such denominations and registered
in such names as required by the underwriters to permit prompt delivery to
each purchaser.
(f) That insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the provisions described
under Item 15 above, or otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in
the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to
a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
(g) That, for purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of prospectus
filed as part of this Registration Statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the registrant pursuant to Rule
424(b)(i) or (4) or 497(h) under the Securities Act of 1933 shall be deemed
to be part of this Registration Statement as of the time it was declared
effective.
(h) That, for the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a form
of prospectus shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering thereof.
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS
AMENDED, THE REGISTRANT CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE
THAT IT MEETS ALL OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY
CAUSED THIS AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT TO BE SIGNED ON
ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF
WINSTON-SALEM, STATE OF NORTH CAROLINA, ON JULY 8, 1999.
THE FIRST NATIONAL BANK OF ATLANTA
as originator of the Trusts and registrant
By: /s/ John H. Loughridge, Jr., Esq.
---------------------------------------
John H. Loughridge, Jr., Esq.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS
AMENDED, THIS AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT HAS BEEN SIGNED
ON JULY 8, 1999 BY THE FOLLOWING PERSONS IN THE CAPACITIES INDICATED.
Signature Title
--------- -----
/s/ Charles M. Hegarty* President and Director (Principal
- ------------------------------- Executive Officer)
(Charles M. Hegarty)
/s/ Donald K. Truslow* Controller (Principal Financial Officer
- ------------------------------- and Principal Accounting Officer)
(Donald K. Truslow)
/s/ Beverly B. Wells* Chairman and Director
- -------------------------------
(Beverly B. Wells)
/s/ J. Peirce Anderson, Esq.* Director
- -------------------------------
(J. Peirce Anderson, Esq.)
/s/ John E.F. Corson* Director
- -------------------------------
(John E.F. Corson)
/s/ Martin I. Lubaroff, Esq.* Director
- -------------------------------
(Martin I. Lubaroff, Esq.)
/s/ Richard G. McCauley, Esq.* Director
- --------------------------------
(Richard G. McCauley, Esq.)
- -----------------
* The undersigned, by signing his name hereto, does hereby sign this
Amendment No. 1 to the Registration Statement on behalf of each of the
above-indicated officers and directors of the registrant pursuant to
the previously filed power of attorney signed by such officers and
directors.
By: /s/ John H. Loughridge, Jr., Esq.
----------------------------------
John H. Loughridge, Jr., Esq.
Attorney-in-fact
EXHIBITS INDEX
EXHIBIT NO. DESCRIPTION OF EXHIBIT
- ----------- ----------------------
1.1 Form of Underwriting Agreement.*
3.1 Articles of Association.*
3.2 By-Laws.*
4.1 Amended and Restated Pooling and Servicing Agreement.
4.2 Form of Series Supplement
(including form of Certificate).
5.1 Opinion of Richards, Layton & Finger with respect to
legality.
8.1 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP with
respect to tax matters.
23.1 Consent of Richards, Layton & Finger (included in opinion
filed as Exhibit 5.1).
23.2 Consent of Skadden, Arps, Slate, Meagher & Flom (included in
opinion filed as Exhibit 8.1).
24.1 Power of Attorney.**
- ------------
* Incorporated herein by reference to Registration Statement on Form S-3
(File No. 33-95714) of The First National Bank of Atlanta.
** Previously filed.
Exhibit 4.1
THE FIRST NATIONAL BANK OF ATLANTA
Transferor and Servicer
and
THE BANK OF NEW YORK (DELAWARE)
Trustee
on behalf of the Certificateholders
of the Wachovia Credit Card Master Trust
---------------------
AMENDED AND RESTATED
POOLING AND SERVICING AGREEMENT
Dated as of June 4, 1999
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS...................................................1
Section 1.1 Definitions......................................1
Section 1.2 Other Definitional Provisions...................26
ARTICLE II
CONVEYANCE OF RECEIVABLES;
ISSUANCE OF CERTIFICATES.....................................28
Section 2.1 Conveyance of Receivables.......................28
Section 2.2 Acceptance by Trustee...........................30
Section 2.3 Representations and Warranties
of the Transferor.............................31
Section 2.4 Representations and Warranties of the
Transferor Relating to the Agreement
and the Receivables...........................33
Section 2.5 Covenants of the Transferor.....................41
Section 2.6 Addition of Accounts............................44
Section 2.7 Removal of Accounts.............................49
Section 2.8 Discount Option.................................51
ARTICLE III
ADMINISTRATION AND SERVICING
OF RECEIVABLES...............................................53
Section 3.1 Acceptance of Appointment and Other
Matters Relating to the Servicer..............53
Section 3.2 Servicing Compensation..........................56
Section 3.3 Representations and Warranties of the
Servicer......................................56
Section 3.4 Reports and Records for the Trustee.............58
Section 3.5 Annual Servicer's Certificate...................59
Section 3.6 Annual Independent Accountants'
Servicing Report..............................60
Section 3.7 Tax Treatment...................................61
Section 3.8 Notices to the Transferor.......................62
Section 3.9 Reports to the Commission.......................62
ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS AND ALLOCATION
AND APPLICATION OF COLLECTIONS...............................63
Section 4.1 Rights of Certificateholders....................63
Section 4.2 Establishment of Accounts.......................63
Section 4.3 Collections and Allocations.....................67
ARTICLE V
[ARTICLE V IS RESERVED AND SHALL
BE SPECIFIED IN ANY SUPPLEMENT
WITH RESPECT TO ANY SERIES]..................................71
ARTICLE VI
THE CERTIFICATES.............................................72
Section 6.1 The Certificates................................72
Section 6.2 Authentication of Certificates..................73
Section 6.3 Registration of Transfer and Exchange
of Certificates...............................73
Section 6.4 Mutilated, Destroyed, Lost or Stolen
Certificates..................................77
Section 6.5 Persons Deemed Owners...........................78
Section 6.6 Appointment of Paying Agent.....................79
Section 6.7 Access to List of Certificateholders'
Names and Addresses...........................80
Section 6.8 Authenticating Agent............................81
Section 6.9 Tender of Transferor Certificate................83
Section 6.10 Book-Entry Certificates.........................86
Section 6.11 Notices to Clearing Agency. ....................87
Section 6.12 Definitive Certificates.........................87
Section 6.13 Global Certificate; Euro-Certificate
Exchange Date.................................88
Section 6.14 Meetings of Certificateholders..................89
ARTICLE VII
OTHER MATTERS RELATING
TO THE TRANSFEROR............................................90
Section 7.1 Liability of the Transferor.....................90
Section 7.2 Merger or Consolidation of, or
Assumption of the Obligations of, the
Transferor....................................90
Section 7.3 Limitation on Liability.........................91
Section 7.4 Liabilities.....................................92
ARTICLE VIII
OTHER MATTERS RELATING
TO THE SERVICER..............................................94
Section 8.1 Liability of the Servicer.......................94
Section 8.2 Merger or Consolidation of, or
Assumption of the Obligations of,
the Servicer..................................94
Section 8.3 Limitation on Liability of the
Servicer and Others...........................95
Section 8.4 Servicer Indemnification of the Trust
and the Trustee...............................96
Section 8.5 The Servicer Not to Resign......................96
Section 8.6 Access to Certain Documentation and
Information Regarding the Receivables.........97
Section 8.7 Delegation of Duties............................97
Section 8.8 Examination of Records..........................98
ARTICLE IX
PAY OUT EVENTS...............................................99
Section 9.1 Pay Out Events..................................99
Section 9.2 Additional Rights Upon the Occurrence
of Certain Events............................100
ARTICLE X
SERVICER DEFAULTS...........................................102
Section 10.1 Servicer Defaults..............................102
Section 10.2 Trustee to Act; Appointment of Successor.......105
Section 10.3 Notification to Certificateholders.............107
Section 10.4 Waiver of Past Defaults........................108
ARTICLE XI
THE TRUSTEE.................................................109
Section 11.1 Duties of Trustee.............................109
Section 11.2 Certain Matters Affecting the Trustee.........111
Section 11.3 Trustee Not Liable for Recitals in
Certificates...............................113
Section 11.4 Trustee May Own Certificates..................113
Section 11.5 The Servicer to Pay Trustee's Fees
and Expenses................................113
Section 11.6 Eligibility Requirements for Trustee..........114
Section 11.7 Resignation or Removal of Trustee.............115
Section 11.8 Successor Trustee.............................115
Section 11.9 Merger or Consolidation of Trustee............116
Section 11.10 Appointment of Co-Trustee or Separate
Trustee.....................................116
Section 11.11 Tax Returns...................................118
Section 11.12 Trustee May Enforce Claims without
Possession of Certificates................. 119
Section 11.13 Suits for Enforcement.........................119
Section 11.14 Rights of Certificateholders to Direct
Trustee.....................................119
Section 11.15 Representations and Warranties of
Trustee.....................................120
Section 11.16 Maintenance of Office or Agency...............120
ARTICLE XII
TERMINATION.................................................121
Section 12.1 Termination of Trust..........................121
Section 12.2 Optional Purchase.............................122
Section 12.3 Final Payment with Respect to any
Series......................................123
Section 12.4 Termination Rights of Holder of
Transferor Certificate......................125
Section 12.5 Defeasance....................................126
ARTICLE XIII
MISCELLANEOUS PROVISIONS....................................128
Section 13.1 Amendment.....................................128
Section 13.2 Protection of Right, Title and
Interest to Trust...........................129
Section 13.3 Limitation on Rights of
Certificateholders..........................131
Section 13.4 Governing Law.................................132
Section 13.5 Notices.......................................132
Section 13.6 Severability of Provisions....................133
Section 13.7 Assignment....................................133
Section 13.8 Certificates Non-Assessable and Fully
Paid........................................133
Section 13.9 Further Assurances............................134
Section 13.10 No Waiver; Cumulative Remedies................134
Section 13.11 Counterparts..................................134
Section 13.12 Third-Party Beneficiaries.....................134
Section 13.13 Actions by Certificateholders.................134
Section 13.14 Rule 144A Information.........................135
Section 13.15 Merger and Integration........................135
Section 13.16 Headings......................................135
This AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT,
dated as of June 4, 1999 by and between THE FIRST NATIONAL BANK OF ATLANTA,
a national banking association (the "Bank") d/b/a/ WACHOVIA BANK CARD
SERVICES, as Transferor and Servicer, and THE BANK OF NEW YORK (DELAWARE),
a Delaware banking corporation (the "Trustee"), as Trustee.
W I T N E S S E T H:
WHEREAS, the parties hereto intend to amend and restate that
certain Pooling and Servicing Agreement, dated as of October 26, 1995 (the
"Original Pooling and Servicing Agreement"), between the Bank and the
Trustee on the terms and conditions set forth herein;
NOW, THEREFORE, pursuant to Section 13.1(a) of the Original
Pooling and Servicing Agreement, the parties hereto hereby agree that
effective on and as of the date hereof, the Original Pooling and Servicing
Agreement is hereby amended to read in its entirety as follows: In
consideration of the mutual agreements herein contained, each party agrees
as follows for the benefit of the other parties and the Certificateholders:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. Whenever used in this Agreement, the
following words and phrases shall have the following meanings:
"Account" shall mean each VISA(R) and MasterCard(R)** credit
card account serviced at the New Castle, Delaware or Atlanta, Georgia
servicing center of the Transferor, or at such other servicing center of
the Transferor as shall be designated by the Transferor or the Servicer
pursuant to Section 13.2(c), and established pursuant to a Credit Card
Agreement between the Transferor and any Person identified by its customer
account number and by the Receivable balance as of the Cut Off Date and as
of each Addition Cut Off Date in each computer file or microfiche list
delivered to the Trustee by the Transferor pursuant to Section 2.1 or 2.6.
The definition of Account shall include each Transferred Account. The term
"Account" shall be deemed to refer to an Additional Account only from and
after the Addition Date with respect thereto and to an Automatic Additional
Account only from and after the Creation Date with respect thereto, and the
term "Account" shall be deemed to refer to any Removed Account only prior
to the Removal Date with respect thereto.
- -----------
** VISA(R) and MasterCard(R) are registered trademarks of VISA U.S.A.,
Inc. and of MasterCard International Inc., respectively.
"Account Information" shall have the meaning specified in
subsection 2.2(b).
"Accumulation Period" shall mean, with respect to any Series,
or any Class within a Series, a period following the Revolving Period,
which shall be the accumulation or other period in which Collections of
Principal Receivables are accumulated in an account for the benefit of the
Investor Certificateholders of such Series, or a class within such Series,
in each case as defined with respect to such Series in the related
Supplement.
"Addition Cut Off Date" shall mean each date as of which
Additional Accounts shall be selected to be included as Accounts pursuant
to Section 2.6.
"Addition Date" shall mean each date as of which Additional
Accounts will be included as Accounts pursuant to Section 2.6.
"Additional Accounts" shall have the meaning specified in
subsection 2.6(a).
"Affiliate" of any Person shall mean any other Person
controlling, controlled by or under common control with such Person.
"Aggregate Investor Interest" shall mean, as of any date of
determination, the sum of the Investor Interests of all Series of
Certificates issued and outstanding on such date of determination.
"Aggregate Investor Percentage" with respect to Principal
Receivables, Finance Charge Receivables and Receivables in Defaulted
Accounts, as the case may be, shall mean, as of any date of determination,
the sum of such Investor Percentages of all Series of Certificates issued
and outstanding on such date of determination; provided, however, that the
Aggregate Investor Percentage shall not exceed 100%.
"Agreement" shall mean this Pooling and Servicing Agreement and
all amendments hereof and supplements hereto, including any Supplement.
"Amortization Period" shall mean, with respect to any Series,
or any Class within a Series, a period following the Revolving Period
during which principal is distributed to Investor Certificateholders, which
shall be the controlled amortization period, the principal amortization
period, the rapid amortization period or other amortization period, in each
case as defined with respect to such Series in the related Supplement.
"Applicants" shall have the meaning specified in Section 6.7.
"Appointment Day" shall have the meaning specified in
subsection 9.2(a).
"Assignment" shall have the meaning specified in subsection 2.6
(c)(ii).
"Authorized Newspaper" shall mean the Wall Street Journal or a
newspaper (or newspapers) of general circulation in the Borough of
Manhattan, The City of New York and the City of Atlanta, Georgia printed in
the English language and customarily published on each Business Day,
whether or not published on Saturdays, Sundays and holidays.
"Automatic Additional Accounts" shall have the meaning
specified in subsection 2.6(d).
"Average Principal Receivables" shall mean, for any period, an
amount equal to (a) the sum of the aggregate amount of Principal
Receivables at the end of each day during such period divided by (b) the
number of days in such period.
"Bank Portfolio" shall mean the MasterCard and VISA accounts
owned by the Transferor.
"Bearer Certificates" shall have the meaning specified in
Section 6.1.
"Bearer Rules" shall mean the provisions of the Internal
Revenue Code, in effect from time to time, governing the treatment of
bearer obligations, including sections 163(f), 871, 881, 1441, 1442 and
4701, and any regulations thereunder including, to the extent applicable to
any Series, Proposed or Temporary Regulations.
"BIF" shall mean the Bank Insurance Fund administered by the
FDIC.
"Book-Entry Certificates" shall mean certificates evidencing a
beneficial interest in the Investor Certificates, ownership and transfers
of which shall be made through book entries by a Clearing Agency as
described in Section 6.10; provided, however, that after the occurrence of
a condition whereupon book-entry registration and transfer are no longer
authorized and Definitive Certificates are to be issued to the Certificate
Owners, such certificates shall no longer be "Book-Entry Certificates."
"Business Day" shall mean any day other than a Saturday, a
Sunday or a day on which banking institutions in New York, New York,
Atlanta, Georgia or New Castle, Delaware (or, with respect to any Series,
any additional city specified in the related Supplement) are authorized or
obligated by law or executive order to be closed.
"Cash Advance Fees" shall have the meaning specified in the
Credit Card Agreement applicable to each Account for cash advance fees or
similar terms.
"Cedelbank" shall mean Cedelbank, societe anonyme.
"Certificate" shall mean any one of the Investor Certificates
of any Series or the Transferor Certificate.
"Certificateholder" or "Holder" shall mean the Person in whose
name a Certificate is registered in the Certificate Register and, if
applicable, the holder of any Bearer Certificate or Coupon, as the case may
be or such other Person deemed to be a "Certificateholder" or "Holder" in
any related Supplement.
"Certificate Interest" shall mean interest payable in respect
of the Investor Certificates of any Series pursuant to Article IV of the
Supplement for such Series.
"Certificate Owner" shall mean, with respect to a Book-Entry
Certificate, the Person who is the beneficial owner of such Book-Entry
Certificate, as may be reflected on the books of the Clearing Agency, or on
the books of a Person maintaining an account with such Clearing Agency
(directly or as an indirect participant, in accordance with the rules of
such Clearing Agency).
"Certificate Principal" shall mean principal payable in respect
of the Investor Certificates of any Series pursuant to Article IV of this
Agreement.
"Certificate Rate" shall mean, with respect to any Series of
Certificates (or, for any Series with more than one Class, for each Class
of such Series), the rate (or formula on the basis of which such rate shall
be determined) stated in the related Supplement.
"Certificate Register" shall mean the register maintained
pursuant to Section 6.3, providing for the registration of the Certificates
and transfers and exchanges thereof.
"Class" shall mean, with respect to any Series, any one of the
classes of Certificates of that Series as specified in the related
Supplement.
"Clearing Agency" shall mean an organization registered as a
"clearing agency" pursuant to Section 17A of the Securities Exchange Act of
1934, as amended.
"Clearing Agency Participant" shall mean a broker, dealer,
bank, other financial institution or other Person for whom from time to
time a Clearing Agency or Foreign Clearing Agency effects book-entry
transfers and pledges of securities deposited with the Clearing Agency or
Foreign Clearing Agency.
"Closing Date" shall mean, with respect to any Series, the date
of issuance of such Series of Certificates, as specified in the related
Supplement.
"Collateral Interest" shall have the meaning, with respect to
any Series, specified in the related Supplement.
"Collection Account" shall have the meaning specified in
subsection 4.2(a).
"Collections" shall mean all payments (including Insurance
Proceeds) received by the Servicer in respect of the Receivables, in the
form of cash, checks, wire transfers, ATM transfers or other form of
payment in accordance with the Credit Card Agreement in effect from time to
time on any Receivables. A Collection processed on an Account in excess of
the aggregate amount of Receivables in such Account as of the Date of
Processing of such Collection shall be deemed to be a payment in respect of
Principal Receivables to the extent of such excess. Collections with
respect to any Monthly Period shall include the amount of Interchange (if
any) allocable to any Series of Certificates pursuant to any Supplement
with respect to such Monthly Period (to the extent received by the Trust
and deposited into the Finance Charge Account or any Series Account, as the
case may be, on the Transfer Date following such Monthly Period) to be
applied as if such amount were Collections of Finance Charge Receivables
for all purposes. Collections with respect to any Monthly Period shall also
include the amount deposited by the Transferor into the Finance Charge
Account (or Series Account if provided in any Supplement) pursuant to
Section 2.8.
"Corporate Trust Office" shall mean the principal office of the
Trustee at which at any particular time its corporate trust business shall
be administered, which office at the date of the execution of this
Agreement is located at White Clay Center, Route 273, Newark, Delaware
19711, Attention: Corporate Trust Administration.
"Coupon" shall have the meaning specified in Section 6.1.
"Creation Date" shall mean the date on which an Automatic
Additional Account is originated by the Transferor.
"Credit Adjustment" shall have the meaning specified in
subsection 4.3 (c).
"Credit Card Agreement" shall mean the agreement and Federal
Truth in Lending Statement for MasterCard and VISA credit card accounts
between any Obligor and The First National Bank of Atlanta d/b/a Wachovia
Bank Card Services, as such agreements may be amended, modified or
otherwise changed from time to time.
"Credit Card Guidelines" shall mean the Transferor's policies
and procedures relating to the operation of its credit card business,
including, without limitation, the policies and procedures for determining
the creditworthiness of credit card customers, the extension of credit to
credit card customers, and relating to the maintenance of credit card
accounts and collection of credit card receivables, as such policies and
procedures may be amended from time to time.
"Credit Enhancement" shall mean, with respect to any Series,
the subordination, the cash collateral guaranty or account, collateral
interest, letter of credit, surety bond, insurance policy, spread account,
reserve account, cross-support feature or any other contract, agreement or
arrangement for the benefit of the Certificateholders of such Series (or
Certificateholders of a Class within such Series) as designated in the
applicable Supplement.
"Credit Enhancement Provider" shall mean, with respect to any
Series, the Person, if any, designated as such in the related Supplement.
"Cut Off Date" shall mean September 26, 1995.
"Date of Processing" shall mean, with respect to any
transaction, the date on which such transaction is first recorded on the
Servicer's computer master file of VISA and MasterCard accounts (without
regard to the effective date of such recordation).
"Default Amount" shall mean, with respect to any Defaulted
Account, the amount of Receivables (other than Ineligible Receivables) in
such Defaulted Account on the day such Account became a Defaulted Account.
"Defaulted Account" shall mean each Account with respect to
which, in accordance with the Credit Card Guidelines or the Servicer's
customary and usual servicing procedures for servicing credit card
receivables comparable to the Receivables, the Servicer has charged-off the
Receivables in such Account as uncollectible; an Account shall become a
Defaulted Account on the day on which such Receivables are recorded as
charged off as uncollectible on the Servicer's computer master file of VISA
and MasterCard accounts. Notwithstanding any other provision hereof, any
Receivables in a Defaulted Account that are Ineligible Receivables shall be
treated as Ineligible Receivables rather than Receivables in Defaulted
Accounts.
"Definitive Certificate" shall have the meaning specified in
Section 6.10.
"Depository" shall have the meaning specified in Section 6.10.
"Depository Agreement" shall mean, with respect to a Series
having Book-Entry Certificates, the agreement among the Transferor, the
Trustee and the Clearing Agency, or as otherwise provided in the related
Supplement.
"Determination Date" shall mean, unless otherwise specified in
the related Series Supplement, the fourth Business Day prior to each
Transfer Date.
"Discounted Percentage" shall have the meaning specified in
Section 2.8.
"Discount Option Receivables" shall mean Principal Receivables
designated by the Transferor that are transferred to the Trust at a
specified discount, which discount is applied such that the discounted
portion of Collections of such Principal Receivables are treated as
Collections of Finance Charge Receivables.
"Discount Option Receivable Collections" shall have the meaning
specified in Section 2.8.
"Distribution Account" shall have the meaning specified in
subsection 4.2(c).
"Distribution Date" shall mean, with respect to each Series,
the dates specified in the related Supplement.
"Dollars," "$" or "U.S. $" shall mean United States dollars.
"Eligible Account" shall mean, as of the Cut Off Date (or, with
respect to Additional Accounts, as of the relevant Addition Cut Off Date,
or with respect to Automatic Additional Accounts, as of the relevant
Creation Date), each Account owned by the Transferor:
(a) which is in existence and maintained with the Transferor
and has not been assigned in whole or part to any other Person;
(b) which is payable in Dollars;
(c) the Obligor on which has provided, as its most recent
billing address, an address which is located in the United States or
its territories or possessions;
(d) which the Transferor has not classified on its electronic
records as counterfeit, cancelled, fraudulent, stolen or lost;
(e) the Obligor on which has not been identified by the
Transferor as having commenced bankruptcy or insolvency proceedings;
and
(f) the Obligor on which has not been identified by the
Transferor as being deceased.
"Eligible Receivable" shall mean each Receivable:
(a) which has arisen under an Eligible Account;
(b) which was created in compliance, in all material respects,
with all Requirements of Law applicable to the Transferor and
pursuant to a Credit Card Agreement which complies, in all material
respects, with all Requirements of Law applicable to the Transferor;
(c) with respect to which all consents, licenses, approvals or
authorizations of, or registrations or declarations with, any
Governmental Authority required to be obtained, effected or given by
the Transferor in connection with the creation of such Receivable or
the execution, delivery and performance by the Transferor of the
Credit Card Agreement pursuant to which such Receivable was created,
have been duly obtained, effected or given and are in full force and
effect as of such date of creation;
(d) as to which, at the time of and at all times after the
creation of such Receivable, the Transferor or the Trust had good and
marketable title thereto, free and clear of all Liens arising under
or through the Transferor or any of its Affiliates (other than Liens
permitted pursuant to subsection 2.5(b));
(e) which is the legal, valid and binding payment obligation of
the Obligor thereon, enforceable against such Obligor in accordance
with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws, now or hereafter in effect, affecting the
enforcement of creditors' rights in general and except as such
enforceability may be limited by general principles of equity
(whether considered in a suit at law or in equity);
(f) which constitutes an "account" under and as defined in
Article 9 of the UCC as then in effect in the State of Delaware;
(g) which is not subject to any setoff, right of rescission,
counterclaim or other defense, other than defenses arising out of
applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws; and
(h) as to which the Transferor has satisfied all obligations to
be fulfilled at the time it is transferred to the Trust.
"Eligible Servicer" shall mean the initial Servicer hereunder,
the Trustee, or Affiliate of the Trustee, or an entity which, at the time
of its appointment as Servicer, (a) is servicing a portfolio of consumer
revolving credit card accounts or other consumer revolving credit accounts,
(b) is legally qualified and has the capacity to service the Accounts, (c)
is qualified (or licensed) to use the software that the Servicer is then
currently using to service the Accounts or obtains the right to use, or has
its own, software which is adequate to perform its duties under this
Agreement, (d) has, in the reasonable judgment of the Trustee, demonstrated
the ability to professionally and competently service a portfolio of
similar accounts in accordance with customary standards of skill and care
and (e) has a net worth of at least $50,000,000 as of the end of its most
recent fiscal quarter.
"Enhancement Invested Amount" shall have the meaning, with
respect to any Series, specified in the related Supplement.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time.
"Euroclear Operator" shall mean Morgan Guaranty
Trust Company of New York, Brussels, Belgium office, as operator of the
Euroclear System.
"Excess Funding Account" shall have the meaning specified in
subsection 4.2(d).
"Excess Funding Amount" shall mean, as of any date of
determination, the principal amount on deposit in the Excess Funding
Account.
"Exchange" shall mean either of the procedures described under
Section 6.9.
"Exchange Date" shall have the meaning, with respect to any
Series issued pursuant to an Exchange, specified in Section 6.9.
"Exchange Notice" shall have the meaning, with respect to any
Series issued pursuant to an Exchange, specified in Section 6.9.
"Extended Trust Termination Date" shall have the meaning
specified in subsection 12.1(a).
"FDIC" shall mean the Federal Deposit Insurance Corporation.
"Finance Charge Account" shall have the meaning specified in
subsection 4.2(b).
"Finance Charge Receivables" shall mean Receivables created in
respect of the Periodic Finance Charges, Cash Advance Fees, Late Fees and
annual fees and similar fees and charges, including Special Fees to the
extent such Special Fees are categorized as Finance Charge Receivables, but
excluding premiums for credit insurance. Finance Charge Receivables with
respect to any Monthly Period shall include the amount of Interchange (if
any) and Discount Option Receivables (if any), and net investment earnings
on funds on deposit in the Excess Funding Account (if any) and any other
amounts allocable to any Series of Certificates pursuant to any Supplement
with respect to such Monthly Period that are to be treated as Finance
Charge Receivables (to the extent received by the Trust and deposited into
the Finance Charge Account or any Series Account, as the case may be, on
the Transfer Date following such Monthly Period).
"Fitch" shall mean Fitch Investors Service, L.P.
"Floating Principal Allocation" shall have the meaning
specified in the related Supplement.
"Foreign Clearing Agency" shall mean Cedelbank and the
Euroclear Operator.
"Global Certificate" shall have the meaning specified in
Section 6.13.
"Governmental Authority" shall mean the United States of
America, any state or other political subdivision thereof and any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Group" shall mean, with respect to any Series, the group of
Series in which the related Supplement specifies that such Series shall be
included.
"Ineligible Receivable" shall have the meaning specified in
subsection 2.4(d)(iii).
"Initial Closing Date" shall mean October 26, 1995.
"Initial Investor Interest" shall mean, with respect to any
Series of Certificates, the amount stated in the related Supplement.
"Insolvency Event" shall have the meaning specified in
subsection 9.1(a).
"Insurance Proceeds" shall mean any amounts recovered by the
Servicer pursuant to any credit insurance policies covering any Obligor
with respect to Receivables under such Obligor's Account.
"Interchange" shall mean interchange fees payable to the
Transferor, in its capacity as credit card issuer, through VISA U.S.A.,
Inc. and MasterCard International Inc.
"Internal Revenue Code" shall mean the Internal Revenue Code of
1986, as amended from time to time.
"Investment Company Act" shall mean the Investment Company Act
of 1940, as amended from time to time.
"Investor Account" shall mean each of the Finance Charge
Account, the Principal Account, the Excess Funding Account and the
Distribution Account.
"Investor Certificate" shall mean any one of the certificates
(including, without limitation, the Bearer Certificates, the Registered
Certificates or the Global Certificates) issued by the Trust, executed by
the Transferor and authenticated by the Trustee substantially in the form
(or forms in the case of a Series with multiple Classes) of the investor
certificate attached to the related Supplement or such other interest in
the Trust deemed to be an "Investor Certificate" in any related Supplement.
"Investor Certificateholder" shall mean the holder of record of
an Investor Certificate.
"Investor Charge-Off" shall have, with respect to each Series,
the meaning specified in the applicable Supplement.
"Investor Default Amount" shall have, with respect to any
Series of Certificates, the meaning stated in the related Supplement.
"Investor Exchange" shall have the meaning specified in
subsection 6.9(b).
"Investor Interest" shall have, with respect to any Series of
Certificates, the meaning stated in the related Supplement.
"Investor Percentage" shall have, with respect to Principal
Receivables, Finance Charge Receivables and Receivables in Defaulted
Accounts, and any Series of Certificates, the meaning stated in the related
Supplement.
"Investor Servicing Fee" shall have, with respect to each
Series, the meaning specified in Section 3.2.
"Late Fees" shall have the meaning specified in the Credit Card
Agreement applicable to each Account for late fees or similar terms.
"Lien" shall mean any mortgage, deed of trust, pledge,
hypothecation, assignment, participation or equity interest, deposit
arrangement, encumbrance, lien (statutory or other), preference, priority
or other security agreement or preferential arrangement of any kind or
nature whatsoever, including, without limitation, any conditional sale or
other title retention agreement, any financing lease having substantially
the same economic effect as any of the foregoing and the filing of any
financing statement under the UCC (other than any such financing statement
filed for informational purposes only) or comparable law of any
jurisdiction to evidence any of the foregoing; provided, however, that any
assignment pursuant to Section 7.2 or transfer of an interest in the
Transferor Certificate in accordance with subsection 6.3(b) shall not be
deemed to constitute a Lien.
"Master File" shall mean the file on the Transferor's computer
system that identifies MasterCard and VISA accounts of the Transferor,
which file is designated by the Transferor as its "Master File" or any
other file or record in replacement thereof.
"Maximum Addition Amount" shall mean, unless otherwise provided
in a Supplement, the number of accounts originated by the Transferor after
the Cut Off Date designated as Additional Accounts or Automatic Additional
Accounts pursuant to Section 2.6 without prior Rating Agency confirmation
of its then existing rating of any Series of Investor Certificates then
issued and outstanding which would either (a) with respect to any of three
consecutive Monthly Periods commencing on November 1, 1995 be equal to the
product of (i) 15% and (ii) the number of Accounts as of the end of the
ninth Monthly Period preceding the commencement of such three Monthly
Periods (or the Cut Off Date, whichever is later) or (b) with respect to
any twelve-month period equal to the product of (i) 20% and (ii) the number
of Accounts as of the first day of such twelve-month period; provided,
however, that if the aggregate principal balance in the Additional Accounts
and Automatic Additional Accounts specified in clause (a) or clause (b)
above, as the case may be, shall exceed either (y) the product of (i) 15%
and (ii) the aggregate amount of Principal Receivables determined as of the
first day of the third preceding Monthly Period (or in the case of any date
occurring on or before January 1, 1996, the aggregate amount of Principal
Receivables on the Initial Closing Date) minus the aggregate amount of
Principal Receivables as of the date each such Additional Account or
Automatic Additional Account was added to the Trust in all of the Accounts
owned by the Transferor that have been designated as Additional Accounts or
Automatic Additional Accounts since the first day of the third preceding
Monthly Period or the Initial Closing Date, as the case may be, or (z) the
product of (i) 20% and (ii) the aggregate amount of Principal Receivables
determined as of the first day of the calendar year in which such date
occurs (or in the case of any date occurring on or before October 1, 1996,
the aggregate amount of Principal Receivables on the Initial Closing Date)
minus the aggregate amount of Principal Receivables as of the date each
such Additional Account or Automatic Additional Account was added to the
Trust in all of the Accounts owned by the Transferor after the Cut Off Date
that have been designated as Additional Accounts or Automatic Additional
Accounts since the first day of such calendar year or the Initial Closing
Date, as the case may be, the Maximum Addition Amount shall be an amount
equal to the lesser of the aggregate amount of Principal Receivables
specified in either clause (y) or clause (z) of this proviso.
"Minimum Aggregate Principal Receivables" shall mean, unless
otherwise provided in a Supplement relating to a Series having a Paired
Series or a Floating Principal Allocation, as of any date of determination,
an amount equal to the sum of the Initial Investor Interests for all
outstanding Series on such date.
"Minimum Transferor Amount" shall mean 5% (or such other
percentage as specified in the related Supplement) of the sum of the
Average Principal Receivables for the preceding Monthly Period plus the
Excess Funding Amount plus the amount on deposit on any Series Accounts or
other accounts specified in a Supplement as of the end of such Monthly
Period; provided, however, that the Transferor may reduce the Minimum
Transferor Amount upon (w) delivery to the Trustee of a Tax Opinion with
respect to such reduction, (x) 30 day's prior notice to the Trustee, each
Rating Agency and any Credit Enhancement Provider entitled to receive such
notice pursuant to the relevant Supplement, (y) written confirmation from
the Rating Agency that such reduction will not result in the reduction or
withdrawal of the respective ratings of each Rating Agency for any Series
outstanding and (z) delivery to the Trustee and each such Credit
Enhancement Provider of an Officer's Certificate stating that the
Transferor reasonably believes that such reduction will not, based on the
facts known to such officer at the time of such certification, then or
thereafter cause a Pay Out Event to occur with respect to any Series;
provided further that the Minimum Transferor Amount shall not at any time
be less than 2%.
"Monthly Period" shall mean, unless otherwise defined in any
Supplement, the period from and including the first day of a calendar month
to and including the last day of a calendar month.
"Monthly Servicer Report" shall mean, a report substantially in
the form attached as Exhibit C to this Agreement, with such changes as the
Servicer may determine to be necessary or desirable; provided, however,
that no such change shall serve to exclude information required by the
Agreement or any Supplement.
"Moody's" shall mean Moody's Investors Service, Inc.
"Notice Date" shall have the meaning specified in subsection
2.6(c)(i).
"Obligor" shall mean, with respect to any Account, the Person
or Persons obligated to make payments with respect to such Account,
including any guarantor thereof.
"Officer's Certificate" shall mean a certificate signed by any
Vice President or more senior officer of the Transferor or Servicer and
delivered to the Trustee.
"Opinion of Counsel" shall mean a written opinion of counsel,
who may be counsel for or an employee of the Person providing the opinion,
and who shall be reasonably acceptable to the Trustee; provided, however,
that any Tax Opinion or other opinion relating to federal income tax
matters shall be an opinion of nationally recognized tax counsel.
"Paired Series" shall mean (i) each Series which has been
paired with another Series (which Series may be prefunded or partially
prefunded), such that the reduction of the Investor Interest of such Series
results in the increase of the Investor Interest of such other Series, as
described in the related Supplements, and (ii) such other Series.
"Participations" shall have the meaning specified in subsection
2.6(a)(ii).
"Pay Out Commencement Date" shall mean, (a) with respect to
each Series, the date on which a Trust Pay Out Event is deemed to occur
pursuant to Section 9.1 or (b) with respect to any Series, the date on
which a Series Pay Out Event is deemed to occur pursuant to the Supplement
for such Series.
"Pay Out Event" shall mean, with respect to each Series, a
Trust Pay Out Event or a Series Pay Out Event.
"Paying Agent" shall mean any paying agent appointed pursuant
to Section 6.6 and shall initially be the Trustee.
"Periodic Finance Charges" shall have the meaning specified in
the Credit Card Agreement applicable to each Account for finance charges
(due to periodic rate) or any similar term.
"Permitted Investments" shall mean, unless otherwise provided
in the Supplement with respect to any Series, (a) book-entry securities or
negotiable instruments or securities represented by instruments in bearer
or registered form which evidence (i) obligations of or fully guaranteed by
the United States of America; (ii) time deposits or certificates of deposit
of any depositary institution or trust company incorporated under the laws
of the United States of America or any state thereof (or domestic branches
of foreign depository institutions or trust companies) and subject to
supervision and examination by federal or state banking or depositary
institution authorities; provided, however, that at the time of the Trust's
investment or contractual commitment to invest therein, the certificates of
deposit or short-term deposits of such depositary institution or trust
company shall have a credit rating from Moody's and Standard & Poor's of
P-1 and A-l+, respectively; (iii) commercial paper having, at the time of
the Trust's investment or contractual commitment to invest therein, a
rating from Moody's and Standard & Poor's of P-1 and A- 1+, respectively;
(iv) bankers' acceptances issued by any depository institution or trust
company described in clause (a)(ii) above; and (v) repurchase agreements
transacted with either (A) an entity subject to the United States
Bankruptcy Code or (B) a financial institution insured by the FDIC or a
broker-dealer with retail customers that is under the jurisdiction of the
Securities Investors Protection Corp., in each case having a short-term
unsecured rating of A-1+ by Standard & Poor's and P-1 by Moody's; (b)
demand deposits in the name of the Trust or the Trustee in any depositary
institution or trust company referred to in clause (a)(ii) above; (c) any
other investment if each Rating Agency confirms in writing that such
investment will not adversely affect its then current rating of the
Investor Certificates, provided that such investment will not cause the
Trust to be treated as an "investment company" within the meaning of the
Investment Company Act.
"Person" shall mean any legal person, including any individual,
corporation, limited liability company, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization,
governmental entity or other entity of similar nature.
"Principal Account" shall have the meaning specified in
subsection 4.2(b).
"Principal Receivable" shall mean each Receivable other than
(i) Finance Charge Receivables, and (ii) Receivables in Defaulted Accounts.
A Receivable shall be deemed to have been created at the end of the day on
the Date of Processing of such Receivable. In calculating the aggregate
amount of Principal Receivables on any day, the amount of Principal
Receivables shall be reduced by the aggregate amount of credit balances in
the Accounts on such day. Any Receivables which the Transferor is unable to
transfer as provided in subsection 2.5(d) shall not be included in
calculating the aggregate amount of Principal Receivables.
"Principal Shortfalls" shall mean, with respect to a Transfer
Date, the aggregate amount for all outstanding Series that the related
Supplements specify are "Series Principal Shortfalls" for such Transfer
Date.
"Principal Terms" shall have the meaning, with respect to any
Series issued pursuant to an Exchange, specified in subsection 6.9(c).
"Qualified Institution" shall mean (i) a depositary
institution, which may include the Trustee, organized under the laws of the
United States or any one of the States thereof including the District of
Columbia, the deposits in which are insured by the FDIC and which at all
times has a short-term unsecured debt rating of at least A-1+ by Standard &
Poor's and P-1 by Moody's or (ii) any other depositary institution, subject
to the Rating Agency Condition; provided, however, that an institution
which shall have corporate trust powers and which maintains the Collection
Account, the Principal Account, the Finance Charge Account, any Series
Account or any other account maintained for the benefit of
Certificateholders as a fully segregated trust account with the trust
department of such institution shall not be required to meet the foregoing
rating requirements, and need only at all times have a long-term unsecured
debt rating of at least Baa3 by Moody's so long as Moody's is a Rating
Agency.
"Rating Agency" shall mean, with respect to each Series, the
rating agency or agencies, if any, selected by the Transferor to rate the
Certificates, as specified in the related Supplement.
"Rating Agency Condition" shall mean, with respect to any
action, that each Rating Agency shall have notified the Transferor or the
Trustee in writing that such action will not result in a withdrawal or
reduction of its rating of any outstanding Series of Certificates with
respect to which it is a Rating Agency.
"Reassignment" shall have the meaning specified in subsection
2.7(b)(ii).
"Reassignment Date" shall have the meaning specified in
subsection 2.4(e).
"Receivable" shall mean any amount owing by the Obligors under
an Account including, without limitation, amounts owing for the payment of
goods and services, cash advances, Transfer and Convenience Check Fees,
Cash Advance Fees, Periodic Finance Charges, Late Fees and Special Fees, if
any.
"Record Date" shall mean, with respect to any Distribution
Date, the last Business Day of the preceding Monthly Period.
"Registered Certificates" shall have the meaning specified in
Section 6.1.
"Removal Date" shall mean the date on which Receivables in
certain designated Removed Accounts will be reassigned by the Trustee to
the Transferor.
"Removal Notice Date" shall have the meaning specified in
Section 2.7(a).
"Removed Accounts" shall have the meaning specified in
subsection 2.7(a).
"Requirements of Law" for any Person shall mean the certificate
of incorporation or articles of association and by-laws or other
organizational or governing documents of such Person, and any law, treaty,
rule or regulation, or determination of an arbitrator or Governmental
Authority, in each case applicable to or binding upon such Person or to
which such Person is subject, whether federal, state or local (including,
without limitation, usury laws, the federal Truth in Lending Act and
Regulation Z and Regulation B of the Board of Governors of the Federal
Reserve System).
"Responsible Officer" shall mean any officer within the
Corporate Trust Office (or any successor group of the Trustee), including
any Vice President, any Assistant Secretary or any other officer of the
Trustee customarily performing functions similar to those performed by any
person who at the time shall be an above-designated officer and also, with
respect to a particular officer to whom any corporate trust matter is
referred because of such officer's knowledge of and familiarity with the
particular subject.
"Revolving Period" shall have, with respect to each Series, the
meaning specified in the related Supplement.
"SAIF" shall mean the Savings Association Insurance Fund
administered by the FDIC.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Series" shall mean any series of Investor Certificates, which
may include within any such Series a Class or Classes of Investor
Certificates subordinate to another such Class or Classes of Investor
Certificates.
"Series Account" shall mean any account or accounts established
pursuant to a Supplement for the benefit of such Series.
"Series Pay Out Event" shall have, with respect to any Series,
the meaning specified pursuant to the Supplement for the related Series.
"Series Servicing Fee Percentage" shall mean, with respect to
any Series, the amount specified in the related Supplement.
"Series Termination Date" shall mean, with respect to any
Series of Certificates, the date stated in the related Supplement.
"Service Transaction Fees" shall have the meaning specified in
the Credit Card Agreement applicable to each Account for any service
transaction fees or similar terms.
"Servicer" shall mean initially The First National Bank of
Atlanta d/b/a Wachovia Bank Card Services, and its permitted successors and
assigns, and thereafter any Person appointed as successor as herein
provided to service the Receivables.
"Servicer Default" shall have the meaning specified in Section
10.1.
"Servicing Fee" shall have the meaning specified in Section
3.2.
"Servicing Officer" shall mean any officer of the Servicer
involved in, or responsible for, the administration and servicing of the
Receivables whose name appears on a list of servicing officers furnished to
the Trustee by the Servicer, as such list may from time to time be amended.
"Shared Excess Finance Charge Collections" shall mean, with
respect to any Transfer Date, and for any Group, the aggregate amount for
all outstanding Series in such Group that the related Supplements specify
are to be treated as "Shared Excess Finance Charge Collections" with
respect to such Group for such Transfer Date.
"Shared Principal Collections" shall mean, with respect to any
Transfer Date, the aggregate amount for all outstanding Series that the
related Supplements specify are to be treated as "Shared Principal
Collections" for such Transfer Date.
"Special Fees" shall mean Receivables which are Transfer and
Convenience Check Fees, and any other fees which are not now but from time
to time may be assessed on the Accounts. On or after the date on which any
of such Special Fees begin to be assessed on the Accounts, the Transferor
shall designate in an Officer's Certificate whether such Special Fees shall
be treated as Principal Receivables or Finance Charge Receivables.
"Standard & Poor's" shall mean Standard & Poor's Ratings
Services, a Division of The McGraw-Hill Companies, Inc. (by whatever
variant appellation it may be known from time to time).
"Successor Servicer" shall have the meaning specified in
subsection 10.2(a).
"Supplement" or "Series Supplement" shall mean, with respect to
any Series, a supplement to this Agreement complying with the terms of
Section 6.9 of this Agreement, executed in conjunction with any issuance of
any Series of Certificates (or, in the case of the issuance of Certificates
on the Initial Closing Date, the supplement executed in connection with the
issuance of such Certificates).
"Tax Opinion" shall mean with respect to any action, an Opinion
of Counsel to the effect that, for federal income tax purposes, (a) such
action will not adversely affect the tax characterization as debt of
Investor Certificates of any outstanding Series or Class that were
characterized as debt at the time of their issuance, (b) following such
action the Trust will not be deemed to be an association (or publicly
traded partnership) taxable as a corporation and (c) such action will not
cause or constitute an event in which gain or loss would be recognized by
any Investor Certificateholder or the Trust.
"Termination Notice" shall have, with respect to any Series,
the meaning specified in subsection 10.1(d).
"Transfer Agent and Registrar" shall have the meaning specified
in Section 6.3 and shall initially be the Trustee's Corporate Trust Office.
"Transfer and Convenience Check Fees" shall have the meaning
specified in the Credit Card Agreement applicable to each Account for any
such fees or similar terms.
"Transfer Date" shall mean, unless otherwise specified in the
related Supplement, with respect to any Series, the Business Day
immediately prior to each Distribution Date.
"Transferor" shall mean The First National Bank of Atlanta, a
national banking association, d/b/a Wachovia Bank Card Services and its
successors in interest and permitted assigns.
"Transferor Amount" shall mean, on any date of determination,
the sum of the aggregate amount of Principal Receivables, the Excess
Funding Amount and the principal amount on deposit in any Principal Funding
Account (as defined in any Supplement) plus the amount on deposit in any
Series Account specified in a Supplement, at the end of the day immediately
prior to such date of determination, minus the Aggregate Investor Interest
at the end of such day, minus the aggregate Enhancement Invested Amounts
not included in the Aggregate Investor Interest, if any, for each Series
outstanding at the end of such day, minus the aggregate Collateral
Interests not included in the Aggregate Investor Interest, if any, for each
Series outstanding at the end of such day.
"Transferor Certificate" shall mean the certificate executed by
the Transferor and authenticated by the Trustee, substantially in the form
of Exhibit A and exchangeable as provided in Section 6.9; provided,
however, that at any time there shall be only one Transferor Certificate.
"Transferor Exchange" shall have the meaning specified in
subsection 6.9(b).
"Transferor Participation" shall mean any participation
interest or other similar interest in the Transferor Certificate that is
granted or sold by the Transferor.
"Transferor Percentage" shall mean, on any date of
determination, when used with respect to Principal Receivables, Finance
Charge Receivables and Receivables in Defaulted Accounts, a percentage
equal to 100% minus the Aggregate Investor Percentage with respect to such
categories of Receivables.
"Transferor Servicing Fee" shall have the meaning specified in
Section 3.2.
"Transferred Account" shall mean (a) an Account with respect to
which a new customer account number has been issued by the Servicer or the
Transferor under circumstances resulting from a lost or stolen credit card
or from the transfer from one program to another program and not requiring
standard application and credit evaluation procedures under the Credit Card
Guidelines or (b) an Eligible Account resulting from the conversion of an
Account that was a standard account to a premium account or from a premium
account to a standard account, and which in either case can be traced or
identified in the Master File as a Transferred Account into which an
Account has been transferred by reference to or by way of the computer
files or microfiche lists delivered to the Trustee pursuant to Section 2.1
or 2.6.
"Trust" shall mean the trust created by this Agreement, the
corpus of which shall consist of the Receivables now existing or hereafter
created and arising in connection with the Accounts, the Participations, if
any, all monies due or to become due with respect to the Receivables and
the Participations, all proceeds (as defined in Section 9-306 of the UCC as
in effect in the State of Delaware) of the Receivables and Insurance
Proceeds relating to the Receivables, the right to receive certain amounts
paid or payable as Interchange (if provided for in any Supplement), such
funds as from time to time are deposited in the Collection Account, the
Finance Charge Account, the Principal Account, the Distribution Account,
the Excess Funding Account and any Series Account and the rights to any
Credit Enhancement with respect to any Series.
"Trust Extension" shall have the meaning specified in
subsection 12.1(a).
"Trust Pay Out Event" shall have, with respect to each Series,
the meaning specified in Section 9.1.
"Trust Termination Date" shall mean the earliest to occur of
(i) unless a Trust Extension shall have occurred, the first Business Day
after the Distribution Date on which the Investor Interest, the Collateral
Interest, the Enhancement Invested Amount and any other interest issued by
the Trust, as applicable, for each Series is zero, (ii) if a Trust
Extension shall have occurred, the Extended Trust Termination Date, (iii)
October 26, 2045 and (iv) the date of any termination pursuant to Section
9.2(b).
"Trustee" shall mean The Bank of New York (Delaware), a
Delaware banking corporation, and its successors and any corporation
resulting from or surviving any consolidation or merger to which it or its
successors may be a party and any successor trustee appointed as herein
provided.
"UCC" shall mean the Uniform Commercial Code, as amended from
time to time, as in effect in any specified jurisdiction.
"Undivided Interest" shall mean the undivided interest in the
Trust evidenced by an Investor Certificate.
Section 1.2 Other Definitional Provisions.
(a) All terms defined in any Supplement or this Agreement shall
have the defined meanings when used in any certificate or other document
made or delivered pursuant hereto unless otherwise defined therein.
(b) As used herein and in any certificate or other document
made or delivered pursuant hereto or thereto, accounting terms not defined
in Section 1.1, and accounting terms partially defined in Section 1.1 to
the extent not defined, shall have the respective meanings given to them
under generally accepted accounting principles or regulatory accounting
principles, as applicable. To the extent that the definitions of accounting
terms herein are inconsistent with the meanings of such terms under
generally accepted accounting principles or regulatory accounting
principles, the definitions contained herein shall control.
(c) The agreements, representations and warranties of The First
National Bank of Atlanta d/b/a Wachovia Bank Card Services in this
Agreement and in any Supplement in each of its capacities as Transferor and
Servicer shall be deemed to be the agreements, representations and
warranties of The First National Bank of Atlanta d/b/a Wachovia Bank Card
Services solely in each such capacity for so long as The First National
Bank of Atlanta d/b/a Wachovia Bank Card Services acts in each such
capacity under this Agreement.
(d) The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to any Supplement or
this Agreement as a whole and not to any particular provision of this
Agreement or any Supplement; and Section, subsection, Schedule and Exhibit
references contained in this Agreement or any Supplement are references to
Sections, subsections, Schedules and Exhibits in or to this Agreement or
any Supplement unless otherwise specified. The Servicer shall, upon making
such determination, deliver to the Trustee and each Rating Agency an
Officer's Certificate to which shall be annexed the form of the related
Exhibit, as so changed. Upon the delivery of such Officer's Certificate to
the Trustee, the related Exhibit, as so changed, shall for all purposes of
this Agreement constitute such Exhibit. The Trustee may conclusively rely
upon such Officer's Certificate in determining whether the related Exhibit,
as changed, conforms to the requirements of this Agreement.
[End of Article I]
ARTICLE II
CONVEYANCE OF RECEIVABLES;
ISSUANCE OF CERTIFICATES
Section 2.1 Conveyance of Receivables. The Transferor does
hereby transfer, assign, set-over, and otherwise convey to the Trust for
the benefit of the Certificateholders, without recourse, all of its right,
title and interest in and to the Receivables now existing and hereafter
created and arising in connection with the Accounts, all monies due or to
become due with respect to such Receivables (including all Finance Charge
Receivables and recoveries on any charged-off Receivables), all proceeds of
such Receivables, Insurance Proceeds relating to such Receivables and the
proceeds thereof.
In connection with such transfer, assignment, set-over and
conveyance, the Transferor agrees to record and file, at its own expense, a
financing statement (including any continuation statements with respect to
such financing statement when applicable) with respect to the Receivables
now existing and hereafter created for the transfer of accounts (as defined
in Section 9-106 of the UCC as in effect in the State of Delaware) meeting
the requirements of applicable state law in such manner and in such
jurisdictions as are necessary to perfect the assignment of the Receivables
to the Trust, and to deliver a file-stamped copy of such financing
statement or continuation statement or other evidence of such filing (which
may, for purposes of this Section 2.1, consist of telephone confirmation of
such filing) to the Trustee on or prior to the date of issuance of the
Certificates, and in the case of any continuation statements filed pursuant
to this Section 2.1, as soon as practicable after receipt thereof by the
Transferor. The foregoing transfer, assignment, set-over and conveyance to
the Trust shall be made to the Trustee, on behalf of the Trust, and each
reference in this Agreement to such transfer, assignment, set-over and
conveyance shall be construed accordingly.
In connection with such transfer, the Transferor agrees, at its
own expense, on or prior to the Initial Closing Date (i) to indicate in the
Master File maintained in its computer files that Receivables created in
connection with the Accounts (other than any Additional Accounts or
Automatic Additional Accounts) have been transferred to the Trust pursuant
to this Agreement for the benefit of the Certificateholders by identifying
such Accounts in the Master File with the designation "2" in the first
position of the field "Current Funding Source Code" and (ii) to deliver to
the Trustee a computer file or microfiche list containing a true and
complete list of all such Accounts, identified by account number and
setting forth the Receivable balance as of the Cut Off Date. Such file or
list shall be marked as Schedule 1 to this Agreement, delivered to the
Trustee as confidential and proprietary, and is hereby incorporated into
and made a part of this Agreement. The Transferor further agrees not to
alter the file designation referenced in clause (i) of this paragraph with
respect to any Account during the term of this Agreement unless and until
such Account becomes a Removed Account. The Transferor further agrees to
deliver to the Trustee on a monthly basis at any time when the Transferor
shall be designating Automatic Additional Accounts pursuant to subsection
2.6(d), and otherwise as promptly as possible after the Trustee may at any
time request, a computer file or microfiche list containing a true and
complete list of all Accounts (including any Additional Accounts or
Automatic Additional Accounts), each identified by account number, and to
deliver to the Trustee as promptly as possible after the Trustee may at any
time request tracing information with respect to Transferred Accounts. The
Transferor shall hold such information with respect to the Accounts and
Transferred Accounts, prior to delivery thereof to the Trustee, in trust
for the benefit of the Trustee, on behalf of the Trust.
The parties intend that if, and to the extent that, the
transfer set forth above is not deemed to be a sale, the Transferor shall
be deemed hereunder to have granted, and the Transferor does hereby grant,
to the Trustee a first priority perfected security interest in all of the
Transferor's right, title and interest in, to and under the Receivables now
existing and hereafter created and arising in connection with the Accounts,
all moneys due or to become due with respect to such Receivables, all
proceeds of such Receivables and all Insurance Proceeds relating to such
Receivables and all proceeds thereof to secure the payment of each Series,
and that this Agreement shall constitute a security agreement under
applicable law.
Pursuant to the request of the Transferor, the Trustee shall
cause Certificates in authorized denominations evidencing the entire
interest in the Trust to be duly authenticated and delivered to or upon the
order of the Transferor pursuant to Section 6.2.
Section 2.2 Acceptance by Trustee.
(a) The Trustee hereby acknowledges its acceptance, on behalf
of the Trust, of all right, title and interest to the property now existing
and hereafter created, conveyed to the Trust pursuant to Section 2.1, and
declares that it shall maintain such right, title and interest, upon the
Trust herein set forth, for the benefit of all Certificateholders. The
Trustee further acknowledges that, prior to or simultaneously with the
execution and delivery of this Agreement, the Transferor delivered to the
Trustee the computer file or microfiche list described in the third
paragraph of Section 2.1.
(b) The Trustee hereby agrees not to disclose to any Person any
of the account numbers or other information contained in the computer files
or microfiche lists delivered to the Trustee by the Transferor pursuant to
Sections 2.1, 2.6 and 2.7 ("Account Information") except as is required in
connection with the performance of its duties hereunder or in enforcing the
rights of the Certificateholders or to a Successor Servicer appointed
pursuant to Section 10.2, as mandated pursuant to any Requirement of Law
applicable to the Trustee or as requested by any Person in connection with
financing statements filed with the Trust. The Trustee agrees to take such
measures as shall be reasonably requested by the Transferor to protect and
maintain the security and confidentiality of such information, and, in
connection therewith, shall allow the Transferor to inspect the Trustee's
security and confidentiality arrangements from time to time during normal
business hours. In the event that the Trustee is required by law to
disclose any Account Information, the Trustee shall provide the Transferor
with prompt written notice, unless such notice is prohibited by law, of any
such request or requirement so that the Transferor may request a protective
order or other appropriate remedy. The Trustee shall make best efforts to
provide the Transferor with written notice no later than five days prior to
any disclosure pursuant to this subsection 2.2(b).
(c) The Trustee shall have no power to create, assume or incur
indebtedness or other liabilities in the name of the Trust other than as
contemplated in this Agreement.
Section 2.3 Representations and Warranties of the Transferor.
The Transferor hereby represents and warrants to the Trust as of the
Initial Closing Date:
(a) Organization and Good Standing. The Transferor is a
national banking association duly organized and validly existing in good
standing under the laws of the United States and has full corporate power,
authority and legal right to own its properties and conduct its business as
such properties are presently owned and such business is presently
conducted, and to execute, deliver and perform its obligations under this
Agreement and to execute and deliver to the Trustee the Certificates
pursuant hereto.
(b) Due Qualification. The Transferor is duly qualified to do
business and is in good standing (or is exempt from such requirement) in
any state required in order to conduct its business, and has obtained all
necessary licenses and approvals with respect to the Transferor required
under federal and Delaware law, in each case to the extent required of a
national banking association; provided, however, that no representation or
warranty is made with respect to any qualifications, licenses or approvals
which the Trustee would have to obtain to do business in any state in which
the Trustee seeks to enforce any Receivable.
(c) Due Authorization. The execution and delivery of this
Agreement and the execution and delivery to the Trustee of the Certificates
by the Transferor and the consummation of the transactions provided for in
this Agreement have been duly authorized by the Transferor by all necessary
corporate action on its part and this Agreement is, at the time of its
execution, an official record of the Transferor.
(d) No Conflict. The execution and delivery of this Agreement
and the Certificates, the performance of the transactions contemplated by
this Agreement and the fulfillment of the terms hereof will not conflict
with, result in any breach of any of the material terms and provisions of,
or constitute (with or without notice or lapse of time or both) a material
default under, any indenture, contract, agreement, mortgage, deed of trust,
or other instrument to which the Transferor is a party or by which it or
any of its properties are bound.
(e) No Violation. The execution and delivery of this Agreement
and the Certificates, the performance of the transactions contemplated by
this Agreement and the fulfillment of the terms hereof will not conflict
with or violate any Requirements of Law applicable to the Transferor.
(f) No Proceedings. There are no proceedings or investigations
pending or, to the best knowledge of the Transferor, threatened against the
Transferor before any court, regulatory body, administrative agency, or
other tribunal or governmental instrumentality (i) asserting the invalidity
of this Agreement or the Certificates, (ii) seeking to prevent the issuance
of the Certificates or the consummation of any of the transactions
contemplated by this Agreement or the Certificates, (iii) seeking any
determination or ruling that, in the reasonable judgment of the Transferor,
would materially and adversely affect the performance by the Transferor of
its obligations under this Agreement, (iv) seeking any determination or
ruling that would materially and adversely affect the validity or
enforceability of this Agreement or the Certificates or (v) seeking to
affect adversely the income tax attributes of the Trust.
(g) Eligibility of Accounts. As of the Cut Off Date, each
Account was an Eligible Account and no selection procedures adverse to the
Investor Certificateholders have been employed by the Transferor in
selecting the Accounts from among the Eligible Accounts in the Bank
Portfolio.
(h) All Consents Required. All approvals, authorizations,
consents, orders or other actions of any Person or of any governmental body
or official required in connection with the execution and delivery of this
Agreement and the Certificates, the performance of the transactions
contemplated by this Agreement and the fulfillment of the terms hereof have
been obtained.
For the purposes of the representations and warranties
contained in this Section 2.3 and made by the Transferor on the Initial
Closing Date, "Certificates" shall mean the Certificates issued on the
Initial Closing Date. The representations and warranties set forth in this
Section 2.3 shall survive the transfer and assignment of the respective
Receivables to the Trust, and termination of the rights and obligations of
the Servicer pursuant to Section 10.1. The Transferor hereby represents and
warrants to the Trust, with respect to any Series of Certificates, as of
its Closing Date, unless otherwise stated in such Supplement, that the
representations and warranties of the Transferor set forth in Section 2.3
are true and correct as of such date (for the purposes of such
representations and warranties, "Certificates" shall mean the Certificates
issued on the related Closing Date). Upon discovery by the Transferor, the
Servicer or the Trustee of a breach of any of the foregoing representations
and warranties, the party discovering such breach shall give prompt written
notice to the others.
Section 2.4 Representations and Warranties of the Transferor
Relating to the Agreement and the Receivables.
(a) Binding Obligation; Valid Transfer and Assignment. The
Transferor hereby represents and warrants to the Trust that, as of the
Initial Closing Date and, with respect to any Automatic Additional Account,
as of the applicable Creation Date thereof:
(i) This Agreement constitutes a legal, valid and binding
obligation of the Transferor, enforceable against the Transferor in
accordance with its terms, except (A) as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect affecting
the enforcement of creditors' rights in general and the rights of
creditors of national banking associations, and (B) as such
enforceability may be limited by general principles of equity
(whether considered in a suit at law or in equity).
(ii) This Agreement constitutes either (A) a valid transfer,
assignment, set-over and conveyance to the Trust of all right, title
and interest of the Transferor in and to the Receivables now existing
and hereafter created and arising in connection with the Accounts
(other than Receivables in Additional Accounts), all proceeds of such
Receivables and Insurance Proceeds relating thereto, and such
Receivables and all proceeds thereof and Insurance Proceeds relating
thereto will be held by the Trust free and clear of any Lien of any
Person claiming through or under the Transferor or any of its
Affiliates except for (x) Liens permitted under subsection 2.5(b),
(y) the interest of the Transferor as Holder of the Transferor
Certificate and any holder of a Transferor Participation and (z) the
Transferor's right, if any, to interest accruing on, and investment
earnings, if any, in respect of the Finance Charge Account, the
Principal Account or any Series Account, as provided in this
Agreement or any related Supplement or (B) a grant of a security
interest (as defined in the UCC as in effect in the State of
Delaware) in such property to the Trust, which is enforceable with
respect to the existing Receivables (other than Receivables in
Additional Accounts), the proceeds thereof and Insurance Proceeds
relating thereto upon execution and delivery of this Agreement, and
which will be enforceable with respect to such Receivables hereafter
created, the proceeds thereof and Insurance Proceeds relating
thereto, upon such creation. If this Agreement constitutes the grant
of a security interest to the Trust in such property, upon the filing
of the financing statement described in Section 2.1 and in the case
of the Receivables hereafter created and proceeds thereof and
Insurance Proceeds relating thereto, upon such creation, the Trust
shall have a first priority perfected security interest in such
property (subject to Section 9-306 of the UCC as in effect in the
State of Delaware), except for Liens permitted under subsection
2.5(b). Neither the Transferor nor any Person claiming through or
under the Transferor shall have any claim to or interest in the
Principal Account, the Finance Charge Account, the Distribution
Account or any Series Account, except for the Transferor's rights to
receive interest accruing on, and investment earnings in respect of,
the Finance Charge Account and Principal Account as provided in this
Agreement (or, if applicable, any Series Account as provided in any
Supplement) and, if this Agreement constitutes the grant of a
security interest in such property, except for the interest of the
Transferor in such property as a debtor for purposes of the UCC as in
effect in the State of Delaware.
(b) Eligibility of Receivables. The Transferor hereby
represents and warrants to the Trust as of the Initial Closing Date, as of
the Creation Date with respect to an Automatic Additional Account and as of
the Addition Cut Off Date with respect to an Additional Account, as the
case may be, that:
(i) Each Receivable is an Eligible Receivable as of the Cut Off
Date, the Creation Date or the Addition Cut Off Date, as applicable.
(ii) Each Receivable then existing has been conveyed to the
Trust free and clear of any Lien of any Person claiming through or
under the Transferor or any of its Affiliates (other than Liens
permitted under subsection 2.5(b)) and in compliance, in all material
respects, with all Requirements of Law applicable to the Transferor.
(iii) With respect to each Receivable then existing, all
consents, licenses, approvals or authorizations of or registrations
or declarations with any Governmental Authority required to be
obtained, effected or given by the Transferor in connection with the
conveyance of such Receivable to the Trust have been duly obtained,
effected or given and are in full force and effect.
(iv) On each day on which any new Receivable is created, the
Transferor shall be deemed to represent and warrant to the Trust that
(A) each Receivable created on such day is an Eligible Receivable,
(B) each Receivable created on such day has been conveyed to the
Trust in compliance, in all material respects, with all Requirements
of Law applicable to the Transferor, (C) with respect to each such
Receivable, all consents, licenses, approvals or authorizations of or
registrations or declarations with, any Governmental Authority
required to be obtained, effected or given by the Transferor in
connection with the conveyance of such Receivable to the Trust have
been duly obtained, effected or given and are in full force and
effect and (D) the representations and warranties set forth in
subsection 2.4(a) are true and correct with respect to each
Receivable created on such day as if made on such day.
(v) As of the Initial Closing Date and as of the applicable
Creation Date with respect to Automatic Additional Accounts, Schedule
1 to this Agreement, and as of the applicable Addition Date with
respect to Additional Accounts, the related computer file or
microfiche list referred to in Section 2.6, is an accurate and
complete listing in all material respects of all the Accounts as of
the Cut Off Date, or with respect to Automatic Additional Accounts,
as of the applicable Creation Date, or with respect to Additional
Accounts, as of the applicable Addition Cut Off Date, and the
information contained therein with respect to the identity of such
Accounts and the Receivables existing thereunder is true and correct
in all material respects as of the Cut Off Date, such applicable
Creation Date or such applicable Addition Cut Off Date. As of the Cut
Off Date, the aggregate amount of Receivables in all the Accounts was
$1,936,840,556, of which $1,917,652,287 were Principal Receivables.
(c) Notice of Breach. The representations and warranties set
forth in this Section 2.4 shall survive the transfer and assignment of the
respective Receivables to the Trust. Upon discovery by the Transferor, the
Servicer or the Trustee of a breach of any of the representations and
warranties set forth in this Section 2.4, the party discovering such breach
shall give prompt written notice to the other parties mentioned above. The
Transferor agrees to cooperate with the Servicer and the Trustee in
attempting to cure any such breach.
(d) Transfer of Ineligible Receivables.
(i) Automatic Removal. In the event of a breach with respect to
a Receivable of any representations and warranties set forth in
subsection 2.4(b)(ii), or in the event that a Receivable is not an
Eligible Receivable as a result of the failure to satisfy the
conditions set forth in clause (d) of the definition of Eligible
Receivable, and any of the following three conditions is met: (A) as
a result of such breach or event such Receivable is charged off as
uncollectible or the Trust's rights in, to or under such Receivable
or its proceeds are impaired or the proceeds of such Receivable are
not available for any reason to the Trust free and clear of any Lien;
(B) the Lien upon the subject Receivable (1) arises in favor of the
United States of America or any State or any agency or
instrumentality thereof and involves taxes or liens arising under
Title IV of ERISA or (2) has been consented to by the Transferor; or
(C) the unsecured short-term debt rating of the Transferor is not at
least P-1 by Moody's and the Lien upon the subject Receivable ranks
prior to the Lien created pursuant to this Agreement; then, upon the
earlier to occur of the discovery of such breach or event by the
Transferor or the Servicer or receipt by the Transferor of written
notice of such breach or event given by the Trustee, each such
Receivable shall be automatically removed from the Trust on the terms
and conditions set forth in subsection 2.4(d)(iii).
(ii) Removal After Cure Period. In the event of a breach of any
of the representations and warranties set forth in subsection 2.4(b)
other than a breach or event as set forth in clause (d)(i) above, and
as a result of such breach the related Account becomes a Defaulted
Account or the Trust's rights in, to or under the Receivable or its
proceeds are impaired or the proceeds of such Receivable are not
available for any reason to the Trust free and clear of any Lien,
then, upon the expiration of 60 days (or such longer period as may be
agreed to by the Trustee in its sole discretion, but in no event
later than 120 days) from the earlier to occur of the discovery of
any such event by either the Transferor or the Servicer, or receipt
by the Transferor of written notice of any such event given by the
Trustee, each such Receivable shall be removed from the Trust on the
terms and conditions set forth in subsection 2.4(d)(iii); provided,
however, that no such removal shall be required to be made if, on any
day within such applicable period, such representations and
warranties with respect to such Receivable shall then be true and
correct in all material respects as if such Receivable had been
created on such day.
(iii) Procedures for Removal. When the provisions of subsection
2.4(d)(i) or (ii) above require removal of a Receivable, the
Transferor shall accept reassignment of such Receivable (an
"Ineligible Receivable") by directing the Servicer to deduct the
principal balance of each such Ineligible Receivable from the
Principal Receivables in the Trust and to decrease the Transferor
Amount by such amount. On and after the date of such removal, each
Ineligible Receivable shall be deducted from the aggregate amount of
Principal Receivables used in the calculation of any Investor
Percentage, the Transferor Percentage or the Transferor Amount. In
the event that the exclusion of an Ineligible Receivable from the
calculation of the Transferor Amount would cause the Transferor
Amount to be reduced below zero or would otherwise not be permitted
by law, the Transferor shall concurrently make a deposit in the
Excess Funding Account in immediately available funds prior to the
Transfer Date related to such Monthly Period in which such event
occurred in an amount equal to the amount by which the Transferor
Amount would be reduced below zero. Upon the reassignment to the
Transferor of an Ineligible Receivable, the Trust shall automatically
and without further action be deemed to transfer, assign, set-over
and otherwise convey to the Transferor, without recourse,
representation or warranty, all the right, title and interest of the
Trust in and to such Ineligible Receivable, all monies due or to
become due with respect to such Ineligible Receivable and all
proceeds of such Ineligible Receivable and Insurance Proceeds
relating to such Ineligible Receivable and Interchange (if any)
allocated to such Ineligible Receivable pursuant to any Supplement.
Such reassigned Ineligible Receivable shall be treated by the Trust
as collected in full as of the date on which it was transferred. The
Trustee shall execute such documents and instruments of transfer or
assignment and take other actions as shall reasonably be requested by
the Transferor to evidence the conveyance of such Ineligible
Receivable pursuant to this subsection 2.4(d)(iii). The obligation of
the Transferor set forth in this subsection 2.4(d)(iii), or the
automatic removal of such Receivable from the Trust, as the case may
be, shall constitute the sole remedy respecting any breach of the
representations and warranties set forth in the above-referenced
subsections with respect to such Receivable available to
Certificateholders or the Trustee on behalf of Certificateholders.
(iv) Proceeds Held by Servicer. For the purposes of subsections
2.4(d)(i) and (ii) above, proceeds of a Receivable shall not be
deemed to be impaired hereunder solely because such proceeds are held
by the Servicer (if the Servicer is the Transferor) for more than the
applicable period under Section 9-306(3) of the UCC as in effect in
the State of Delaware.
(e) Reassignment of Trust Portfolio. In the event of a breach
of any of the representations and warranties set forth in subsection
2.4(a), either the Trustee or the Holders of Investor Certificates
evidencing Undivided Interests aggregating more than 50% of the Aggregate
Investor Interest, by notice then given in writing to the Transferor (and
to the Trustee and the Servicer, if given by the Investor
Certificateholders), may direct the Transferor to accept reassignment of
the Receivables within 60 days of such notice (or within such longer period
as may be specified in such notice), and the Transferor shall be obligated
to accept reassignment of such Principal Receivables on a Distribution Date
specified by the Transferor (such Distribution Date, the "Reassignment
Date") occurring within such applicable period on the terms and conditions
set forth below; provided, however, that no such reassignment shall be
required to be made if, at any time during such applicable period, the
representations and warranties contained in subsection 2.4(a) shall then be
true and correct in all material respects. The Transferor shall deposit on
the Transfer Date (in New York Clearing House, next day funds) preceding
the Reassignment Date an amount equal to the reassignment deposit amount
for such Receivables in the Distribution Account or Series Account, as
provided in the related Supplement, for distribution to the Investor
Certificateholders pursuant to Article XII. The reassignment deposit amount
with respect to each Series for such reassignment, unless otherwise stated
in the related Supplement, shall be equal to (i) the Investor Interest of
such Series at the end of the day on the last day of the Monthly Period
preceding the Reassignment Date, less the amount, if any, previously
allocated for payment of principal to such Certificateholders on the
related Distribution Date in the Monthly Period in which the Reassignment
Date occurs, plus (ii) an amount equal to all interest accrued but unpaid
on the Investor Certificates of such Series at the applicable Certificate
Rate through the Reassignment Date, less the amount, if any, previously
allocated for payment of interest to the Certificateholders of such Series
on the related Distribution Date in the Monthly Period in which the
Reassignment Date occurs. Payment of the reassignment deposit amount with
respect to each Series, and all other amounts in the Distribution Account
or the applicable Series Account in respect of the preceding Monthly
Period, shall be considered a prepayment in full of the Receivables
represented by the Investor Certificates. On the Distribution Date
following the Transfer Date on which such amount has been deposited in full
into the Distribution Account or the applicable Series Account, the
Receivables and all monies due or to become due with respect to such
Receivables and all proceeds of the Receivables and Insurance Proceeds
relating to such Receivables and Interchange (if any) allocated to the
Receivables pursuant to any Supplement shall be released to the Transferor
after payment of all amounts otherwise due hereunder on or prior to such
dates and the Trustee shall execute and deliver such instruments of
transfer or assignment, in each case without recourse, representation or
warranty, as shall be prepared by and as are reasonably requested by the
Transferor to vest in the Transferor, or its designee or assignee, all
right, title and interest of the Trust in and to the Receivables, all
monies due or to become due with respect to such Receivables and all
proceeds of the Receivables and Insurance Proceeds relating to such
Receivables and Interchange (if any) allocated to the Receivables pursuant
to any Supplement. If the Trustee or the Investor Certificateholders give
notice directing the Transferor to accept reassignment as provided above,
the obligation of the Transferor to accept reassignment of the Receivables
and pay the reassignment deposit amount pursuant to this subsection 2.4(e)
shall constitute the sole remedy respecting a breach of the representations
and warranties contained in subsection 2.4(a) available to the Investor
Certificateholders or the Trustee on behalf of the Investor
Certificateholders.
Section 2.5 Covenants of the Transferor. The Transferor hereby
covenants that:
(a) Receivables to be Accounts. The Transferor will take no
action to cause any Receivable to be evidenced by any instrument (as
defined in the UCC as in effect in the State of Delaware). Each Receivable
shall be payable pursuant to a contract which does not create a Lien on any
goods purchased thereunder. The Transferor will take no action to cause any
Receivable to be anything other than an "account" (as defined in the UCC as
in effect in the State of Delaware).
(b) Security Interests. Except for the conveyances hereunder,
the Transferor will not sell, pledge, assign or transfer to any other
Person, or grant, create, incur, assume or suffer to exist any Lien on any
Receivable, whether now existing or hereafter created, or any interest
therein; the Transferor will immediately notify the Trustee of the
existence of any Lien on any Receivable; and the Transferor shall defend
the right, title and interest of the Trust in, to and under the
Receivables, whether now existing or hereafter created, against all claims
of third parties claiming through or under the Transferor; provided,
however, that nothing in this subsection 2.5(b) shall prevent or be deemed
to prohibit the Transferor from suffering to exist upon any of the
Receivables any Liens for municipal or other local taxes if such taxes
shall not at the time be due and payable or if the Transferor shall
currently be contesting the validity thereof in good faith by appropriate
proceedings and shall have set aside on its books adequate reserves with
respect thereto.
(c) Credit Card Agreements and Account Guidelines. The
Transferor shall comply with and perform its obligations under the Credit
Card Agreements relating to the Accounts and the Credit Card Guidelines and
all applicable rules and regulations of VISA U.S.A., Inc. and MasterCard
International Inc., except insofar as any failure to comply or perform
would not materially and adversely affect the rights of the Trust or the
Certificateholders hereunder or under the Certificates. The Transferor may
change the terms and provisions of the Credit Card Agreements or the Credit
Card Guidelines in any respect (including, without limitation, the
reduction of the required minimum monthly payment, the calculation of the
amount, or the timing, of charge offs and the Periodic Finance Charges and
other fees to be assessed thereon) only if such change (i) would not, in
the reasonable belief of the Transferor, cause a Pay Out Event to occur and
(ii) is made applicable to the comparable segment of the revolving credit
card accounts owned and serviced by the Transferor which have
characteristics the same as, or substantially similar to, the Accounts that
are the subject of such change, except as otherwise restricted by an
endorsement, sponsorship, or other agreement between the Transferor and an
unrelated third party or by the terms of the Credit Card Agreements.
(d) Account Allocations.
(i) In the event that the Transferor is unable for any reason
to transfer Receivables to the Trust in accordance with the
provisions of this Agreement (including, without limitation, by
reason of the application of the provisions of Section 9.2 or an
order by any federal governmental agency having regulatory authority
over the Transferor or any court of competent jurisdiction that the
Transferor not transfer any additional Principal Receivables to the
Trust) then, in any such event, (A) the Transferor agrees to allocate
and pay to the Trust, after the date of such inability, all
Collections with respect to Principal Receivables, and all amounts
which would have constituted Collections with respect to Principal
Receivables but for the Transferor's inability to transfer such
Receivables (up to an aggregate amount equal to the amount of
Principal Receivables in the Trust on such date); (B) the Transferor
agrees to have such amounts applied as Collections in accordance with
Article IV; and (C) for only so long as all Collections and all
amounts which would have constituted Collections are allocated and
applied in accordance with clauses (A) and (B) above, Principal
Receivables (and all amounts which would have constituted Principal
Receivables but for the Transferor's inability to transfer
Receivables to the Trust) that are written off as uncollectible in
accordance with this Agreement shall continue to be allocated in
accordance with Article IV, and all amounts that would have
constituted Principal Receivables but for the Transferor's inability
to transfer Receivables to the Trust shall be deemed to be Principal
Receivables for the purpose of calculating (i) the applicable
Investor Percentage with respect to any Series and (ii) the Aggregate
Investor Percentage thereunder. If the Transferor is unable pursuant
to any Requirement of Law to allocate Collections as described above,
the Transferor agrees that it shall in any such event allocate, after
the occurrence of such event, payments on each Account with respect
to the principal balance of such Account first to the oldest
principal balance of such Account and to have such payments applied
as Collections in accordance with Article IV. The parties hereto
agree that Finance Charge Receivables, whenever created, accrued in
respect of Principal Receivables that have been conveyed to the
Trust, or that would have been conveyed to the Trust but for the
above described inability to transfer such Receivables, shall
continue to be a part of the Trust notwithstanding any cessation of
the transfer of additional Principal Receivables to the Trust and
that Collections with respect thereto shall continue to be allocated
and paid in accordance with Article IV.
(ii) In the event that, pursuant to subsection 2.4(d), the
Transferor accepts reassignment of an Ineligible Receivable as a
result of a breach of the representations and warranties in
subsection 2.4(b) relating to such Receivable, then, in any such
event, the Transferor agrees to account for payments received with
respect to such Ineligible Receivable separately from its accounting
for Collections on Principal Receivables retained by the Trust. If
payments received from or on behalf of an Obligor are not
specifically applicable either to an Ineligible Receivable of such
Obligor reassigned to the Transferor or to the Receivables of such
Obligor retained in the Trust, then the Transferor agrees to allocate
payments proportionately based on the total amount of Principal
Receivables of such Obligor retained in the Trust and the total
amount owing by such Obligor on any Ineligible Receivables reassigned
to the Transferor, and the portion allocable to any Principal
Receivables retained in the Trust shall be treated as Collections and
deposited in accordance with the provisions of Article IV.
(e) Delivery of Collections. The Transferor agrees to pay to
the Servicer all payments received by the Transferor in respect of the
Receivables as soon as practicable after receipt thereof by the Transferor.
(f) Conveyance of Accounts. The Transferor covenants and agrees
that it will not convey, assign, exchange or otherwise transfer the
Accounts to any Person prior to the termination of this Agreement pursuant
to Article XII; provided, however, that the Transferor shall not be
prohibited hereby from conveying, assigning, exchanging or otherwise
transferring the Accounts in connection with a transaction complying with
the provisions of Section 7.2.
(g) Official Record. The Transferor shall maintain this
Agreement, from the time of its execution, as an official record of the
Transferor.
Section 2.6 Addition of Accounts.
(a)(i) If, (A) as of the end of any Monthly Period, the
Transferor Amount is less than the Minimum Transferor Amount, the
Transferor shall designate additional eligible MasterCard or VISA
accounts from the Bank Portfolio ("Additional Accounts") to be
included as Accounts in a sufficient amount such that the Transferor
Amount after giving effect to such addition will be at least equal to
the Minimum Transferor Amount, or (B) as of the end of any Monthly
Period, the sum of the aggregate amount of Principal Receivables and
the Excess Funding Amount is less than the Minimum Aggregate
Principal Receivables (as adjusted for any Series having a Paired
Series as described in the Supplement for such Series), the
Transferor shall designate Additional Accounts to be included as
Accounts in a sufficient amount such that the sum of the aggregate
amount of Principal Receivables and the Excess Funding Amount will be
equal to or greater than the Minimum Aggregate Principal Receivables.
Receivables from such Additional Accounts shall be transferred to the
Trust on or before the tenth Business Day following the end of such
Monthly Period.
(ii) In lieu of, or in addition to, designating Additional
Accounts pursuant to clause (i) above, the Transferor may, subject to
any applicable conditions specified in paragraph (c) below, convey to
the Trust participations representing undivided interests in a pool
of assets primarily consisting of receivables arising under revolving
credit card accounts and collections thereon ("Participations");
provided, however, that each such Participation shall, to the extent
then required under the Securities Act, have been (A) previously
registered under the Securities Act or held for at least the holding
period required by Rule 144(k) promulgated under the Securities Act
and (B) acquired in a bona fide secondary market transaction (and not
from the Transferor or an Affiliate thereof). The first addition of
Participations in the Trust pursuant to this paragraph (a) or
paragraph (b) below shall be effected by an amendment hereto, dated
on or prior to the applicable Addition Date, pursuant to Section
13.1(a).
(b) In addition to its obligation under subsection 2.6(a), the
Transferor may, but shall not be obligated to, designate from time to time
Additional Accounts of the Transferor to be included as Accounts or
Participations to be included as property of the Trust, in either case as
of the applicable Addition Date.
(c) The Transferor agrees that any designation pursuant to
subsection 2.6(a) or (b) shall satisfy the following conditions (to the
extent provided below):
(i) on or before the fifth Business Day prior to the Addition
Date with respect to additions pursuant to subsection 2.6(a) and on
or before the tenth Business Day prior to the Addition Date with
respect to additions pursuant to subsection 2.6(b) (the "Notice
Date"), the Transferor shall give the Trustee, each Rating Agency and
the Servicer written notice that such Additional Accounts will be
included, which notice shall specify the approximate aggregate amount
of the Receivables to be transferred;
(ii) on or before the Addition Date, the Transferor shall have
delivered to the Trustee a written assignment (including an
acceptance by the Trustee on behalf of the Trust for the benefit of
the Investor Certificateholders) in substantially the form of Exhibit
B (the "Assignment") and the Transferor shall have indicated in its
computer files that the Receivables created in connection with the
Additional Accounts have been transferred to the Trust and, within
five Business Days thereafter, or as otherwise agreed upon between
the Transferor and the Trustee, the Transferor shall have delivered
to the Trustee a computer file or microfiche list containing a true
and complete list of all Additional Accounts and identifying each
Account by account number and the aggregate amount of the Receivables
in such Additional Accounts, as of the Addition Date, which computer
file or microfiche list shall be as of the date of such Assignment
incorporated into and made a part of such Assignment and this
Agreement;
(iii) the Transferor shall represent and warrant that (x) with
respect to Additional Accounts, each Additional Account is, as of the
Addition Cut Off Date, an Eligible Account, and each Receivable in
such Additional Account is, as of the Addition Cut Off Date, an
Eligible Receivable, (y) no selection procedures believed by the
Transferor to be materially adverse to the interests of the Investor
Certificateholders were utilized in selecting the Additional Accounts
from the available Eligible Accounts from the Bank Portfolio, and (z)
as of the Addition Date, the Transferor is not insolvent;
(iv) the Transferor shall represent and warrant that, as of the
Addition Date, the Assignment constitutes either (x) a valid
transfer, assignment, set-over and conveyance to the Trust of all
right, title and interest of the Transferor in and to the Receivables
then existing and thereafter created in connection with the
Additional Accounts, all proceeds (as defined in the UCC as in effect
in the State of Delaware) of such Receivables and Insurance Proceeds
relating thereto, and such Receivables and all proceeds thereof and
Insurance Proceeds relating thereto will be held by the Trust free
and clear of any Lien of any Person claiming through or under the
Transferor or any of its Affiliates, except for (i) Liens permitted
under subsection 2.5(b), (ii) the interest of the Transferor as
Holder of the Transferor Certificate and any holder of a Transferor
Participation and (iii) the Transferor's right, if any, to receive
interest accruing on, and investment earnings, if any, in respect of
the Finance Charge Account, the Principal Account or any Series
Account, as provided in this Agreement or any related Supplement or
(y) a grant of a security interest (as defined in the UCC as in
effect in the State of Delaware) in such property to the Trust, which
is enforceable with respect to then existing Receivables of the
Additional Accounts, the proceeds (as defined in the UCC as in effect
in the State of Delaware) thereof and Insurance Proceeds relating
thereto upon the conveyance of such Receivables to the Trust, and
which will be enforceable with respect to the Receivables thereafter
created in respect of Additional Accounts conveyed on such Addition
Date, the proceeds (as defined in the UCC as in effect in the State
of Delaware) thereof and Insurance Proceeds relating thereto, upon
such creation; and (z) if the Assignment constitutes the grant of a
security interest to the Trust in such property, upon the filing of a
financing statement as described in Section 2.1 with respect to such
Additional Accounts and in the case of the Receivables thereafter
created in such Additional Accounts and the proceeds (as defined in
the UCC as in effect in the State of Delaware) thereof and Insurance
Proceeds relating thereto, upon such creation, the Trust shall have a
first priority perfected security interest in such property (subject
to Section 9-306 of the UCC as in effect in the State of Delaware),
except for Liens permitted under subsection 2.5(b);
(v) the Transferor shall deliver an Officer's Certificate
substantially in the form of Schedule 2 to Exhibit B to the Trustee
confirming the items set forth in paragraphs (ii), (iii) and (iv)
above and that the Transferor has filed (or will file within the time
required by the applicable UCC) any financing statements required
under the applicable UCC with respect to the Receivables in the
Additional Accounts;
(vi) the Transferor shall deliver an Opinion of Counsel with
respect to the Receivables in the Additional Accounts to the Trustee
(with a copy to each Rating Agency) substantially in the form of
Exhibit E;
(vii) with respect to accounts in excess of the Maximum
Addition Amount and with respect to Participations, the Transferor
shall have received notice from each Rating Agency that the inclusion
of such accounts as Additional Accounts pursuant to subsection 2.6(b)
or the inclusion of such Participations to be included as property of
the Trust pursuant to subsections 2.6(a) and (b), as the case may be,
will not result in the reduction or withdrawal of its then existing
rating of any Series of Investor Certificates then issued and
outstanding;
(viii) with respect to Participations, a Tax Opinion; and
(ix) the Transferor shall provide each Rating Agency 30 days'
prior notice of the inclusion of any business cards as Additional
Accounts pursuant to subsection 2.6(b) and, if the Obligor with
respect to any such business cards is a business entity, the Rating
Agency Condition shall be satisfied.
(d) The Transferor may from time to time, at its sole
discretion, subject to and in compliance with the limitations and
conditions specified below, designate Eligible Accounts to be included as
Accounts as of the applicable Creation Date ("Automatic Additional
Accounts").
(i) The Transferor shall not be permitted to designate
Automatic Additional Accounts pursuant to clause (i) above in excess
of the Maximum Addition Amount unless the Rating Agency Condition
shall have been satisfied;
(ii) On or before April 30 and October 31 of each calendar year
(if the Transferor or Wachovia Corporation shall then be rated A- or
higher by Standard & Poor's), on or before January 31, April 30, July
31 and October 31 of each calendar year (if the Transferor or
Wachovia Corporation shall be rated BBB- or higher by Standard &
Poor's but neither is rated A- or higher by Standard & Poor's), or on
or before the last day of each calendar month (if neither the
Transferor nor Wachovia is rated BBB- or higher by Standard &
Poor's), commencing on April 30, 1996 the Transferor shall deliver to
the Trustee and each Rating Agency an Opinion of Counsel (which shall
be an outside counsel) with respect to the Receivables in the
Automatic Additional Accounts included as Accounts during the
preceding six-month period, three-month period or one-month period,
as applicable), substantially in the form of Exhibit E. If such
Opinion of Counsel with respect to any Automatic Additional Accounts
is not so received, the ability of the Transferor to designate
Automatic Additional Accounts shall be suspended until such time as
each Rating Agency shall otherwise consent in writing; and
(iii) The Transferor shall record and file financing statements
with respect to the Receivables then existing and thereafter created
in the Automatic Additional Accounts for the transfer of accounts (as
defined in the UCC in effect in the State of Delaware) meeting the
requirements of applicable state law in such manner and in such
jurisdictions as are necessary to perfect the assignment of the
Receivables in Automatic Additional Accounts by the Transferor to the
Trust.
Section 2.7 Removal of Accounts.
(a) Subject to the conditions set forth below, the Transferor
may, but shall not be obligated to, designate Receivables from Accounts for
deletion and removal ("Removed Accounts") from the Trust. On or before the
fifth Business Day (the "Removal Notice Date") prior to the date on which
the designated Removed Accounts will be reassigned by the Trustee to the
Transferor (the "Removal Date"), the Transferor shall give the Trustee and
the Servicer written notice that the Receivables from such Removed Accounts
are to be reassigned to the Transferor.
(b) The Transferor shall be permitted to designate and require
reassignment to it of the Receivables from Removed Accounts only upon
satisfaction of the following conditions:
(i) the removal of any Receivables of any Removed Accounts on
any Removal Date shall not, in the reasonable belief of the
Transferor, (a) cause a Pay Out Event to occur, (b) cause the
Transferor Amount to be less than the Minimum Transferor Amount on
such Removal Date, (c) cause the sum of the aggregate amount of
Principal Receivables and the Excess Funding Amount to be less than
the Minimum Aggregate Principal Receivables, or (d) result in the
failure to make any payment specified in the related Supplement with
respect to any Series;
(ii) on or prior to the Removal Date, the Transferor shall have
delivered to the Trustee for execution a written assignment in
substantially the form of Exhibit G (the "Reassignment") and, within
five Business Days (or as otherwise agreed upon between the
Transferor and the Trustee) thereafter, the Transferor shall have
delivered to the Trustee a computer file or microfiche list
containing a true and complete list of all Removed Accounts
identified by account number and the aggregate amount of the
Receivables in such Removed Accounts as of the Removal Date, which
computer file or microfiche list shall as of the Removal Date modify
and amend and be made a part of this Agreement;
(iii) the Transferor shall represent and warrant that no
selection procedures believed by the Transferor to be materially
adverse to the interests of the Certificateholders were utilized in
selecting the Removed Accounts to be removed from the Trust;
(iv) on or before the tenth Business Day prior to the Removal
Date, each Rating Agency shall have received notice of such proposed
removal of the Receivables of such Accounts and the Transferor shall
have received written notice prior to the Removal Date from such
Rating Agency that such proposed removal will not result in a
downgrade or withdrawal of its then current rating of any outstanding
Class or Series of the Investor Certificates;
(v) on any Removal Notice Date, the amount of the Principal
Receivables of the Removed Accounts to be reassigned to the
Transferor on the related Removal Date shall not equal or exceed 10%
of the aggregate amount of the Principal Receivables on such Removal
Date; provided, however, that if any Series has been paid in full,
the Principal Receivables in such Removed Accounts may approximate
the Initial Investor Interest of such Series; and
(vi) the Transferor shall have delivered to the Trustee an
Officer's Certificate confirming the items set forth in clauses (i)
through (v) above. The Trustee may conclusively rely on such
Officer's Certificate, shall have no duty to make inquiries with
regard to the matters set forth therein and shall incur no liability
in so relying.
Upon satisfaction of the above conditions, the Trustee shall
execute and deliver the Reassignment to the Transferor, and the Receivables
from the Removed Accounts shall no longer constitute a part of the Trust.
Section 2.8 Discount Option. The Transferor may at any time,
upon at least 30 days' prior written notice to the Servicer, the Trustee,
each Credit Enhancement Provider and each Rating Agency, designate a
percentage, which may be a fixed percentage or a variable percentage based
on a formula (the "Discounted Percentage"), of the amount of Principal
Receivables to be treated on and after such designation, or for the period
specified, as Discount Option Receivables; provided, however, that no such
designation shall become effective on the date specified in the written
notice unless the following conditions have been satisfied:
(i) the designation of Discount Option Receivables shall not,
in the reasonable belief of the Transferor, cause a Pay Out Event to
occur or cause an event which with notice or the lapse of time or
both would constitute a Pay Out Event;
(ii) on or before the date specified in the written notice, the
Transferor shall have received written confirmation from each Rating
Agency that such designation will not result in a downgrade or
withdrawal of its then current rating of any outstanding Series of
Investor Certificates;
(iii) the Transferor shall have delivered to the Trustee an
Officer's Certificate confirming the items set forth in clauses (i)
and (ii) above. The Trustee may conclusively rely on such Officer's
Certificate, shall have no duty to make inquiries with regard to the
matters set forth therein and shall incur no liability in so relying.
On and after the date of satisfaction of the above conditions,
in processing Collections of Principal Receivables of the Accounts, the
Servicer shall deem the product of the Discounted Percentage and
Collections of such Principal Receivables as "Discount Option Receivable
Collections" and shall treat such Discount Option Receivable Collections
for all purposes hereunder as Collections of Finance Charge Receivables.
[End of Article II]
ARTICLE III
ADMINISTRATION AND SERVICING
OF RECEIVABLES
Section 3.1 Acceptance of Appointment and Other Matters
Relating to the Servicer.
(a) The Transferor agrees to act as the Servicer under this
Agreement. The Investor Certificateholders of each Series by their
acceptance of the related Certificates consent to the Transferor acting
as Servicer.
(b) The Servicer shall service and administer the Receivables
and shall collect payments due under the Receivables in accordance with its
customary and usual servicing procedures for servicing credit card
receivables comparable to the Receivables and in accordance with the Credit
Card Guidelines and shall have full power and authority, acting alone or
through any party properly designated by it hereunder, to do any and all
things in connection with such servicing and administration which it may
deem necessary or desirable. Without limiting the generality of the
foregoing and subject to Section 10.1, the Servicer is hereby authorized
and empowered (i) to make withdrawals from the Collection Account as set
forth in this Agreement, (ii) unless such power and authority is revoked by
the Trustee on account of the occurrence of a Servicer Default pursuant to
Section 10.1, to instruct the Trustee to make withdrawals and payments,
from the Finance Charge Account, the Principal Account, the Excess Funding
Account and any Series Account, in accordance with such instructions as set
forth in this Agreement, (iii) unless such power and authority is revoked
by the Trustee on account of the occurrence of a Servicer Default pursuant
to Section 10.1, to give other instructions to the Trustee in writing, as
set forth in this Agreement, (iv) to execute and deliver, on behalf of the
Trust for the benefit of the Certificateholders, any and all instruments of
satisfaction or cancellation, or of partial or full release or discharge,
and all other comparable instruments, with respect to the Receivables and,
after the delinquency of any Receivable and to the extent permitted under
and in compliance with applicable law and regulations, to commence
enforcement proceedings with respect to such Receivables and (v) to make
any filings, reports, notices, applications, registrations with, and to
seek any consents or authorizations from the Securities and Exchange
Commission and any state securities authority on behalf of the Trust as may
be necessary or advisable to comply with any federal or state securities or
reporting requirements. Subject to the foregoing, the Trustee agrees that
it shall promptly follow the instructions of the Servicer to withdraw funds
from the Principal Account, the Finance Charge Account, the Excess Funding
Account or any Series Account and to take any action required under any
Credit Enhancement at such time as required under this Agreement. The
Trustee shall execute at the Servicer's written request such documents
prepared by the Transferor and acceptable to the Trustee as may be
necessary or appropriate to enable the Servicer to carry out its servicing
and administrative duties hereunder.
(c) In the event that the Transferor is unable for any reason
to transfer Receivables to the Trust in accordance with the provisions of
this Agreement (including, without limitation, by reason of the application
of the provisions of Section 9.2 or the order of any federal governmental
agency having regulatory authority over the Transferor or any court of
competent jurisdiction that the Transferor not transfer any additional
Principal Receivables to the Trust) then, in any such event, (A) the
Servicer agrees to allocate, after such date, all Collections with respect
to Principal Receivables, and all amounts which would have constituted
Collections with respect to Principal Receivables but for the Transferor's
inability to transfer such Receivables (up to an aggregate amount equal to
the aggregate amount of Principal Receivables in the Trust as of such date)
in accordance with subsection 2.5(d); (B) the Servicer agrees to apply such
amounts as Collections in accordance with Article IV, and (C) for only so
long as all Collections and all amounts which would have constituted
Collections are allocated and applied in accordance with clauses (A) and
(B) above, Principal Receivables and all amounts which would have
constituted Principal Receivables but for the Transferor's inability to
transfer Receivables to the Trust that are written off as uncollectible in
accordance with this Agreement shall continue to be allocated in accordance
with Article IV and all amounts which would have constituted Principal
Receivables but for the Transferor's inability to transfer Receivables to
the Trust shall be deemed to be Principal Receivables for the purpose of
calculating the applicable Investor Percentage thereunder. If the Servicer
is unable pursuant to any Requirement of Law to allocate payments on the
Accounts as described above, the Servicer agrees that it shall in any such
event allocate, after the occurrence of such event, payments on each
Account with respect to the principal balance of such Account first to the
oldest principal balance of such Account and to have such payments applied
as Collections in accordance with Article IV. The parties hereto agree that
Finance Charge Receivables, whenever created, accrued in respect of
Principal Receivables which have been conveyed to the Trust, or which would
have been conveyed to the Trust but for the above described inability to
transfer such Receivables, shall continue to be a part of the Trust
notwithstanding any cessation of the transfer of additional Principal
Receivables to the Trust and that Collections with respect thereto shall
continue to be allocated and paid in accordance with Article IV.
(d) In the event that pursuant to subsection 2.4(d), the
Transferor accepts reassignment of an Ineligible Receivable as a result of
a breach of the representations and warranties in subsection 2.4(b)
relating to such Receivable, then, in any such event, the Servicer agrees
to account for payments received with respect to such Ineligible Receivable
separately from its accounting for Collections on Principal Receivables
retained by the Trust. If payments received from or on behalf of an Obligor
are not specifically applicable either to an Ineligible Receivable of such
Obligor reassigned to the Transferor or to Receivables of such Obligor
retained in the Trust, then the Servicer agrees to allocate payments
proportionately based on the total amount of Principal Receivables of such
Obligor retained in the Trust and the total amount owing by such Obligor on
any Ineligible Receivables purchased by the Transferor, and the portion
allocable to any Principal Receivables retained in the Trust shall be
treated as Collections and deposited in accordance with the provisions of
Article IV.
(e) The Servicer shall not be obligated to use separate
servicing procedures, offices, employees or accounts for servicing the
Receivables from the procedures, offices, employees and accounts used by
the Servicer in connection with servicing other credit card receivables.
(f) The Servicer shall maintain or cause to be maintained
fidelity bond coverage insuring against losses through wrongdoing of its
officers and employees who are involved in the servicing of credit card
receivables covering such actions and in such amounts as the Servicer
believes to be reasonable from time to time.
Section 3.2 Servicing Compensation. As compensation for its
servicing activities hereunder and reimbursement for its expenses as set
forth in the immediately following paragraph, the Servicer shall be
entitled to receive a servicing fee (the "Servicing Fee") prior to the
termination of the Trust pursuant to Section 12.1. The Servicing Fee shall
be payable, with respect to each Series, at the times and in the amounts
set forth in the related Supplement. The Servicing Fee shall be allocated
between the Investor Certificates (the "Investor Servicing Fee") and the
Holder of the Transferor Certificate (the "Transferor Servicing Fee") as
specified in the related Supplements.
The Servicer's expenses include the amounts due to the Trustee
pursuant to Section 11.5 and the reasonable fees and disbursements of
independent public accountants and all other expenses incurred by the
Servicer in connection with its activities hereunder; provided, however,
that the Servicer shall not be liable for any liabilities, costs or
expenses of the Trust, the Investor Certificateholders or the Certificate
Owners arising under any tax law, including without limitation any federal,
state or local income or franchise taxes or any other tax imposed on or
measured by income (or any interest or penalties with respect thereto or
arising from a failure to comply therewith). The Servicer shall be required
to pay such expenses for its own account and shall not be entitled to any
payment therefor other than the Servicing Fee.
Section 3.3 Representations and Warranties of the Servicer. The
First National Bank of Atlanta d/b/a Wachovia Bank Card Services, as
initial Servicer, hereby makes, and any Successor Servicer by its
appointment hereunder shall make (with appropriate modifications to Section
3.3(a) to reflect the Successor Servicer's organization) the following
representations, warranties and covenants on which the Trustee has relied
in accepting the Receivables in trust and in authenticating the
Certificates:
(a) Organization and Good Standing. The Servicer is a national
banking association duly organized, validly existing and in good standing
under the laws of the United States and has full corporate power, authority
and legal right to own its properties and conduct its credit card business
as such properties are presently owned and as such business is presently
conducted, and to execute, deliver and perform its obligations under this
Agreement.
(b) Due Qualification. The Servicer is not required to qualify
nor register as a foreign corporation in any state in order to service the
Receivables as required by this Agreement and has obtained all licenses and
approvals necessary (in the case of a national banking association) in
order to so service the Receivables as required under federal and Delaware
law. If the Servicer shall be required by any Requirement of Law to so
qualify or register or obtain such license or approval, then it shall do
so.
(c) Due Authorization. The execution, delivery, and performance
of this Agreement have been duly authorized by the Servicer by all
necessary corporate action on the part of the Servicer and this Agreement
will remain, from the time of its execution, an official record of the
Servicer.
(d) Binding Obligation. This Agreement constitutes a legal,
valid and binding obligation of the Servicer, enforceable in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
now or hereinafter in effect, affecting the enforcement of creditors'
rights in general and the rights of creditors of national banking
associations.
(e) No Violation. The execution and delivery of this Agreement
by the Servicer, and the performance of the transactions contemplated by
this Agreement and the fulfillment of the terms hereof applicable to the
Servicer, will not conflict with, violate, result in any breach of any of
the material terms and provisions of, or constitute (with or without notice
or lapse of time or both) a default under, any Requirement of Law
applicable to the Servicer or any indenture, contract, agreement, mortgage,
deed of trust or other instrument to which the Servicer is a party or by
which it is bound.
(f) No Proceedings. There are no proceedings or investigations
pending or, to the best knowledge of the Servicer, threatened against the
Servicer before any court, regulatory body, administrative agency or other
tribunal or governmental instrumentality seeking to prevent the
consummation of any of the transactions contemplated by this Agreement,
seeking any determination or ruling that, in the reasonable judgment of the
Servicer, would materially and adversely affect the performance by the
Servicer of its obligations under this Agreement, or seeking any
determination or ruling that would materially and adversely affect the
validity or enforceability of this Agreement.
(g) Compliance with Requirements of Law. The Servicer shall
duly satisfy all obligations on its part to be fulfilled under or in
connection with each Receivable and the related Account, will maintain in
effect all qualifications required under Requirements of Law in order to
service properly each Receivable and the related Account and will comply in
all material respects with all other Requirements of Law in connection with
servicing each Receivable and the related Account the failure to comply
with which would have a material adverse effect on the Certificateholders
or any Credit Enhancement Provider.
Section 3.4 Reports and Records for the Trustee.
(a) Daily Reports. On each Business Day, the Servicer shall,
upon reasonable prior notice, and during normal business hours, prepare and
make available at the office of the Servicer for inspection by the Trustee
a record setting forth (i) the aggregate amount of Collections processed by
the Servicer on the preceding Business Day and (ii) the aggregate amount of
Receivables as of the close of business on the preceding Business Day.
(b) Monthly Servicer's Certificate. Unless otherwise stated in
the related Supplement with respect to any Series, on each Determination
Date the Servicer shall forward, as provided in Section 13.5, to the
Trustee, the Paying Agent, any Credit Enhancement Provider and each Rating
Agency, a certificate of a Servicing Officer in the form of Exhibit C
(which includes the Schedule thereto specified as such in each Supplement)
setting forth (i) the aggregate amount of Collections processed during the
preceding Monthly Period, (ii) the aggregate amount of the applicable
Investor Percentage of Collections of Principal Receivables processed by
the Servicer pursuant to Article IV during the preceding Monthly Period
with respect to each Series then outstanding, (iii) the aggregate amount of
the applicable Investor Percentage of Collections of Finance Charge
Receivables processed by the Servicer pursuant to Article IV during the
preceding Monthly Period with respect to each Series then outstanding, (iv)
the aggregate amount of Receivables processed as of the end of the last day
of the preceding Monthly Period, (v) the balance on deposit in the Finance
Charge Account, the Principal Account or any Series Account applicable to
any Series then outstanding on such Determination Date with respect to
Collections processed by the Servicer during the preceding Monthly Period,
(vi) the aggregate amount, if any, of withdrawals, drawings or payments
under any Credit Enhancement, if any, for each Series then outstanding
required to be made with respect to the previous Monthly Period in the
manner provided in the related Supplement, (vii) the sum of all amounts
payable to the Investor Certificateholders of each Series (or for a Series
of more than one Class, each such Class) on the succeeding Distribution
Date in respect of Certificate Principal and Certificate Interest with
respect to such preceding Monthly Period and (viii) such other matters as
are set forth in Exhibit C.
Section 3.5 Annual Servicer's Certificate. On or before
November 30 of each calendar year, beginning with November 30, 1996, the
Servicer will deliver, as provided in Section 13.5, to the Trustee, any
Credit Enhancement Provider and the Rating Agency, an officer's Certificate
substantially in the form of Exhibit D stating that (a) a review of the
activities of the Servicer during the twelve-month period ending on October
31 of such year, or for the initial period, from the Closing Date until
October 31, 1996, and of its performance under this Agreement was made
under the supervision of the officer signing such certificate and (b) to
the best of such officer's knowledge, based on such review, the Servicer
has fully performed all its obligations under this Agreement throughout
such period, or, if there has been a default in the performance of any such
obligation, specifying each such default known to such officer and the
nature and status thereof. A copy of such certificate may be obtained by
any Investor Certificateholder by a request in writing to the Trustee
addressed to the Corporate Trust Office.
Section 3.6 Annual Independent Accountants' Servicing Report.
(a) On or before November 30 of each calendar year, beginning
with November 30, 1996, the Servicer shall cause a firm of nationally
recognized independent certified public accountants (who may also render
other services to the Servicer or the Transferor) to furnish, as provided
in Section 13.5, a report to the Trustee, any Credit Enhancement Provider
and the Rating Agency, to the effect that such firm has made a study and
evaluation, in accordance with generally accepted auditing standards, of
the Servicer's internal accounting controls with respect to the servicing
of Accounts under this Agreement, and that, on the basis of such study and
evaluation, such firm is of the opinion (assuming the accuracy of any
reports generated by the Servicer's third party agents) that the system of
internal accounting controls in effect on the date set forth in such
report, relating to servicing procedures performed by the Servicer, taken
as a whole, was sufficient for the prevention and detection of errors and
irregularities in amounts that would be material to the financial
statements of the Servicer and that such servicing was conducted in
compliance with the sections of this Agreement during the period covered by
such report (which shall be the period from November 1 of the preceding
calendar year to and including October 31 of such calendar year, or for the
initial period, from the Closing Date to and including October 31, 1996),
except for such exceptions, errors or irregularities as such firm shall
believe to be immaterial to the financial statements of the Servicer and
such other exceptions, errors or irregularities as shall be set forth in
such report. Unless otherwise provided with respect to any Series in the
related Supplement, a copy of such report may be obtained by any Investor
Certificateholder by a request in writing to the Trustee addressed to the
Corporate Trust Office.
(b) On or before November 30 of each calendar year, beginning
with November 30, 1996, the Servicer shall cause a firm of nationally
recognized independent certified public accountants (who may also render
other services to the Servicer or the Transferor) to furnish, as provided
in Section 13.5, a report, prepared using generally accepted auditing
standards, to the Trustee and the Rating Agency to the effect that they
have compared the mathematical calculations of each amount set forth in the
monthly certificates forwarded by the Servicer pursuant to subsection
3.4(c) during the period covered by such report (which shall be the period
from November 1 of the preceding calendar year to and including October 31
of such calendar year, or for the initial period, from the Closing Date to
and including October 31, 1996) with the Servicer's computer reports which
were the source of such amounts and that on the basis of such comparison,
such firm is of the opinion that such amounts are in agreement, except for
such exceptions as it believes to be immaterial to the financial statements
of the Servicer and such other exceptions as shall be set forth in such
report. A copy of such report may be obtained by any Investor
Certificateholder by a request in writing to the Trustee addressed to the
Corporate Trust Office.
Section 3.7 Tax Treatment. The Transferor has structured this
Agreement, the Investor Certificates and any Collateral Interest with the
intention that the Investor Certificates and any Collateral Interest will
qualify under applicable federal, state, local and foreign tax law as
indebtedness of the Transferor secured by the Receivables. The Transferor,
the Servicer, the Holder of the Transferor Certificate or any interest
therein (including any Transferor Participation), each Investor
Certificateholder, each Certificate Owner, and each owner of any Collateral
Interest or interest therein agree to treat and to take no action
inconsistent with the treatment of the Investor Certificates and any
Collateral Interest (or beneficial interest therein) as such indebtedness
for purposes of federal, state, local and foreign income or franchise taxes
and any other tax imposed on or measured by income. Each Investor
Certificateholder and the Holder of the Transferor Certificate or any
interest therein (including any Transferor Participation), by acceptance of
its Certificate or interest therein, each Certificate Owner, by acquisition
of a beneficial interest in a Certificate, and any owner of any Collateral
Interest or interest therein, by acquisition of such interest therein,
agree to be bound by the provisions of this Section 3.7. Each
Certificateholder agrees that it will cause any Certificate Owner acquiring
an interest in a Certificate through it, and each owner of any Collateral
Interest or any interest therein agrees that it will cause any Person
acquiring any such interest, to comply with this Agreement as to treatment
as indebtedness under applicable tax law, as described in this Section 3.7.
Notwithstanding this Section 3.7, if the treatment of any Collateral
Interest or interest therein as indebtedness is challenged by any
governmental authority, the Holder of the Transferor Certificate and any
owner of such interest do not intend to be foreclosed from adopting as a
secondary tax position that such interest constitutes equity in a
partnership.
Section 3.8 Notices to the Transferor. In the event that the
Transferor is no longer acting as Servicer, any Successor Servicer
appointed pursuant to Section 10.2 shall deliver or make available to the
Transferor each certificate and report required to be prepared, forwarded
or delivered thereafter pursuant to Sections 3.4, 3.5 and 3.6.
Section 3.9 Reports to the Commission. The Servicer shall, on
behalf of the Trust, cause to be filed with the Commission any periodic
reports required to be filed under the provisions of the Securities
Exchange Act of 1934 and the rules and regulations of the Commission
thereunder. The Transferor, if the Transferor is not the Servicer, shall,
at the expense of the Servicer, cooperate in any reasonable request of the
Servicer in connection with such filings.
[End of Article III]
ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS AND ALLOCATION
AND APPLICATION OF COLLECTIONS
Section 4.1 Rights of Certificateholders. Each Series of
Investor Certificates shall represent Undivided Interests in the Trust,
including the benefits of any Credit Enhancement issued with respect to
such Series and the right to receive the Collections and other amounts at
the times and in the amounts specified in this Article IV to be deposited
in the Investor Accounts and any other Series Account (if so specified in
the related Supplement) or to be paid to the Investor Certificateholders of
such Series; provided, however, that the aggregate interest represented by
such Certificates at any time in the Principal Receivables shall not exceed
an amount equal to the Investor Interest at such time. The Transferor
Certificate shall represent the remaining undivided interest in the Trust
not allocated to the Investor Certificates and the other interests issued
by the Trust, including the right to receive the Collections and other
amounts at the times and in the amounts specified in this Article IV to be
paid to the Holder of the Transferor Certificate; provided, however, that
the aggregate interest represented by such Transferor Certificate at any
time in the Principal Receivables shall not exceed the Transferor Amount at
such time and such Certificate shall not represent any interest in the
Investor Accounts, except as provided in this Agreement, or the benefits of
any Credit Enhancement issued with respect to any Series.
Section 4.2 Establishment of Accounts.
(a) The Collection Account. The Servicer, for the benefit of
the Certificateholders, shall establish and maintain in the name of the
Trustee, on behalf of the Trust, a non-interest bearing segregated account
(the "Collection Account") bearing a designation clearly indicating that
the funds deposited therein are held in trust for the benefit of the
Certificateholders, or shall cause such Collection Account to be
established and maintained, with an office or branch of (i) the Servicer
(so long as the Servicer or Wachovia Corporation shall have and maintain a
certificate of deposit or commercial paper rating of P-1 by Moody's and of
A-1 by Standard & Poor's) or (ii) a Qualified Institution; provided,
however, that upon the insolvency of the Servicer, the Collection Account
shall not be permitted to be maintained with the Servicer. Pursuant to
authority granted to it pursuant to subsection 3.1(b), the Servicer shall
have the revocable power to withdraw funds from the Collection Account for
the purposes of carrying out its duties hereunder.
(b) The Finance Charge and Principal Accounts. The Trustee, for
the benefit of the Investor Certificateholders, shall establish and
maintain with the Trustee, or cause to be established and maintained with a
Qualified Institution, in the name of the Trust, two segregated trust
accounts (the "Finance Charge Account" and the "Principal Account,"
respectively), bearing a designation clearly indicating that the funds
therein are held for the benefit of the Investor Certificateholders. The
Trustee shall possess all right, title and interest in all funds on deposit
from time to time in the Finance Charge Account and the Principal Account
and in all proceeds thereof. The Finance Charge Account and the Principal
Account shall be under the sole dominion and control of the Trustee for the
benefit of the Investor Certificateholders. If, at any time, the
institution holding the Principal Account or the Finance Charge Account
ceases to be a Qualified Institution, the Trustee shall notify the Rating
Agency and within 10 Business Days establish a new Principal Account or
Finance Charge Account, as the case may be, meeting the conditions
specified above with a Qualified Institution, and shall transfer any cash
or any investments to such new Principal Account or Finance Charge Account,
as the case may be. From the date such new Principal Account or Finance
Charge Account, as the case may be, is established, it shall be the
"Principal Account" or "Finance Charge Account." Pursuant to authority
granted to it hereunder, the Servicer shall have the revocable power to
instruct the Trustee to withdraw funds from the Finance Charge Account and
Principal Account for the purpose of carrying out the Servicer's duties
hereunder. The Trustee at all times shall maintain accurate records
reflecting each transaction in the Principal Account and the Finance Charge
Account and that funds held therein shall at all times be held in trust for
the benefit of the Investor Certificateholders.
(c) The Distribution Account. The Trustee, for the benefit of
the Investor Certificateholders, shall cause to be established and
maintained in the name of the Trust, with an office or branch of a
Qualified Institution (other than the Transferor), a non-interest bearing
segregated demand deposit account (the "Distribution Account") bearing a
designation clearly indicating that the funds deposited therein are held in
trust for the benefit of the Investor Certificateholders. The Trustee shall
possess all right, title and interest in all funds on deposit from time to
time in the Distribution Account and in all proceeds thereof. The
Distribution Account shall be under the sole dominion and control of the
Trustee for the benefit of the Investor Certificateholders.
(d) The Excess Funding Account. The Trustee, for the benefit of
the Investor Certificateholders, shall establish and maintain with the
Trustee, or cause to be established and maintained with a Qualified
Institution, in the name of the Trust, a segregated trust account (the
"Excess Funding Account") bearing a designation clearly indicating that the
funds therein are held for the benefit of the Investor Certificateholders.
The Trustee shall possess all right, title and interest in all funds on
deposit from time to time in the Excess Funding Account and in all proceeds
thereof. The Excess Funding Account shall be under the sole dominion and
control of the Trustee for the benefit of the Investor Certificateholders.
If, at any time, the institution holding the Excess Funding Account ceases
to be a Qualified Institution, the Trustee shall notify the Rating Agency
and within 10 Business Days establish a new Excess Funding Account meeting
the conditions specified above with a Qualified Institution, and shall
transfer any cash or any investments to such new Excess Funding Account.
From the date such new Excess Funding Account is established, it shall be
the "Excess Funding Account." Pursuant to authority granted to it
hereunder, the Servicer shall have the revocable power to instruct the
Trustee to withdraw funds from the Excess Funding Account for the purpose
of carrying out the Servicer's duties hereunder. The Trustee at all times
shall maintain accurate records reflecting each transaction in the Excess
Funding Account and that funds held therein shall at all times be held in
trust for the benefit of the Investor Certificateholders.
(e) Series Accounts. If so provided in the related Supplement,
the Trustee, for the benefit of the Investor Certificateholders, shall
cause to be established and maintained in the name of the Trust, one or
more Series Accounts. Each such Series Account shall bear a designation
clearly indicating that the funds deposited therein are held for the
benefit of the Investor Certificateholders of such Series. Each such Series
Account will be a trust account, if so provided in the related Supplement
and will have the other features and be applied as set forth in the related
Supplement.
(f) Administration of the Finance Charge Account, Principal
Account and Excess Funding Account. Funds on deposit in the Principal
Account, the Finance Charge Account and the Excess Funding Account shall at
all times be invested in Permitted Investments. Any such investment shall
mature and such funds shall be available for withdrawal on or prior to the
Transfer Date related to the Monthly Period in which such funds were
processed for collection, or if so specified in the related supplement,
immediately preceding a Distribution Date. The Trustee shall maintain for
the benefit of the Investor Certificateholders possession of the negotiable
instruments or securities evidencing the Permitted Investments described in
clause (a) of the definition thereof from the time of purchase thereof
until the time of sale or maturity; provided, however, that no such
investment shall be disposed of prior to its maturity date. All interest
and earnings (net of losses and investment expenses) on funds on deposit in
the Principal Account, the Finance Charge Account with respect to each
Monthly Period shall be deposited by the Trustee in a separate deposit
account with a Qualified Institution in the name of the Servicer, or a
Person designated in writing by the Servicer, which shall not constitute a
part of the Trust, or shall otherwise be turned over by the Trustee to the
Servicer not less frequently than monthly, and all interest and earnings
(net of losses and investment expenses) on funds on deposit in the Excess
Funding Account with respect to each Monthly Period shall be deposited by
the Trustee in the Finance Charge Account on the following Transfer Date
for application as Collections of Finance Charge Receivables. Subject to
the restrictions set forth above, the Servicer, or a Person designated in
writing by the Servicer, of which the Trustee shall have received written
notification thereof, shall have the authority to instruct the Trustee with
respect to the investment of funds on deposit in the Principal Account, the
Finance Charge Account and the Excess Funding Account. For purposes of
determining the availability of funds or the balances in the Finance Charge
Account, the Principal Account and, except as provided in the second
preceding sentence, the Excess Funding Account for any reason under this
Agreement, all investment earnings on such funds shall be deemed not to be
available or on deposit.
Section 4.3 Collections and Allocations.
(a) Collections. Except as provided below, the Servicer shall
deposit all Collections in the Collection Account as promptly as possible
after the Date of Processing of such Collections, but in no event later
than the second Business Day following such Date of Processing. In the
event of the insolvency of the Servicer, then, immediately upon the
occurrence of such event and thereafter, the Servicer shall deposit all
Collections into the Collection Account which shall be established and
maintained with a Qualified Institution other than the Servicer in
accordance with subsection 4.2(a), and in no such event shall the Servicer
deposit any Collections thereafter into any account established, held or
maintained with the Servicer.
The Servicer shall allocate such amounts to each Series of
Investor Certificates and to the Holder of the Transferor Certificate in
accordance with this Article IV and shall withdraw amounts from the
Collection Account in accordance with this Article IV, as modified by any
Supplement. The Servicer shall make such deposits or payments on the date
indicated therein by wire transfer or as otherwise provided in the
Supplement for any Series of Certificates with respect to such Series.
Notwithstanding anything in this Agreement to the contrary, for
so long as, and only so long as, the Transferor or an Affiliate thereof
shall remain the Servicer hereunder, and (a)(i) the Servicer provides to
the Trustee a letter of credit or other credit support that satisfies the
Rating Agency Condition or (b) the Servicer or Wachovia Corporation shall
have and maintain a certificate of deposit or commercial paper rating of P-
1 by Moody's and of A-1 by Standard & Poor's, the Servicer need not deposit
Collections into the Collection Account, the Principal Account, the Finance
Charge Account, the Excess Funding Account or any Series Account, as
provided in any Supplement, or make payments to the Holder of the
Transferor Certificate, on a daily basis as provided in Article IV, but may
make such deposits, payments and withdrawals on each Transfer Date in an
amount equal to the net amount of such deposits, payments and withdrawals
which would have been made but for the provisions of this paragraph. If at
any time the Servicer shall qualify to make deposits on the Transfer Date
as provided in this paragraph (or shall cease to be so qualified) the
Servicer shall deliver an Officer's Certificate to the Trustee stating that
the criteria set forth in (a) or (b) of this paragraph have been satisfied
(or have ceased to be satisfied). The Trustee may rely on such Officer's
Certificate without investigation or inquiry.
Notwithstanding anything else in this Agreement to the
contrary, with respect to any Monthly Period, whether the Servicer is
required to make monthly or daily deposits into the Collection Account, the
Finance Charge Account, the Principal Account, the Excess Funding Account
or any Series Account, as provided in any Supplement, (i) the Servicer will
only be required to deposit Collections from the Collection Account into
the Finance Charge Account, the Principal Account, the Excess Funding
Account or any Series Account up to the required amount to be deposited
into any such account or, without duplication, distributed on or prior to
the related Distribution Date to Investor Certificateholders or to any
Credit Enhancement Provider pursuant to the terms of any Supplement or
agreement relating to such Credit Enhancement and (ii) if at any time prior
to such Distribution Date the amount of Collections deposited in the
Collection Account exceeds the amount required to be deposited pursuant to
clause (i) above, the Servicer will be permitted to withdraw the excess
from the Collection Account.
(b) Allocations for the Transferor Certificate. Throughout the
existence of the Trust, unless otherwise stated in any Supplement, the
Servicer shall allocate to the Holder of the Transferor Certificate an
amount equal to the product of (A) the Transferor Percentage and (B) the
aggregate amount of such Collections allocated to Principal Receivables and
Finance Charge Receivables, respectively, in respect of each Monthly
Period. Notwithstanding anything in this Agreement to the contrary, unless
otherwise stated in any Supplement, the Servicer need not deposit this
amount or any other amounts so allocated to the Transferor Certificate
pursuant to any Supplement into the Collection Account and shall pay, or be
deemed to pay, such amounts as collected to the Holder of the Transferor
Certificate.
(c) Adjustments for Miscellaneous Credits and Fraudulent
Charges. The Servicer shall be obligated to reduce on a net basis each
Monthly Period the aggregate amount of Principal Receivables used to
calculate the Transferor Amount as provided in this subsection 4.3(c) (a
"Credit Adjustment") with respect to any Principal Receivable (i) which was
created in respect of merchandise refused or returned by the Obligor
thereunder or as to which the Obligor thereunder has asserted a
counterclaim or defense, (ii) which is reduced by the Servicer by any
rebate, refund, charge-back or adjustment (including Servicer errors, but
excluding any rebates or refunds relating to any reward-type program) or
(iii) which was created as a result of a fraudulent or counterfeit charge.
In the event that the inclusion of the amount of a Credit
Adjustment in the calculation of the Transferor Amount would cause the
Transferor Amount to be an amount less than zero, the Transferor shall make
a deposit, no later than the Business Day following the Date of Processing
of such Credit Adjustment, in the Excess Funding Account in immediately
available funds in an amount equal to the amount by which such Credit
Adjustment would cause the Transferor Amount to be less than zero on such
Date of Processing.
(d) Operation of Excess Funding Account. On each Determination
Date on which one or more Series is in its Amortization Period or
Accumulation Period, the Servicer shall determine the aggregate amount of
Principal Shortfalls, if any, with respect to each such Series, and the
Servicer shall instruct the Trustee to withdraw such amount (up to the
Excess Funding Amount) from the Excess Funding Account on the next
succeeding Transfer Date and deposit such amount in the Principal Account
for allocation among each such Series as Shared Principal Collections as
specified in each related Supplement. On any Business Day on which the
Transferor Amount exceeds the Minimum Transferor Amount, the Servicer shall
instruct the Trustee to withdraw the amount of such excess (up to the
Excess Funding Amount) from the Excess Funding Account on such day and pay
such amount to the Holder of the Transferor Certificate.
[THE REMAINDER OF ARTICLE IV IS RESERVED AND
SHALL BE SPECIFIED IN ANY SUPPLEMENT WITH
RESPECT TO ANY SERIES]
[End of Article IV]
ARTICLE V
[ARTICLE V IS RESERVED AND SHALL
BE SPECIFIED IN ANY SUPPLEMENT
WITH RESPECT TO ANY SERIES]
[End of Article V]
ARTICLE VI
THE CERTIFICATES
Section 6.1 The Certificates. Subject to Sections 6.10 and
6.13, the Investor Certificates of each Series and any Class thereof may be
issued in bearer form (the "Bearer Certificates") with attached interest
coupons and a special coupon (collectively, the "Coupons") or in fully
registered form (the "Registered Certificates"), and shall be substantially
in the form of the exhibits with respect thereto attached to the related
Supplement. The Transferor Certificate shall be substantially in the form
of Exhibit A. The Investor Certificates and the Transferor Certificate
shall, upon issue pursuant hereto or to Section 6.9 or Section 6.10, be
executed and delivered by the Transferor to the Trustee for authentication
and redelivery as provided in Sections 2.1 and 6.2. Any Investor
Certificate shall be issuable in a minimum denomination of $1,000 Undivided
Interest and integral multiples thereof, unless otherwise specified in any
Supplement. The Transferor Certificate shall be issued as a single
certificate. Each Certificate shall be executed by manual or facsimile
signature on behalf of the Transferor by its President or any Vice
President. Certificates bearing the manual or facsimile signature of the
individual who was, at the time when such signature was affixed, authorized
to sign on behalf of the Transferor or the Trustee shall not be rendered
invalid, notwithstanding that such individual has ceased to be so
authorized prior to the authentication and delivery of such Certificates or
does not hold such office at the date of such Certificates. Unless
otherwise provided in the related supplement, no Certificate shall be
entitled to any benefit under this Agreement, or be valid for any purpose,
unless there appears on such Certificate a certificate of authentication
substantially in the form provided for herein, executed by or on behalf of
the Trustee by the manual signature of a duly authorized signatory, and
such certificate upon any Certificate shall be conclusive evidence, and the
only evidence, that such Certificate has been duly authenticated and
delivered hereunder. All Certificates shall be dated the date of their
authentication except Bearer Certificates which shall be dated the
applicable Issuance Date as provided in the related Supplement.
Section 6.2 Authentication of Certificates. Contemporaneously
with the initial assignment and transfer of the Receivables, whether now
existing or hereafter created (other than Receivables in Additional
Accounts) and the other components to the Trust, the Trustee shall
authenticate and deliver the initial Series of Investor Certificates, upon
the written order of the Transferor, against payment to the Transferor of
the Initial Investor Interest (net of any discount applicable to the
purchase thereof). Upon the receipt of such payment and the issuance of the
Investor Certificates, such Investor Certificates shall be fully paid and
non-assessable. The Trustee shall authenticate and deliver the Transferor
Certificate to the Transferor simultaneously with its delivery to the
Transferor of the initial Series of Investor Certificates. Upon an Exchange
as provided in Section 6.9 and the satisfaction of certain other conditions
specified therein, the Trustee shall authenticate and deliver the Investor
Certificates of additional Series (with the designation provided in the
related Supplement), upon the order of the Transferor, to the Persons
designated in such Supplement. Upon the order of the Transferor, the
Certificates of any Series shall be duly authenticated by or on behalf of
the Trustee, in authorized denominations. If specified in the related
Supplement for any Series, the Trustee shall authenticate and deliver
outside the United States the Global Certificate that is issued upon
original issuance thereof, upon the written order of the Transferor, to the
Depository against payment of the purchase price therefor. If specified in
the related Supplement for any Series, the Trustee shall authenticate
Book-Entry Certificates that are issued upon original issuance thereof,
upon the written order of the Transferor, to a Clearing Agency or its
nominee as provided in Section 6.10 against payment of the purchase price
thereof.
Section 6.3 Registration of Transfer and Exchange of
Certificates.
(a) The Trustee shall cause to be kept at the office or agency
to be maintained by a transfer agent and registrar (the "Transfer Agent and
Registrar"), in accordance with the provisions of Section 11.16, a register
(the "Certificate Register") in which, subject to such reasonable
regulations as it may prescribe, the Transfer Agent and Registrar shall
provide for the registration of the Investor Certificates of each Series
(unless otherwise provided in the related Supplement) and of transfers and
exchanges of the Investor Certificates as herein provided. The Trustee is
hereby initially appointed Transfer Agent and Registrar for the purposes of
registering the Investor Certificates and transfers and exchanges of the
Investor Certificates as herein provided. If any form of Investor
Certificate is issued as a Global Certificate, the Trustee may, or if and
so long as any Series of Investor Certificates are listed on the Luxembourg
Stock Exchange and such exchange shall so require, the Trustee shall
appoint a co-transfer agent and co-registrar in Luxembourg or another
European city. Any reference in this Agreement to the Transfer Agent and
Registrar shall include any co-transfer agent and co-registrar unless the
context otherwise requires. The Trustee shall be permitted to resign as
Transfer Agent and Registrar upon 30 days' written notice to the Servicer.
In the event that the Trustee shall no longer be the Transfer Agent and
Registrar, the Trustee shall appoint a successor Transfer Agent and
Registrar.
Upon surrender for registration of transfer of any Certificate
at any office or agency of the Transfer Agent and Registrar, the Transferor
shall execute, subject to the provisions of subsection 6.3(c), and the
Trustee shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Certificates in authorized
denominations of like aggregate Undivided Interests; provided, however,
that the provisions of this paragraph shall not apply to Bearer
Certificates.
At the option of an Investor Certificateholder, Investor
Certificates may be exchanged for other Investor Certificates of the same
Series in authorized denominations of like aggregate Undivided Interests,
upon surrender of the Investor Certificates to be exchanged at any such
office or agency. At the option of any Holder of Registered Certificates,
Registered Certificates may be exchanged for other Registered Certificates
of the same Series in authorized denominations of like aggregate Undivided
Interests in the Trust, upon surrender of the Registered Certificates to be
exchanged at any office or agency of the Transfer Agent and Registrar
maintained for such purpose. At the option of a Bearer Certificateholder,
subject to applicable laws and regulations (including without limitation,
the Bearer Rules), Bearer Certificates may be exchanged for other Bearer
Certificates or Registered Certificates of the same Series in authorized
denominations of like aggregate Undivided Interests in the Trust, in the
manner specified in the Supplement for such Series, upon surrender of the
Bearer Certificates to be exchanged at an office or agency of the Transfer
Agent and Registrar located outside the United States. Each Bearer
Certificate surrendered pursuant to this Section 6.3 shall have attached
thereto (or be accompanied by) all unmatured Coupons, provided that any
Bearer Certificate so surrendered after the close of business on the Record
Date preceding the relevant Distribution Date after the related Series
Termination Date need not have attached the Coupons relating to such
Distribution Date.
Whenever any Investor Certificates of any Series are so
surrendered for exchange, the Transferor shall execute, and the Trustee
shall authenticate and (unless the Transfer Agent and Registrar is
different than the Trustee, in which case the Transfer Agent and Registrar
shall) deliver, the Investor Certificates of such Series which the
Certificateholder making the exchange is entitled to receive. Every
Investor Certificate presented or surrendered for registration of transfer
or exchange shall be accompanied by a written instrument of transfer in a
form satisfactory to the Trustee and the Transfer Agent and Registrar duly
executed by the Certificateholder thereof or his attorney-in-fact duly
authorized in writing.
The preceding provisions of this Section 6.3 notwithstanding,
the Trustee or the Transfer Agent and Registrar, as the case may be, shall
not be required to register the transfer of or exchange any Investor
Certificate of any Series for a period of 15 days preceding the due date
for any payment with respect to the Investor Certificates of such Series.
Unless otherwise provided in the related Supplement, no service
charge shall be made for any registration of transfer or exchange of
Certificates, but the Transfer Agent and Registrar may require payment of a
sum sufficient to cover any tax or governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.
All Investor Certificates (together with any Coupons attached
to Bearer Certificates) surrendered for registration of transfer and
exchange shall be canceled by the Transfer Agent and Registrar and disposed
of in a manner satisfactory to the Trustee. The Trustee shall cancel and
destroy the Global Certificates upon its exchange in full for Definitive
Certificates and shall deliver a certificate of destruction to the
Transferor. Such certificate shall also state that a certificate or
certificates of each Foreign Clearing Agency to the effect referred to in
Section 6.13 was received with respect to each portion of the Global
Certificate exchanged for Definitive Certificates.
The Transferor shall execute and deliver to the Trustee or the
Transfer Agent and Registrar, as applicable, Bearer Certificates and
Registered Certificates in such amounts and at such times as are necessary
to enable the Trustee to fulfill its responsibilities under this Agreement
and the Certificates.
(b) Except as provided in Section 6.9 or 7.2 or in any
Supplement (and except for the transfer of a Transferor Participation to
Wachovia Bank of Georgia, N.A., on the Initial Closing Date and, upon the
Exchange and cancellation of a Transferor Certificate and the issuance of a
reissued Transferor Certificate, on each Exchange Date), in no event shall
the Transferor Certificate or any interest therein be transferred
hereunder, in whole or in part, unless the Transferor shall have consented
in writing to such transfer and unless the Trustee shall have received (1)
confirmation in writing from each Rating Agency that such transfer will not
result in a lowering or withdrawal of its then existing rating of any
Series of Investor Certificates, and (2) an Opinion of Counsel that such
transfer does not adversely affect the conclusions reached in any of the
federal income tax opinions dated the applicable Closing Date issued in
connection with the original issuance of any Series of Investor
Certificates; provided, however, that unless the consent of Holders of
Investor Certificates evidencing more than 50% of the Aggregate Investor
Interest is obtained for such transfer, the Holder of the Transferor
Certificate shall be permitted to transfer the Transferor Certificate only
if the Holder of the Transferor Certificate shall have provided the Trustee
with an Opinion of Counsel to the effect that the contemplated transfer
would be treated as a financing and not as a sale for federal income tax
purposes.
(c) Unless otherwise provided in the related Supplement,
registration of transfer of Registered Certificates containing a legend
relating to the restrictions on transfer of such Registered Certificates
(which legend shall be set forth in the Supplement relating to such
Investor Certificates) shall be effected only if the conditions set forth
in such related Supplement are satisfied.
Whenever a Registered Certificate containing the legend set
forth in the related Supplement is presented to the Transfer Agent and
Registrar for registration of transfer, the Transfer Agent and Registrar
shall promptly seek instructions from the Servicer regarding such transfer.
The Transfer Agent and Registrar and the Trustee shall be entitled to
receive written instructions signed by a Servicing Officer prior to
registering any such transfer or authenticating new Registered
Certificates, as the case may be. The Servicer hereby agrees to indemnify
the Transfer Agent and Registrar and the Trustee and to hold each of them
harmless against any loss, liability or expense incurred without negligence
or bad faith on their part arising out of or in connection with actions
taken or omitted by them in reliance on any such written instructions
furnished pursuant to this subsection 6.3(c).
(d) The Transfer Agent and Registrar will maintain at its
expense in the Borough of Manhattan, the City of New York (and subject to
this Section 6.3, if specified in the related Supplement for any Series,
any other city designated in such Supplement) an office or offices or an
agency or agencies where Investor Certificates of such Series may be
surrendered for registration of transfer or exchange.
Section 6.4 Mutilated, Destroyed, Lost or Stolen Certificates.
If (a) any mutilated Certificate (together, in the case of Bearer
Certificates, with all unmatured Coupons, if any, appertaining thereto) is
surrendered to the Transfer Agent and Registrar, or the Transfer Agent and
Registrar receives evidence to its satisfaction of the destruction, loss or
theft of any Certificate and (b) there is delivered to the Transfer Agent
and Registrar and the Trustee such security or indemnity as may be required
by them to save each of them harmless, then, in the absence of notice to
the Trustee that such Certificate has been acquired by a bona fide
purchaser, the Transferor shall execute and the Trustee shall authenticate
and (unless the Transfer Agent and Registrar is different from the Trustee,
in which case the Transfer Agent and Registrar shall) deliver (in
compliance with applicable law), in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
tenor and aggregate Undivided Interest. In connection with the issuance of
any new Certificate under this Section 6.4, the Trustee or the Transfer
Agent and Registrar may require the payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the
Trustee and the Transfer Agent and Registrar) connected therewith. Any
duplicate Certificate issued pursuant to this Section 6.4 shall constitute
complete and indefeasible evidence of ownership in the Trust, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
Section 6.5 Persons Deemed Owners. Prior to due presentation of
a Certificate for registration of transfer, the Trustee, the Paying Agent,
the Transfer Agent and Registrar and any agent of any of them may treat a
Certificateholder as the owner of the related Certificate for the purpose
of receiving distributions pursuant to Article V (as described in any
Supplement) and for all other purposes whatsoever, and neither the Trustee,
the Paying Agent, the Transfer Agent and Registrar nor any agent of any of
them shall be affected by any notice to the contrary; provided, however,
that in determining whether the holders of Investor Certificates evidencing
the requisite Undivided Interests have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Investor
Certificates owned by the Transferor, the Servicer or any Affiliate thereof
shall be disregarded and deemed not to be outstanding, except that, in
determining whether the Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Investor Certificates which a Responsible Officer in the Corporate Trust
Office of the Trustee knows to be so owned shall be so disregarded.
Investor Certificates so owned that have been pledged in good faith shall
not be disregarded as outstanding, if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to
such Investor Certificates and that the pledgee is not the Transferor, the
Servicer or an Affiliate thereof.
In the case of a Bearer Certificate, the Trustee, the Paying
Agent, the Transfer Agent and Registrar and any agent of any of them may
treat the holder of a Bearer Certificate or Coupon as the owner of such
Bearer Certificate or Coupon for the purpose of receiving distributions
pursuant to Article IV and Article XII and for all other purposes
whatsoever, and neither the Trustee, the Paying Agent, the Transfer Agent
and Registrar nor any agent of any of them shall be affected by any notice
to the contrary. Certificates so owned which have been pledged in good
faith shall not be disregarded and may be regarded as outstanding, if the
pledgee establishes to the satisfaction of the Trustee the pledgee's right
so to act with respect to such Investor Certificates and that the pledgee
is not the Transferor, the Servicer or an Affiliate thereof.
Section 6.6 Appointment of Paying Agent.
(a) The Paying Agent shall make distributions to Investor
Certificateholders from the appropriate account or accounts maintained for
the benefit of Certificateholders as specified in this Agreement or the
related Supplement for any Series pursuant to Articles IV and V hereof. Any
Paying Agent shall have the revocable power to withdraw funds from such
appropriate account or accounts for the purpose of making distributions
referred to above. The Trustee (or the Servicer if the Trustee is the
Paying Agent) may revoke such power and remove the Paying Agent, if the
Trustee (or the Servicer if the Trustee is the Paying Agent) determines in
its sole discretion that the Paying Agent shall have failed to perform its
obligations under this Agreement in any material respect or for other good
cause. The Trustee (or the Servicer if the Trustee is the Paying Agent)
shall notify Moody's and Standard & Poor's of the removal of any Paying
Agent. The Paying Agent, unless the Supplement with respect to any Series
states otherwise, shall initially be the Trustee. If any form of Investor
Certificate is issued as a Global Certificate, or if and so long as any
Series of Investor Certificates are listed on the Luxembourg Stock Exchange
and such exchange shall so require, the Trustee shall appoint a co-paying
agent in Luxembourg or another European city. The Trustee shall be
permitted to resign as Paying Agent upon 30 days' written notice to the
Servicer. In the event that the Trustee shall no longer be the Paying
Agent, the Trustee shall appoint a successor to act as Paying Agent (which
shall be a bank or trust company). The provisions of Sections 11.1, 11.2
and 11.3 shall apply to the Trustee also in its role as Paying Agent, for
so long as the Trustee shall act as Paying Agent. Any reference in this
Agreement to the Paying Agent shall include any co-paying agent unless the
context requires otherwise.
If specified in the related Supplement for any Series, so long
as the Investor Certificates of such Series are outstanding, the Transferor
shall maintain a co-paying agent in New York City (for Registered
Certificates only) or any other city designated in such Supplement which,
if and so long as any Series of Investor Certificates is listed on the
Luxembourg Stock Exchange or other stock exchange and such exchange so
requires, shall be in Luxembourg or the location required by such other
stock exchange.
(b) The Trustee shall cause the Paying Agent (other than
itself) to execute and deliver to the Trustee an instrument in which such
Paying Agent shall agree with the Trustee that such Paying Agent will hold
all sums, if any, held by it for payment to the Certificateholders in trust
for the benefit of the Certificateholders entitled thereto until such sums
shall be paid to such Certificateholders and shall agree, and if the
Trustee is the Paying Agent it hereby agrees, that it shall comply with all
requirements of the Internal Revenue Code regarding the withholding by the
Trustee of payments in respect of federal income taxes due from Certificate
Owners.
Section 6.7 Access to List of Certificateholders' Names and
Addresses.
The Trustee will furnish or cause to be furnished by the
Transfer Agent and Registrar to the Servicer or the Paying Agent, within
five Business Days after receipt by the Trustee of a request therefor from
the Servicer or the Paying Agent, respectively, in writing, a list in such
form as the Servicer or the Paying Agent may reasonably require, of the
names and addresses of the Investor Certificateholders as of the most
recent Record Date for payment of distributions to Investor
Certificateholders. Unless otherwise provided in the related Supplement,
holders of Investor Certificates evidencing Undivided Interests aggregating
not less than 10% of the Investor Interest of the Investor Certificates of
any Series (the "Applicants") may apply in writing to the Trustee, and if
such application states that the Applicants desire to communicate with
other Investor Certificateholders of any Series with respect to their
rights under this Agreement or under the Investor Certificates and is
accompanied by a copy of the Communication which such Applicants propose to
transmit, then the Trustee, after having been adequately indemnified by
such Applicants for its costs and expenses, shall afford or shall cause the
Transfer Agent and Registrar to afford such Applicants access during normal
business hours to the most recent list of Certificateholders held by the
Trustee and shall give the Servicer notice that such request has been made,
within five Business Days after the receipt of such application. Such list
shall be as of a date no more than 45 days prior to the date of receipt of
such Applicants' request. Every Certificateholder, by receiving and holding
a Certificate, agrees with the Trustee that neither the Trustee, the
Transfer Agent and Registrar, nor any of their respective agents shall be
held accountable by reason of the disclosure of any such information as to
the names and addresses of the Certificateholders hereunder, regardless of
the source from which such information was obtained.
Section 6.8 Authenticating Agent.
(a) The Trustee may appoint one or more authenticating agents
with respect to the Certificates which shall be authorized to act on behalf
of the Trustee in authenticating the Certificates in connection with the
issuance, delivery, registration of transfer, exchange or repayment of the
Certificates. Whenever reference is made in this Agreement to the
authentication of Certificates by the Trustee or the Trustee's certificate
of authentication, such reference shall be deemed to include authentication
on behalf of the Trustee by an authenticating agent and a certificate of
authentication executed on behalf of the Trustee by an authenticating
agent. Each authenticating agent must be acceptable to the Transferor.
(b) Any institution succeeding to the corporate agency business
of an authenticating agent shall continue to be an authenticating agent
without the execution or filing of any paper or any further act on the part
of the Trustee or such authenticating agent.
(c) An authenticating agent may at any time resign by giving
written notice of resignation to the Trustee and to the Transferor. The
Trustee may at any time terminate the agency of an authenticating agent by
giving notice of termination to such authenticating agent and to the
Transferor. Upon receiving such a notice of resignation or upon such a
termination, or in case at any time an authenticating agent shall cease to
be acceptable to the Trustee or the Transferor, the Trustee promptly may
appoint a successor authenticating agent. Any successor authenticating
agent upon acceptance of its appointment hereunder shall become vested with
all the rights, powers and duties of its predecessor hereunder, with like
effect as if originally named as an authenticating agent. No successor
authenticating agent shall be appointed unless acceptable to the Trustee
and the Transferor.
(d) The Trustee agrees to pay each authenticating agent from
time to time reasonable compensation for its services under this Section
6.8, and the Trustee shall be entitled to be reimbursed and the Servicer
shall reimburse the Trustee for such reasonable payments actually made,
subject to the provisions of section 11.5.
(e) The provisions of Sections 11.1, 11.2 and 11.3 shall be
applicable to any authenticating agent.
(f) Pursuant to an appointment made under this Section 6.8, the
Certificates may have endorsed thereon, in lieu of the Trustee's
certificate of authentication, an alternate certificate of authentication
in substantially the following form:
This is one of the certificates described in the Pooling and
Servicing Agreement.
________________________________
as Authenticating Agent
for the Trustee,
By: ____________________________
Authorized Officer
Section 6.9 Tender of Transferor Certificate.
(a) Upon any Exchange, the Trustee shall issue to the Holder of
the Transferor Certificate under Section 6.1, for execution and redelivery
to the Trustee for authentication under Section 6.2, one or more new Series
of Investor Certificates. Any such Series of Investor Certificates shall be
substantially in the form specified in the related Supplement and shall
bear, upon its face, the designation for such Series to which it belongs,
as selected by the Transferor. Except as specified in any Supplement for a
related Series, all Investor Certificates of any Series shall rank pari
passu and be equally and ratably entitled as provided herein to the
benefits hereof (except that the Credit Enhancement provided for any Series
shall not be available for any other Series) without preference, priority
or distinction on account of the actual time or times of authentication and
delivery, all in accordance with the terms and provisions of this Agreement
and the related Supplement.
(b) The Holder of the Transferor Certificate may tender the
Transferor Certificate to the Trustee in exchange for (i) one or more newly
issued Series of Investor Certificates or in connection with a Paired
Series, interests in such Series and (ii) a reissued Transferor Certificate
(any such tender, a "Transferor Exchange"). In addition, to the extent
permitted for any Series of Investor Certificates as specified in the
related Supplement, the Investor Certificateholders of such Series may
tender their Investor Certificates and the Holder of the Transferor
Certificate may tender the Transferor Certificate to the Trustee pursuant
to the terms and conditions set forth in such Supplement in exchange for
(i) one or more newly issued Series of Investor Certificates and (ii) a
reissued Transferor Certificate (an "Investor Exchange"). The Transferor
Exchange and Investor Exchange are referred to collectively herein as an
"Exchange." The Holder of the Transferor Certificate may perform an
Exchange by notifying the Trustee, in writing at least three days in
advance (an "Exchange Notice") of the date upon which the Exchange is to
occur (an "Exchange Date"). Any Exchange Notice shall state the designation
of any Series (and Class thereof, if applicable) to be issued on the
Exchange Date and, with respect to each such Series: (a) its initial
Investor Interest (or the method for calculating such Initial Investor
Interest), (b) its Certificate Rate (or the method for allocating interest
payments or other cash flows to such Series), if any, and (c) the Credit
Enhancement Provider, if any, with respect to such Series. On the Exchange
Date, the Trustee shall authenticate and deliver any such Series of
Investor Certificates only upon delivery to it of the following: (a) a
Supplement satisfying the criteria set forth in subsection 6.9(c) executed
by the Transferor and the Servicer and specifying the Principal Terms of
such Series, (b) the applicable Credit Enhancement, if any, (c) the
agreement, if any, pursuant to which the Credit Enhancement Provider agrees
to provide the Credit Enhancement, if any, (d) (i) an Opinion of Counsel to
the effect that, unless otherwise stated in the related Supplement, the
newly issued Series of Investor Certificates will be treated as debt for
federal income tax purposes and (ii) a Tax Opinion with respect to the
issuance of such Series, (e) written confirmation from each Rating Agency
that the Exchange will not result in such Rating Agency's reducing or
withdrawing its rating on any then outstanding Series as to which it is a
Rating Agency, (f) an Officer's Certificate signed by a Vice President (or
any more senior officer) of the Transferor, that on the Exchange Date (i)
the Transferor, after giving effect to the Exchange, would not be required
to designate Additional Accounts pursuant to subsection 2.6(a) and (ii)
after giving effect to such Exchange, the Transferor Amount would be at
least equal to the Minimum Transferor Amount, and (g) the existing
Transferor Certificate or applicable Investor Certificates, as the case may
be. Upon satisfaction of such conditions, the Trustee shall cancel the
existing Transferor Certificate or applicable Investor Certificates, as the
case may be, and issue, as provided above, such Series of Investor
Certificates and a new Transferor Certificate, dated the Exchange Date.
There is no limit to the number of Exchanges that may be performed under
the Agreement.
(c) In conjunction with an Exchange, the parties hereto shall
execute a Supplement, which shall specify the relevant terms with respect
to any newly issued Series of Investor Certificates, which may include
without limitation: (i) its name or designation, (ii) an Initial Investor
Interest or the method of calculating the Initial Investor Interest, (iii)
the method of determining any adjusted Investor Interest, if applicable,
(iv) the Certificate Rate (or formula for the determination thereof), (v)
the Closing Date, (vi) each rating agency rating such Series, (vii) the
name of the Clearing Agency, if any, (viii) the rights of the Holder of the
Transferor Certificate that have been transferred to the Holders of such
Series pursuant to such Exchange (including any rights to allocations of
Collections of Finance Charge Receivables and Principal Receivables), (ix)
the interest payment date or dates and the date or dates from which
interest shall accrue, (x) the periods during which or dates on which
principal will be paid or accrued, (xi) the method of allocating
Collections with respect to Principal Receivables for such Series and, if
applicable, with respect to other Series and the method by which the
principal amount of Investor Certificates of such Series shall amortize or
accrete and the method for allocating Collections with respect to Finance
Charge Receivables and Receivables in Defaulted Accounts, (xii) any other
Collections with respect to Receivables or other amounts available to be
paid with respect to such Series, (xiii) the names of any accounts to be
used by such Series and the terms governing the operation of any such
account and use of moneys therein, (xiv) the Series Servicing Fee and the
Series Servicing Fee Percentage, (xv) the applicable Minimum Transferor
Amount and, the Series Termination Date, (xvi) the terms of any Credit
Enhancement with respect to such Series, and the Credit Enhancement
Provider, if applicable, (xvii) the Base Rate (as defined in such
Supplement) applicable to such Series, (xviii) the terms on which the
Certificates of such Series may be repurchased or remarketed to other
investors, (xix) any deposit into any account provided for such Series,
(xx) the number of Classes of such Series, and if more than one Class, the
rights and priorities of each such Class, (xxi) whether Interchange or
other fees will be included in the funds available to be paid for such
Series, (xxii) the priority of any Series with respect to any other Series,
(xxiii) the applicable Minimum Aggregate Principal Receivables, (xxiv)
whether such Series will be part of a Group, (xxv) whether such Series will
or may be a Paired Series and the Series with which it will be paired, if
applicable, and (xxvi) any other relevant terms of such Series (including
whether or not such Series will be pledged as collateral for an issuance of
any other securities, including commercial paper) (all such terms, the
"Principal Terms" of such Series). The terms of such Supplement may modify
or amend the terms of this Agreement solely as applied to such new Series.
If on the date of the issuance of such Series there is issued and
outstanding one or more Series of Investor Certificates and no Series of
Investor Certificates is currently rated by a Rating Agency, then as a
condition to such Exchange a nationally recognized investment banking firm
or commercial bank shall also deliver to the Trustee an officer's
certificate stating, in substance, that the Exchange will not have an
adverse effect on the timing or distribution of payments to such other
Series of Investor Certificates then issued and outstanding.
Section 6.10 Book-Entry Certificates. Unless otherwise provided
in any related Supplement, the Investor Certificates, upon original
issuance, shall be issued in the form of typewritten Certificates
representing the Book-Entry Certificates, to be delivered to the depository
specified in such Supplement (the "Depository") which shall be the Clearing
Agency or Foreign Clearing Agency, by or on behalf of such Series. The
Investor Certificates of each Series shall, unless otherwise provided in
the related Supplement, initially be registered on the Certificate Register
in the name of the nominee of the Clearing Agency or Foreign Clearing
Agency. No Certificate Owner will receive a definitive certificate
representing such Certificate Owner's interest in the related Series of
Investor Certificates, except as provided in Section 6.12. Unless and until
definitive, fully registered Investor Certificates of any Series
("Definitive Certificates") have been issued to Certificate Owners pursuant
to Section 6.12:
(i) the provisions of this Section 6.10 shall be in full force
and effect with respect to each such Series;
(ii) the Transferor, the Servicer, the Paying Agent, the
Transfer Agent and Registrar and the Trustee may deal with the
Clearing Agency and the Clearing Agency Participants for all purposes
(including the making of distributions on the Investor Certificates
of each such Series) as the authorized representatives of the
Certificate Owners;
(iii) to the extent that the provisions of this Section 6.10
conflict with any other provisions of this Agreement, the provisions
of this Section 6.10 shall control with respect to each such Series;
and
(iv) the rights of Certificate Owners of each such Series shall
be exercised only through the Clearing Agency or Foreign Clearing
Agency and the applicable Clearing Agency Participants and shall be
limited to those established by law and agreements between such
Certificate Owners and the Clearing Agency or Foreign Clearing Agency
and/or the Clearing Agency Participants. Pursuant to the Depository
Agreement applicable to a Series, unless and until Definitive
Certificates of such Series are issued pursuant to Section 6.12, the
initial Clearing Agency will make book-entry transfers among the
Clearing Agency Participants and receive and transmit distributions
of principal and interest on the Investor Certificates to such
Clearing Agency Participants.
Section 6.11 Notices to Clearing Agency. Whenever notice or
other communication to the Certificateholders is required under this
Agreement, unless and until Definitive Certificates shall have been issued
to Certificate owners pursuant to Section 6.12, the Trustee shall give all
such notices and communications specified herein to be given to Holders of
the Investor Certificates to the Clearing Agency or Foreign Clearing Agency
for distribution to Holders of Investor Certificates.
Section 6.12 Definitive Certificates. If (i) (A) the Transferor
advises the Trustee in writing that the Clearing Agency or Foreign Clearing
Agency is no longer willing or able to discharge properly its
responsibilities under the applicable Depository Agreement, and (B) the
Trustee or the Transferor is unable to locate a qualified successor, (ii)
the Transferor, at its option, advises the Trustee in writing that it
elects to terminate the book-entry system through the Clearing Agency or
Foreign Clearing Agency with respect to any Series of Certificates or (iii)
after the occurrence of a Servicer Default, Certificate Owners of a Series
representing beneficial interests aggregating not less than 50% of the
Investor Interest of such Series advise the Trustee and the applicable
Clearing Agency or Foreign Clearing Agency through the applicable Clearing
Agency Participants in writing that the continuation of a book-entry system
through the applicable Clearing Agency or Foreign Clearing Agency is no
longer in the best interests of the Certificate Owners, the Trustee shall
notify all Certificate Owners of such Series, through the applicable
Clearing Agency Participants, of the occurrence of any such event and of
the availability of Definitive Certificates to Certificate owners of such
Series requesting the same. Upon surrender to the Trustee of the Investor
Certificates of such Series by the applicable Clearing Agency or Foreign
Clearing Agency, accompanied by registration instructions from the
applicable Clearing Agency or Foreign Clearing Agency for registration, the
Trustee shall issue the Definitive Certificates of such Series. Neither the
Transferor nor the Trustee shall be liable for any delay in delivery of
such instructions and may conclusively rely on, and shall be protected in
relying on, such instructions. Upon the issuance of Definitive Certificates
of such Series all references herein to obligations imposed upon or to be
performed by the applicable Clearing Agency or Foreign Clearing Agency
shall be deemed to be imposed upon and performed by the Trustee, to the
extent applicable with respect to such Definitive Certificates, and the
Trustee shall recognize the Holders of the Definitive Certificates of such
Series as Certificateholders of such Series hereunder.
Section 6.13 Global Certificate; Euro-Certificate Exchange
Date. If specified in the related Supplement for any Series, the Investor
Certificates may be initially issued in the form of a single temporary
Global Certificate (the "Global Certificate") in bearer form, without
interest coupons, in the denomination of the Initial Investor Interest and
substantially in the form attached to the related Supplement. Unless
otherwise specified in the related Supplement, the provisions of this
Section 6.13 shall apply to such Global Certificate. The Global Certificate
will be authenticated by the Trustee upon the same conditions, in
substantially the same manner and with the same effect as the Definitive
Certificates. The Global Certificate may be exchanged in the manner
described in the related Supplement for Registered or Bearer Certificates
in definitive form.
Section 6.14 Meetings of Certificateholders. To the extent
provided by the Supplement for any Series issued in whole or in part in
Bearer Certificates, the Servicer of the Trustee may at any time call a
meeting of the Certificateholders of such Series, to be held at such time
and at such place as the Servicer or the Trustee, as the case may be, shall
determine, for the purpose of approving a modification of or amendment to,
or obtaining a waiver of, any covenant or condition set forth in this
Agreement with respect to such Series or in the Certificates of such
Series, subject to Section 13.1 of the Agreement.
[End of Article VI]
ARTICLE VII
OTHER MATTERS RELATING
TO THE TRANSFEROR
Section 7.1 Liability of the Transferor. The Transferor shall
be liable in accordance herewith to the extent of the obligations
specifically undertaken by the Transferor.
Section 7.2 Merger or Consolidation of, or Assumption of the
Obligations of, the Transferor.
(a) The Transferor shall not consolidate with or
merge into any other corporation or convey or transfer its properties and
assets substantially as an entirety to any Person, unless:
(i) the corporation formed by such consolidation or
into which the Transferor is merged or the Person which acquires by
conveyance or transfer the properties and assets of the Transferor
substantially as an entirety shall be, if the Transferor is not the
surviving entity, organized and existing under the laws of the United
States of America or any State or the District of Columbia, and shall
be a national banking association, state banking corporation or other
entity which is not subject to the bankruptcy laws of the United
States of America or, subject to the Rating Agency Condition, any
other type of entity, and shall assume the performance of every
covenant and obligation of the Transferor, as applicable hereunder,
and shall benefit from all the rights granted to the Transferor, as
applicable hereunder. To the extent that any right, covenant or
obligation of the Transferor, as applicable hereunder, is
inapplicable to the successor entity, such successor entity shall be
subject to such covenant or obligation, or benefit from such right,
as would apply, to the extent practicable, to such successor entity.
In furtherance hereof, in applying this Section 7.2 to a successor
entity, Section 9.2 hereof shall be applied by reference to events of
involuntary liquidation, receivership or conservatorship applicable
to such successor entity as shall be set forth in the officer's
certificate described in subsection 7.2(a)(ii);
(ii) the Transferor shall have delivered to the
Trustee an Officer's Certificate signed by a Vice President (or any
more senior officer) of the Transferor stating that such
consolidation, merger, conveyance or transfer and such supplemental
agreement comply with this Section 7.2 and that all conditions
precedent herein provided for relating to such transaction have been
complied with and an Opinion of Counsel that such supplemental
agreement is legal, valid and binding;
(iii) the Transferor shall have delivered notice to
each Rating Agency of such consolidation, merger, conveyance or
transfer; and
(iv) the Transferor shall have delivered to the
Trustee a Tax Opinion, dated the date of such merger, conveyance or
transfer, with respect thereto.
(b) The obligations of the Transferor hereunder shall not be
assignable nor shall any Person succeed to the obligations of the
Transferor hereunder except for mergers, consolidations, assumptions or
transfers in accordance with the provisions of the foregoing paragraph.
Section 7.3 Limitation on Liability. The directors, officers,
employees or agents of the Transferor shall not be under any liability to
the Trust, the Trustee, the Certificateholders, any Credit Enhancement
Provider or any other Person hereunder or pursuant to any document
delivered hereunder, it being expressly understood that all such liability
is expressly waived and released as a condition of, and as consideration
for, the execution of this Agreement and any Supplement and the issuance of
the Certificates; provided, however, that this provision shall not protect
the officers, directors, employees, or agents of the Transferor against any
liability which would otherwise be imposed by reason of willful
misfeasance, bad faith or gross negligence in the performance of duties or
by reason of reckless disregard of obligations and duties hereunder. Except
as provided in Section 7.4, the Transferor shall not be under any liability
to the Trust, the Trustee, the Certificateholders, any Credit Enhancement
Provider or any other Person for any action taken or for refraining from
the taking of any action in its capacity as Transferor pursuant to this
Agreement or any Supplement whether arising from express or implied duties
under this Agreement or any Supplement; provided, however, that this
provision shall not protect the Transferor against any liability which
would otherwise be imposed by reason of willful misfeasance, bad faith or
gross negligence in the performance of duties or by reason of reckless
disregard of obligations and duties hereunder. The Transferor and any
director, officer, employee or agent may rely in good faith on any document
of any kind prima facie properly executed and submitted by any Person
respecting any matters arising hereunder.
Section 7.4 Liabilities. Notwithstanding Section 7.3 (and
notwithstanding Sections 3.2, 8.3, 8.4 and 11.11), or any other provision
herein, the Transferor by entering into this Agreement, and any holder of
an interest in the Transferor Certificate (including any Transferor
Participation) by its acceptance thereof, agree to be liable, directly to
the injured party, for the entire amount of any losses, claims, damages or
liabilities (other than those that would be incurred by an Investor
Certificateholder if the Investor Certificates were notes secured by the
Receivables, for example, as a result of the performance of the
Receivables, market fluctuations, a shortfall or failure to make payment
under any Credit Enhancement or other similar market or investment risks
associated with ownership of the Investor Certificates) arising out of or
based on the arrangement created by this Agreement (to the extent that, if
the Trust assets at the time the claim is made were used to pay in full all
outstanding Certificates of all Series, the Trust assets that would remain
after the Investor Certificateholders and Credit Enhancement Providers, if
any, were paid in full would be insufficient to pay any such losses,
claims, damages or liabilities) as though this Agreement created a
partnership under the Delaware Uniform Partnership Law in which the
Transferor and such holder of an interest in the Transferor Certificate
(including any Transferor Participation) were general partners. The rights
created by this Section 7.4 shall run directly to and be enforceable by the
injured party subject to the limitations hereof. To the extent provided in
Section 8.4, the Servicer will (from its own assets and not from the assets
of the Trust) indemnify and hold harmless the Transferor and each holder of
an interest in the Transferor Certificate (including any Transferor
Participation) against and from certain losses, claims, damages and
liabilities of the Transferor as described in this Section arising from the
actions or omissions of the Servicer.
[End of Article VII]
ARTICLE VIII
OTHER MATTERS RELATING
TO THE SERVICER
Section 8.1 Liability of the Servicer. The Servicer shall be
liable in accordance herewith only to the extent of the obligations
specifically undertaken by the Servicer in such capacity herein.
Section 8.2 Merger or Consolidation of, or Assumption of the
Obligations of, the Servicer. The Servicer shall not consolidate with or
merge into any other corporation or convey or transfer its properties and
assets substantially as an entirety to any Person, unless:
(i) the corporation formed by such consolidation or
into which the Servicer is merged or the Person which acquires by
conveyance or transfer the properties and assets of the Servicer
substantially as an entirety shall be a corporation organized and
existing under the laws of the United States of America or any State
or the District of Columbia, and shall be a state or national banking
association or other entity which is not subject to the bankruptcy
laws of the United States of America or, subject to the Rating Agency
Condition, any other type of entity, and, if the Servicer is not the
surviving entity, shall assume the performance of every covenant and
obligation of the Servicer hereunder (to the extent that any right,
covenant or obligation of the Servicer, as applicable hereunder, is
inapplicable to the successor entity, such successor entity shall be
subject to such covenant or obligation, or benefit from such right,
as would apply, to the extent practicable, to such successor entity);
(ii) the Servicer shall have delivered to the Trustee
an Officer's Certificate that such consolidation, merger, conveyance
or transfer and such supplemental agreement comply with this Section
8.2 and that all conditions precedent herein provided for relating to
such transaction have been complied with and an Opinion of Counsel
that such supplemental agreement is legal, valid and binding with
respect to the Servicer; and
(iii) the Servicer shall have delivered notice to the
Rating Agency of such consolidation, merger, conveyance or transfer.
Section 8.3 Limitation on Liability of the Servicer and Others.
The directors, officers, employees or agents of the Servicer shall not be
under any liability to the Trust, the Trustee, the Certificateholders, any
Credit Enhancement Provider or any other Person hereunder or pursuant to
any document delivered hereunder, it being expressly understood that all
such liability is expressly waived and released as a condition of, and as
consideration for, the execution of this Agreement and any Supplement and
the issuance of the Certificates; provided, however, that this provision
shall not protect the directors, officers, employees and agents of the
Servicer against any liability which would otherwise be imposed by reason
of willful misfeasance, bad faith or gross negligence in the performance of
duties or by reason of reckless disregard of obligations and duties
hereunder. Except as provided in Section 8.4 with respect to the Trust and
the Trustee, its officers, directors, employees and agents, the Servicer
shall not be under any liability to the Trust, the Trustee, its officers,
directors, employees and agents, the Certificateholders or any other Person
for any action taken or for refraining from the taking of any action in its
capacity as Servicer pursuant to this Agreement or any Supplement;
provided, however, that this provision shall not protect the Servicer
against any liability which would otherwise be imposed by reason of willful
misfeasance, bad faith or gross negligence in the performance of duties or
by reason of its reckless disregard of its obligations and duties hereunder
or under any Supplement. The Servicer may rely in good faith on any
document of any kind prima facie properly executed and submitted by any
Person respecting any matters arising hereunder. The Servicer shall not be
under any obligation to appear in, prosecute or defend any legal action
which is not incidental to its duties to service the Receivables in
accordance with this Agreement which in its reasonable opinion may involve
it in any expense or liability.
Section 8.4 Servicer Indemnification of the Trust and the
Trustee. The Servicer shall indemnify and hold harmless the Trust and the
Trustee, its officers, directors, employees and agents, from and against
any reasonable loss, liability, expense, damage or injury suffered or
sustained by reason of any acts or omissions of the Servicer with respect
to activities of the Trust or the Trustee pursuant to this Agreement or any
Supplement, including, but not limited to any judgment, award, settlement,
reasonable attorneys' fees and other costs or expenses incurred in
connection with the defense of any actual or threatened action, proceeding
or claim; provided, however, that the Servicer shall not indemnify the
Trustee if such acts or omissions constitute or are caused by fraud,
negligence, or willful misconduct by the Trustee; provided further, that
the Servicer shall not indemnify the Trust, the Investor Certificateholders
or the Certificate Owners for any liabilities, costs or expenses of the
Trust with respect to any action taken by the Trustee at the request of the
Investor Certificateholders; provided further, that the Servicer shall not
indemnify the Trust, the Investor Certificateholders or the Certificate
Owners as to any losses claims or damages incurred by any of them in their
capacities as investors, including without limitation losses incurred as a
result of Defaulted Accounts or Receivables which are written off as
uncollectible; and provided further, that the Servicer shall not indemnify
the Trust, the Investor Certificateholders or the Certificate Owners for
any liabilities, costs or expenses of the Trust, the Investor
Certificateholders or the Certificate Owners arising under any tax law,
including without limitation, any federal, state, local or foreign income
or franchise taxes or any other tax imposed on or measured by income (or
any interest or penalties with respect thereto or arising from a failure to
comply therewith) required to be paid by the Trust, the Investor
Certificateholders or the Certificate Owners in connection herewith to any
taxing authority. Any such indemnification shall not be payable from the
assets of the Trust. The provisions of this indemnity shall run directly to
and be enforceable by an injured party subject to the limitations hereof
and shall survive the termination of this Agreement and the registration
and removal of the Trustee.
Section 8.5 The Servicer Not to Resign. The Servicer shall not
resign from the obligations and duties hereby imposed on it except upon
determination that (i) the performance of its duties hereunder is no longer
permissible under applicable law and (ii) there is no reasonable action
which the Servicer could take to make the performance of its duties
hereunder permissible under applicable law. Any such determination
permitting the resignation of the Servicer shall be evidenced as to clause
(i) above by an Opinion of Counsel and as to clause (ii) by an Officer's
Certificate, each to such effect delivered to the Trustee. No such
resignation shall become effective until the Trustee or a Successor
Servicer shall have assumed the responsibilities and obligations of the
Servicer in accordance with Section 10.2 hereof. If the Trustee is unable
within 120 days of the date of such determination to appoint a Successor
Servicer, the Trustee shall serve as Successor Servicer hereunder.
Section 8.6 Access to Certain Documentation and Information
Regarding the Receivables. The Servicer shall provide to the Trustee access
to the documentation regarding the Accounts and the Receivables in such
cases where the Trustee is required in connection with the enforcement of
the rights of the Investor Certificateholders, or by applicable statutes or
regulations, to review such documentation, such access being afforded
without charge but only (i) upon reasonable request, (ii) during normal
business hours, (iii) subject to the Servicer's normal security and
confidentiality procedures and (iv) at offices designated by the Servicer.
Nothing in this Section 8.6 shall derogate from the obligation of the
Trustee, the Transferor or the Servicer to observe any applicable law
prohibiting disclosure of information regarding the obligors and the
failure of the Servicer to provide access as provided in this Section 8.6
as a result of such obligations shall not constitute a breach of this
Section 8.6.
Section 8.7 Delegation of Duties. It is understood and agreed
by the parties hereto that the Servicer may delegate certain of its duties
hereunder to Wachovia Operational Services Corporation ("WOSC") and
Wachovia Bank Card Services, Inc. ("WBCS"). In the ordinary course of
business, the Servicer may at any time delegate any duties hereunder to any
Person who agrees to conduct such duties in accordance with the Credit Card
Guidelines. Any such delegations shall not relieve the Servicer of its
liability and responsibility with respect to such duties, and shall not
constitute a resignation within the meaning of Section 8.5 hereof. If any
such delegation is to a party other than WOSC or WBCS, notification thereof
shall be given to each Rating Agency.
Section 8.8 Examination of Records. The Servicer shall clearly
and unambiguously identify each Account (including any Additional Account
designated pursuant to Section 2.6) in its computer or other records to
reflect that the Receivables arising in such Account have been conveyed to
the Trust pursuant to this Agreement. The Servicer shall, prior to the sale
or transfer to a third party of any receivable held in its custody, examine
its computer and other records to determine that such receivable is not a
Receivable.
[End of Article VIII)
ARTICLE IX
PAY OUT EVENTS
Section 9.1 Pay Out Events. If any one of the following events
(each, a "Trust Pay Out Event") shall occur:
(a) the Transferor or any holder of an interest in
the Transferor Certificate (including any Transferor Participation) shall
consent to the appointment of a conservator or receiver or liquidator in
any insolvency, readjustment of debt, marshalling of assets and liabilities
or similar proceedings of or relating to the Transferor or any holder of an
interest in the Transferor Certificate (including any Transferor
Participation) or all or substantially all of their respective property, or
a decree or order of a court or agency or supervisory authority having
jurisdiction in the premises for the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt, marshalling
of assets and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against the Transferor
or any holder of an interest in the Transferor Certificate (including any
Transferor Participation); or the Transferor or any holder of an interest
in the Transferor Certificate (including any Transferor Participation)
shall admit in writing its inability to pay its debts generally as they
become due, file a petition to take advantage of any applicable insolvency
or reorganization statute, make an assignment for the benefit of its
creditors or voluntarily suspend payment of its obligations (any such
event, an "Insolvency Event");
(b) the Transferor shall become unable for any reason
to transfer Receivables to the Trust in accordance with the provisions of
this Agreement; or
(c) the Trust shall become subject to regulation by
the Securities and Exchange Commission as an "investment company" within
the meaning of the Investment Company Act;
then a Pay Out Event with respect to all Series of Certificates shall occur
without any notice or other action on the part of the Trustee or the
Investor Certificateholders immediately upon the occurrence of such event.
Section 9.2 Additional Rights Upon the Occurrence of Certain
Events.
(a) If an Insolvency Event occurs with respect to the
Transferor or any holder of an interest in the Transferor Certificate
(including any Transferor Participation), the Transferor shall on the day
of such Insolvency Event or violation (the "Appointment Day") immediately
cease to transfer Principal Receivables, or interests in Principal
Receivables represented by any Participations, to the Trust and shall
promptly give notice to the Trustee thereof. Notwithstanding any cessation
of the transfer to the Trust of additional Principal Receivables or any
Participations, Principal Receivables or any Participations transferred to
the Trust prior to the occurrence of such Insolvency Event or violation and
Collections in respect of such Principal Receivables and Participations,
and Finance Charge Receivables, whenever created, accrued in respect of
such Principal Receivables, shall continue to be a part of the Trust, and
shall continue to be allocated and paid in accordance with Article IV.
Within 15 days of the Appointment Day, the Trustee shall (i) publish a
notice in an Authorized Newspaper that an Insolvency Event or violation has
occurred, that the Trust has dissolved and that the Trustee intends to
sell, dispose of or otherwise liquidate the Receivables on commercially
reasonable terms and in a commercially reasonable manner and (ii) send
written notice to (w) any Holder of the Transferor Certificate and any
holder of an interest in the Transferor Certificate (including any
Transferor Participation) with respect to which the Insolvency Event has
not occurred, (x) the Investor Certificateholders, (y) each Credit
Enhancement Provider, if any, and (z) any other Person entitled thereto
pursuant any Supplement describing the provisions of this Section 9.2.
Unless within 75 days from the day notice pursuant to clause (i) above is
first published the Trustee shall have received written instructions from
Holders of Investor Certificates evidencing more than 50% of the Investor
Interest of each Series issued and outstanding (or, if any such Series has
two or more Classes, each Class) and from each person described in (ii)(w),
(ii)(y) and (ii)(z) to the effect that such Persons disapprove of the
liquidation of the Receivables, the Trustee shall promptly sell, dispose of
or otherwise liquidate the Receivables and Participations in a commercially
reasonable manner and on commercially reasonable terms, which shall include
the solicitation of competitive bids. In the event that, in accordance with
the result of the voting procedures set forth above, the Receivables and
Participations are not sold at the time of dissolution, the Trustee shall
retain the Receivables and Participations (and no Receivables or
Participations shall thereafter be added to the Trust) and apply
collections thereon in accordance with the provisions in Article IV.
Notwithstanding the foregoing, the Trustee shall cause any remaining
Receivables and Participations to be disposed of in a manner so that the
Trust is liquidated on or prior to the date that is three (3) years after
the Appointment Date. The Trustee may obtain a prior determination from any
conservator, receiver or liquidator that the terms and manner of any
proposed sale, disposition or liquidation are commercially reasonable. The
provisions of Sections 9.1 and 9.2 shall not be deemed to mutually
exclusive.
(b) The proceeds from the sale, disposition or
liquidation of the Receivables and Participations pursuant to subsection
(a) above shall be treated as Collections on the Receivables and shall be
allocated and deposited in accordance with the provisions of Article IV;
provided, however, that the Trustee shall determine conclusively in its
sole discretion the amount of such proceeds which are allocable to Finance
Charge Receivables and the amount of such proceeds which are allocable to
Principal Receivables. On the day following the Distribution Date on which
the proceeds from any sale, disposition or liquidation of the Receivables
and any Participations are distributed to the Investor Certificateholders
of each Series pursuant to Article IV, the Trust shall terminate.
(c) The Trustee may appoint an agent or agents to
assist with its responsibilities pursuant to this Article IX with respect
to competitive bids.
[End of Article IX]
ARTICLE X
SERVICER DEFAULTS
Section 10.1 Servicer Defaults. If any one of the following
events (a "Servicer Default") shall occur and be continuing:
(a) any failure by the Servicer to make any payment,
transfer or deposit or to give instructions or notice to the Trustee
pursuant to Article IV or to instruct the Trustee to make any required
drawing, withdrawal, or payment under any Credit Enhancement on or before
the date occurring five Business Days after the date such payment,
transfer, deposit withdrawal or drawing or such instruction or notice is
required to be made or given, as the case may be, under the terms of this
Agreement;
(b) failure on the part of the Servicer duly to
observe or perform in any respect any other covenants or agreements of the
Servicer set forth in this Agreement, which has a material adverse effect
on the Investor Certificateholders of any Series and which continues
unremedied for a period of 60 days after the date on which written notice
of such failure, requiring the same to be remedied, shall have been given
to the Servicer by the Trustee, or to the Servicer and the Trustee by the
Holders of Investor Certificates evidencing Undivided Interests aggregating
not less than 50% of the Investor Interest of any Series adversely affected
thereby and continues to materially adversely affect such Investor
Certificateholders for such period; or the Servicer shall delegate its
duties under this Agreement, except as permitted by Section 8.7;
(c) any representation, warranty or certification
made by the Servicer in this Agreement or in any certificate delivered
pursuant to this Agreement shall prove to have been incorrect when made,
which has a material adverse effect on the Investor Certificateholders of
any Series and 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 by
the Trustee, or to the Servicer and the Trustee by the Holders of Investor
Certificates evidencing Undivided Interests aggregating not less than 50%
of the Investor Interest of any Series adversely affected thereby and
continues to materially adversely affect such Investor Certificateholders
for such period; or
(d) the Servicer shall consent to the appointment of
a conservator or receiver or liquidator in any insolvency, readjustment of
debt, marshalling of assets and liabilities or similar proceedings of or
relating to the Servicer or of or relating to all or substantially all of
its property, or a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises for the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of
debt, marshalling of assets and liabilities or similar proceedings, or for
the winding-up or liquidation of its affairs, shall have been entered
against the Servicer, and such decree or order shall have remained in force
undischarged or unstayed for a period of 60 days; or the Servicer shall
admit in writing its inability to pay its debts generally as they become
due, file a petition to take advantage of any applicable insolvency or
reorganization statute, make any assignment for the benefit of its
creditors or voluntarily suspend payment of its obligations;
then, so long as such Servicer Default shall not have been remedied, either
the Trustee, or the Holders of Investor Certificates evidencing Undivided
Interests aggregating more than 50% of the Aggregate Investor Interest, by
notice then given in writing to the Servicer (and to the Trustee if given
by the Investor Certificateholders) (a "Termination Notice"), may terminate
all of the rights and obligations of the Servicer as Servicer under this
Agreement. After receipt by the Servicer of such Termination Notice, and on
the date that a Successor Servicer shall have been appointed by the Trustee
pursuant to Section 10.2, all authority and power of the Servicer under
this Agreement shall pass to and be vested in a Successor Servicer; and,
without limitation, the Trustee is hereby authorized and empowered (upon
the failure of the Servicer to cooperate) to execute and deliver, on behalf
of the Servicer, as attorney-in-fact or otherwise, all documents and other
instruments upon the failure of the Servicer to execute or deliver such
documents or instruments, and to do and accomplish all other acts or things
necessary or appropriate to effect the purposes of such transfer of
servicing rights and obligations. The Servicer agrees to cooperate with the
Trustee and such Successor Servicer in effecting the termination of the
responsibilities and rights of the Servicer to conduct servicing hereunder
including, without limitation, the transfer to such Successor Servicer of
all authority of the Servicer to service the Receivables provided for under
this Agreement, including, without limitation, all authority over all
Collections which shall on the date of transfer be held by the Servicer for
deposit, or which have been deposited by the Servicer, in the Collection
Account, the Finance Charge Account, the Principal Account, the Excess
Funding Account and any Series Account, or which shall thereafter be
received with respect to the Receivables, and in assisting the Successor
Servicer and in enforcing all rights to Insurance Proceeds and Interchange
(if any) applicable to the Trust. The Servicer shall promptly transfer its
electronic records or electronic copies thereof relating to the Receivables
to the Successor Servicer in such electronic form as the Successor Servicer
may reasonably request and shall promptly transfer to the Successor
Servicer all other records, correspondence and documents necessary for the
continued servicing of the Receivables in the manner and at such times as
the Successor Servicer shall reasonably request. To the extent that
compliance with this Section 10.1 shall require the Servicer to disclose to
the Successor Servicer information of any kind which the Servicer
reasonably deems to be confidential, the Successor Servicer shall be
required to enter into such customary licensing and confidentiality
agreements as the Servicer shall deem necessary to protect its interests.
The Servicer shall, on the date of any servicing transfer, transfer all of
its rights and obligations under the Credit Enhancement with respect to any
Series to the Successor Servicer.
Notwithstanding the foregoing, a delay in or failure of
performance referred to under subsection 10.1(a) for a period of 10
Business Days or under subsection 10.1(b) or (c) for a period of 60
Business Days shall not constitute a Servicer Default if such delay or
failure could not be prevented by the exercise of reasonable diligence by
the Servicer and such delay or failure was caused by an act of God or the
public enemy, acts of declared or undeclared war, public disorder,
rebellion, riot or sabotage, epidemics, landslides, lightning, fire,
hurricanes, tornadoes, earthquakes, nuclear disasters or meltdowns, floods,
power outages or similar causes. The preceding sentence shall not relieve
the Servicer from using its best efforts to perform its obligations in a
timely manner in accordance with the terms of this Agreement and the
Servicer shall provide the Trustee, any Credit Enhancement Provider, the
Transferor and the Holders of Investor Certificates with an Officer's
Certificate giving prompt notice of such failure or delay by it, together
with a description of the cause of such failure or delay and its efforts so
to perform its obligations.
Section 10.2 Trustee to Act; Appointment of Successor.
(a) On and after the receipt by the Servicer of a
Termination Notice pursuant to Section 10.1, the Servicer shall continue to
perform all servicing functions under this Agreement until the date
specified in the Termination Notice or otherwise specified by the Trustee
in writing or, if no such date is specified in such Termination Notice, or
otherwise specified by the Trustee, until a date mutually agreed upon by
the Servicer and Trustee. The Trustee shall notify each Rating Agency of
such removal of the Servicer. The Trustee shall, as promptly as possible
after the giving of a Termination Notice, appoint a successor servicer (the
"Successor Servicer"), and such Successor Servicer shall accept its
appointment by a written assumption in a form acceptable to the Trustee.
The Trustee may obtain bids from any potential successor servicer. If the
Trustee is unable to obtain any bids from any potential successor servicer
and the Servicer delivers an Officer's Certificate to the effect that the
Servicer cannot in good faith cure the Servicer Default which gave rise to
a Termination Notice, and if the Trustee is legally unable to act as
Successor Servicer, then the Trustee shall notify each Credit Enhancement
Provider of the proposed sale of the Receivables, shall provide each such
Credit Enhancement Provider an opportunity to bid on the Receivables and
shall offer the Transferor the right of first refusal to purchase the
Receivables on terms equivalent to the best purchase offer as determined by
the Trustee, but in no event less than an amount equal to the Aggregate
Investor Interest on the date of such purchase plus all interest accrued
but unpaid on all of the outstanding Investor Certificates at the
applicable Certificate Rate through the date of such purchase; provided,
however, that if the short-term deposits or long-term unsecured debt
obligations of the Transferor (or if neither such deposits nor such
obligations of the Transferor are rated by Moody's, if Moody's is a Rating
Agency with respect to any Series of Certificates outstanding, then of the
holding company of the Transferor so long as such holding company shall be
Wachovia Corporation) are not rated at the time of such purchase at least
P-3 or Baa3, respectively, by Moody's, if Moody's is a Rating Agency with
respect to any Series of Certificates outstanding, no such purchase by the
Transferor shall occur unless the Transferor shall deliver an Opinion of
Counsel reasonably acceptable to the Trustee that such purchase would not
constitute a fraudulent conveyance of the Transferor. The proceeds of such
sale shall be deposited in the Distribution Account or any Series Account,
as provided in the related Supplement, for distribution to the Investor
Certificateholders of each outstanding Series pursuant to Section 12.3 of
the Agreement. In the event that a Successor Servicer has not been
appointed and has not accepted its appointment at the time when the
Servicer ceases to act as Servicer, the Trustee without further action
shall automatically be appointed the Successor Servicer. Notwithstanding
the above, the Trustee shall, if it is legally unable so to act, petition a
court of competent jurisdiction to appoint any established financial
institution having, in the case of an entity that is subject to risk-based
capital adequacy requirements, risk-based capital of at least $50,000,000
or, in the case of an entity that is not subject to risk-based capital
requirements, having a net worth of not less than $50,000,000 and whose
regular business includes the servicing of VISA or MasterCard credit card
receivables as the Successor Servicer hereunder.
(b) Upon its appointment, the Successor Servicer
shall be the successor in all respects to the Servicer with respect to
servicing functions under this Agreement and shall be subject to all the
responsibilities, duties and liabilities relating thereto placed on the
Servicer by the terms and provisions hereof, and all references in this
Agreement to the Servicer shall be deemed to refer to the Successor
Servicer. Any Successor Servicer, by its acceptance of its appointment,
will automatically agree to be bound by the terms and provisions of each
Credit Enhancement.
(c) In connection with such appointment and
assumption, the Trustee shall be entitled to such compensation, or may make
such arrangements for the compensation of the Successor Servicer out of
Collections, as it and such Successor Servicer shall agree; provided,
however, that no such compensation shall be in excess of the Servicing Fee
permitted to the Servicer pursuant to Section 3.2. The Transferor agrees
that if the Servicer is terminated hereunder, it will agree to deposit with
the Trustee a portion of the Collections in respect of Finance Charge
Receivables that it is entitled to receive pursuant to Article IV to pay
its share of the compensation of the Successor Servicer.
(d) All authority and power granted to the Successor
Servicer under this Agreement shall automatically cease and terminate upon
termination of the Trust pursuant to Section 12.1 and shall pass to and be
vested in the Transferor and, without limitation, the Transferor is hereby
authorized and empowered to execute and deliver, on behalf of the Successor
Servicer, as attorney-in-fact or otherwise, all documents and other
instruments, and to do and accomplish all other acts or things necessary or
appropriate to effect the purposes of such transfer of servicing rights.
The Successor Servicer agrees to cooperate with the Transferor in effecting
the termination of the responsibilities and rights of the Successor
Servicer to conduct servicing on the Receivables. The Successor Servicer
shall transfer its electronic records relating to the Receivables to the
Transferor in such electronic form as the Transferor may reasonably request
and shall transfer all other records, correspondence and documents to the
Transferor in the manner and at such times as the Transferor shall
reasonably request. To the extent that compliance with this Section 10.2
shall require the Successor Servicer to disclose to the Transferor
information of any kind which the Successor Servicer deems to be
confidential, the Transferor shall be required to enter into such customary
licensing and confidentiality agreements as the Successor Servicer shall
deem necessary to protect its interests.
Section 10.3 Notification to Certificateholders. Within two
Business Days after the Servicer becomes aware of any Servicer Default, the
Servicer shall give prompt written notice thereof to the Trustee, each
Rating Agency and any Credit Enhancement Provider, and the Trustee shall
give notice to the Investor Certificateholders at their respective
addresses appearing in the Certificate Register. Upon any termination or
appointment of a Successor Servicer pursuant to this Article X, the Trustee
shall give prompt written notice thereof to Investor Certificateholders at
their respective addresses appearing in the Certificate Register.
Section 10.4 Waiver of Past Defaults. The Holders of Investor
Certificates evidencing Undivided Interests aggregating not less than
66-2/3% of the Investor Interest of each Series adversely affected by any
default by the Servicer or Transferor may, on behalf of all
Certificateholders of such Series, waive any default by the Servicer or
Transferor in the performance of its obligations hereunder and its
consequences, except a default relating to the failure to make any required
deposits or payments of interest or principal relating to such Series
pursuant to Article IV which default does not result from the failure of
the Paying Agent to perform its obligations to make any required deposits
or payments of interest and principal in accordance with Article IV. Upon
any such waiver of a past default, such default shall cease to exist, and
any default arising therefrom shall be deemed to have been remedied for
every purpose of this Agreement. No such waiver shall extend to any
subsequent or other default or impair any right consequent thereon except
to the extent expressly so waived.
[End of Article XI]
ARTICLE XI
THE TRUSTEE
Section 11.1 Duties of Trustee.
(a) The Trustee, prior to the occurrence of any Servicer
Default and after the curing of all Servicer Defaults which may have
occurred, undertakes to perform such duties and only such duties as are
specifically set forth in this Agreement. If a Responsible Officer has
received written notice that a Servicer Default has occurred (which has not
been cured or waived), the Trustee shall exercise such of the rights and
powers vested in it by this Agreement, and use the same degree of care and
skill in its exercise, as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
(b) The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments
furnished to the Trustee which are specifically required to be furnished
pursuant to any provision of this Agreement, shall examine them to
determine whether they substantially conform to the requirements of this
Agreement.
(c) Subject to subsection 11.1(a), no provision of this
Agreement shall be construed to relieve the Trustee from liability for its
own negligent action, its own negligent failure to act or its own
misconduct; provided, however, that:
(i) the Trustee shall not be personally liable for an error of
judgment made in good faith by a Responsible Officer or Responsible
Officers of the Trustee, unless it shall be proved that the Trustee
was negligent in ascertaining the pertinent facts;
(ii) the Trustee shall not be personally liable with respect to
any action taken, suffered or omitted to be taken by it in good faith
in accordance with the direction of the Holders of Investor
Certificates evidencing Undivided Interests aggregating more than 50%
of the Investor Interest of any Series relating to the time, method
and place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred upon the
Trustee in relation to such Series, under this Agreement; and
(iii) the Trustee shall not be charged with knowledge of any
failure by the Servicer referred to in clauses (a) and (b) of Section
10.1 unless a Responsible Officer of the Trustee obtains actual
knowledge of such failure or the Trustee receives written notice of
such failure from the Servicer or any Holders of Investor
Certificates evidencing Undivided Interests aggregating not less than
10% of the Investor Interest of any Series adversely affected
thereby.
(d) The Trustee shall not be required to expend or risk its own
funds or otherwise incur financial liability in the performance of any of
its duties hereunder, or in the exercise of any of its rights or powers, if
there is reasonable ground for believing that the repayment of such funds
or adequate indemnity against such risk or liability is not reasonably
assured to it, and none of the provision contained in this Agreement shall
in any event require the Trustee to perform, or be responsible for the
manner of performance of, any of the obligations of the Servicer under this
Agreement, except during such time, if any, as the Trustee shall be the
successor to, and be vested with the rights, duties, powers and privileges
of, the Servicer in accordance with the terms of this Agreement.
(e) Except for actions expressly authorized by this Agreement,
the Trustee shall take no action reasonably likely to impair the interests
of the Trust in any Receivable now existing or hereafter created or to
impair the value of any Receivable now existing or hereafter created.
(f) Except as provided in this subsection 11.1(f), the Trustee
shall have no power to vary the corpus of the Trust including, without
limitation, the power to (i) accept any substitute obligation for a
Receivable initially assigned to the Trust under Section 2.1 or 2.6 hereof,
(ii) add any other investment, obligation or security to the Trust, except
for an addition permitted under Section 2.6 or (iii) withdraw from the
Trust any Receivables, except for a withdrawal permitted under Sections
2.7, 9.2, 10.2, 12.1 or 12.2 or subsections 2.4(d), 2.4(e) or Article IV.
(g) Subject to subsection 11.1(d) above, in the event that the
Paying Agent or the Transfer Agent and Registrar (if other than the
Trustee) shall fail to perform any obligation, duty or agreement in the
manner or on the day required to be performed by the Paying Agent or the
Transfer Agent and Registrar, as the case may be, under this Agreement, the
Trustee shall be obligated promptly to perform such obligation, duty or
agreement in the manner so required.
(h) If the Transferor has agreed to transfer any of its credit
card receivables (other than the Receivables) to another Person, upon the
written request of the Transferor, the Trustee will enter into such
intercreditor agreements with the transferee of such receivables as are
customary and necessary to identify separately the rights, if any, of the
Trust and such other Person in the Transferor's credit card receivables;
provided, however, that the Trust shall not be required to enter into any
intercreditor agreement which could adversely affect the interests of the
Certificateholders and, upon the request of the Trustee, the Transferor
will deliver an Opinion of Counsel on any matters relating to such
intercreditor agreement, reasonably requested by the Trustee.
Section 11.2 Certain Matters Affecting the Trustee. Except as
otherwise provided in Section 11.1:
(a) the Trustee may rely on and shall be protected in acting
on, or in refraining from acting in accord with, any assignment of
Receivables in Additional Accounts, the initial report, the monthly
Servicer's certificate, the annual Servicer's certificate, the monthly
payment instructions and notification to the Trustee, the monthly
Certificateholder's statement, any resolution, Officer's Certificate,
certificate of auditors or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, appraisal, bond or other
paper or document believed by it to be genuine and to have been signed or
presented to it pursuant to this Agreement by the proper party or parties;
(b) the Trustee may consult with counsel of its selection, and
any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or suffered or omitted by it
hereunder in good faith and in accordance with such Opinion of Counsel;
(c) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Agreement or any Credit
Enhancement, or to institute, conduct or defend any litigation hereunder or
in relation hereto, at the request, order or direction of any of the
Certificateholders or any Credit Enhancement Provider, pursuant to the
provisions of this Agreement, unless such Certificateholders or Credit
Enhancement Provider shall have offered to the Trustee reasonable security
or indemnity against the costs, expenses and liabilities, which may be
incurred therein or thereby; nothing contained herein shall, however,
relieve the Trustee of the obligations, upon the occurrence of any Servicer
Default (which has not been cured), to exercise such of the rights and
powers vested in it by this Agreement and any Credit Enhancement, and to
use the same degree of care and skill in its exercise as a prudent person
would exercise or use under the circumstances in the conduct of his own
affairs;
(d) the Trustee shall not be personally liable for any action
taken, suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon it
by this Agreement;
(e) the Trustee shall not be bound to make any investigation
into the facts of matters stated in any assignment of Receivables in
Additional Accounts, the initial report, the monthly Servicer's
certificate, the annual Servicer's certificate, the monthly payment
instructions and notification to the Trustee, the monthly
Certificateholder's statement, any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond or other paper or document, unless requested in writing so to do by
Holders of Investor Certificates evidencing Undivided Interests aggregating
more than 50% of the Investor Interest of any Series;
(f) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys or a custodian, and the Trustee shall not be
responsible for any misconduct or negligence on the part of any such agent,
attorney or custodian appointed with due care by it hereunder; and
(g) except as may be required by subsection 11.1(a), the
Trustee shall not be required to make any initial or periodic examination
of any documents or records related to the Receivables or the Accounts for
the purpose of establishing the presence or absence of defects, the
compliance by the Transferor with its representations and warranties or for
any other purpose.
Section 11.3 Trustee Not Liable for Recitals in Certificates.
The Trustee assumes no responsibility for the correctness of the recitals
contained in this Agreement and in the Certificates (other than the
certificate of authentication on the Certificates). Except as set forth in
Section 11.15, the Trustee makes no representations as to the validity or
sufficiency of this Agreement or of the Certificates (other than the
certificate of authentication on the Certificates) or of any Receivable or
related document. The Trustee shall not be accountable for the use or
application by the Transferor of any of the Certificates or of the proceeds
of such Certificates, or for the use or application of any funds paid to
the Transferor or to the holder of the Transferor Certificate in respect of
the Receivables or deposited in or withdrawn from the Collection Account,
the Principal Account or the Finance Charge Account, or any Series Account
by the Servicer.
Section 11.4 Trustee May Own Certificates. The Trustee in its
individual or any other capacity may become the owner or pledgee of
Investor Certificates with the same rights as it would have if it were not
the Trustee.
Section 11.5 The Servicer to Pay Trustee's Fees and Expenses.
The Servicer covenants and agrees to pay to the Trustee from time to time,
and the Trustee shall be entitled to receive, reasonable compensation
(which shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust) for all services rendered by
it in the execution of the Trust hereby created and in the exercise and
performance of any of the powers and duties hereunder of the Trustee, and,
subject to Section 8.4, the Servicer will pay or reimburse the Trustee
(without reimbursement from any Investor Account, any Series Account or
otherwise) upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any of the
provisions of this Agreement except any such expense, disbursement or
advance as may arise from its own negligence or bad faith and except as
provided in the following sentence. If the Trustee is appointed Successor
Servicer pursuant to Section 10.2, the provisions of this Section 11.5
shall not apply to expenses, disbursements and advances made or incurred by
the Trustee in its capacity as Successor Servicer.
The obligations of the Servicer under this Section 11.5 shall
survive the termination of the Trust and the resignation or removal of the
Trustee.
Section 11.6 Eligibility Requirements for Trustee. The Trustee
hereunder shall at all times be a corporation organized and doing business
under the laws of the United States of America or any state thereof
authorized under such laws to exercise corporate trust powers, having a
long-term unsecured debt rating of at least Baa3 by Moody's and BBB by
Standard & Poor's having, in the case of an entity that is subject to
risk-based capital adequacy requirements, risk-based capital of at least
$50,000,000 or, in the case of an entity that is not subject to risk-based
capital adequacy requirements, having a combined capital and surplus of at
least $50,000,000 and subject to supervision or examination by federal or
state authority. If such corporation publishes reports of condition at
least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purpose of this Section
11.6, the combined capital and surplus of such corporation shall be deemed
to be its combined capital and surplus as set forth in its most recent
report of condition so published. In case at any time the Trustee shall
cease to be eligible in accordance with the provisions of this Section
11.6, the Trustee shall resign immediately in the manner and with the
effect specified in Section 11.7.
Section 11.7 Resignation or Removal of Trustee.
(a) The Trustee may at any time resign and be discharged from
the Trust hereby created by giving written notice thereof to the Servicer.
Upon receiving such notice of resignation, the Servicer shall promptly
appoint a successor trustee by written instrument, in duplicate, one copy
of which instrument shall be delivered to the resigning Trustee and one
copy to the successor trustee. If no successor trustee shall have been so
appointed and have accepted within 30 days after the giving of such notice
of resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee.
(b) If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 11.6 hereof and shall fail to
resign after written request therefor by the Transferor, or if at any time
the Trustee shall be legally unable to act, or shall be adjudged a bankrupt
or insolvent, or a receiver of the Trustee or of its property shall be
appointed, or any public officer shall take charge or control of the
Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then the Transferor may, but shall not be
required to, remove the Trustee and promptly appoint a successor trustee by
written instrument, in duplicate, one copy of which instrument shall be
delivered to the Trustee so removed and one copy to the successor trustee.
(c) Any resignation or removal of the Trustee and appointment
of a successor trustee pursuant to any of the provisions of this Section
11.7 shall not become effective until acceptance of appointment by the
successor trustee as provided in Section 11.8 hereof and any liability of
the Trustee arising hereunder shall survive such appointment of a successor
trustee.
Section 11.8 Successor Trustee.
(a) Any successor trustee appointed as provided in Section 11.7
hereof shall execute, acknowledge and deliver to the Transferor and to its
predecessor Trustee an instrument accepting such appointment hereunder, and
thereupon the resignation or removal of the predecessor Trustee shall
become effective and such successor trustee, without any further act, deed
or conveyance, shall become fully vested with all the rights, powers,
duties and obligations of its predecessor hereunder, with the like effect
as if originally named as Trustee herein. The predecessor Trustee shall
deliver to the successor trustee all documents and statements held by it
hereunder, and the Transferor and the predecessor Trustee shall execute and
deliver such instruments and do such other things as may reasonably be
required for fully and certainly vesting and confirming in the successor
trustee all such rights, powers, duties and obligations.
(b) No successor trustee shall accept appointment as provided
in this Section 11.8 unless at the time of such acceptance such successor
trustee shall be eligible under the provisions of Section 11.6 hereof and
shall be an Eligible Servicer, and, if Standard & Poor's is then a Rating
Agency, unless Standard & Poor's shall have consented to such appointment.
(c) Upon acceptance of appointment by a successor trustee as
provided in this Section 11.8, such successor trustee shall mail notice of
such succession hereunder to all Certificateholders at their addresses as
shown in the Certificate Register.
Section 11.9 Merger or Consolidation of Trustee. Any Person
into which the Trustee may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any Person
succeeding to the corporate trust business of the Trustee, shall be the
successor of the Trustee hereunder, provided such corporation shall be
eligible under the provisions of section 11.6 hereof, without the execution
or filing of any paper or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding.
Section 11.10 Appointment of Co-Trustee or Separate Trustee.
(a) Notwithstanding any other provisions of this Agreement, at
any time, for the purpose of meeting any legal requirements of any
jurisdiction in which any part of the Trust may at the time be located, the
Trustee shall have the power and may execute and deliver all instruments to
appoint one or more Persons to act as a co-trustee or co-trustees, or
separate trustee or separate trustees, of all or any part of the Trust, and
to vest in such Person or Persons, in such capacity and for the benefit of
the Certificateholders, such title to the trust, or any part thereof, and,
subject to the other provisions of this Section 11.10, such powers, duties,
obligations, rights and trusts as the Trustee may consider necessary or
desirable. No co-trustee or separate trustee hereunder shall be required to
meet the terms of eligibility as a successor trustee under Section 11.6 and
no notice to Certificateholders of the appointment of any co-trustee or
separate trustee shall be required under Section 11.8 hereof.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions
and conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Trustee
joining in such act), except to the extent that under any laws of any
jurisdiction in which any particular act or acts are to be performed
(whether as Trustee hereunder or as successor to the Servicer
hereunder), the Trustee shall be incompetent or unqualified to
perform such act or acts, in which event such rights, powers, duties
and obligations (including the holding of title to the Trust or any
portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but solely
at the direction of the Trustee;
(ii) no trustee hereunder shall be personally liable by reason
of any act or omission of any other trustee hereunder; and
(iii) the Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the then separate trustees
and co-trustees, as effectively as if given to each of them. Every
instrument appointing any separate trustee or co-trustee shall refer to
this Agreement and the conditions of this Article XI. Each separate trustee
and co-trustee, upon its acceptance of the trusts conferred, shall be
vested with the estates or property specified in its instrument of
appointment, either jointly with the Trustee or separately, as may be
provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the
conduct of, affecting the liability of, or affording protection to, the
Trustee. Every such instrument shall be filed with the Trustee and a copy
thereof given to the Servicer.
(d) Any separate trustee or co-trustee may at any time
constitute the Trustee as its agent or attorney-in-fact with full power and
authority, to the extent not prohibited by law, to do any lawful act under
or in respect to this Agreement on its behalf and in its name. If any
separate trustee or co-trustee shall die, become incapable of acting,
resign or be removed, all of its estates, properties, rights, remedies and
trusts shall vest in and be exercised by the Trustee, to the extent
permitted by law, without the appointment of a new or successor trustee.
Section 11.11 Tax Returns. In the event the Trust shall be
required to file tax returns, the Trustee, as soon as practicable after it
is made aware of such requirement, shall prepare or cause to be prepared
any tax returns required to be filed by the Trust and, to the extent
possible, shall file such returns at least five days before such returns
are due to be filed. The Trustee is hereby authorized to sign any such
return on behalf of the Trust. The Servicer shall prepare or shall cause to
be prepared all tax information required by law to be distributed to
Certificateholders and shall deliver such information to the Trustee at
least five days prior to the date it is required by law to be distributed
to Certificateholders. The Servicer, upon request, will furnish the Trustee
with all such information known to the Servicer as may be reasonably
required in connection with the preparation of all tax returns of the
Trust. In no event shall the Trustee or the Servicer be liable for any
liabilities, costs or expenses of the Trust, the Investor
Certificateholders or the Certificate Owners arising under any tax law,
including without limitation federal, state, local or foreign income or
excise taxes or any other tax imposed on or measured by income (or any
interest or penalty with respect thereto or arising from a failure to
comply therewith).
Section 11.12 Trustee May Enforce Claims without Possession of
Certificates. All rights of action and claims under this Agreement or any
Series of Certificates may be prosecuted and enforced by the Trustee
without the possession of any of the Certificates or the production thereof
in any proceeding relating thereto, and any such proceeding instituted by
the Trustee shall be brought in its own name as trustee. Any recovery of
judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel, be for the ratable benefit of any Series of
Certificateholders in respect of which such judgment has been obtained.
Section 11.13 Suits for Enforcement. If a Servicer Default shall
occur and be continuing, the Trustee, in its discretion may, subject to the
provisions of Section 10.1 and 11.14, proceed to protect and enforce its
rights and the rights of any Series of Certificateholders under this
Agreement by a suit, action or proceeding in equity or at law or otherwise,
whether for the specific performance of any covenant or agreement contained
in this Agreement or in aid of the execution of any power granted in this
Agreement or for the enforcement cement of any other legal, equitable or
other remedy as the Trustee, being advised by counsel, shall deem most
effectual to protect and enforce any of the rights of the Trustee or any
Series of Certificateholders.
Section 11.14 Rights of Certificateholders to Direct Trustee.
Holders of Investor Certificates evidencing Undivided Interests aggregating
more than 50% of the Aggregate Investor Interest (or, with respect to any
remedy, trust or power that does not relate to all Series, 50% of the
Aggregate Investor Interest of the Investor Certificates of all Series to
which such remedy, trust or power relates) shall have the right to direct
the time, method, and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred on the
Trustee; provided, however, that, subject to Section 11.1, the Trustee
shall have the right to decline to follow any such direction if the Trustee
being advised by counsel determines that the action so directed may not
lawfully be taken, or if the Trustee in good faith shall, by a Responsible
Officer or Responsible Officers of the Trustee, determine that the
proceedings so directed would be illegal or involve it in personal
liability or be unduly prejudicial to the rights of Certificateholders not
parties to such direction; and provided further that nothing in this
Agreement shall impair the right of the Trustee to take any action deemed
proper by the Trustee and which is not inconsistent with such direction of
such Holders of Investor Certificates.
Section 11.15 Representations and Warranties of Trustee. The
Trustee represents and warrants that:
(i) the Trustee is a banking corporation organized, existing
and authorized to engage in the business of banking under the laws of
the State of Delaware;
(ii) the Trustee has full power, authority and right to
execute, deliver and perform this Agreement, and has taken all
necessary action to authorize the execution, delivery and performance
by it of this Agreement; and
(iii) this Agreement has been duly executed and delivered by
the Trustee.
Section 11.16 Maintenance of Office or Agency. The Trustee will
maintain at its expense in the Borough of Manhattan, the City of New York
an office or offices, or agency or agencies, where notices and demands to
or upon the Trustee in respect of the Certificates and this Agreement may
be served. The Trustee initially appoints The Bank of New York, 101 Barclay
Street, New York, New York 10286, as its office for such purposes in New
York. The Trustee will give prompt written notice to the Servicer and to
Certificateholders (or in the case of Holders of Bearer Certificates, in
the manner provided for in the related Supplement) of any change in the
location of the Certificate Register or any such office or agency.
[End of Article XI]
ARTICLE XII
TERMINATION
Section 12.1 Termination of Trust.
(a) The respective obligations and responsibilities of the
Transferor, the Servicer and the Trustee created hereby (other than the
obligation of the Trustee to make payments to Certificateholders as
hereafter set forth) shall terminate, except with respect to the duties
described in Section 8.4, Section 11.5 and subsections 2.4(c) and 12.3(b),
on the Trust Termination Date; provided, however, that the Trust shall not
terminate on the date specified in clause (i) of the definition of "Trust
Termination Date" if each of the Servicer and the Holder of the Transferor
Certificate notify the Trustee in writing, not later than five Business
Days preceding such date, that they desire that the Trust not terminate on
such date, which notice (such notice, a "Trust Extension") shall specify
the date on which the Trust shall terminate (such date, the "Extended Trust
Termination Date"); provided, however, that the Extended Trust Termination
Date shall be not later than October 26, 2045. The Servicer and the Holder
of the Transferor Certificate may, on any date following the Trust
Extension, so long as no Series of Certificates is outstanding, deliver a
notice in writing to the Trustee changing the Extended Trust Termination
Date.
(b) All principal and interest with respect to any Series of
Investor Certificates shall be due and payable no later than the Series
Termination Date with respect to such Series. Unless otherwise provided in
a Supplement, in the event that the Investor Interest of any Series of
Certificates is greater than zero on its Series Termination Date (after
giving effect to all transfers, withdrawals, deposits and drawings to occur
on such date and the payment of principal to be made on such Series on such
date), the Trustee will sell or cause to be sold, and pay the proceeds
first, to all Certificateholders of such Series in accordance with the
priority for each Class within such Series as provided in the related
Supplement, in final payment of all principal of and accrued interest on
such Series of Certificates, and second, as provided in the related
Supplement, an amount of Principal Receivables and the related Finance
Charge Receivables (or interests therein) up to 110% of the sum of the
Investor Interest of such Series plus the Enhancement Invested Amount or
the Collateral Interest (if not included in the Investor Interest) of such
Series, if any, at the close of business on such date (but not more than an
amount of Principal Receivables and the related Finance Charge Receivables
equal to the sum of (1) the product of (A) the Transferor Amount divided by
the aggregate amount of Principal Receivables, (B) the aggregate amount of
Principal Receivables in the Trust and (C) a fraction the numerator of
which is the applicable Investor Percentage with respect to Finance Charge
Receivables and the denominator of which is the sum of all Investor
Percentages with respect to Finance Charge Receivables of all Series and
(2) the Investor Interest of such Series plus the Enhancement Invested
Amount or the Collateral Interest (if not included in the Investor
Interest) of such Series). The Trustee shall notify each Credit Enhancement
Provider of the proposed sale of such Receivables and shall provide each
Credit Enhancement Provider an opportunity to bid on such Receivables. The
Transferor shall be permitted to purchase such Receivables in such case and
shall have a right of first refusal with respect thereto. Any proceeds of
such sale in excess of such principal and interest paid and such other
amounts paid pursuant to the related Supplement shall be paid to the Holder
of the Transferor Certificate. Upon such Series Termination Date with
respect to the applicable Series of Certificates, final payment of all
amounts allocable to any Investor Certificates of such Series shall be made
in the manner provided in Section 12.3.
Section 12.2 Optional Purchase. (a) If so provided in any
Supplement, the Transferor may, but shall not be obligated to, cause a
final distribution to be made in respect of the related Series of
Certificates on a Distribution Date specified in such Supplement by
depositing into the Distribution Account or the applicable Series Account,
not later than the Transfer Date preceding such Distribution Date, for
application in accordance with Section 12.3, the amount specified in such
Supplement; provided, however that if the short-term deposits or long-term
unsecured debt obligations of the Transferor (or, if neither such deposits
nor such obligations of the Transferor are rated by Moody's, then the
short-term deposits or long-term unsecured debt obligations of the holding
company of the Transferor so long as such holding company is Wachovia
Corporation) are not rated at the time of such purchase of Receivables at
least P-3 or Baa3, respectively, by Moody's, no such event shall occur
unless the Transferor shall deliver an Opinion of Counsel reasonably
acceptable to the Trustee that such deposit into the Distribution Account
or any Series Account as provided in the related Supplement would not
constitute a fraudulent conveyance of the Transferor.
(b) The amount deposited pursuant to subsection 12.2(a) shall
be paid to the Investor Certificateholders of the related Series pursuant
to Section 12.3 on the related Distribution Date following the date of such
deposit. All Certificates of a Series which are purchased by the Transferor
pursuant to subsection 12.2(a) shall be delivered by the Transferor upon
such purchase to, and be canceled by, the Transfer Agent and Registrar and
be disposed of in a manner satisfactory to the Trustee and the Transferor.
The Investor Interest of each Series which is purchased by the Transferor
pursuant to subsection 12.2(a) shall, for the purposes of the definition of
"Transferor Amount," be deemed to be equal to zero on the Distribution Date
following the making of the deposit, and the Transferor Amount shall
thereupon be deemed to have been increased by the Investor Interest of such
Series.
Section 12.3 Final Payment with Respect to any Series.
(a) Written notice of any termination, specifying the
Distribution Date upon which the Investor Certificateholders of any Series
may surrender their Certificates for payment of the final distribution with
respect to such Series and cancellation, shall be given (subject to at
least two Business Days' prior notice from the Servicer to the Trustee) by
the Trustee to Investor Certificateholders of such Series mailed not later
than the fifth day of the month of such final distribution (or in the
manner provided by the Supplement relating to such Series) specifying (i)
the Distribution Date (which shall be the Distribution Date in the month
(x) in which the deposit is made pursuant to subsection 2.4(e), 9.2(b),
10.2(a), or subsection 12.2(a) of the Agreement or such other section as
may be specified in the related Supplement, or (y) in which the related
Series Termination Date occurs) upon which final payment of such Investor
Certificates will be made upon presentation and surrender of such Investor
Certificates at the office or offices therein designated (which, in the
case of Bearer Certificates, shall be outside the United States), (ii) the
amount of any such final payment and (iii) that the Record Date otherwise
applicable to such Distribution Date is not applicable, payments being made
only upon presentation and surrender of the Investor Certificates at the
office or offices therein specified. The Servicer's notice to the Trustee
in accordance with the preceding sentence shall be accompanied by an
Officer's Certificate setting forth the information specified in Article V
of this Agreement covering the period during the then current calendar year
through the date of such notice and setting forth the date of such final
distribution. The Trustee shall give such notice to the Transfer Agent and
Registrar and the Paying Agent at the time such notice is given to such
Investor Certificateholders.
(b) Notwithstanding the termination of the Trust pursuant to
subsection 12.1(a) or the occurrence of the Series Termination Date with
respect to any Series, all funds then on deposit in the Finance Charge
Account, the Principal Account, the Distribution Account or any Series
Account applicable to the related Series shall continue to be held in trust
for the benefit of the Certificateholders of the related Series and the
Paying Agent or the Trustee shall pay such funds to the Certificateholders
of the related Series upon surrender of their Certificates (which
surrenders and payments, in the case of Bearer Certificates, shall be made
only outside the United States). In the event that all of the Investor
Certificateholders of any Series shall not surrender their Certificates for
cancellation within six months after the date specified in the
above-mentioned written notice, the Trustee shall give a second written
notice (or, in the case of Bearer Certificates, publication notice) to the
remaining Investor Certificateholders of such Series upon receipt of the
appropriate records from the Transfer Agent and Registrar to surrender
their Certificates for cancellation and receive the final distribution with
respect thereto. If within one and one-half years after the second notice
with respect to a Series, all the Investor Certificates of such Series
shall not have been surrendered for cancellation, the Trustee may take
appropriate steps or may appoint an agent to take appropriate steps, to
contact the remaining Investor Certificateholders of such Series concerning
surrender of their Certificates, and the cost thereof shall be paid out of
the funds in the Distribution Account or any Series Account held for the
benefit of such Investor Certificateholders. The Trustee and the Paying
Agent shall pay to the Transferor upon request any monies held by them for
the payment of principal or interest which remains unclaimed for two years.
After such payment to the Transferor, Investor Certificateholders entitled
to any of such monies must look to the Transferor for payment as general
creditors unless an applicable abandoned property law designates another
Person.
(c) All Certificates surrendered for payment of the final
distribution with respect to such Certificates and cancellation shall be
canceled by the Transfer Agent and Registrar and be disposed of in a manner
satisfactory to the Trustee and the Transferor.
Section 12.4 Termination Rights of Holder of Transferor
Certificate. Upon the termination of the Trust pursuant to Section 12.1,
and after payment of all amounts due hereunder on or prior to such
termination and the surrender of the Transferor Certificate, the Trustee
shall execute a written reconveyance substantially in the form of Exhibit H
pursuant to which it shall reconvey to the Holder of the Transferor
Certificate (without recourse, representation or warranty) all right, title
and interest of the Trust in the Receivables, whether then existing or
thereafter created, all moneys due or to become due with respect to such
Receivables (including all accrued interest theretofore posted as Finance
Charge Receivables) and all proceeds of such Receivables and Insurance
Proceeds relating to such Receivables and Interchange (if any) allocable to
the Trust pursuant to any Supplement, except for amounts held by the
Trustee pursuant to subsection 12.3(b). The Trustee shall execute and
deliver such instruments of transfer and assignment, in each case without
recourse, as shall be reasonably requested by the Holder of the Transferor
Certificate to vest in such Holder all right, title and interest which the
Trust had in the Receivables.
Section 12.5 Defeasance.
Notwithstanding anything to the contrary in this Agreement or
any Supplement:
(a) The Transferor may at its option be discharged from its
obligations with respect to all of the Investor Certificates issued by the
Trust or any specified Series thereof on the date the applicable conditions
set forth in Section 12.5(c) are satisfied ("Defeasance"); provided,
however, that the following rights, obligations, powers, duties and
immunities shall survive until otherwise terminated or discharged
hereunder: (A) the rights of Holders of Investor Certificates of the Trust
or any specified Series thereof to receive, solely from the trust fund
provided for in Section 12.5(c), payments in respect of principal of and
interest on such Investor Certificates when such payments are due; (B) the
Transferor's obligations with respect to such Series of Certificates under
Sections 6.3, 6.4 and 12.3; (C) the rights, powers, trusts, duties and
immunities of the Trustee, the Paying Agent and the Transfer Agent and
Registrar hereunder; and (D) this Section 12.5.
(b) Subject to section 12.5(c), the Transferor at its option
may use Collections to purchase Permitted Investments rather than
additional Receivables for transfer to the Trust until such time as no
Receivables remain in the Trust.
(c) The following shall be the conditions to Defeasance under
Section 12.5(a): (1) the Transferor irrevocably shall have deposited or
caused to be deposited with the Trustee, under the terms of an irrevocable
trust agreement in form and substance satisfactory to the Trustee, as trust
funds in trust for making the payments described below (A) Dollars in an
amount, or (B) Permitted Investments which through the scheduled payment or
principal and interest in respect thereof will provide, not later than the
due date of payment thereon, money in an amount, or (C) a combination
thereof, in each case sufficient to pay and discharge, and, which shall be
applied by the Trustee to pay and discharge, all remaining scheduled
interest and principal payments on all outstanding Investor Certificates of
the Trust or any specified Series thereof on the dates scheduled for such
payments in this Agreement and the applicable Supplements and all amounts
owed to the Credit Enhancement Provider for any Series if so provided in
the related Supplements or agreements with such Credit Enhancement
Provider; (2) prior to its first exercise of its right to substitute money
or Permitted Investments for Receivables, the Transferor shall deliver to
the Trustee (x) an Opinion of Counsel to the effect that such deposit and
termination of obligations will not result in the Trust being required to
register as an "investment company" within the meaning of the Investment
Company Act and (y) a Tax Opinion with respect to such deposit and
termination; and (3) such deposit and termination of obligations will not
result in a Pay Out Event for any Series.
[End Of Article XII]
ARTICLE XIII
MISCELLANEOUS PROVISIONS
Section 13.1 Amendment.
(a) This Agreement or any Supplement may be amended in writing
from time to time by the Servicer, the Transferor and the Trustee,
including for the purpose of enabling the Trust or a portion thereof to
elect to qualify as a financial asset securitization investment trust (or
comparable tax entity for the securitization of financial assets) in
accordance with the Internal Revenue Code, without the consent of any of
Certificateholders; provided, however, that (i) such action shall not, in
the reasonable belief of the Transferor, as evidenced by an Officer's
Certificate, adversely affect in any material respect the interests of any
Investor Certificateholders; (ii) the Transferor shall have delivered a Tax
Opinion to the Trustee and (iii) each Rating Agency shall have notified the
Transferor, the Servicer and the Trustee in writing (which writing need
only be addressed to any one of the Transferor, the Servicer or the
Trustee) that such action will not result in a reduction or withdrawal of
the rating of any outstanding Series or Class to which it is a Rating
Agency.
(b) This Agreement or any Supplement may also be amended in
writing from time to time by the Servicer, the Transferor and the Trustee
with the consent of the Holders of Investor Certificates evidencing
Undivided Interests aggregating not less than 66-2/3% of the Investor
Interest of each outstanding Series adversely affected by such amendment
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement or any Supplement or
modifying in any manner the rights of Investor Certificateholders of any
Series then issued and outstanding; provided, however, that no such
amendment shall (i) reduce in any manner the amount of, or delay the timing
of, distributions which are required to be made on any Investor
Certificates of such Series without the consent of each Investor
Certificateholder of such Series, (ii) change the definition of or the
manner of calculating the Investor Interest, the Investor Percentage or the
Investor Default Amount of such Series without the consent of each Investor
Certificateholder of such Series or (iii) reduce the aforesaid percentage
required to consent to any such amendment, without the consent of each
Investor Certificateholder of all Series adversely affected. The Trustee
may, but shall not be obligated to, enter into any such amendment which
affects the Trustee's rights, duties or immunities under this Agreement or
otherwise.
(c) Notwithstanding anything in this Section 13.1 to the
contrary, a Supplement with respect to any Series may be amended on the
terms in accordance with the procedures provided in such Supplement.
(d) Promptly after the execution of any such amendment, the
Trustee shall furnish notification of the substance of such amendment to
each Investor Certificateholder of each Series affected and to each Rating
Agency providing a rating for such Series.
(e) It shall not be necessary for the consent of Investor
Certificateholders under this Section 13.1 to approve the particular form
of any proposed amendment, but it shall be sufficient if such consent shall
approve the substance thereof. The manner of obtaining such consents and of
evidencing the authorization of the execution thereof by Investor
Certificateholders shall be subject to such reasonable requirements as the
Trustee may prescribe.
(f) Any Series Supplement executed and delivered pursuant to
Section 6.9 and any amendments regarding the addition to or removal of
Receivables or Participations from the Trust as provided in Sections 2.6
and 2.7, executed in accordance with the provisions hereof, shall not be
considered amendments to this Agreement for the purpose of subsections
13.1(a) and (b).
(g) In connection with any amendment, the Trustee may request
an Opinion of Counsel from the Transferor or Servicer to the effect that
the amendment complies with all requirements of this Agreement.
Section 13.2 Protection of Right, Title and Interest to Trust.
(a) The Servicer shall cause this Agreement, all amendments
hereto and/or all financing statements and continuation statements and any
other necessary documents covering the Certificateholders and the Trustee's
right, title and interest to the Trust to be promptly recorded, registered
and filed, and at all times to be kept recorded, registered and filed, all
in such manner and in such places as may be required by law fully to
preserve and protect the right, title and interest of the
Certificateholders or the Trustee, as the case may be, hereunder to all
property comprising the Trust. The Servicer shall deliver to the Trustee
file-stamped copies of, or filing receipts for, any document recorded,
registered or filed as provided above, as soon as available following such
recordings registration or filing. The Transferor shall cooperate fully
with the Servicer in connection with the obligations set forth above and
will execute any and all documents reasonably required to fulfill the
intent of this subsection 13.2(a).
(b) Within 30 days after the Transferor makes any change in its
name, identity or corporate structure which would make any financing
statement or continuation statement filed in accordance with paragraph (a)
above seriously misleading within the meaning of Section 9-402(7) of the
UCC as in effect in the State of Delaware, the Transferor shall give the
Trustee notice of any such change and shall file such financing statements
or amendments as may be necessary to continue the perfection of the Trust's
security interest in the Receivables and the proceeds thereof.
(c) Each of the Transferor and the Servicer will give the
Trustee prompt written notice of any relocation of any office from which it
services Receivables or keeps records concerning the Receivables or of its
principal executive office and whether, as a result of such relocation, the
applicable provisions of the UCC would require the filing of any amendment
of any previously filed financing or continuation statement or of any new
financing statement and shall file such financing statements or amendments
as may be necessary to continue the perfection of the Trust's security
interest in the Receivables and the proceeds thereof. Each of the
Transferor and the Servicer will at all times maintain each office from
which it services Receivables and its principal executive office within the
United States of America.
(d) The Servicer will deliver to the Trustee on or before
November 30 of each year, beginning with November 30, 1996, an Opinion of
Counsel, substantially
in the form of Exhibit F.
Section 13.3 Limitation on Rights of Certificateholders.
(a) The death or incapacity of any Certificateholder shall not
operate to terminate this Agreement or the Trust, nor shall such death or
incapacity entitle such Certificateholder's legal representatives or heirs
to claim an accounting or to take any action or commence any proceeding in
any court for a partition or winding up of the Trust, nor otherwise affect
the rights, obligations and liabilities of the parties hereto or any of
them.
(b) No Certificateholder shall have any right to vote (except
with respect to the Investor Certificateholders as provided in Section 13.1
hereof) or in any manner otherwise control the operation and management of
the Trust, or the obligations of the parties hereto, nor shall anything
herein set forth, or contained in the terms of the Certificates, be
construed so as to constitute the Certificateholders from time to time as
partners or members of an association; nor shall any Certificateholder be
under any liability to any third person by reason of any action taken by
the parties to this Agreement pursuant to any provision hereof.
(c) No Certificateholder shall have any right by virtue of any
provisions of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless
such Certificateholder previously shall have given written notice to the
Trustee, and unless the Holders of Certificates evidencing Undivided
Interests aggregating more than 50% of the Investor Interest of any Series
which may be adversely affected but for the institution of such suit,
action or proceeding, shall have made written request upon the Trustee to
institute such action, suit or proceeding in its own name as Trustee
hereunder and shall have offered to the Trustee such reasonable indemnity
as it may require against the costs, expenses and liabilities to be
incurred therein or thereby, and the Trustee, for 60 days after its receipt
of such notice, request and offer of indemnity, shall have neglected or
refused to institute any such action, suit or proceeding; it being
understood and intended, and being expressly covenanted by each
Certificateholder with every other Certificateholder and the Trustee, that
no one or more Certificateholders shall have the right in any manner
whatever by virtue or by availing itself or themselves of any provisions of
this Agreement to affect, disturb or prejudice the rights of the
Certificateholders of any other of the Certificates, or to obtain or seek
to obtain priority over or preference to any other such Certificateholder,
or to enforce any right under this Agreement, except in the manner herein
provided and for the equal, ratable and common benefit of all
Certificateholders. For the protection and enforcement of the provisions of
this Section 13.3, each and every Certificateholder and the Trustee shall
be entitled to such relief as can be given either at law or in equity.
Section 13.4 Governing Law. This Agreement shall be construed
in accordance with the laws of the State of Delaware without reference to
its conflict of law provisions, and the obligations, rights and remedies of
the parties hereunder shall be determined in accordance with such laws.
Section 13.5 Notices. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given
if personally delivered at, sent by facsimile to, sent by courier at or
mailed by registered mail, return receipt requested, to (a) in the case of
the Transferor and the Servicer, to The First National Bank of Atlanta, 77
Read's Way, New Castle Corporate Commons, New Castle, Delaware 19720,
Attention: Center Manager, with a copy to Wachovia Bank of North Carolina,
100 North Main Street, Winston-Salem, North Carolina 27150, Attention:
Legal Department, (b) in the case of the Trustee, to the Corporate Trust
Office, with a copy to The Bank of New York, 101 Barclay Street, New York,
New York 10286, Attention: Corporate Trust Asset Backed Unit, (c) in the
case of the Credit Enhancement Provider for a particular Series, the
address, if any, specified in the Supplement relating to such Series and
(d) in the case of the Rating Agency for a particular Series, the address,
if any, specified in the Supplement relating to such Series; or, as to each
party, at such other address as shall be designated by such party in a
written notice to each other party. Unless otherwise provided with respect
to any Series in the related Supplement any notice required or permitted to
be mailed to a certificateholder shall be given by first class mail,
postage prepaid, at the address of such Certificateholder as shown in the
Certificate Register, or with respect to any notice required or permitted
to be made to the Holders of Bearer Certificates, by publication in the
manner provided in the related Supplement. If and so long as any Series or
Class is listed on the Luxembourg Stock Exchange and such Exchange shall so
require, any Notice to Investor Certificateholders shall be published in an
authorized newspaper of general circulation in Luxembourg within the time
period prescribed in this Agreement. Any notice so mailed within the time
prescribed in this Agreement shall be conclusively presumed to have been
duly given, whether or not the Certificateholder receives such notice.
Section 13.6 Severability of Provisions. If any one or more of
the covenants, agreements, provisions or terms of this Agreement shall for
any reason whatsoever be held invalid, then such covenants, agreements,
provisions or terms shall be deemed severable from the remaining covenants,
agreements, provisions or terms of this Agreement and shall in no way
affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or rights of the Certificateholders
thereof.
Section 13.7 Assignment. Notwithstanding anything to the
contrary contained herein, except as provided in Section 8.2, this
Agreement may not be assigned by the Servicer without the prior consent of
Holders of Investor Certificates evidencing Undivided Interests aggregating
not less than 66 2/3% of the Investor Interest of each Series.
Section 13.8 Certificates Non-Assessable and Fully Paid. It is
the intention of the parties to this Agreement that the Certificateholders
shall not be personally liable for obligations of the Trust, that the
Undivided Interests represented by the Certificates shall be non-assessable
for any losses or expenses of the Trust or for any reason whatsoever, and
that Certificates upon authentication thereof by the Trustee pursuant to
Sections 2.1 and 6.2 are and shall be deemed fully paid.
Section 13.9 Further Assurances. The Transferor and the
Servicer agree to do and perform, from time to time, any and all acts and
to execute any and all further instruments required or reasonably requested
by the Trustee more fully to effect the purposes of this Agreement,
including, without limitation, the execution of any financing statements or
continuation statements relating to the Receivables for filing under the
provisions of the UCC of any applicable jurisdiction.
Section 13.10 No Waiver; Cumulative Remedies. No failure to
exercise and no delay in exercising, on the part of the Trustee, any Credit
Enhancement Provider or the Investor Certificateholders, any right, remedy,
power or privilege hereunder, shall operate as a waiver thereof; nor shall
any single or partial exercise of any right, remedy, power or privilege
hereunder preclude any other or further exercise thereof or the exercise of
any other right, remedy, power or privilege. The rights, remedies, powers
and privileges herein provided are cumulative and not exhaustive of any
rights, remedies, powers and privileges provided by law.
Section 13.11 Counterparts. This Agreement may be executed in
two or more counterparts (and by different parties on separate
counterparts), each of which shall be an original, but all of which
together shall constitute one and the same instrument.
Section 13.12 Third-Party Beneficiaries. This Agreement will
inure to the benefit of and be binding upon the parties hereto, the
Certificateholders and, to the extent provided in the related Supplement,
to the Credit Enhancement Provider named therein, and their respective
successors and permitted assigns. Except as otherwise provided in this
Article XIII and Section 7.4 hereof, no other Person will have any right or
obligation hereunder.
Section 13.13 Actions by Certificateholders.
(a) Wherever in this Agreement a provision is made that an
action may be taken or a notice, demand or instruction given by Investor
Certificateholders, such action, notice or instruction may be taken or
given by any Investor Certificateholder, unless such provision requires a
specific percentage of Investor Certificateholders.
(b) Any request, demand, authorization, direction, notice,
consent, waiver or other act by a Certificateholder shall bind such
Certificateholder and every subsequent holder of such Certificate issued
upon the registration of transfer thereof or in exchange therefor or in
lieu thereof in respect of anything done or omitted to be done by the
Trustee or the Servicer in reliance thereon, whether or not notation of
such action is made upon such Certificate.
Section 13.14 Rule 144A Information. For so long as any of the
Investor Certificates of any Series or any Class are "restricted
securities" within the meaning of Rule 144(a)(3) under the Securities Act,
each of the Transferor, the Servicer, the Trustee and the Credit
Enhancement Provider for such Series agree to cooperate with each other to
provide to any Investor Certificateholders of such Series or Class and to
any prospective purchaser of such Investor Certificates designated by such
an Investor Certificateholder upon the request of such Investor
Certificateholder or prospective purchaser, any information required to be
provided to such holder or prospective purchaser to satisfy the condition
set forth in Rule 144A(d)(4) under the Securities Act.
Section 13.15 Merger and Integration. Except as specifically
stated otherwise herein, this Agreement sets forth the entire understanding
of the parties relating to the subject matter hereof, and all prior
understandings, written or oral, are superseded by this Agreement. This
Agreement may not be modified, amended, waived or supplemented except as
provided herein.
Section 13.16 Headings. The headings herein are for purposes of
reference only and shall not otherwise affect the meaning or interpretation
of any provision hereof.
[End of Article XIII]
IN WITNESS WHEREOF, the Transferor, the Servicer and the
Trustee have caused this Agreement to be duly executed by their respective
officers as of the day and year first above written.
THE FIRST NATIONAL BANK OF ATLANTA
Transferor and Servicer
By:________________________________
Name: Suzanne Bachman
Title: Vice President
THE BANK OF NEW YORK (DELAWARE)
Trustee
By:________________________________
Name:
Title:
Acknowledged and, as to
Section 7.4, Agreed to:
WACHOVIA BANK, N.A.
By:________________________
Name:
Title:
Exhibit 4.2
THE FIRST NATIONAL BANK OF ATLANTA
Transferor and Servicer
and
THE BANK OF NEW YORK (DELAWARE)
Trustee
on behalf of the Certificateholders
SERIES 1999-_ SUPPLEMENT
Dated as of , 1999
to
AMENDED AND RESTATED
POOLING AND SERVICING AGREEMENT
Dated as of June 4, 1999
WACHOVIA CREDIT CARD MASTER TRUST
Series 1999-_
TABLE OF CONTENTS
Page
SECTION 1. DESIGNATION.............................................1
SECTION 2. DEFINITIONS.............................................2
SECTION 3. SERVICING COMPENSATION AND ASSIGNMENT OF INTERCHANGE...21
SECTION 4. REASSIGNMENT AND TRANSFER TERMS........................23
SECTION 5. DELIVERY AND PAYMENT FOR THE INVESTOR CERTIFICATES.....24
SECTION 6. DEPOSITORY; FORM OF DELIVERY OF INVESTOR CERTIFICATES..24
SECTION 7. ARTICLE IV OF AGREEMENT................................24
SECTION 4.4 Rights of Certificateholders....................24
SECTION 4.5 Allocations.....................................25
SECTION 4.6 Determination of Monthly Interest...............29
SECTION 4.7 Determination of Monthly Principal..............30
SECTION 4.8 Coverage of Required Amount.....................31
SECTION 4.9 Monthly Payments................................32
SECTION 4.10 Investor Charge-Offs...........................37
SECTION 4.11 Excess Spread; Shared Excess Finance Charge
Collections..................................39
SECTION 4.12 Reallocated Principal Collections..............41
SECTION 4.13 Shared Principal Collections...................42
SECTION 4.14 Shared Excess Finance Charge Collections.......42
SECTION 4.15 Principal Funding Account......................43
SECTION 4.16 Reserve Account................................44
SECTION 4.17 Determination of LIBOR.........................46
SECTION 4.18 Transferor's or Servicer's Failure to Make a
Deposit or Payment...........................47
SECTION 8. ARTICLE V OF THE AGREEMENT.............................47
SECTION 5.1 Distributions...................................47
SECTION 5.2 Monthly Series 1999-_ Certificateholders'
Statement.....................................48
SECTION 9. SERIES 1999-_ PAY OUT EVENTS...........................51
SECTION 10. SERIES 1999-_ TERMINATION.............................53
SECTION 11. TRANSFERS OF INVESTOR CERTIFICATES....................53
SECTION 12. COUNTERPARTS..........................................54
SECTION 13. GOVERNING LAW.........................................54
SECTION 14. NO PETITION...........................................54
SECTION 15. TAX REPRESENTATION AND COVENANT.......................54
SECTION 16. RIGHTS UPON INSOLVENCY EVENT..........................55
EXHIBITS
EXHIBIT A-1 Form of Class A Certificate
EXHIBIT A-2 Form of Class B Certificate
EXHIBIT B Form of Monthly Payment Instructions and Notification to the
Trustee
EXHIBIT C Form of Monthly Series 1999-_ Certificateholders' Statement
SERIES 1999-_ SUPPLEMENT, dated as of , 1999 (this "Series
Supplement"), between THE FIRST NATIONAL BANK OF ATLANTA, a national
banking association, as Transferor and Servicer, and THE BANK OF NEW YORK
(DELAWARE), as Trustee under the Amended and Restated Pooling and Servicing
Agreement, dated as of June 4, 1999, between The First National Bank of
Atlanta and the Trustee (as amended, modified or supplemented from time to
time, the "Agreement").
Section 6.9 of the Agreement provides, among other things, that
the Transferor and the Trustee may at any time and from time to time enter
into a supplement to the Agreement for the purpose of authorizing the
delivery by the Trustee to the Transferor for the execution and redelivery
to the Trustee for authentication of one or more Series of Certificates.
Pursuant to this Series Supplement, the Transferor and the
Trust shall create a Series of Investor Certificates and shall specify the
Principal Terms thereof.
SECTION 1. Designation. (i) There is hereby created a Series of
Investor Certificates to be issued in two classes pursuant to the Agreement
and this Series Supplement and to be known together as the "Series 1999-_
Certificates." The two classes shall be designated the Class A Floating
Rate Asset Backed Certificates, Series 1999-_ (the "Class A Certificates")
and the Class B Floating Rate Asset Backed Certificates, Series 1999-_ (the
"Class B Certificates"). The Class A Certificates and the Class B
Certificates shall be substantially in the form of Exhibits A-1 and A-2
hereto, respectively. In addition, there is hereby created a third Class of
an uncertificated interest in the Trust which shall be deemed to be an
"Investor Certificate" for all purposes under the Agreement and this Series
Supplement, except as expressly provided herein, and which shall be known
as the Collateral Interest, Series 1999-_ (the "Collateral Interest").
(ii) Series 1999-_ shall be included in Group One (as defined
below). Series 1999-_ shall not be subordinated to any other Series.
(iii) The Collateral Interest Holder, as holder of an "Investor
Certificate" under the Agreement, shall be entitled to the benefits of the
Agreement and this Series Supplement upon payment by the Collateral
Interest Holder of amounts owing on the Closing Date pursuant to the Loan
Agreement. Notwithstanding the foregoing, except as expressly provided
herein, the provisions of Article VI and Article XII of the Agreement
relating to the registration, authentication, delivery, presentation,
cancellation and surrender of Registered Certificates and the Opinion of
Counsel described in Section 6.9(b)(d)(i) shall not be applicable to the
Collateral Interest.
SECTION 2. Definitions.
In the event that any term or provision contained herein shall
conflict with or be inconsistent with any provision contained in the
Agreement, the terms and provisions of this Series Supplement shall govern.
All Article, Section or subsection references herein shall mean Articles,
Sections or subsections of the Agreement, except as otherwise provided
herein. All capitalized terms not otherwise defined herein are defined in
the Agreement. Each capitalized term defined herein shall relate only to
the Investor Certificates and no other Series of Certificates issued by the
Trust.
"Accumulation Period Factor" shall mean, for each Monthly
Period, a fraction, the numerator of which is equal to the sum of the
initial investor interests (or other amounts specified in the applicable
Supplement) of all outstanding Series, and the denominator of which is
equal to the sum of (a) the Initial Investor Interest, (b) the initial
investor interests (or other amounts specified in the applicable
Supplement) of all outstanding Series (other than Series 1999-_) which are
not expected to be in their revolving periods, and (c) the initial investor
interests (or other amounts specified in the applicable Supplement) of all
other outstanding Series which are not allocating Shared Principal
Collections to other Series and are in their revolving periods.
"Accumulation Period Length" shall have the meaning assigned
such term in subsection 4.9(i).
"Accumulation Shortfall" shall initially mean zero and shall
thereafter mean, with respect to any Monthly Period during the Controlled
Accumulation Period, the excess, if any, of the Controlled Deposit Amount
for the previous Monthly Period over the amount deposited into the
Principal Funding Account pursuant to subsection 4.9(e)(i) with respect to
the Class A Certificates for the previous Monthly Period.
"Adjusted Investor Interest" shall mean, with respect to any
date of determination, an amount equal to the sum of (a) the Class A
Adjusted Investor Interest and (b) the Class B Investor Interest and (c)
the Collateral Interest.
"Aggregate Investor Default Amount" shall mean, with respect to
any Monthly Period, the sum of the Investor Default Amounts in respect of
such Monthly Period.
"Available Investor Principal Collections" shall mean with
respect to any Monthly Period, an amount equal to (a) the Investor
Principal Collections for such Monthly Period, minus (b) the amount of
Reallocated Collateral Principal Collections and Reallocated Class B
Principal Collections with respect to such Monthly Period which pursuant to
Section 4.12 are required to fund the Class A Required Amount and the Class
B Required Amount, plus (c) the amount of Shared Principal Collections that
are allocated to Series 1999-_ in accordance with subsection 4.13(b).
"Available Reserve Account Amount" shall mean, with respect to
any Transfer Date, the lesser of (a) the amount on deposit in the Reserve
Account on such date (after taking into account any interest and earnings
retained in the Reserve Account pursuant to subsection 4.16(b) on such
date, but before giving effect to any deposit made or to be made pursuant
to subsection 4.11(i) to the Reserve Account on such date) and (b) the
Required Reserve Account Amount.
"Base Rate" shall mean, with respect to any Monthly Period, the
annualized percentage equivalent of a fraction, the numerator of which is
equal to the sum of the Class A Monthly Interest, the Class B Monthly
Interest, the Collateral Monthly Interest, each for the related Interest
Period, and the Investor Servicing Fee with respect to such Monthly Period
and the denominator of which is the Investor Interest as of the close of
business on the last day of such Monthly Period.
"Class A Additional Interest" shall have the meaning specified
in Section 4.6(a).
"Class A Adjusted Investor Interest" shall mean, with respect
to any date of determination, an amount equal to the Class A Investor
Interest minus the Principal Funding Account Balance on such date of
determination.
"Class A Available Funds" shall mean, with respect to any
Monthly Period, an amount equal to the sum of (a) the Class A Floating
Allocation of the Collections of Finance Charge Receivables (including net
investment earnings on funds on deposit in the Excess Funding Account)
allocated to the Investor Certificates and deposited in the Finance Charge
Account for such Monthly Period (or to be deposited in the Finance Charge
Account on the related Transfer Date with respect to the preceding Monthly
Period pursuant to the third paragraph of subsection 4.3(a) of the
Agreement and subsection 3(b) of this Series Supplement), excluding the
portion of Collections of Finance Charge Receivables attributable to
Servicer Interchange, (b) with respect to any Monthly Period during the
Controlled Accumulation Period prior to the payment in full of the Class A
Investor Interest, the Principal Funding Investment Proceeds arising
pursuant to subsection 4.15(b), if any, with respect to the related
Transfer Date and (c) amounts, if any, to be withdrawn from the Reserve
Account which will be deposited into the Finance Charge Account on the
related Transfer Date pursuant to subsections 4.16(b) and 4.16(d).
"Class A Certificate Rate" shall mean from the Closing Date
through , 1999, and from , 1999, through , 1999 and
with respect to each Interest Period thereafter, a per annum rate equal to
% per annum in excess of LIBOR, as determined on the related LIBOR
Determination Date.
"Class A Certificateholder" shall mean the Person in whose name
a Class A Certificate is registered in the Certificate Register.
"Class A Certificates" shall mean any of the certificates
executed by the Transferor and authenticated by or on behalf of the
Trustee, substantially in the form of Exhibit A-1 hereto.
"Class A Deficiency Amount" shall have the meaning specified in
subsection 4.6(a).
"Class A Fixed Allocation" shall mean, with respect to any
Monthly Period following the Revolving Period, the percentage equivalent
(which percentage shall never exceed 100%) of a fraction, the numerator of
which is the Class A Investor Interest as of the close of business on the
last day of the Revolving Period and the denominator of which is equal to
the Investor Interest as of the close of business on the last day of the
Revolving Period.
"Class A Floating Allocation" shall mean, with respect to any
Monthly Period, the percentage equivalent (which percentage shall never
exceed 100%) of a fraction, the numerator of which is the Class A Adjusted
Investor Interest as of the close of business on the last day of the
preceding Monthly Period and the denominator of which is equal to the
Adjusted Investor Interest as of the close of business on such day;
provided, however, that, with respect to the first Monthly Period, the
Class A Floating Allocation shall mean the percentage equivalent of a
fraction, the numerator of which is the Class A Initial Investor Interest
and the denominator of which is the Initial Investor Interest.
"Class A Initial Investor Interest" shall mean the aggregate
initial principal amount of the Class A Certificates, which is $ .
"Class A Investor Allocation" shall mean, with respect to any
Monthly Period, (a) with respect to Default Amounts and Finance Charge
Receivables at any time and Principal Receivables during the Revolving
Period, the Class A Floating Allocation and (b) with respect to Principal
Receivables during the Controlled Accumulation Period or Rapid Amortization
Period, the Class A Fixed Allocation.
"Class A Investor Charge-Offs" shall have the meaning specified
in subsection 4.10(a).
"Class A Investor Default Amount" shall mean, with respect to
each Transfer Date, an amount equal to the product of (a) the Aggregate
Investor Default Amount for the related Monthly Period and (b) the Class A
Floating Allocation applicable for the related Monthly Period.
"Class A Investor Interest" shall mean, on any date of
determination, an amount equal to (a) the Class A Initial Investor
Interest, minus (b) the aggregate amount of principal payments made to
Class A Certificateholders prior to such date and minus (c) the excess, if
any, of the aggregate amount of Class A Investor Charge-Offs pursuant to
subsection 4.10(a) over Class A Investor Charge-Offs reimbursed pursuant to
subsection 4.11(b) prior to such date of determination; provided, however,
that the Class A Investor Interest may not be reduced below zero.
"Class A Monthly Interest" shall mean the monthly interest
distributable in respect of the Class A Certificates as calculated in
accordance with subsection 4.6(a).
"Class A Monthly Principal" shall mean the monthly principal
distributable in respect of the Class A Certificates as calculated in
accordance with subsection 4.7(a).
"Class A Required Amount" shall have the meaning specified in
subsection 4.8(a).
"Class A Scheduled Payment Date" shall mean the Distribution
Date.
"Class A Servicing Fee" shall have the meaning specified in
subsection 3(a) of this Series Supplement.
"Class B Additional Interest" shall have the meaning specified
in subsection 4.6(b).
"Class B Available Funds" shall mean, with respect to any
Monthly Period, an amount equal to the Class B Floating Allocation of the
Collections of Finance Charge Receivables (including net investment
earnings on funds on deposit in the Excess Funding Account) allocated to
the Investor Certificates and deposited in the Finance Charge Account for
such Monthly Period (or to be deposited in the Finance Charge Account on
the related Transfer Date with respect to the preceding Monthly Period
pursuant to the third paragraph of subsection 4.3(a) of the Agreement and
subsection 3(b) of this Series Supplement), excluding the portion of
Collections of Finance Charge Receivables attributable to Servicer
Interchange.
"Class B Certificate Rate" shall mean from the Closing Date
through , 1999, and from , 1999 through , 1999
and with respect to each Interest Period thereafter, a per annum rate equal
to % per annum in excess of LIBOR, as determined on the related LIBOR
Determination Date.
"Class B Certificateholder" shall mean the Person in whose name
a Class B Certificate is registered in the Certificate Register.
"Class B Certificates" shall mean any of the certificates
executed by the Transferor and authenticated by or on behalf of the
Trustee, substantially in the form of Exhibit A-2 hereto.
"Class B Deficiency Amount" shall have the meaning specified in
subsection 4.6(b).
"Class B Fixed Allocation" shall mean, with respect to any
Monthly Period following the Revolving Period, the percentage equivalent
(which percentage shall never exceed 100%) of a fraction, the numerator of
which is the Class B Investor Interest as of the close of business on the
last day of the Revolving Period and the denominator of which is equal to
the Investor Interest as of the close of business on the last day of the
Revolving Period.
"Class B Floating Allocation" shall mean, with respect to any
Monthly Period, the percentage equivalent (which percentage shall never
exceed 100%) of a fraction, the numerator of which is the Class B Investor
Interest as of the close of business on the last day of the preceding
Monthly Period and the denominator of which is equal to the Adjusted
Investor Interest as of the close of business on such day; provided,
however, that, with respect to the first Monthly Period, the Class B
Floating Allocation shall mean the percentage equivalent of a fraction, the
numerator of which is the Class B Initial Investor Interest and the
denominator of which is the Initial Investor Interest.
"Class B Initial Investor Interest" shall mean the aggregate
initial principal amount of the Class B Certificates, which is $ .
"Class B Investor Allocation" shall mean, with respect to any
Monthly Period, (a) with respect to Default Amounts and Finance Charge
Receivables at any time or Principal Receivables during the Revolving
Period, the Class B Floating Allocation and (b) with respect to Principal
Receivables during the Controlled Accumulation Period or Rapid Amortization
Period, the Class B Fixed Allocation.
"Class B Investor Charge-Offs" shall have the meaning specified
in subsection 4.10(b).
"Class B Investor Default Amount" shall mean, with respect to
each Transfer Date, an amount equal to the product of (a) the Aggregate
Investor Default Amount for the related Monthly Period and (b) the Class B
Floating Allocation applicable for the related Monthly Period.
"Class B Investor Interest" shall mean, on any date of
determination, an amount equal to (a) the Class B Initial Investor
Interest, minus (b) the aggregate amount of principal payments made to
Class B Certificateholders prior to such date, minus (c) the aggregate
amount of Class B Investor Charge-Offs for all prior Transfer Dates
pursuant to subsection 4.10(b), minus (d) the amount of the Reallocated
Class B Principal Collections allocated pursuant to subsection 4.12(a) on
all prior Transfer Dates for which the Collateral Interest has not been
reduced, minus (e) an amount equal to the amount by which the Class B
Investor Interest has been reduced on all prior Transfer Dates pursuant to
subsection 4.10(a) and plus (f) the aggregate amount of Excess Spread
allocated and available on all prior Transfer Dates pursuant to subsection
4.11(d), for the purpose of reimbursing amounts deducted pursuant to the
foregoing clauses (c), (d) and (e); provided, however, that the Class B
Investor Interest may not be reduced below zero.
"Class B Monthly Interest" shall mean the monthly interest
distributable in respect of the Class B Certificates as calculated in
accordance with subsection 4.6(b).
"Class B Monthly Principal" shall mean the monthly principal
distributable in respect of the Class B Certificates as calculated in
accordance with subsection 4.7(b).
"Class B Required Amount" shall have the meaning specified in
subsection 4.8(b).
"Class B Scheduled Payment Date" shall mean the Distribution
Date.
"Class B Servicing Fee" shall have the meaning specified in
subsection 3(a) hereof.
"Closing Date" shall mean , 1999.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
"Collateral Allocation" shall mean, with respect to any Monthly
Period, (a) with respect to Default Amounts and Finance Charge Receivables
at any time or Principal Receivables during the Revolving Period, the
Collateral Floating Allocation and (b) with respect to Principal
Receivables during the Controlled Accumulation Period or Rapid Amortization
Period, the Collateral Fixed Allocation.
"Collateral Available Funds" shall mean, with respect to any
Monthly Period, an amount equal to the Collateral Floating Allocation of
the Collections of Finance Charge Receivables (including net investment
earnings or funds on deposit in the Excess Funding Account) allocated to
the Investor Certificates and deposited in the Finance Charge Account for
such Monthly Period (or to be deposited in the Finance Charge Account on
the related Transfer Date with respect to the preceding Monthly Period
pursuant to the third paragraph of subsection 4.3(a) of the Agreement and
subsection 3(b) of this Series Supplement), excluding the portion of
Collections of Finance Charge Receivables attributable to Servicer
Interchange.
"Collateral Charge-Offs" shall have the meaning specified in
subsection 4.10(c).
"Collateral Default Amount" shall mean, with respect to any
Transfer Date, an amount equal to the product of (a) the Aggregate Investor
Default Amount for the related Monthly Period and (b) the Collateral
Floating Allocation applicable for the related Monthly Period.
"Collateral Fixed Allocation" shall mean, with respect to any
Monthly Period following the Revolving Period, the percentage equivalent
(which percentage shall never exceed 100%) of a fraction, the numerator of
which is the Collateral Interest as of the close of business on the last
day of the Revolving Period and the denominator of which is equal to the
Investor Interest as of the close of business on the last day of the
Revolving Period.
"Collateral Floating Allocation" shall mean, with respect to
any Monthly Period, the percentage equivalent (which percentage shall never
exceed 100%) of a fraction, the numerator of which is the Collateral
Interest as of the close of business on the last day of the preceding
Monthly Period and the denominator of which is equal to the Adjusted
Investor Interest as of the close of business on such day; provided,
however, that, with respect to the first Monthly Period, the Collateral
Floating Allocation shall mean the percentage equivalent of a fraction, the
numerator of which is the Collateral Initial Interest and the denominator
of which is the Initial Investor Interest.
"Collateral Initial Interest" shall mean the aggregate initial
principal amount of the Collateral Interest, which is $ .
"Collateral Interest" shall mean, on any date of determination,
an amount equal to (a) the Collateral Initial Interest, minus (b) the
aggregate amount of principal payments made to the Collateral Interest
Holder prior to such date, minus (c) the aggregate amount of Collateral
Charge-Offs for all prior Transfer Dates pursuant to subsection 4.10(c),
minus (d) the amount of Reallocated Principal Collections allocated
pursuant to subsections 4.12(a) and (b) on all prior Transfer Dates, minus
(e) an amount equal to the amount by which the Collateral Interest has been
reduced on all prior Transfer Dates pursuant to subsections 4.10(a) and
(b), and plus (f) the aggregate amount of Excess Spread allocated and
available on all prior Transfer Dates pursuant to subsection 4.11(h), for
the purpose of reimbursing amounts deducted pursuant to the foregoing
clauses (c), (d) and (e); provided further, however, that the Collateral
Interest may not be reduced below zero.
"Collateral Interest Holder" shall mean the entity so
designated in the Loan Agreement.
"Collateral Interest Servicing Fee" shall have the meaning
specified in subsection 3(a) hereof.
"Collateral Monthly Interest" shall mean the monthly interest
distributable in respect of the Collateral Interest as calculated in
accordance with subsection 4.6(c).
"Collateral Monthly Principal" shall mean the monthly principal
distributable in respect of the Collateral Interest as calculated in
accordance with subsection 4.7 (c).
"Collateral Rate" shall mean, for any Interest Period, the rate
specified in the Loan Agreement.
"Controlled Accumulation Amount" shall mean (a) for any
Transfer Date with respect to the Controlled Accumulation Period prior to
the payment in full of the Class A Investor Interest, $ ; provided,
however, that if the Accumulation Period Length is determined to be less
than 12 months pursuant to subsection 4.9(i), the Controlled Accumulation
Amount for each Transfer Date with respect to the Controlled Accumulation
Period prior to the payment in full of the Class A Investor Interest will
be equal to (i) the product of (x) the Class A Initial Investor Interest
and (y) the Accumulation Period Factor for such Monthly Period divided by
(ii) the Required Accumulation Factor Number, (b) for any Transfer Date
with respect to the Controlled Accumulation Period after payment in full of
the Class A Investor Interest but prior to the payment in full of the Class
B Investor Interest, an amount equal to the Class B Investor Interest as of
such Transfer Date and (c) for any Transfer Date with respect to the
Controlled Accumulation Period after payment in full of the Class B
Investor Interest, an amount equal to the Collateral Interest as of such
Transfer Date.
"Controlled Accumulation Period" shall mean, unless a Pay Out
Event shall have occurred prior thereto, the period commencing at the close
of business on or such later date as is determined in accordance with
subsection 4.9(i) and ending on the first to occur of (a) the commencement
of the Rapid Amortization Period and (b) the Series 1999-_ Termination
Date.
"Controlled Deposit Amount" shall mean, with respect to any
Transfer Date, the sum of (a) the Controlled Accumulation Amount for such
Transfer Date and (b) any existing Accumulation Shortfall.
"Covered Amount" shall mean an amount, determined as of the
Transfer Date with respect to any Interest Period, equal to the product of
(a) (i) a fraction, the numerator of which is the actual number of days in
such Interest Period and the denominator of which is 360, times (ii) the
Class A Certificate Rate in effect with respect to such Interest Period and
(b) the Principal Funding Account Balance as of the Record Date preceding
such Transfer Date.
"Credit Enhancement" shall mean (a) with respect to the Class A
Certificates, the subordination of the Class B Certificates and the
Collateral Interest and (b) with respect to the Class B Certificates. the
subordination of the Collateral Interest.
"Credit Enhancement Provider" shall mean the Collateral
Interest Holder.
"Cumulative Finance Charge Shortfall" shall mean the sum of the
Finance Charge Shortfalls (as such term is defined in each of the related
Series Supplements) for each Series in Group One.
"Cumulative Series Principal Shortfall" shall mean the sum of
the Series Principal Shortfalls (as such term is defined in each of the
related Series Supplements) for each Series.
"Daily Principal Shortfall" shall mean, on any date of
determination, the excess of the Monthly Principal Payment for the Monthly
Period relating to such date over the month to date amount of Collections
processed in respect of Principal Receivables for such Monthly Period
allocable to investor certificates of all outstanding Series, not subject
to reallocation, which are on deposit or to be deposited in the Principal
Account on such date.
"Deficiency Amount" shall mean, at any time of determination,
the sum of the Class A Deficiency Amount and the Class B Deficiency Amount.
"Distribution Date" shall mean , 1999 and the
fifteenth day of each calendar month thereafter, or if such fifteenth day
is not a Business Day, the next succeeding Business Day.
"Excess Principal Funding Investment Proceeds" shall mean, with
respect to each Transfer Date relating to the Controlled Accumulation
Period, the amount, if any, by which the Principal Funding Investment
Proceeds for such Transfer Date exceed the Covered Amount determined on
such Transfer Date.
"Excess Spread" shall mean, with respect to any Transfer Date,
the sum of the amounts with respect to such Transfer Date, if any,
specified pursuant to subsections 4.9(a)(iv), 4.9(b)(iii) and 4.9(c)(ii).
"Finance Charge Shortfall" shall mean, with respect to any
Transfer Date, the excess, if any, of the amount distributable pursuant to
subsections 4.11(a)-(j) over Excess Spread.
"Fixed Investor Percentage" shall mean, with respect to any
Monthly Period, the percentage equivalent of a fraction, the numerator of
which is the Investor Interest as of the close of business on the last day
of the Revolving Period and the denominator of which is the greater of (a)
the sum of (i) the aggregate amount of Principal Receivables in the Trust
determined as of the close of business on the last day of the prior Monthly
Period and (ii) the Excess Funding Amount as of the close of business on
such last day of the prior Monthly Period and (b) the sum of the numerators
used to calculate the Investor Percentages (as such term is defined in the
Agreement) for allocations with respect to Principal Receivables for all
outstanding Series on such date of determination; provided, however, that
with respect to any Monthly Period in which an Addition Date occurs or in
which a Removal Date occurs, the denominator determined pursuant to clause
(a)(i) hereof shall be (A) the aggregate amount of Principal Receivables in
the Trust as of the close of business on the last day of the prior Monthly
Period for the period from and including the first day of such Monthly
Period to but excluding the related Addition Date or Removal Date and (B)
the aggregate amount of Principal Receivables in the Trust as of the
beginning of the day on the related Addition Date or Removal Date after
adjusting for the aggregate amount of Principal Receivables added to or
removed from the Trust on the related Addition Date or Removal Date, for
the period from and including the related Addition Date or Removal Date to
and including the last day of such Monthly Period.
"Floating Investor Percentage" shall mean, with respect to any
Monthly Period, the percentage equivalent of a fraction, the numerator of
which is the Adjusted Investor Interest as of the close of business on the
last day of the prior Monthly Period (or with respect to the first Monthly
Period, the Initial Investor Interest) and the denominator of which is the
greater of (a) the sum of (i) the aggregate amount of Principal Receivables
as of the close of business on the last day of the prior Monthly Period (or
with respect to the first calendar month in the first Monthly Period, the
aggregate amount of Principal Receivables in the Trust as of the opening of
business on the Closing Date, and with respect to the second calendar month
in the first Monthly Period, the aggregate amount of Principal Receivables
as of the close of business on the last day of the first calendar month in
the first Monthly Period) and (ii) the Excess Funding Amount as of the
close of business on such last day of the prior Monthly Period and (b) the
sum of the numerators used to calculate the Investor Percentages (as such
term is defined in the Agreement) for allocations with respect to Finance
Charge Receivables, Default Amounts or Principal Receivables, as
applicable, for all outstanding Series on such date of determination;
provided, however, that with respect to any Monthly Period in which an
Addition Date occurs or in which a Removal Date occurs, the denominator
determined pursuant to clause (a)(i) hereof shall be (A) the aggregate
amount of Principal Receivables in the Trust as of the close of business on
the last day of the prior Monthly Period for the period from and including
the first day of such Monthly Period to but excluding the related Addition
Date or Removal Date and (B) the aggregate amount of Principal Receivables
in the Trust as of the beginning of the day on the related Addition Date or
Removal Date after adjusting for the aggregate amount of Principal
Receivables added to or removed from the Trust on the related Addition Date
or Removal Date, for the period from and including the related Addition
Date or Removal Date to and including the last day of such Monthly Period.
"Group One" shall mean Series 1999-_ and each other Series
specified in the related Supplement to be included in Group One.
"Initial Investor Interest" shall mean $ .
"Interest Period" shall mean, with respect to any Distribution
Date, the period from and including the previous Distribution Date through
the day preceding such Distribution Date, except that the initial Interest
Period shall be the period from and including the Closing Date through the
day preceding the initial Distribution Date.
"Investor Certificateholder" shall mean (a) with respect to the
Class A Certificates, the holder of record of a Class A Certificate, (b)
with respect to the Class B Certificates, the holder of record of a Class B
Certificate and (c) with respect to the Collateral Interest, the Collateral
Interest Holder.
"Investor Certificates" shall mean the Class A Certificates,
the Class B Certificates and the Collateral Interest.
"Investor Default Amount" shall mean, with respect to any
Receivable in a Defaulted Account, an amount equal to the product of (a)
the Default Amount and (b) the Floating Investor Percentage on the day such
Account became a Defaulted Account.
"Investor Interest" shall mean, on any date of determination,
an amount equal to the sum of (a) the Class A Investor Interest, (b) the
Class B Investor Interest and (c) the Collateral Interest, each as of such
date.
"Investor Percentage" shall mean for any Monthly Period, (a)
with respect to Finance Charge Receivables and Default Amounts at any time
and Principal Receivables during the Revolving Period, the Floating
Investor Percentage and (b) with respect to Principal Receivables during
the Controlled Accumulation Period or the Rapid Amortization Period, the
Fixed Investor Percentage.
"Investor Principal Collections" shall mean, with respect to
any Monthly Period, the sum of (a) the aggregate amount deposited into the
Principal Account for such Monthly Period pursuant to subsections
4.5(a)(ii), (iii) and (iv), 4.5(b)(ii), (iii) and (iv) or 4.5(c)(ii), in
each case, as applicable to such Monthly Period and (b) the aggregate
amount to be treated as Investor Principal Collections pursuant to
subsections 4.9(a)(iii) and 4.11(a) (to the extent allocable to the Class A
Investor Default Amount), (b), (c) (to the extent allocable to the Class B
Investor Default Amount), (d), (g) and (h) for such Monthly Period (other
than such amount paid from Reallocated Principal Collections).
"Investor Servicing Fee shall have the meaning specified in
subsection 3(a) hereof.
"LIBOR" shall mean, for any Interest Period, the London
interbank offered rate for one-month United States dollar deposits
determined by the Trustee for each Interest Period in accordance with the
provisions of Section 4.17.
"LIBOR Determination Date" shall mean , 1999 for the
period from the Closing Date through , 1999, , 1999 for the
period from , 1999 through , 1999, and the second London Business
Day prior to the commencement of the second and each subsequent Interest
Period.
"Loan Agreement" shall mean the agreement among the Transferor,
the Servicer, the Trustee, and the Collateral Interest Holder, dated as of
, 1999, as amended or modified from time to time.
"London Business Day" shall mean any Business Day on which
dealings in deposits in United States dollars are transacted in the London
interbank market.
"Monthly Period" shall have the meaning specified in the
Agreement, except that the first Monthly Period with respect to the
Investor Certificates shall begin on and include the Closing Date and shall
end on and include , 1999.
"Monthly Principal Payment" shall mean with respect to any
Monthly Period, for all Series (including Series 1999-_) which are in an
Amortization Period or Accumulation Period (as such terms are defined in
the related Supplements for all Series), the sum of (a) the Controlled
Distribution Amount for the related Transfer Date for any Series in its
Controlled Amortization Period (as such terms are defined in the related
Supplements for all Series), (b) the Controlled Deposit Amount for the
related Transfer Date for any Series in its Accumulation Period, other than
its Rapid Accumulation Period, if applicable (as such terms are defined in
the related Supplements for all Series), (c) the Investor Interest as of
the end of the prior Monthly Period taking into effect any payments to be
made on the following Distribution Date for any Series in its Principal
Amortization Period or Rapid Amortization Period (as such terms are defined
in the related Supplements for all Series), (d) the Adjusted Investor
Interest as of the end of the prior Monthly Period taking into effect any
payments or deposits to be made on the following Transfer Date and
Distribution Date for any Series in Group One in its Rapid Accumulation
Period (as such terms are defined in the related Supplements for all
Series), (e) the excess of the Collateral Interest as of the Transfer Date
occurring in such Monthly Period over the Required Collateral Interest for
the related Transfer Date, assuming no Accumulation Shortfall and (f) such
other amounts as may be specified in the related Supplements for all
Series.
"Net Servicing Fee Rate" shall mean (a) so long as the
Transferor, an Affiliate thereof, The Bank of New York (Delaware) or an
Affiliate thereof is the Servicer, 1% per annum and (b) if the Transferor,
an Affiliate thereof, The Bank of New York (Delaware) or an Affiliate
thereof is no longer the Servicer, 2% per annum.
"Pay Out Commencement Date" shall mean the date on which a
Trust Pay Out Event is deemed to occur pursuant to Section 9.1 or a Series
1999-_ Pay Out Event is deemed to occur pursuant to Section 9 hereof.
"Portfolio Adjusted Yield" shall mean, with respect to any
Transfer Date, the average of the percentages obtained for each of the
three preceding Monthly Periods by subtracting the Base Rate from the
Portfolio Yield for such Monthly Period.
"Portfolio Yield" shall mean, with respect to any Monthly
Period, the annualized percentage equivalent of a fraction, the numerator
of which is an amount equal to the sum of (a) the amount of Collections of
Finance Charge Receivables deposited into the Finance Charge Account
(including recoveries on charged-off Receivables and net investment
earnings on funds on deposit in the Excess Funding Account) and allocable
to the Investor Certificates for such Monthly Period, (b) the Principal
Funding Investment Proceeds deposited into the Finance Charge Account on
the Transfer Date related to such Monthly Period, and (c) the amount of the
Reserve Draw Amount (up to the Available Reserve Account Amount) plus any
amounts of interest and earnings described in subsection 4.16, each
deposited into the Finance Charge Account on the Transfer Date relating to
such Monthly Period, such sum to be calculated on a cash basis after
subtracting the Aggregate Investor Default Amount for such Monthly Period,
and the denominator of which is the Investor Interest as of the close of
business on the last day of such Monthly Period.
"Principal Funding Account" shall have the meaning set forth in
subsection 4.15(a).
"Principal Funding Account Balance" shall mean, with respect to
any date of determination, the principal amount, if any, on deposit in the
Principal Funding Account on such date of determination.
"Principal Funding Investment Proceeds" shall mean, with
respect to each Transfer Date, the investment earnings on funds in the
Principal Funding Account (net of investment expenses and losses) for the
period from and including the immediately preceding Transfer Date to but
excluding such Transfer Date.
"Principal Funding Investment Shortfall" shall mean, with
respect to each Transfer Date relating to the Controlled Accumulation
Period, the amount, if any, by which the Principal Funding Investment
Proceeds for such Transfer Date are less than the Covered Amount determined
as of such Transfer Date.
"QIB" shall mean a "qualified institutional buyer" within the
meaning of Rule 144A under the Securities Act.
"Rapid Amortization Period" shall mean the Amortization Period
commencing on the Pay Out Commencement Date and ending on the earlier to
occur of (a) the Series 1999-_ Termination Date and (b) the termination of
the Trust pursuant to Section 12.1.
"Rating Agency" shall mean Moody's, Standard & Poor's
and Fitch.
"Rating Agency Condition" shall mean the notification in
writing by each Rating Agency that an action will not result in any Rating
Agency reducing or withdrawing its then existing rating of the investor
certificates of any outstanding Series or class of a Series with respect to
which it is a Rating Agency.
"Reallocated Class B Principal Collections" shall mean, with
respect to any Transfer Date, Collections of Principal Receivables applied
in accordance with subsection 4.12(a) in an amount not to exceed the
product of (a) the Class B Investor Allocation with respect to the Monthly
Period relating to such Transfer Date and (b) the Investor Percentage with
respect to the Monthly Period relating to such Transfer Date and (c) the
amount of Collections of Principal Receivables with respect to the Monthly
Period relating to such Transfer Date; provided however, that such amount
shall not exceed the Class B Investor Interest after giving effect to any
Class B Investor Charge-Offs for such Transfer Date.
"Reallocated Collateral Principal Collections" shall mean, with
respect to any Transfer Date, Collections of Principal Receivables applied
in accordance with subsections 4.12(a) and (b) in an amount not to exceed
the product of (a) the Collateral Allocation with respect to the Monthly
Period relating to such Transfer Date and (b) the Investor Percentage with
respect to the Monthly Period relating to such Transfer Date and (c) the
amount of Collections of Principal Receivables with respect to the Monthly
Period relating to such Transfer Date; provided however, that such amount
shall not exceed the Collateral Interest after giving effect to any
Collateral Charge-Offs for such Transfer Date.
"Reallocated Principal Collections" shall mean the sum of (a)
Reallocated Class B Principal Collections and (b) Reallocated Collateral
Principal Collections.
"Reference Banks" shall mean four major banks in the London
interbank market selected by the Servicer.
"Required Accumulation Factor Number" shall be equal to a
fraction, rounded upwards to the nearest whole number, the numerator of
which is one and the denominator of which is equal to the lowest monthly
principal payment rate on the Accounts, expressed as a decimal, for the 12
months preceding the date of such calculation.
"Required Collateral Interest" shall mean (a) on the Initial
Transfer Date, $ and (b) on any Transfer Date thereafter, an amount equal
to % of the sum of (x) the Class A Adjusted Investor Interest and the Class
B Investor Interest on such Transfer Date, after taking into account
deposits into the Principal Funding Account on such Transfer Date and
payments to be made on the related Distribution Date and (y) the Collateral
Interest on the prior Transfer Date after any adjustments made on such
Transfer Date, but not less than $ ; provided, however, that (x) if either
(i) there is a reduction in the Collateral Interest pursuant to clause (c),
(d) or (e) of the definition of such term or (ii) a Pay Out Event with
respect to the Investor Certificates has occurred, the Required Collateral
Interest for any Transfer Date shall equal the Required Collateral Interest
for the Transfer Date immediately preceding such reduction or Pay Out
Event, (y) in no event shall the Required Collateral Interest exceed the
sum of the outstanding principal amounts of (i) the Class A Certificates
and (ii) the Class B Certificates, each as of the last day of the Monthly
Period preceding such Transfer Date after taking into account the payments
to be made on the related Distribution Date and (z) the Required Collateral
Interest may be reduced at the Transferor's option at any time to a lesser
amount if the Transferor, the Servicer, the Collateral Interest Holder and
the Trustee have been provided evidence that the Rating Agency Condition
shall have been satisfied.
"Required Reserve Account Amount" shall mean, with respect to
any Transfer Date on or after the Reserve Account Funding Date, an amount
equal to (a) 0.5% of the outstanding principal balance of the Class A
Certificates or (b) any other amount designated by the Transferor;
provided, however, that if such designation is of a lesser amount, the
Transferor shall (i) provide the Servicer, the Collateral Interest Holder
and the Trustee with evidence that the Rating Agency Condition shall have
been satisfied and (ii) deliver to the Trustee a certificate of an
authorized officer to the effect that, based on the facts known to such
officer at such time, in the reasonable belief of the Transferor, such
designation will not cause a Pay Out Event or an event that, after the
giving of notice or the lapse of time, would cause a Pay Out Event to occur
with respect to Series 1999-_.
"Reserve Account" shall have the meaning specified in
subsection 4.16(a).
"Reserve Account Funding Date" shall mean the Transfer Date
which occurs not later than the earliest of (a) the Transfer Date with
respect to the Monthly Period which commences 3 months prior to the
commencement of the Controlled Accumulation Period; (b) the first Transfer
Date for which the Portfolio Adjusted Yield is less than 2%, but in such
event the Reserve Account Funding Date shall not be required to occur
earlier than the Transfer Date with respect to the Monthly Period which
commences 12 months prior to the commencement of the Controlled
Accumulation Period; (c) the first Transfer Date for which the Portfolio
Adjusted Yield is less than 3%, but in such event the Reserve Account
Funding Date shall not be required to occur earlier than the Transfer Date
with respect to the Monthly Period which commences 6 months prior to the
commencement of the Controlled Accumulation Period; and (d) the first
Transfer Date for which the Portfolio Adjusted Yield is less than 4%, but
in such event the Reserve Account Funding Date shall not be required to
occur earlier than the Transfer Date with respect to the Monthly Period
which commences 4 months prior to the commencement of the Controlled
Accumulation Period.
"Reserve Account Surplus" shall mean, as of any Transfer Date
following the Reserve Account Funding Date, the amount, if any, by which
the amount on deposit in the Reserve Account exceeds the Required Reserve
Account Amount.
"Reserve Draw Amount" shall have the meaning specified in
subsection 4.16(c).
"Revolving Period" shall mean the period from and including the
Closing Date to, but not including, the earlier of (a) the day the
Controlled Accumulation Period commences and (b) the Pay Out Commencement
Date.
"Series 1999-_" shall mean the Series of the Wachovia Credit
Card Master Trust represented by the Investor Certificates.
"Series 1999-_ Certificateholders" shall mean the holder of
record of a Series 1999-_ Certificate.
"Series 1999-_ Certificates" shall mean the Class A
Certificates and the Class B Certificates.
"Series 1999-_ Pay Out Event" shall have the meaning specified
in Section 9 hereof.
"Series 1999-_ Termination Date" shall mean the earliest to
occur of (a) the Distribution Date on which the Investor Interest is paid
in full, (b) the Distribution Date and (c) the Trust Termination Date.
"Series Principal Shortfall" shall mean with respect to any
Transfer Date, the excess, if any, of (a) (i) with respect to any Transfer
Date relating to the Controlled Accumulation Period, the sum of (A) the
Controlled Deposit Amount for such Transfer Date, and (B) the excess, if
any, of the Collateral Interest for such Transfer Date over the Required
Collateral Interest for such Transfer Date and (ii) with respect to any
Transfer Date during the Rapid Amortization Period, the Adjusted Investor
Interest over (b) the Investor Principal Collections minus the Reallocated
Principal Collections for such Transfer Date.
"Series Servicing Fee Percentage" shall mean 2%.
"Servicer Interchange" shall mean, for any Monthly Period, the
portion of Collections of Finance Charge Receivables allocated to the
Investor Certificates and deposited in the Finance Charge Account with
respect to such Monthly Period that is attributable to Interchange;
provided, however, that Servicer Interchange for a Monthly Period shall not
exceed one-twelfth of the product of (i) the Adjusted Investor Interest as
of the last day of such Monthly Period and (ii) 1%.
"Shared Excess Finance Charge Collections" shall mean, with
respect to any Distribution Date, either (a) the amount described in
subsection 4.11(k) allocated to the Investor Certificates but available to
cover shortfalls in amounts payable from Collections of Finance Charge
Receivables allocated to other Series in Group One, if any, or (b) the
aggregate amount of Collections Finance Charge Receivables allocable to
other Series in Group One in excess of the amounts necessary to make
required payments with respect to such Series, if any, and available to
cover shortfalls with respect to the Investor Certificates in accordance
with subsection 4.14(b).
"Shared Principal Collections" shall mean, with respect to any
Distribution Date, either (a) the amount allocated to the Investor
Certificates which may be applied to the Series Principal Shortfall with
respect to other outstanding Series or (b) the sum of the Excess Funding
Amount, with respect to any Distribution Date, and amounts allocated to the
investor certificates of other Series which the applicable Supplements for
such Series specify are to be treated as "Shared Principal Collections" and
which may be applied to cover the Series Principal Shortfall with respect
to the Investor Certificates.
"Telerate Page 3750" shall mean 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).
SECTION 3. Servicing Compensation and Assignment of
Interchange. (i) The share of the Servicing Fee allocable to Series 1999-_
with respect to any Transfer Date (the "Investor Servicing Fee") shall be
equal to one-twelfth of the product of (i) the Series Servicing Fee
Percentage and (ii) the Adjusted Investor Interest as of the last day of
the Monthly Period preceding such Transfer Date; provided, however, that
with respect to the first Transfer Date, the Investor Servicing Fee shall
be equal to $ . On each Transfer Date for which the Transferor, an
Affiliate thereof, The Bank of New York (Delaware) or an Affiliate thereof
is the Servicer, a portion of Interchange with respect to the related
Monthly Period that is on deposit in the Finance Charge Account shall be
withdrawn from the Finance Charge Account and paid to the Servicer in
payment of a portion of the Investor Servicing Fee with respect to such
Monthly Period ("Servicer Interchange"). Should the Servicer Interchange on
deposit in the Finance Charge Account on any Transfer Date with respect to
the related Monthly Period be less than one-twelfth of 1% of the Adjusted
Investor Interest as of the last day of such Monthly Period, the Investor
Servicing Fee with respect to such Monthly Period will not be paid to the
extent of such insufficiency of Servicer Interchange on deposit in the
Finance Charge Account. The share of the Investor Servicing Fee allocable
to the Class A Investor Interest with respect to any Transfer Date (the
"Class A Servicing Fee") shall be equal to one-twelfth of the product of
(i) the Class A Floating Allocation, (ii) the Net Servicing Fee Rate and
(iii) the Adjusted Investor Interest as of the last day of the Monthly
Period preceding such Transfer Date; provided, however, that with respect
to the first Transfer Date, the Class A Servicing Fee shall be equal to $ .
The share of the Investor Servicing Fee allocable to the Class B Investor
Interest with respect to any Transfer Date (the "Class B Servicing Fee")
shall be equal to one-twelfth of the product of (i) the Class B Floating
Allocation, (ii) the Net Servicing Fee Rate and (iii) the Adjusted Investor
Interest as of the last day of the Monthly Period preceding such Transfer
Date; provided, however, that with respect to the first Transfer Date, the
Class B Servicing Fee shall be equal to $ . The share of the Investor
Servicing Fee allocable to the Collateral Interest with respect to any
Transfer Date (the "Collateral Interest Servicing Fee") shall be equal to
one-twelfth of the product of (i) the Collateral Floating Allocation, (ii)
the Net Servicing Fee Rate and (iii) the Adjusted Investor Interest as of
the last day of the Monthly Period preceding such Transfer Date; provided,
however, that with respect to the first Transfer Date, the Collateral
Interest Servicing Fee shall be equal to $ . Except as specifically
provided above, the Servicing Fee shall be paid by the cash flows from the
Trust allocated to the Transferor or the certificateholders of other Series
(as provided in the related Supplements) and in no event shall the Trust,
the Trustee or the Investor Certificateholders be liable therefor. The
Class A Servicing Fee shall be payable to the Servicer solely to the extent
amounts are available for distribution in respect thereof pursuant to
subsections 4.9(a)(ii) and 4.11(a). The Class B Servicing Fee shall be
payable solely to the extent amounts are available for distribution in
respect thereof pursuant to subsections 4.9(b)(ii) and 4.11(c). The
Collateral Interest Servicing Fee shall be payable solely to the extent
amounts are available for distribution in respect thereof pursuant to
subsection 4.11(f) or, if applicable, subsection 4.9(c)(i).
(ii) On or before each Transfer Date, the Transferor shall
notify the Servicer of the amount of Interchange to be included as
Collections of Finance Charge Receivables and allocable to the Investor
Certificateholders with respect to the preceding Monthly Period as
determined pursuant to this subsection 3(b). Such amount of Interchange
shall be equal to the product of (i) the total amount of Interchange paid
or payable to the Transferor with respect to such Monthly Period, (ii) a
fraction the numerator of which is the aggregate amount of cardholder
charges for goods and services in the Accounts with respect to such Monthly
Period and the denominator of which is the aggregate amount of cardholder
charges for goods and services in all MasterCard and VISA consumer
revolving credit card accounts owned by the Transferor with respect to such
Monthly Period and (iii) the Investor Percentage with respect to Finance
Charge Receivables with respect to such Monthly Period. On each Transfer
Date, the Transferor shall pay to the Servicer, and the Servicer shall
deposit into the Finance Charge Account, in immediately available funds,
the amount of Interchange to be so included as Collections of Finance
Charge Receivables allocable to the Investor Certificates with respect to
the preceding Monthly Period. The Transferor hereby assigns, sets-over,
conveys, pledges and grants a security interest and lien to the Trustee for
the benefit of the Investor Certificateholders in Interchange and the
proceeds of Interchange, as set forth in this subsection 3(b). In
connection with the foregoing grant of a security interest, this Series
Supplement shall constitute a security agreement under applicable law. To
the extent that a Supplement for a related Series, other than Series
1999-_, assigns, sets-over, conveys, pledges or grants a security interest
in Interchange allocable to the Trust, all investor certificates of any
such Series (except as otherwise specified in any such Supplement) and the
Investor Certificates shall rank pari passu and be equally and ratably
entitled as provided herein to the benefits of such Interchange without
preference or priority on account of the actual time or times of
authentication and delivery, all in accordance with the terms and
provisions of this Series Supplement and other related Supplements.
SECTION 4. Reassignment and Transfer Terms. The Investor
Certificates shall be subject to purchase by the Transferor at its option,
in accordance with the terms specified in subsection 12.2(a), on any
Distribution Date on or after the Distribution Date on which the Investor
Interest is reduced to an amount less than or equal to 5% of the Initial
Investor Interest. The deposit required in connection with any such
purchase shall include the amount, if any, on deposit in the Principal
Funding Account and will be equal to the sum of (a) the Investor Interest
and (b) accrued and unpaid interest on the Investor Certificates through
the day preceding the Distribution Date on which the repurchase occurs.
SECTION 5. Delivery and Payment for the Investor Certificates.
The Transferor shall execute and deliver the Series 1999-_ Certificates to
the Trustee for authentication in accordance with Section 6.1. The Trustee
shall deliver such Certificates when authenticated in accordance with
Section 6.2.
SECTION 6. Depository; Form of Delivery of Investor
Certificates.
(i) The Class A Certificates and the Class B Certificates shall
be delivered as Book-Entry Certificates as provided in Sections 6.1 and
6.10.
(ii) The Depository for Series 1999-_ shall be The Depository
Trust Company, and the Class A Certificates and Class B Certificates shall
be initially registered in the name of Cede & Co., its nominee.
SECTION 7. Article IV of Agreement. Sections 4.1, 4.2 and 4.3
shall be read in their entirety as provided in the Agreement. Article IV
(except for Sections 4.1, 4.2 and 4.3 thereof) shall be read in its
entirety as follows and shall be applicable only to the Investor
Certificates:
ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS AND
ALLOCATION AND APPLICATION OF COLLECTIONS
SECTION 4.4 Rights of Certificateholders. The Investor
Certificates shall represent undivided interests in the Trust, consisting
of the right to receive, to the extent necessary to make the required
payments with respect to such Investor Certificates at the times and in the
amounts specified in this Agreement, (a) the Floating Investor Percentage
and Fixed Investor Percentage (as applicable from time to time) of
Collections received with respect to the Receivables and (b) funds on
deposit in the Collection Account, the Excess Funding Account, the Finance
Charge Account, the Principal Account, the Principal Funding Account, the
Reserve Account and the Distribution Account. The Collateral Interest shall
be subordinate to the Class A Certificates and the Class B Certificates.
The Class B Certificates shall be subordinate to the Class A Certificates.
The Transferor Certificate shall not represent any interest in the
Collection Account, the Excess Funding Account, the Finance Charge Account,
the Principal Account, the Principal Funding Account, the Reserve Account
or the Distribution Account, except as specifically provided in this
Article IV.
SECTION 4.5 Allocations.
(a) Allocations During the Revolving Period. During the
Revolving Period, the Servicer shall, prior to the close of business on the
day any Collections are deposited in the Collection Account, allocate to
the Investor Certificateholders or the Holder of the Transferor Certificate
and pay or deposit from the Collection Account the following amounts as set
forth below:
(i) Deposit into the Finance Charge Account an amount equal to
the product of (A) the Investor Percentage on the Date of Processing
of such Collections and (B) the aggregate amount of Collections
processed in respect of Finance Charge Receivables on such Date of
Processing to be applied in accordance with Section 4.9.
(ii) Deposit into the Principal Account an amount equal to the
product of (A) the Collateral Allocation on the Date of Processing of
such Collections, (B) the Investor Percentage on the Date of
Processing of such Collections and (C) the aggregate amount of
Collections processed in respect of Principal Receivables on such
Date of Processing to be applied first in accordance with Section
4.12 and then in accordance with subsection 4.9(d).
(iii) Deposit into the Principal Account an amount equal to the
product of (A) the Class B Investor Allocation on the Date of
Processing of such Collections, (B) the Investor Percentage on the
Date of Processing of such Collections and (C) the aggregate amount
of Collections processed in respect of Principal Receivables on such
Date of Processing to be applied first in accordance with Section
4.12 and then in accordance with subsection 4.9(d).
(iv) (A) Deposit into the Principal Account an amount equal to
the product of (1) the Class A Investor Allocation on the Date of
Processing of such Collections, (2) the Investor Percentage on the
Date of Processing of such Collections and (3) the aggregate amount
of Collections processed in respect of Principal Receivables on such
Date of Processing; provided, however, that the amount deposited into
the Principal Account pursuant to this subsection 4.5(a)(iv)(A) shall
not exceed the Daily Principal Shortfall, and (B) pay to the Holder
of the Transferor Certificate an amount equal to the excess, if any,
identified in the proviso to clause (A) above; provided, however,
that the amount to be paid to the Holder of the Transferor
Certificate pursuant to this subsection 4.5(a)(iv)(B) with respect to
any Date of Processing shall be paid to the Holder of the Transferor
Certificate only if the Transferor Amount on such Date of Processing
is greater than the Minimum Transferor Amount (after giving effect to
the inclusion in the Trust of all Receivables created on or prior to
such Date of Processing and the application of payments referred to
in subsection 4.3(b)) and otherwise shall be deposited into the
Excess Funding Account.
(b) Allocations During the Controlled Accumulation Period.
During the Controlled Accumulation Period, the Servicer shall, prior to the
close of business on the day any Collections are deposited in the
Collection Account, allocate to the Investor Certificateholders or the
Holder of the Transferor Certificate and pay or deposit from the Collection
Account the following amounts as set forth below:
(i) Deposit into the Finance Charge Account an amount equal to
the product of (A) the Investor Percentage on the Date of Processing
of such Collections and (B) the aggregate amount of Collections
processed in respect of Finance Charge Receivables on such Date of
Processing to be applied in accordance with Section 4.9.
(ii) Deposit into the Principal Account an amount equal to the
product of (A) the Collateral Allocation on the Date of Processing of
such Collections, (B) the Investor Percentage on the Date of
Processing of such Collections and (C) the aggregate amount of
Collections processed in respect of Principal Receivables on such
Date of Processing to be applied first in accordance with Section
4.12 and then in accordance with subsection 4.9(e).
(iii) Deposit into the Principal Account an amount equal to the
product of (A) the Class B Investor Allocation on the Date of
Processing of such Collections, (B) the Investor Percentage on the
Date of Processing of such Collections and (C) the aggregate amount
of Collections processed in respect of Principal Receivables on such
Date of Processing to be applied first in accordance with Section
4.12 and then in accordance with subsection 4.9(e).
(iv) (A) Deposit into the Principal Account an amount equal to
the product of (1) the Class A Investor Allocation on the Date of
Processing of such Collections, (2) the Investor Percentage on the
Date of Processing of such Collections and (3) the aggregate amount
of Collections processed in respect of Principal Receivables on such
Date of Processing; provided, however, that the amount deposited into
the Principal Account pursuant to this subsection 4.5(b)(iv)(A) shall
not exceed the Daily Principal Shortfall, and (B) pay to the Holder
of the Transferor Certificate an amount equal to the excess, if any,
identified in the proviso to clause (A) above; provided, however,
that the amount to be paid to the Holder of the Transferor
Certificate pursuant to this subsection 4.5(b)(iv)(B) with respect to
any Date of Processing shall be paid to the Holder of the Transferor
Certificate only if the Transferor Amount on such Date of Processing
is greater than the Minimum Transferor Amount (after giving effect to
the inclusion in the Trust of all Receivables created on or prior to
such Date of Processing and the application of payments referred to
in subsection 4.3(b)) and otherwise shall be deposited into the
Excess Funding Account.
(c) Allocations During the Rapid Amortization Period. During
the Rapid Amortization Period, the Servicer shall, prior to the close of
business on the day any Collections are deposited in the Collection
Account, allocate to the Investor Certificateholders and pay or deposit
from the Collection Account the following amounts as set forth below:
(i) Deposit into the Finance Charge Account an amount equal to
the product of (A) the Investor Percentage on the Date of Processing
of such Collections and (E) the aggregate amount of Collections
processed in respect of Finance Charge Receivables on such Date of
Processing to be applied in accordance with Section 4.9.
(ii) (A) Deposit into the Principal Account an amount equal to
the product of (1) the Investor Percentage on the Date of Processing
of such Collections and (2) the aggregate amount of Collections
processed in respect of Principal Receivables on such Date of
Processing; provided, however, that the amount deposited into the
Principal Account pursuant to this subsection 4.5(c)(ii)(A) shall not
exceed the sum of the Investor Interest as of the close of business
on the last day of the prior Monthly Period (after taking into
account any payments to be made on the Distribution Date relating to
such prior Monthly Period and deposits and any adjustments to be made
to the Investor Interest to be made on the Transfer Date relating to
such Monthly Period) and any Reallocated Principal Collections
relating to the Monthly Period in which such deposit is made and (B)
pay to the Holder of the Transferor Certificate an amount equal to
the excess, if any, identified in the proviso to clause (A) above;
provided, however, that the amount to be paid to the Holder of the
Transferor Certificate pursuant to this subsection 4.5(c)(ii)(B) with
respect to any Date of Processing shall be paid to the Holder of the
Transferor Certificate only if the Transferor Amount on such Date of
Processing is greater than the Minimum Transferor Amount (after
giving effect to the inclusion in the Trust of all Receivables
created on or prior to such Date of Processing and the application of
payments referred to in subsection 4.3(b)) and otherwise shall be
deposited into the Excess Funding Account.
(d) Limitation on Required Deposits. With respect to the
Investor Certificates, and notwithstanding anything in the Agreement or
this Series Supplement to the contrary, whether or not the Servicer is
required to make monthly or daily deposits from the Collection Account into
the Finance Charge Account or the Principal Account pursuant to subsections
4.5(a), 4.5(b) and 4.5(c), with respect to any Monthly Period (i) the
Servicer will only be required to deposit Collections from the Collection
Account into the Finance Charge Account or the Principal Account up to the
required amount to be deposited into any such deposit account or, without
duplication, distributed on or prior to the related Distribution Date to
the Investor Certificateholders and (ii) if at any time prior to such
Distribution Date the amount of Collections deposited in the Collection
Account exceeds the amount required to be deposited pursuant to clause (i)
above, the Servicer will be permitted to withdraw the excess from the
Collection Account. To the extent that, in accordance with this subsection
4.5(d), the Servicer has retained amounts which would otherwise be required
to be deposited in the Finance Charge Account or the Principal Account with
respect to any Monthly Period, the Servicer shall be required to deposit
such amounts in the Finance Charge Account or the Principal Account on the
related Transfer Date to the extent necessary to make required
distributions to the Investor Certificateholders on the related
Distribution Date, including any amounts which are required to be applied
as Reallocated Principal Collections.
For so long as the Servicer shall (i) satisfy the conditions
specified in the third paragraph of subsection 4.3(a) of the Agreement and
(ii) be making deposits to the Collection Account, the Principal Account
and Finance Charge Account on a monthly basis, all requirements herein to
deposit amounts on a daily basis shall be deemed to be satisfied to the
extent that the required monthly deposit is made and all references to
amounts on deposit in such accounts shall be deemed to include amounts
which would otherwise have been deposited therein on a daily basis.
SECTION 4.6 Determination of Monthly Interest.
(a) The amount of monthly interest distributable to the Class A
Certificates shall be an amount equal to the product of (i)(A) a fraction,
the numerator of which is the actual number of days in the related Interest
Period and the denominator of which is 360, times (B) the Class A
Certificate Rate in effect with respect to the related Interest Period, and
(ii) the outstanding principal balance of the Class A Certificates
determined as of the Record Date preceding the related Transfer Date (the
"Class A Monthly Interest"); provided, however, that in addition to Class A
Monthly Interest an amount equal to the amount of any unpaid Class A
Deficiency Amounts, as defined below, plus an amount equal to the product
of (A) (1) a fraction, the numerator of which is the actual number of days
in the related Interest Period and the denominator of which is 360, times
(2) the sum of the Class A Certificate Rate in effect with respect to the
related Interest Period, plus 2% per annum, and (B) any Class A Deficiency
Amount from the prior Transfer Date, as defined below (or the portion
thereof which has not theretofore been paid to Class A Certificateholders)
(the "Class A Additional Interest") shall also be distributable to the
Class A Certificates, and on such Transfer Date the Trustee shall deposit
such funds, to the extent available, into the Distribution Account. The
"Class A Deficiency Amount" for any Transfer Date shall be equal to the
excess, if any, of the aggregate amount accrued pursuant to this subsection
4.6(a) as of the prior Interest Period over the amount actually transferred
to the Distribution Account for payment of such amount.
(b) The amount of monthly interest distributable to the Class B
Certificates shall be an amount equal to the product of (i)(A) a fraction,
the numerator of which is the actual number of days in the related Interest
Period and the denominator of which is 360, times (B) the Class B
Certificate Rate in effect with respect to the related Interest Period, and
(ii) the outstanding principal balance of the Class B Certificates
determined as of the Record Date preceding the related Transfer Date (the
"Class B Monthly Interest"); provided, however, that in addition to the
Class B Monthly Interest an amount equal to the amount of any unpaid Class
B Deficiency Amounts, as defined below, plus an amount equal to the product
of (A) (1) a fraction, the numerator of which is the actual number of days
in the related Interest Period and the denominator of which is 360, times
(2) the sum of the Class B Certificate Rate in effect with respect to the
related Interest Period, plus 2% per annum, and (B) any Class B Deficiency
Amount from the prior Transfer Date, as defined below (or the portion
thereof which has not theretofore been paid to Class B Certificateholders)
(the "Class B Additional Interest") shall also be distributable to the
Class B Certificates, and on such Transfer Date the Trustee shall deposit
such funds, to the extent available, into the Distribution Account. The
"Class B Deficiency Amount" for any Transfer Date shall be equal to the
excess, if any, of the aggregate amount accrued pursuant to this subsection
4.6(b) as of the prior Interest Period over the amount actually transferred
to the Distribution Account for payment of such amount.
(c) The amount of monthly interest distributable to the
Collateral Interest, which shall be an amount equal to the product of
(i)(A) a fraction, the numerator of which is the actual number of days in
the related Interest Period and the denominator of which is 360, times (B)
the Collateral Rate in effect with respect to the related Interest Period,
and (ii) the Collateral Interest determined as of the Record Date preceding
such Transfer Date (the "Collateral Monthly Interest"); provided, however,
that for the purposes of determining Collateral Monthly Interest only, the
Collateral Rate shall not exceed a per annum rate of % in excess of LIBOR
as determined on the related LIBOR Determination Date.
SECTION 4.7 Determination of Monthly Principal.
(a) The amount of monthly principal distributable from the
Principal Account with respect to the Class A Certificates on each Transfer
Date ("Class A Monthly Principal"), beginning with the Transfer Date in the
month following the month in which the Controlled Accumulation Period or,
if earlier, the Rapid Amortization Period, begins, shall be equal to the
least of (i) the Available Investor Principal Collections on deposit in the
Principal Account with respect to such Transfer Date, (ii) for each
Transfer Date with respect to the Controlled Accumulation Period prior to
the Class A Scheduled Payment Date, the Controlled Deposit Amount for such
Transfer Date and (iii) the Class A Adjusted Investor Interest on such
Transfer Date prior to any deposit into the Principal Funding Account to be
made on such day.
(b) The amount of monthly principal distributable from the
Principal Account with respect to the Class B Certificates on each Transfer
Date (the "Class B Monthly Principal"), for the Controlled Accumulation
Period, beginning with the Transfer Date following the Monthly Period in
which the Class A Investor Interest has been paid in full, and during the
Rapid Amortization Period, beginning with the Transfer Date immediately
preceding the Distribution Date on which the Class A Investor Interest has
been paid in full, shall be an amount equal to the lesser of (i) the
Available Investor Principal Collections on deposit in the Principal
Account with respect to such Transfer Date (minus the portion of such
Available Investor Principal Collections applied to Class A Monthly
Principal on such Transfer Date) and (ii) the Class B Investor Interest
(after taking into account any adjustments to be made on such Transfer Date
pursuant to Sections 4.10 and 4.12) on such Transfer Date.
(c) The amount of monthly principal (the "Collateral Monthly
Principal") distributable from the Principal Account with respect to the
Collateral Interest on each Transfer Date shall be (A) during the Revolving
Period following any reduction of the Required Collateral Interest pursuant
to clause (z) of the proviso in the definition thereof, at the option of
the Transferor, an amount equal to the lesser of (1) the excess, if any, of
the Collateral Interest (after taking into account any adjustments to be
made on such Transfer Date pursuant to Sections 4.10 and 4.12) over the
Required Collateral Interest on such Transfer Date and (2) the Available
Investor Principal Collections on such Transfer Date or (B) during the
Controlled Accumulation Period or Rapid Amortization Period, an amount
equal to the lesser of (1) the excess, if any, of the sum of the Collateral
Interest (after taking into account any adjustments to be made on such
Transfer Date pursuant to Sections 4.10 and 4.12) over the Required
Collateral Interest on such Transfer Date, and (2) the excess, if any, of
(i) the Available Investor Principal Collections on such Transfer Date over
(ii) the sum of the Class A Monthly Principal and the Class B Monthly
Principal for such Transfer Date.
SECTION 4.8 Coverage of Required Amount. (a) On or before each
Transfer Date, the Servicer shall determine the amount (the "Class A
Required Amount"), if any, by which the sum of (i) the Class A Monthly
Interest for such Transfer Date, plus (ii) the Class A Deficiency Amount,
if any, for such Transfer Date, plus (iii) the Class A Additional Interest,
if any, for such Transfer Date, plus (iv) the Class A Servicing Fee for the
prior Monthly Period plus (v) the Class A Servicing Fee, if any, due but
not paid on any prior Transfer Date, plus (vi) the Class A Investor Default
Amount, if any, for the prior Monthly Period, exceeds the Class A Available
Funds for the related Monthly Period.
(b) On or before each Transfer Date, the Servicer shall also
determine the amount (the "Class B Required Amount"), if any, equal to the
sum of (i) the amount, if any, by which the sum of (A) the Class B Monthly
Interest for such Transfer Date, plus (B) the Class B Deficiency Amount, if
any, for such Transfer Date plus (C) the Class B Additional Interest, if
any, for such Transfer Date, plus (D) the Class B Servicing Fee for the
prior Monthly Period plus (E) the Class B Servicing Fee, if any, due but
not paid on any prior Transfer Date, exceeds the Class B Available Funds
for the related Monthly Period plus (ii) the Class B Investor Default
Amount, if any, for the prior Monthly Period.
(c) In the event that the sum of the Class A Required Amount
and the Class B Required Amount for such Transfer Date is greater than
zero, the Servicer shall give written notice to the Trustee of such
positive Class A Required Amount or Class B Required Amount on or before
such Transfer Date. In the event that the Class A Required Amount for such
Transfer Date is greater than zero, all or a portion of the Excess Spread
and Shared Excess Finance Charge Collections allocable to Series 1999-_
with respect to such Transfer Date in an amount equal to the Class A
Required Amount, to the extent available, for such Transfer Date shall be
distributed from the Finance Charge Account on such Transfer Date pursuant
to subsection 4.11(a). In the event that the Class A Required Amount for
such Transfer Date exceeds the amount of Excess Spread and Shared Excess
Finance Charge Collections allocable to Series 1999-_ with respect to such
Transfer Date, the Collections of Principal Receivables allocable to the
Collateral Interest and the Collections of Principal Receivables allocable
to the Class B Certificates with respect to the prior Monthly Period shall
be applied as specified in Section 4.12. In the event that the Class B
Required Amount for such Transfer Date exceeds the amount of Excess Spread
and Shared Excess Finance Charge Collections allocable to Series 1999-_
with respect to such Transfer Date and not applied toward the Class A
Required Amount, the Collections of Principal Receivables allocable to the
Collateral Interest (after application to the Class A Required Amount)
shall be applied as specified in Section 4.12; provided, however, that the
sum of any payments pursuant to this paragraph shall not exceed the sum of
the Class A Required Amount and Class B Required Amount.
SECTION 4.9 Monthly Payments. On or before each Transfer Date,
the Servicer shall instruct the Trustee in writing (which writing shall be
substantially in the form of Exhibit B hereto) to withdraw and the Trustee,
acting in accordance with such instructions, shall withdraw on such
Transfer Date or the related Distribution Date, as applicable, to the
extent of available funds, the amounts required to be withdrawn from the
Finance Charge Account, the Principal Account, the Principal Funding
Account and the Distribution Account as follows:
(a) An amount equal to the Class A Available Funds deposited
into the Finance Charge Account for the related Monthly Period shall be
distributed on each Transfer Date in the following priority:
(i) an amount equal to Class A Monthly Interest for such
Transfer Date, plus the amount of any Class A Deficiency Amount for
such Transfer Date, plus the amount of any Class A Additional
Interest for such Transfer Date, shall be deposited by the Servicer
or the Trustee into the Distribution Account;
(ii) an amount equal to the Class A Servicing Fee for such
Transfer Date plus the amount of any Class A Servicing Fee due but
not paid to the Servicer on any prior Transfer Date shall be
distributed to the Servicer;
(iii) an amount equal to the Class A Investor Default Amount,
if any, for the preceding Monthly Period shall be treated as a
portion of Investor Principal Collections and deposited into the
Principal Account on such Transfer Date; and
(iv) the balance, if any, shall constitute Excess Spread and
shall be allocated and distributed as set forth in Section 4.11.
(b) An amount equal to the Class B Available Funds deposited
into the Finance Charge Account for the related Monthly Period shall be
distributed on each Transfer Date in the following priority:
(i) an amount equal to the Class B Monthly Interest for such
Transfer Date, plus the amount of any Class B Deficiency Amount for
such Transfer Date, plus the amount of any Class B Additional
Interest for such Transfer Date, shall be deposited by the Servicer
or the Trustee into the Distribution Account;
(ii) an amount equal to the Class B Servicing Fee for such
Transfer Date, plus the amount of any Class B Servicing Fee due but
not paid to the Servicer on any prior Transfer Date for such Transfer
Date shall be distributed to the Servicer; and
(iii) the balance, if any, shall constitute Excess Spread and
shall be allocated and distributed as set forth in Section 4.11.
(c) An amount equal to the Collateral Available Funds deposited
into the Finance Charge Account for the related Monthly Period shall be
distributed on each Transfer Date in the following priority:
(i) if the Transferor, an Affiliate thereof, The Bank of New
York (Delaware) or an Affiliate thereof is no longer the Servicer, an
amount equal to the Collateral Interest Servicing Fee for such
Transfer Date plus the amount of any Collateral Interest Servicing
Fee due but not paid to the Servicer on any prior Transfer Date shall
be distributed to the Servicer; and
(ii) the balance, if any, shall constitute Excess Spread and
shall be allocated and distributed as set forth in Section 4.11.
(d) During the Revolving Period, an amount equal to the
Available Investor Principal Collections deposited into the Principal
Account for the related Monthly Period shall be distributed on each
Transfer Date in the following priority:
(i) an amount equal to the Collateral Monthly Principal for
such Transfer Date shall be distributed to the Collateral Interest
Holder in accordance with the Loan Agreement;
(ii) an amount equal to the lesser of (A) the product of (1) a
fraction, the numerator of which is equal to the Available Investor
Principal Collections remaining after the application specified in
subsection 4.9(d)(i) above and the denominator of which is equal to
the sum of the Available Investor Principal Collections available for
sharing as specified in the related Supplement for each Series and
(2) the Cumulative Series Principal Shortfall and (B) Available
Investor Principal Collections shall remain in the Principal Account
to be treated as Shared Principal Collections and applied to other
Series; and
(iii) an amount equal to the excess, if any, of (A) the
Available Investor Principal Collections for such Transfer Date over
(B) the applications specified in subsections 4.9(d)(i) and (ii)
above shall be paid to the Holder of the Transferor Certificate;
provided, however, that the amount to be paid to the Holder of the
Transferor Certificate pursuant to this subsection 4.9(d)(iii) with
respect to such Transfer Date shall be paid to the Holder of the
Transferor Certificate only if the Transferor Amount on such Date of
Processing is greater than the Minimum Transferor Amount (after
giving effect to the inclusion in the Trust of all Receivables
created on or prior to such Transfer Date and the application of
payments referred to in subsection 4.3(b)) and otherwise shall be
deposited into the Excess Funding Account.
(e) During the Controlled Accumulation Period or the Rapid
Amortization Period, an amount equal to the Available Investor Principal
Collections deposited into the Principal Account for the related Monthly
Period shall be distributed on each Transfer Date in the following
priority:
(i) an amount equal to the Class A Monthly Principal for such
Transfer Date, shall be (A) during the Controlled Accumulation
Period, deposited into the Principal Funding Account, and (B) during
the Rapid Amortization Period, deposited into the Distribution
Account;
(ii) after giving effect to the distribution referred to in
clause (i) above, an amount equal to the Class B Monthly Principal,
shall be deposited into the Distribution Account;
(iii) for each Transfer Date (other than the Transfer Date
immediately preceding the Series 1999-_ Termination Date, in which
case on the Series 1999-_ Termination Date) after giving effect to
the distribution referred to in clauses (i) and (ii) above, an amount
equal to Collateral Monthly Principal shall be distributed to the
Collateral Interest Holder in accordance with the Loan Agreement;
(iv) an amount equal to the lesser of (A) the product of (1) a
fraction, the numerator of which is equal to the Available Investor
Principal Collections remaining after the application specified in
subsections 4.9(e)(i), (ii) and (iii) above and the denominator of
which is equal to the sum of the Available Investor Principal
Collections available for sharing as specified in the related
Supplement for each Series and (2) the Cumulative Series Principal
Shortfall and (B) the Available Investor Principal Collections shall
remain in the Principal Account to be treated as Shared Principal
Collections and applied to other Series; and
(v) an amount equal to the excess, if any, of (A) the Available
Investor Principal Collections over (B) the applications specified in
subsections 4.9(e)(i) through (iv) above shall be paid to the Holder
of the Transferor Certificate; provided, however, that the amount to
be paid to the Holder of the Transferor Certificate pursuant to this
subsection 4.9(e)(v) with respect to such Transfer Date shall be paid
to the Holder of the Transferor Certificate only if the Transferor
Amount on such Date of Processing is greater than the Minimum
Transferor Amount (after giving effect to the inclusion in the Trust
of all Receivables created on or prior to such Transfer Date and the
application of payments referred to in subsection 4.3(b)) and
otherwise shall be deposited into the Excess Funding Account.
(f) on the earlier to occur of (i) the first Transfer Date with
respect to the Rapid Amortization Period and (ii) the Transfer Date
immediately preceding the Class A Scheduled Payment Date, the Trustee,
acting in accordance with instructions from the Servicer, shall withdraw
from the Principal Funding Account and deposit in the Distribution Account
the amount on deposit in the Principal Funding Account.
(g) On each Distribution Date, the Trustee shall pay in
accordance with subsection 5.1(a) to the Class A Certificateholders from
the Distribution Account, the amount deposited into the Distribution
Account pursuant to subsection 4.9(a)(i) on the preceding Transfer Date and
(b) to the Class B Certificateholders from the Distribution Account, the
amount deposited into the Distribution Account pursuant to subsection
4.9(b)(i) on the preceding Transfer Date.
(h) On the earlier to occur of (i) the first Distribution Date
with respect to the Rapid Amortization Period and (ii) the Class A
Scheduled Payment Date and on each Distribution Date thereafter, the
Trustee, acting in accordance with instructions from the Servicer, shall
pay in accordance with Section 5.1 from the Distribution Account the amount
so deposited into the Distribution Account pursuant to subsections 4.9(e)
and (f) on the related Transfer Date in the following priority:
(i) an amount equal to the lesser of such amount on deposit in
the Distribution Account and the Class A Investor Interest shall be
paid to the Class A Certificateholders; and
(ii) for each Distribution Date with respect to the Rapid
Amortization Period and on the Class B Scheduled Payment Date, after
giving effect to the distributions referred to in clause (i) above,
an amount equal to the lesser of such amount on deposit in the
Distribution Account and the Class B Investor Interest shall be paid
to the Class B Certificateholders.
(i) The Controlled Accumulation Period is scheduled to commence
at the close of business on ; provided, however, that, if the Accumulation
Period Length (determined as described below) is less than 12 months, the
date on which the Controlled Accumulation Period actually commences will be
delayed to the first Business Day of the month that is a number of whole
months prior to the Class A Scheduled Payment Date at least equal to the
Accumulation Period Length and, as a result, the number of Monthly Periods
in the Controlled Accumulation Period will at least equal the Accumulation
Period Length. On the Determination Date immediately preceding the
Distribution Date, and each Determination Date thereafter until the
Controlled Accumulation Period begins, the Servicer will determine the
"Accumulation Period Length" which will equal the number of whole months
such that the sum of the Accumulation Period Factors for each month during
such period will be equal to or greater than the Required Accumulation
Factor Number; provided, however, that the Accumulation Period Length will
not be determined to be less than one month.
SECTION 4.10 Investor Charge-Offs.
(a) On or before each Transfer Date, the Servicer shall
calculate the Class A Investor Default Amount. If on any Transfer Date, the
Class A Investor Default Amount for the prior Monthly Period exceeds the
sum of the amount allocated with respect thereto pursuant to subsection
4.9(a)(iii), subsection 4.11(a) and Section 4.12 with respect to such
Monthly Period, the Collateral Interest (after giving effect to reductions
for any Collateral Charge-Offs and any Reallocated Principal Collections on
such Transfer Date) will be reduced by the amount of such excess, but not
by more than the lesser of the Class A Investor Default Amount and the
Collateral Interest (after giving effect to reductions for any Collateral
Charge-Offs and any Reallocated Principal Collections on such Transfer
Date) for such Transfer Date. In the event that such reduction would cause
the Collateral Interest to be a negative number, the Collateral Interest
will be reduced to zero, and the Class B Investor Interest (after giving
effect to reductions for any Class B Investor Charge-Offs and any
Reallocated Class B Principal Collections on such Transfer Date) will be
reduced by the amount by which the Collateral Interest would have been
reduced below zero. In the event that such reduction would cause the Class
B Investor Interest to be a negative number, the Class B Investor Interest
will be reduced to zero, and the Class A Investor Interest will be reduced
by the amount by which the Class B Investor Interest would have been
reduced below zero, but not by more than the Class A Investor Default
Amount for such Transfer Date (a "Class A Investor Charge-Off"). If the
Class A Investor Interest has been reduced by the amount of any Class A
Investor Charge-Offs, it will be reimbursed on any Transfer Date (but not
by an amount in excess of the aggregate Class A Investor Charge-Offs) by
the amount of Excess Spread and Shared Excess Finance Charge Collections
allocable to Series 1999-_ allocated and available for such purpose
pursuant to subsection 4.11(b).
(b) On or before each Transfer Date, the Servicer shall
calculate the Class B Investor Default Amount. If on any Transfer Date, the
Class B Investor Default Amount for the prior Monthly Period exceeds the
amount of Excess Spread and Shared Excess Finance Charge Collections
allocable to Series 1999-_ and the Reallocated Collateral Principal
Collections which are allocated and available to fund such amount pursuant
to subsection 4.11(c) and Section 4.12, the Collateral Interest (after
giving effect to reductions for any Collateral Charge-Offs and any
Reallocated Principal Collections on such Transfer Date and any adjustments
with respect thereto as described in subsection 4.10(a) above) will be
reduced by the amount of such excess but not by more than the lesser of the
Class B Investor Default Amount and the Collateral Interest (after giving
effect to reductions for any Collateral Charge-Offs and any Reallocated
Principal Collections on such Transfer Date and any adjustments with
respect thereto as described in subsection 4.10(a) above) for such Transfer
Date. In the event that such reduction would cause the Collateral Interest
to be a negative number, the Collateral Interest shall be reduced to zero
and the Class B Investor Interest shall be reduced by the amount by which
the Collateral Interest would have been reduced below zero, but not by more
than the Class B Investor Default Amount for such Transfer Date (a "Class B
Investor Charge-Off"). The Class B Investor Interest will also be reduced
by the amount of Reallocated Class B Principal Collections in excess of the
Collateral Interest pursuant to Section 4.12 and the amount of any portion
of the Class B Investor Interest allocated to the Class A Certificates to
avoid a reduction in the Class A Investor Interest pursuant to subsection
4.10(a) above. The Class B Investor Interest will thereafter be reimbursed
(but not to an amount in excess of the unpaid principal balance of the
Class B Certificates) on any Transfer Date by the amount of Excess Spread
and Shared Excess Finance Charge Collections allocable to Series 1999-_
allocated and available for that purpose as described under subsection
4.11(d).
(c) On or before each Transfer Date, the Servicer shall
calculate the Collateral Default Amount. If on any Transfer Date, the
Collateral Default Amount for the prior Monthly Period exceeds the amount
of Excess Spread and Shared Excess Finance Charge Collections allocable to
Series 1999-_ which are allocated and available to fund such amount
pursuant to subsection 4.11(g), the Collateral Interest will be reduced by
the amount of such excess but not by more than the lesser of the Collateral
Default Amount and the Collateral Interest for such Transfer Date (a
"Collateral Charge-Off"). The Collateral Interest will also be reduced by
the amount of Reallocated Principal Collections pursuant to Section 4.12
and the amount of any portion of the Collateral Interest allocated to the
Class A Certificates or the Class B Certificates to avoid a reduction in
the Class A Investor Interest, pursuant to subsection 4.10(a), or the Class
B Investor Interest, pursuant to subsection 4.10(b), respectively. The
Collateral Interest will thereafter be reimbursed on any Transfer Date by
the amount of the Excess Spread and Shared Excess Finance Charge
Collections allocable to Series 1999-_ allocated and available for that
purpose as described under subsection 4.11(h).
SECTION 4.11 Excess Spread; Shared Excess Finance Charge
Collections. On or before each Transfer Date, the Servicer shall instruct
the Trustee in writing (which writing shall be substantially in the form of
Exhibit B hereto) to apply, Excess Spread with respect to the related
Monthly Period, and to the extent of the Finance Charge Shortfall, any
Shared Excess Finance Charge Collections with respect to other Series in
Group One allocable to Series 1999-_, to make the following distributions
on each Transfer Date in the following priority:
(a) an amount equal to the Class A Required Amount, if any,
with respect to such Transfer Date shall be used to fund the Class A
Required Amount and be applied in accordance with, and in the priority set
forth in, subsection 4.9(a);
(b) an amount equal to the aggregate amount of Class A Investor
Charge-Offs which have not been previously reimbursed shall be treated as a
portion of Investor Principal Collections and deposited into the Principal
Account on such Transfer Date;
(c) an amount equal to the Class B Required Amount, if any,
with respect to such Transfer Date shall be used to fund the Class B
Required Amount and be applied first in accordance with, and in the
priority set forth in, subsection 4.9(b) and then any remaining amount
available to pay the Class B Investor Default Amount shall be treated as a
portion of Investor Principal Collections and deposited into the Principal
Account on such Transfer Date;
(d) an amount equal to the aggregate amount by which the Class
B Investor Interest has been reduced below the initial Class B Investor
Interest for reasons other than the payment of principal to the Class B
Certificateholders (but not in excess of the aggregate amount of such
reductions which have not been previously reimbursed) shall be treated as a
portion of Investor Principal Collections and deposited into the Principal
Account on such Transfer Date;
(e) an amount equal to the Collateral Monthly Interest plus the
amount of any past due Collateral Monthly Interest for such Transfer Date
shall be paid to the Collateral Interest Holder in accordance with the Loan
Agreement;
(f) if the Transferor, an Affiliate thereof, The Bank of New
York (Delaware) or an Affiliate thereof is the Servicer, an amount equal to
the aggregate amount of accrued but unpaid Collateral Interest Servicing
Fees shall be paid to the Servicer;
(g) an amount equal to the Collateral Default Amount, if any,
for the prior Monthly Period shall be treated as a portion of Investor
Principal Collections and deposited into the Principal Account on such
Transfer Date;
(h) an amount equal to the aggregate amount by which the
Collateral Interest has been reduced for reasons other than the payment of
principal to the Collateral Interest Holder (but not in excess of the
aggregate amount of such reductions which have not been previously
reimbursed) shall be treated as a portion of Investor Principal Collections
and deposited into the Principal Account on such Transfer Date;
(i) on each Transfer Date from and after the Reserve Account
Funding Date, but prior to the date on which the Reserve Account terminates
as described in Section 4.16(f), an amount up to the excess, if any, of the
Required Reserve Account Amount over the Available Reserve Account Amount
shall be deposited into the Reserve Account;
(j) the aggregate of any other amounts then due to the
Collateral Interest Holder pursuant to the Loan Agreement shall be paid to
the Collateral Interest Holder for application in accordance with the Loan
Agreement; and
(k) the balance, if any, after giving effect to the payments
made pursuant to subparagraphs (a) through (j) above shall first be treated
as "Shared Excess Finance Charge Collections" with respect to other Series
in Group One and then the balance, if any, remaining after such sharing
shall be paid to the holder of the Transferor Certificate.
SECTION 4.12 Reallocated Principal Collections. On or before
each Transfer Date, the Servicer shall instruct the Trustee in writing
(which writing shall be substantially in the form of Exhibit B hereto) to
withdraw from the Principal Account and apply Reallocated Principal
Collections (applying all Reallocated Collateral Principal Collections in
accordance with subsections 4.12(a) and (b) prior to applying any
Reallocated Class B Principal Collections in accordance with subsection
4.12(a) for any amounts still owing after the application of Reallocated
Collateral Principal Collections) with respect to such Transfer Date, to
make the following distributions on each Transfer Date in the following
priority:
(a) an amount equal to the excess, if any, of (i) the Class A
Required Amount, if any, with respect to such Transfer Date over (ii) the
amount of Excess Spread with respect to the related Monthly Period and the
amount of Shared Excess Finance Charge Collections, shall be applied in
accordance with, and in the priority set forth in, subsection 4.9(a); and
(b) an amount equal to the excess, if any, of (i) the Class B
Required Amount, if any, with respect to such Transfer Date over (ii) the
amount of Excess Spread and the amount of Shared Excess Finance Charge
Collections allocated and available to the Class B Certificates pursuant to
subsection 4.11(c) on such Transfer Date shall be applied first in
accordance with and in the priority set forth in, subsection 4.9(b) and
then pursuant to subsection 4.11(c).
(c) On each Transfer Date, the Collateral Interest shall be
reduced by the amount of Reallocated Collateral Principal Collections and
by the amount of Reallocated Class B Principal Collections for such
Transfer Date. In the event that such reduction would cause the Collateral
Interest (after giving effect to any Collateral Charge-Offs for such
Transfer Date) to be a negative number, the Collateral Interest (after
giving effect to any Collateral Charge-Offs for such Transfer Date) shall
be reduced to zero and the Class B Investor Interest shall be reduced by
the amount by which the Collateral Interest would have been reduced below
zero. In the event that the reallocation of Reallocated Principal
Collections would cause the Class B Investor Interest (after giving effect
to any Class B Investor Charge-Offs for such Transfer Date) to be a
negative number on any Transfer Date, Reallocated Principal Collections
shall be reallocated on such Transfer Date in an aggregate amount not to
exceed the amount which would cause the Class B Investor Interest (after
giving effect to any Class B Investor Charge-Offs for such Transfer Date)
to be reduced to zero.
SECTION 4.13 Shared Principal Collections.
(a) The portion of Shared Principal Collections on deposit in
the Principal Account equal to the amount of Shared Principal Collections
allocable to Series 1999-_ on any Transfer Date shall be applied as an
Available Investor Principal Collection pursuant to Section 4.9 and
pursuant to such Section 4.9 shall be deposited in the Distribution Account
or distributed in accordance with the Loan Agreement.
(b) Shared Principal Collections allocable to Series 1999-_
with respect to any Transfer Date shall mean an amount equal to the Series
Principal Shortfall, if any, with respect to Series 1999-_ for such
Transfer Date; provided, however, that if the aggregate amount of Shared
Principal Collections for all Series for such Transfer Date (including the
Excess Funding Amount) is less than the Cumulative Series Principal
Shortfall for such Transfer Date, then Shared Principal Collections
allocable to Series 1999-_ on such Transfer Date shall equal the product of
(i) Shared Principal Collections for all Series for such Transfer Date
(including the Excess Funding Amount) and (ii) a fraction, the numerator of
which is the Series Principal Shortfall with respect to Series 1999-_ for
such Transfer Date and the denominator of which is the aggregate amount of
Cumulative Series Principal Shortfall for all Series for such Transfer
Date.
SECTION 4.14 Shared Excess Finance Charge Collections.
(a) The portion of Shared Excess Finance Charge Collections on
deposit in the Finance Charge Account equal to the amount of Shared Excess
Finance Charge Collections allocable to Series 1999-_ on any Transfer Date
shall be applied pursuant to Section 4.11.
(b) Shared Excess Finance Charge Collections allocable to
Series 1999-_ with respect to any Transfer Date shall mean an amount equal
to the Finance Charge Shortfall, if any, with respect to Series 1999-_ for
such Transfer Date; provided, however, that if the aggregate amount of
Shared Excess Finance Charge Collections for all Series in Group One for
such Transfer Date is less than the Cumulative Finance Charge Shortfall for
such Transfer Date, the Shared Excess Finance Charge Collections allocable
to Series 1999-_ on such Transfer Date shall equal the product of (i)
Shared Excess Finance Charge Collections for all Series in Group One for
such Transfer Date and (ii) a fraction, the numerator of which is the
Finance Charge Shortfall with respect to Series 1999-_ for such Transfer
Date and the denominator of which is the aggregate amount of the Cumulative
Finance Charge Shortfall for all Series on such Transfer Date.
SECTION 4.15 Principal Funding Account.
(a) The Trustee shall establish and maintain with a Qualified
Institution, which may be the Trustee, in the name of the Trust, on behalf
of the Trust, for the benefit of the Investor Certificateholders, a
segregated trust account (the "Principal Funding Account"), bearing a
designation clearly indicating that the funds deposited therein are held
for the benefit of the Investor Certificateholders. The Trustee shall
possess all right, title and interest in all funds on deposit from time to
time in the Principal Funding Account and in all proceeds thereof. The
Principal Funding Account shall be under the sole dominion and control of
the Trustee for the benefit of the Investor Certificateholders. If at any
time the institution holding the Principal Funding Account ceases to be a
Qualified Institution, the Transferor shall notify the Trustee, and the
Trustee upon being notified (or the Servicer on its behalf) shall, within
10 Business Days, establish a new Principal Funding Account meeting the
conditions specified above with a Qualified Institution, and shall transfer
any cash or any investments to such new Principal Funding Account. The
Trustee, at the direction of the Servicer, shall (i) make withdrawals from
the Principal Funding Account from time to time, in the amounts and for the
purposes set forth in this Series Supplement, and (ii) on each Transfer
Date (from and after the commencement of the Controlled Accumulation
Period) prior to termination of the Principal Funding Account make a
deposit into the Principal Funding Account in the amount specified in, and
otherwise in accordance with, subsection 4.9(e).
(b) Funds on deposit in the Principal Funding Account shall be
invested at the direction of the Servicer by the Trustee in Permitted
Investments. Funds on deposit in the Principal Funding Account on any
Transfer Date, after giving effect to any withdrawals from the Principal
Funding Account on such Transfer Date, shall be invested in such
investments that will mature so that such funds will be available for
withdrawal on or prior to the following Transfer Date. The Trustee shall
maintain for the benefit of the Investor Certificateholders possession of
the negotiable instruments or securities, if any, evidencing such Permitted
Investments. No Permitted Investment shall be disposed of prior to its
maturity.
On the Transfer Date occurring in the month following the
commencement of the Controlled Accumulation Period and on each Transfer
Date thereafter with respect to the Controlled Accumulation Period, the
Trustee, acting at the Servicer's direction given on or before such
Transfer Date, shall transfer from the Principal Funding Account to the
Finance Charge Account the Principal Funding Investment Proceeds on deposit
in the Principal Funding Account, but not in excess of the Covered Amount,
for application as Class A Available Funds applied pursuant to subsection
4.9(a)(i).
Any Excess Principal Funding Investment Proceeds shall be paid
to the Transferor on each Transfer Date. An amount equal to any Principal
Funding Investment Shortfall shall be deposited in the Finance Charge
Account on each Transfer Date from the Reserve Account to the extent funds
are available pursuant to subsection 4.16(d). Principal Funding Investment
Proceeds (including reinvested interest) shall not be considered part of
the amounts on deposit in the Principal Funding Account for purposes of
this Series Supplement.
SECTION 4.16 Reserve Account.
(a) The Trustee shall establish and maintain with a Qualified
Institution, which may be the Trustee, in the name of the Trust, on behalf
of the Trust, for the benefit of the Investor Certificateholders, a
segregated trust account (the "Reserve Account"), bearing a designation
clearly indicating that the funds deposited therein are held for the
benefit of the Investor Certificateholders. The Trustee shall possess all
right, title and interest in all funds on deposit from time to time in the
Reserve Account and in all proceeds thereof. The Reserve Account shall be
under the sole dominion and control of the Trustee for the benefit of the
Investor Certificateholders. If at any time the institution holding the
Reserve Account ceases to be a Qualified Institution, the Transferor shall
notify the Trustee, and the Trustee upon being notified (or the Servicer on
its behalf) shall, within 10 Business Days, establish a new Reserve Account
meeting the conditions specified above with a Qualified Institution, and
shall transfer any cash or any investments to such new Reserve Account. The
Trustee, at the direction of the Servicer, shall (i) make withdrawals from
the Reserve Account from time to time in an amount up to the Available
Reserve Account Amount at such time, for the purposes set forth in this
Series Supplement, and (ii) on each Transfer Date (from and after the
Reserve Account Funding Date) prior to termination of the Reserve Account
make a deposit into the Reserve Account in the amount specified in, and
otherwise in accordance with, subsection 4.11(i).
(b) Funds on deposit in the Reserve Account shall be invested
at the direction of the Servicer by the Trustee in Permitted Investments.
Funds on deposit in the Reserve Account on any Transfer Date, after giving
effect to any withdrawals from the Reserve Account on such Transfer Date,
shall be invested in such investments that will mature so that such funds
will be available for withdrawal on or prior to the following Transfer
Date. The Trustee shall maintain for the benefit of the Investor
Certificateholders possession of the negotiable instruments or securities,
if any, evidencing such Permitted Investments. No Permitted Investment
shall be disposed of prior to its maturity. On each Transfer Date, all
interest and earnings (net of losses and investment expenses) accrued since
the preceding Transfer Date on funds on deposit in the Reserve Account
shall be retained in the Reserve Account (to the extent that the Available
Reserve Account Amount is less than the Required Reserve Account Amount)
and the balance, if any, shall be deposited into the Finance Charge Account
and included in Class A Available Funds for such Transfer Date. For
purposes of determining the availability of funds or the balance in the
Reserve Account for any reason under this Series Supplement, except as
otherwise provided in the preceding sentence, investment earnings on such
funds shall be deemed not to be available or on deposit.
(c) On or before each Transfer Date with respect to the
Controlled Accumulation Period prior to the payment in full of the Class A
Investor Interest and on or before the first Transfer Date with respect to
the Rapid Amortization Period, the Servicer shall calculate the "Reserve
Draw Amount" which shall be equal to the Principal Funding Investment
Shortfall with respect to each Transfer Date with respect to the Controlled
Accumulation Period or the first Transfer Date with respect to the Rapid
Amortization Period; provided, however, that such amount will be reduced to
the extent that funds otherwise would be available for deposit in the
Reserve Account under Section 4.11(i) with respect to such Transfer Date.
(d) In the event that for any Transfer Date the Reserve Draw
Amount is greater than zero, the Reserve Draw Amount, up to the Available
Reserve Account Amount, shall be withdrawn from the Reserve Account on such
Transfer Date by the Trustee (acting in accordance with the instructions of
the Servicer), deposited into the Finance Charge Account and included in
Class A Available Funds for such Transfer Date.
(e) In the event that the Reserve Account Surplus on any
Transfer Date, after giving effect to all deposits to and withdrawals from
the Reserve Account with respect to such Transfer Date, is greater than
zero, the Trustee, acting in accordance with the instructions of the
Servicer, shall withdraw from the Reserve Account, and pay in accordance
with the Loan Agreement, an amount equal to such Reserve Account Surplus.
(f) Upon the earliest to occur of (i) the termination of the
Trust pursuant to Article XII of the Agreement, (ii) if the Controlled
Accumulation Period has not commenced, the first Transfer Date relating to
the Rapid Amortization Period and (iii) if the Controlled Accumulation
Period has commenced, the earlier of the first Transfer Date with respect
to the Rapid Amortization Period and the Transfer Date immediately
preceding the Class A Scheduled Payment Date, the Trustee, acting in
accordance with the instructions of the Servicer, after the prior payment
of all amounts owing to the Series 1999-_ Certificateholders that are
payable from the Reserve Account as provided herein, shall withdraw from
the Reserve Account and pay in accordance with the Loan Agreement, all
amounts, if any, on deposit in the Reserve Account and the Reserve Account
shall be deemed to have terminated for purposes of this Series Supplement.
SECTION 4.17 Determination of LIBOR.
(a) On each LIBOR Determination Date, the Trustee shall
determine LIBOR on the basis of the rate for deposits in United States
dollars for a period equal to the relevant Interest Period which appears on
Telerate Page 3750 as of 11:00 a.m., London time, on such date. If such
rate does not appear on Telerate Page 3750, the rate for that LIBOR
Determination Date shall be determined on the basis of the rates at which
deposits in United States dollars are offered by the Reference Banks at
approximately 11:00 a.m., London time, on that day to prime banks in the
London interbank market for a period equal to the relevant Interest Period.
The Trustee shall request the principal London office of each of the
Reference Banks to provide a quotation of its rate. If at least two such
quotations are provided, the rate for that LIBOR Determination Date shall
be the arithmetic mean of the quotations. If fewer than two quotations are
provided as requested, the rate for that LIBOR Determination Date shall 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 a period equal to the relevant Interest Period.
(b) The Class A Certificate Rate and Class B Certificate Rate
applicable to the then current and the immediately preceding Interest
Periods may be obtained by any Investor Certificateholder by telephoning
the Trustee at (800) 254- 2826.
(c) On each LIBOR Determination Date prior to 12:00 noon New
York City time, the Trustee shall send to the Servicer by facsimile
notification of LIBOR for the following Interest Period.
SECTION 4.18 Transferor's or Servicer's Failure to Make a
Deposit or Payment.
If the Servicer or the Transferor fails to make, or give
instructions to make, any payment or deposit (other than as required by
subsections 2.4(d) and (e) and 12.2(a) or Sections 10.2 and 12.1) required
to be made or given by the Servicer or Transferor, respectively, at the
time specified in the Agreement (including applicable grace periods), the
Trustee shall make such payment or deposit from the applicable Investor
Account without instruction from the Servicer or Transferor. The Trustee
shall be required to make any such payment, deposit or withdrawal hereunder
only to the extent that the Trustee has sufficient information to allow it
to determine the amount thereof; provided, however, that the Trustee shall
in all cases be deemed to have sufficient information to determine the
amount of interest payable to the Series 1999-_ Certificateholders on each
Distribution Date. The Servicer shall, upon request of the Trustee,
promptly provide the Trustee with all information necessary to allow the
Trustee to make such payment, deposit or withdrawal. Such funds or the
proceeds of such withdrawal shall be applied by the Trustee in the manner
in which such payment or deposit should have been made by the Transferor or
the Servicer, as the case may be.
SECTION 8. Article V of the Agreement. Article V of the
Agreement shall read in its entirety as follows and shall be applicable
only to the Investor Certificateholders:
ARTICLE V
DISTRIBUTIONS AND REPORTS TO INVESTOR
CERTIFICATEHOLDERS
SECTION 5.1 Distributions. (a) On each Distribution Date, the
Trustee shall distribute (in accordance with the certificate delivered on
or before the related Transfer Date by the Servicer to the Trustee pursuant
to subsection 3.4(b)) to each Class A Certificateholder of record on the
immediately preceding Record Date (other than as provided in subsection
2.4(e) or Section 12.3 respecting a final distribution) such
Certificateholder's pro rata share (based on the aggregate Undivided
Interests represented by Class A Certificates held by such
Certificateholder) of amounts on deposit in the Distribution Account as are
payable to the Class A Certificateholders pursuant to Section 4.9 by check
mailed to each Class A Certificateholder (at such Certificateholder's
address as it appears in the Certificate Register), except that with
respect to Class A Certificates registered in the name of the nominee of a
Clearing Agency, such distribution shall be made in immediately available
funds.
(b) On each Distribution Date, the Trustee shall distribute (in
accordance with the certificate delivered on or before the related Transfer
Date by the Servicer to the Trustee pursuant to subsection 3.4(b)) to each
Class B Certificateholder of record on the immediately preceding Record
Date (other than as provided in subsection 2.4(e) or Section 12.3
respecting a final distribution) such Certificateholder's pro rata share
(based on the aggregate Undivided Interests represented by Class B
Certificates held by such Certificateholder) of amounts on deposit in the
Distribution Account as are payable to the Class B Certificateholders
pursuant to Section 4.9 by check mailed to each Class B Certificateholder
(at such Certificateholder's address as it appears in the Certificate
Register), except that with respect to Class B Certificates registered in
the name of the nominee of a Clearing Agency, such distribution shall be
made in immediately available funds.
SECTION 5.2 Monthly Series 1999-_ Certificateholders'
Statement.
(a) On or before each Distribution Date, the Trustee shall
forward to each Series 1999-_ Certificateholder, each Rating Agency and the
Collateral Interest Holder a statement substantially in the form of Exhibit
C to this Series Supplement prepared by the Servicer, delivered to the
Trustee and setting forth, among other things, the following information
(which, in the case of subclauses (i) and (ii) below, shall be stated on
the basis of an original principal amount of $1,000 per Certificate and, in
the case of subclauses (viii) and (ix) shall be stated on an aggregate
basis and on the basis of an original principal amount of $1,000 per
Certificate, as applicable):
(i) the amount of the current distribution allocable to Class A
Monthly Principal, Class B Monthly Principal and Collateral Monthly
Principal, respectively;
(ii) the amount of the current distribution allocable to Class
A Monthly Interest, Class A Deficiency Amounts, Class A Additional
Interest, Class B Monthly Interest, Class B Deficiency Amounts, Class
B Additional Interest and Collateral Monthly Interest, and any
accrued and unpaid Collateral Monthly Interest, respectively;
(iii) the amount of Collections of Principal Receivables
processed during the related Monthly Period and allocated in respect
of the Class A Certificates, the Class B Certificates and the
Collateral Interest, respectively;
(iv) the amount of Collections of Finance Charge Receivables
processed during the related Monthly Period and allocated in respect
of the Class A Certificates, the Class B Certificates and the
Collateral Interest, respectively;
(v) the aggregate amount of Principal Receivables, the Investor
Interest, the Adjusted Investor Interest, the Class A Investor
Interest, the Class A Adjusted Investor Interest, the Class B
Investor Interest, the Collateral Interest, the Floating Investor
Percentage, the Class A Floating Allocation, the Class B Floating
Allocation, the Collateral Floating Allocation and the Fixed Investor
Percentage, Class A Fixed Allocation, the Class B Fixed Allocation
and the Collateral Fixed Allocation with respect to the Principal
Receivables in the Trust as of the end of the day on the Record Date;
(vi) the aggregate outstanding balance of Accounts which were
30 to 59, 60 to 89 and 90 or more days delinquent as of the end of
the day on the Record Date;
(vii) the Aggregate Investor Default Amount, the Class A
Investor Default Amount, the Class B Investor Default Amount and the
Collateral Default Amount for the related Monthly Period;
(viii) the aggregate amount of Class A Investor Charge-Offs,
Class B Investor Charge-Offs and Collateral Charge-Offs for the
related Monthly Period;
(ix) the aggregate amount of Class A Investor Charge-Offs,
Class B Investor Charge-Offs and Collateral Charge-Offs reimbursed on
the Transfer Date immediately preceding such Distribution Date;
(x) the amount of the Class A Servicing Fee, the Class B
Servicing Fee and the Collateral Servicing Fee for the related
Monthly Period;
(xi) the Portfolio Yield for the preceding Monthly Period;
(xii) the amount of Reallocated Collateral Principal
Collections and Reallocated Class B Principal Collections with
respect to such Distribution Date;
(xiii) the Class B Investor Interest and the Collateral
Interest as of the close of business on such Distribution Date;
(xiv) LIBOR for the Interest Period ending on such Distribution
Date;
(xv) the Principal Funding Account Balance on the Transfer
Date;
(xvi) the Accumulation Shortfall;
(xvii) the Principal Funding Investment Proceeds transferred to
the Finance Charge Account on the related Transfer Date;
(xviii) the Principal Funding Investment Shortfall on the
related Transfer Date;
(xix) the amount of Class A Available Funds and Class B
Available Funds on deposit in the Finance Charge Account on the
related Transfer Date;
(xx) the amount of the Reserve Draw Amount on the related
Transfer Date; and
(xxi) such other items as are set forth in Exhibit C to this
Series Supplement.
(b) Annual Certificateholders' Tax Statement. On or before
January 31 of each calendar year, beginning with calendar year 2000, the
Trustee shall distribute to each Person who at any time during the
preceding calendar year was a Series 1999-_ Certificateholder, a statement
prepared by the Servicer containing the information required to be
contained in the regular monthly report to Series 1999-_
Certificateholders, as set forth in subclauses (i) and (ii) above,
aggregated for such calendar year or the applicable portion thereof during
which such Person was a Series 1999-_ Certificateholder, together with such
other customary information (consistent with the treatment of the
Certificates as debt) as the Servicer deems necessary or desirable to
enable the Series 1999-_ Certificateholders to prepare their tax returns.
Such obligations of the Trustee shall be deemed to have been satisfied to
the extent that substantially comparable information shall be provided by
the Trustee pursuant to any requirements of the Internal Revenue Code as
from time to time in effect.
SECTION 5.03 Rule 144A Information. So long as any of the Class
B Certificates are "restricted securities" within the meaning of Rule
144(a)(3) under the Securities Act and during any period in which the Trust
is not subject to Section 13 or 15(d) of the Exchange Act, the Transferor
agrees to make available to any QIB or beneficial owner of the Class B
Certificates in connection with any sale thereof and any prospective
purchaser of such Class B Certificates from such QIB or beneficial owner,
the information required by Rule 144A(d)(4) under the Securities Act.
SECTION 9. Series 1999-_ Pay Out Events. If any one of the
following events shall occur with respect to the Investor Certificates:
(a) failure on the part of the Transferor (i) to make any
payment or deposit required by the terms of (A) the Agreement or (B) this
Series Supplement, on or before the date occurring five days after the date
such payment or deposit is required to be made herein or (ii) duly to
observe or perform in any material respect any covenants or agreements of
the Transferor set forth in the Agreement or this Series Supplement, which
failure has a material adverse effect on the Series 1999-_
Certificateholders (which determination shall be made without reference to
the amount of the Collateral Interest) and which continues unremedied for a
period of 60 days after the date on which written notice of such failure,
requiring the same to be remedied, shall have been given to the Transferor
by the Trustee, or to the Transferor and the Trustee by the Holders of
Investor Certificates evidencing Undivided Interests aggregating not less
than 50% of the Investor Interest of this Series 1999-_, and continues to
affect materially and adversely the interests of the Series 1999-_
Certificateholders (which determination shall be made without reference to
the amount of the Collateral Interest) for such period;
(b) any representation or warranty made by the Transferor in
the Agreement or this Series Supplement, or any information contained in a
computer file or microfiche list required to be delivered by the Transferor
pursuant to Section 2.1 or 2.6, (i) shall prove to have been incorrect in
any material respect when made or when delivered, which continues to be
incorrect in any material respect for a period of 60 days after the date on
which written notice of such failure, requiring the same to be remedied,
shall have been given to the Transferor by the Trustee, or to the
Transferor and the Trustee by the Holders of Investor Certificates
evidencing Undivided Interests aggregating not less than 50% of the
Investor Interest of this Series 1999-_, and (ii) as a result of which the
interests of the Series 1999-_ Certificateholders are materially and
adversely affected (which determination shall be made without reference to
the amount of the Collateral Interest) and continue to be materially and
adversely affected for such period; provided, however, that a Series 1999-_
Pay Out Event pursuant to this subsection 9(b) shall not be deemed to have
occurred hereunder if the Transferor has accepted reassignment of the
related Receivable, or all of such Receivables, if applicable, during such
period in accordance with the provisions of the Agreement;
(c) the average Portfolio Yield for any three consecutive
Monthly Periods is reduced to a rate which is less than the average Base
Rate for such period;
(d) the Transferor shall fail to convey Receivables arising
under Additional Accounts, or Participations, to the Trust, as required by
subsection 2.6(a);
(e) any Servicer Default shall occur which would have a
material adverse effect on the Series 1999-_ Certificateholders; or
(f) the Class A Investor Interest shall not be paid in full on
the Class A Scheduled Payment Date or the Class B Investor Interest shall
not be paid in full on the Class B Scheduled Payment Date;
then, in the case of any event described in subsection 9(a), (b) or (e)
hereof, after the applicable grace period set forth in such subparagraphs,
either the Trustee or Holders of Investor Certificates evidencing Undivided
Interests aggregating not less than 50% of the Investor Interest of this
Series 1999-_ by notice then given in writing to the Transferor and the
Servicer (and to the Trustee if given by the Certificateholders) may
declare that a pay out event (a "Series 1999-_ Pay Out Event") has occurred
as of the date of such notice, and in the case of any event described in
subsection 9(c), (d) or (f) hereof, a Series 1999-_ Pay Out Event shall
occur without any notice or other action on the part of the Trustee or the
Investor Certificateholders immediately upon the occurrence of such event.
SECTION 10. Series 1999-_ Termination. The right of the
Investor Certificateholders to receive payments from the Trust will
terminate on the first Business Day following the Series 1999-_ Termination
Date.
SECTION 11. Transfers of Investor Certificates.
(a)Each Class B Certificate will bear a legend
substantially in the following form:
EACH PURCHASER REPRESENTS AND WARRANTS
FOR THE BENEFIT OF THE FIRST NATIONAL BANK OF ATLANTA AND THE TRUSTEE THAT
SUCH PURCHASER IS NOT (I) AN EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION
3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA")) THAT IS SUBJECT TO THE PROVISIONS OF TITLE I OF ERISA, (II) A
PLAN DESCRIBED IN SECTION 4975(e)(1) OF THE INTERNAL REVENUE CODE OF 1986,
AS AMENDED (THE "CODE"), (III) A GOVERNMENTAL PLAN, AS DEFINED IN SECTION
3(32) OF ERISA, SUBJECT TO ANY FEDERAL, STATE OR LOCAL LAW WHICH IS, TO A
MATERIAL EXTENT, SIMILAR TO THE PROVISIONS OF SECTION 406 OF ERISA OR
SECTION 4975 OF THE CODE, (IV) AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE
PLAN ASSETS (AS DEFINED IN 29 C.F.R. SECTION 2410.3-101 OR OTHERWISE UNDER
ERISA) BY REASON OF A PLAN'S INVESTMENT IN THE ENTITY OR (V) A PERSON
INVESTING PLAN ASSETS OF ANY SUCH PLAN (INCLUDING WITHOUT LIMITATION, FOR
PURPOSES OF CLAUSE (IV) AND THIS CLAUSE (V), ANY INSURANCE COMPANY GENERAL
ACCOUNT, BUT EXCLUDING ANY ENTITY REGISTERED UNDER THE INVESTMENT COMPANY
ACT OF 1940, AS AMENDED.
THIS CLASS B CERTIFICATE HAS NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR ANY STATE SECURITIES LAW. THE HOLDER HEREOF, BY PURCHASING THIS
CLASS B CERTIFICATE, AGREES THAT THIS CLASS B CERTIFICATE MAY BE REOFFERED,
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE
SECURITIES ACT AND OTHER APPLICABLE LAWS AND ONLY (1) TO THE TRANSFEROR OR
(2) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT TO A PERSON THAT THE
HOLDER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE
MEANING OF RULE 144A ("QIB") PURCHASING FOR ITS OWN ACCOUNT OR A QIB
PURCHASING FOR THE ACCOUNT OF ANOTHER QIB, WHOM THE HOLDER HAS INFORMED, IN
EACH CASE, THAT THE REOFFER, RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE
IN RELIANCE ON RULE 144A. EACH CERTIFICATE OWNER BY ACCEPTING A BENEFICIAL
INTEREST IN THIS CERTIFICATE IS DEEMED TO REPRESENT THAT IT IS EITHER A QIB
PURCHASING FOR ITS OWN ACCOUNT OR A QIB PURCHASING FOR THE ACCOUNT OF
ANOTHER QIB.
(b) The Collateral Interest shall be subject to the
restrictions on transfer set forth in the Loan Agreement, including Section
7.08 thereof.
SECTION 12. Counterparts. This Series Supplement may be
executed in any number of counterparts, each of which so executed shall be
deemed to be an original, but all of such counterparts shall together
constitute but one and the same instrument.
SECTION 13. Governing Law. THIS SERIES SUPPLEMENT
SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE,
WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS,
RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
SECTION 14. No Petition. The Transferor, the Servicer and the
Trustee, by entering into this Series Supplement and each Investor
Certificateholder, by accepting a Series 1999-_ Certificate hereby covenant
and agree that they will not at any time institute against the Trust, or
join in any institution against the Trust of, any bankruptcy proceedings
under any United States Federal or state bankruptcy or similar law in
connection with any obligations relating to the Investor
Certificateholders, the Agreement or this Series Supplement.
SECTION 15. Tax Representation and Covenant.
(a) It is the intention of the parties hereto that the
Collateral Interest be treated under applicable tax law as indebtedness. In
the event that the Collateral Interest is not so treated, it is the
intention of the parties that the Collateral Interest be treated under
applicable tax law as an interest in a partnership that owns the
Receivables. In the event that the Collateral Interest is treated under
applicable tax law as an interest in a partnership, it is the intention of
the parties that the Collateral Interest be treated as guaranteed payments
and, if for any reason it is not so treated, that the holder of the
Collateral Interest be specially allocated gross interest income equal to
the interest accrued during each Interest Period on the Collateral
Interest.
(b) Any Collateral Interest Holder shall be required to
represent and covenant in connection with its acquisition of an interest in
the Trust (x) it has neither acquired, nor will it sell, trade or transfer
any interest in the Trust or cause any interest in the Trust to be marketed
on or through an "established securities market" within the meaning of Code
section 7704(b)(1), including without limitation an interdealer quotation
system that regularly disseminates firm buy or sell quotations by
identified brokers or dealers by electronic means or otherwise, (y) unless
the Transferor consents otherwise, such holder (i) is properly classified
as, and will remain classified as, a "corporation" as described in Code
section 7701(a)(3) and (ii) is not, and will not become, an S corporation
as described in Code section 1361, and (z) it will (i) cause any
participant with respect to such interest otherwise permitted hereunder to
make similar representations and covenants for the benefit of the
Transferor and the Trust and (ii) forward a copy of such representations
and covenants to the Trustee. Each such holder shall further agree in
connection with its acquisition of such interest that, in the event of any
breach of its (or its participant's) representation and covenant that it
(or its participant) is and shall remain classified as a corporation other
than an S corporation, the Transferor shall have the right to procure a
replacement investor to replace such holder (or its participant), and
further that such holder shall take all actions necessary to permit such
replacement investor to succeed to its rights and obligations as a holder
(or to the rights of its participant).
SECTION 16. Rights Upon Insolvency Event. If an Insolvency
Event occurs relating to the Transferor or any holder of an interest in the
Transferor Certificate (including any Transferor Participation) while any
of the Series 1995-1 Certificates remain outstanding, in accordance with
Section 9.2 of the Agreement, within fifteen (15) days of the Appointment
Day, the Trustee will publish a notice of the occurrence of such event
stating that the Trustee intends to sell, dispose of or otherwise liquidate
the Receivables in a commercially reasonable manner. Notwithstanding the
foregoing and anything to the contrary set forth in this Supplement, the
Series Supplement for any other Series or the Agreement, no such sale,
disposal or liquidation of Receivables shall occur in connection with an
Insolvency Event after the Series 1995-1 Certificates have been paid in
full.
IN WITNESS WHEREOF, the Transferor, the Servicer and the
Trustee have caused this Series 1999-_ Supplement to be duly executed by
their respective officers as of the day and year first above written.
THE FIRST NATIONAL BANK
OF ATLANTA
Transferor and Servicer
By: /s/ Suzanne Bachman
--------------------------------
Name: Suzanne Bachman
Title: Vice President
THE BANK OF NEW YORK
(DELAWARE)
Trustee
By: /s/ Cheryl Laser
------------------------------
Name: Cheryl Laser
Title: Assistant Vice President
EXHIBIT A-1
FORM OF CERTIFICATE
CLASS A
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), TO THE FIRST NATIONAL BANK OF ATLANTA OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR
TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
No.__ $_______
CUSIP NO.
WACHOVIA CREDIT CARD MASTER TRUST
CLASS A FLOATING RATE
ASSET BACKED CERTIFICATE, SERIES 1999-_
Evidencing an Undivided Interest in a trust, the corpus of which consists
of a portfolio of MasterCard(R) and VISA(R)* credit card receivables
generated or acquired by The First National Bank of Atlanta and other
assets and interests constituting the Trust under the Pooling and Servicing
Agreement described below.
(Not an interest in or obligation of
The First National Bank of Atlanta
or any Affiliate thereof.)
This certifies that CEDE & CO. (the "Class A
Certificateholder") is the registered owner of an Undivided Interest in a
trust (the "Trust"), the corpus of which consists of a portfolio of
receivables (the "Receivables") now existing or hereafter created and
arising in connection with selected MasterCard and VISA credit card
accounts (the "Accounts") of The First National Bank of Atlanta, a national
banking association, all monies due or to become due in payment of the
Receivables (including all Finance Charge Receivables and recoveries on any
- -----------
* MasterCard(R) and VISA(R) are federally registered service marks of
MasterCard International Inc. and of Visa U.S.A., Inc., respectively.
charged-off Receivables), the right to certain amounts received as
Intercharge and the Collateral Interest, all proceeds of the foregoing and
the other assets and interests constituting the Trust pursuant to an
Amended and Restated Pooling and Servicing Agreement dated as of June 4,
1999 as supplemented by the Series 1999-_ Supplement dated as of , 1999
(collectively, as amended from time to time, the "Pooling and Servicing
Agreement"), by and between The First National Bank of Atlanta, as
Transferor (the "Transferor") and as Servicer (the "Servicer"), and The
Bank of New York (Delaware), as Trustee (the "Trustee"), a summary of
certain of the pertinent provisions of which is set forth herein. To the
extent not defined herein, capitalized terms used herein have the
respective meanings assigned to them in the Pooling and Servicing
Agreement.
The Series 1999-_ Certificates are issued in two classes, the
Class A Certificates (of which this certificate is one) and the Class B
Certificates, which are subordinated to the Class A Certificates in certain
rights of payment as described herein and in the Pooling and Servicing
Agreement.
The Transferor has structured the Pooling and Servicing
Agreement and the Series 1999-_ Certificates with the intention that the
Series 1999-_ Certificates will qualify under applicable tax law as
indebtedness, and each of the Transferor, the Holder of the Transferor
Certificate, the Servicer and each Series 1999-_ Certificateholder (or
Series 1999-_ Certificate Owner) by acceptance of its Series 1999-_
Certificate (or in the case of a Series 1999-_ Certificate Owner, by virtue
of such Series 1999-_ Certificate Owner's acquisition of a beneficial
interest therein), agrees to treat and to take no action inconsistent with
the treatment of the Series 1999-_ Certificates (or any beneficial interest
therein) as indebtedness for purposes of federal, state, local and foreign
income or franchise taxes and any other tax imposed on or measured by
income. Each Series 1999-_ Certificateholder agrees that it will cause any
Series 1999-_ Certificate Owner acquiring an interest in a Series 1999-_
Certificate through it to comply with the Pooling and Servicing Agreement
as to treatment of the Series 1999-_ Certificates as indebtedness for
certain tax purposes.
This Class A Certificate is issued under and is subject to the
terms, provisions and conditions of the Pooling and Servicing Agreement, to
which Pooling and Servicing Agreement, as amended from time to time, the
Class A Certificateholder by virtue of the acceptance hereof assents and by
which the Class A Certificateholder is bound. This Class A Certificates is
one of a duly authorized Series of Investor Certificates entitled "Wachovia
Credit Card Master Trust Class A Floating Rate Asset Backed Certificates,
Series 1999-_" (the "Class A Certificates"), each of which represents an
Undivided Interest in the Trust, including the right to receive the
Collections and other amounts allocated to the Class A Certificates at the
times and in the amounts specified in the Pooling and Servicing Agreement
and to be deposited in the Investor Accounts, the Principal Funding Account
and the Reserve Account or paid to the Class A Certificateholders.
Also issued under the Pooling and Servicing Agreement are the
"Wachovia Credit Card Master Trust Class B Floating Rate Asset Backed
Certificates, Series 1999-_" (the "Class B Certificates"), which represent
an Undivided Interest in the Trust subordinate to the Class A Certificates,
and the "Wachovia Credit Card Master Trust Collateral Interest, Series
1999-_" (the "Collateral Interest" and, collectively with the Class A
Certificates and the Class B Certificates, the "Investor Certificates"),
which is an undivided interest in the Trust subordinated to the Class A
Certificates and Class B Certificates. The subordination of the Class B
Certificates and the subordination of the Collateral Interest to the Class
A Certificates shall constitute the Credit Enhancement for the Class A
Certificates.
The aggregate interest represented by the Class A Certificates
and the Class B Certificates at any time in the Principal Receivables in
the Trust shall not exceed an amount equal to the Class A Investor Interest
and the Class B Investor Interest, respectively, at such time. As of the
Closing Date, the Class A Initial Investor Interest is $ , the Class B
Initial Investor Interest is $ and the Collateral Initial Interest is $ .
The Class A Investor Interest on any date of determination will be an
amount equal to (a) the Class A Initial Investor Interest minus (b) the
aggregate amount of payments of principal made to the Class A
Certificateholders prior to such date of determination, and minus (c) the
excess, if any, of the aggregate amount of Class A Investor Charge-Offs
pursuant to subsection 4.10(a) of the Pooling and Servicing Agreement over
Class A Investor Charge-Offs reimbursed prior to such date of determination
pursuant to subsection 4.11(b) of the Pooling and Servicing Agreement;
provided, however, that the Class A Investor Interest may not be reduced
below zero.
For the purpose of allocating Collections of Finance Charge
Receivables and Receivables in Defaulted Accounts for each Monthly Period
during the Controlled Accumulation Period, the Class A Investor Interest
will be reduced (such reduced amount, the "Class A Adjusted Investor
Interest") by the aggregate principal amount of funds on deposit in the
Principal Funding Account. The Class A Investor Interest together with the
aggregate interest represented by the Class B Certificates in the Principal
Receivables in the Trust (the "Class B Investor Interest") and the
aggregate interest represented by the Collateral Interest in the Principal
Receivables in the Trust are sometimes collectively referred to herein as
the "Investor Interest."
In addition to the Class A Certificates, the Class B
Certificates and the Collateral Interest, a Transferor Certificate
representing an undivided interest in the Trust will be issued to the
Transferor pursuant to the Pooling and Servicing Agreement. The Transferor
Certificate will represent the interest in the Principal Receivables not
represented by all of the Series of Investor Certificates issued by the
Trust. The Transferor Certificate may be exchanged by the Transferor
pursuant to the Pooling and Servicing Agreement for a newly issued Series
of Investor Certificates and a reissued Transferor Certificate upon the
conditions set forth in the Pooling and Servicing Agreement.
Interest will accrue on the Class A Certificates from the
Closing Date through , 1999, from , 1999 through , 1999 and
with respect to each Interest Period thereafter, at the rate of LIBOR plus
% per annum, as more specifically set forth in the Pooling and Servicing
Agreement (the "Class A Certificate Rate"), and will be distributed on ,
1999 and on the 15th day of each calendar month thereafter, or if such day
is not a Business Day, on the next succeeding Business Day (a "Distribution
Date"), to the Class A Certificateholders of record as of the last Business
Day of the calendar month preceding such Distribution Date (the "Record
Date"). During the Rapid Amortization Period, in addition to Class A
Monthly Interest, Class A Monthly Principal will be distributed to the
Class A Certificateholder on each Distribution Date until the Class A
Investor Interest has been paid in full. With respect to the Controlled
Accumulated Period, in addition to monthly payments of Class A Monthly
Interest, the amount on deposit in the Principal Funding Account will be
distributed as principal to the Class A Certificateholders on the
Distribution Date (the "Class A Scheduled Payment Date"), unless
distributed earlier as a result of the occurrence of a Pay Out Event in
accordance with the Pooling and Servicing Agreement.
On or before each Transfer Date, the Servicer shall instruct
the Trustee in writing to withdraw and the Trustee, acting in accordance
with such instructions, shall withdraw on such Transfer Date, from the
Finance Charge Account to the extent of funds on deposit therein (i)
Collections of Finance Charge Receivables processed as of the end of the
preceding Monthly Period which have been allocated to the Series 1999-_
Certificates, (ii) with respect to the Class A Certificates, from other
amounts constituting Class A Available Funds, and (iii) with respect to the
Class B Certificates, from other amounts constituting Class B Available
Funds, the following amounts: (x) an amount equal to the product of (i) (A)
a fraction, the numerator of which is the actual number of days in the
related Interest Period and the denominator of which is 360, times (B) the
Class A Certificate Rate for such Interest Period and (ii) the Class A
Investor Interest as of the close of business on the last day of the
preceding Monthly Period ("Class A Monthly Interest"); provided, however,
that with respect to the first Distribution Date, Class A Monthly Interest
shall be equal to the interest accrued on the Class A Initial Investor
Interest at the applicable Class A Certificate Rate for the period from the
Closing Date through , 1999 and the period from , 1999 through
, 1999; and (y) amounts up to the Class B Monthly Interest followed
by the Collateral Monthly Interest, in the actual amounts and manner described
in the Pooling and Servicing Agreement.
On each Transfer Date, the Trustee shall apply the Class A
Available Funds withdrawn from the Finance Charge Account, as required by
the Pooling and Servicing Agreement, in the following order of priority:
(i) an amount equal to the Class A Monthly Interest for such Transfer Date,
plus the amount of any Class A Deficiency Amount for such Transfer Date,
plus the amount of any Class A Additional Interest for such Transfer Date,
(ii) an amount equal to the Class A Servicing Fee for such Transfer Date
plus the amount of any Class A Servicing Fee due but not paid on any prior
Transfer Date and (iii) an amount equal to the Class A Investor Default
Amount, if any, for the preceding Monthly Period. The Trustee on each
Transfer Date shall apply the Class B Available Funds withdrawn from the
Finance Charge Account, as required by the Pooling and Servicing Agreement,
in the following order of priority: (i) the Class B Monthly Interest for
such Transfer Date, plus the amount of any Class B Deficiency Amount for
such Transfer Date, plus the amount of any Class B Additional Interest for
such Transfer Date, and (ii) the Class B Servicing Fee for such Transfer
Date plus the amount of any Class B Servicing Fee due but not paid on any
prior Transfer Date. The balance of the amount withdrawn from the Finance
Charge Account allocable to the Series 1999-_ Certificates, if any, after
giving effect to the applications above (and, in certain circumstances,
payments in respect of the Collateral Interest Servicing Fee) shall
constitute "Excess Spread."
On or before the Transfer Date immediately succeeding the
Monthly Period in which the Controlled Accumulated Period or the Rapid
Amortization Period commences and on or before each Transfer Date
thereafter, the Servicer shall instruct the Trustee in writing to withdraw,
and the Trustee, acting in accordance with such instructions, shall
withdraw on such Transfer Date from the Principal Account an amount equal
to the Available Investor Principal Collections on deposit in the Principal
Account and from such amounts, (A) deposit an amount equal to Class A
Monthly Principal (i) during the Controlled Accumulation Period, into the
Principal Funding Account, and (ii) during the Rapid Amortization Period,
into the Distribution Account, (B) after the Class A Investor Interest has
been paid in full, deposit an amount equal to Class B Monthly Principal
into the Distribution Account, and (C) any remaining amounts in the
Principal Account shall be used for payment of Collateral Monthly
Principal.
On the earlier to occur of the first Transfer Date with respect
to the Rapid Amortization Period or the Transfer Date immediately preceding
the Class A Scheduled Payment Date, the Servicer shall instruct the Trustee
to withdraw, and the Trustee shall withdraw from the Principal Funding
Account and deposit in the Distribution Account the amount on deposit in
the Principal Funding Account.
On the Class A Scheduled Payment Date or on each Distribution
Date with respect to a Rapid Amortization Period, the Trustee shall pay
from amounts on deposit in the Distribution Account an amount equal to the
lesser of the Class A Investor Interest and the amount of Available
Investor Principal Collections on deposit in the distribution Account with
respect to the related Monthly Period, and after the Class A Investor
Interest has been paid in full (after taking into account distributions to
be made on the related Distribution Date), Available Investor Principal
Collections shall be applied to the Class B Certificates and Collateral
Interest as specified in the Pooling and Servicing Agreement.
On each Distribution Date, the Trustee shall pay to the Class A
Certificateholders and the Class B Certificateholders the amount deposited
on the related Transfer Date into the Distribution Account in respect of
Class A Monthly Interest and Class B Monthly Interest, respectively. On
each Transfer Date, the Trustee shall pay to the Collateral Interest Holder
the Collateral Monthly Interest, to the extent funds are available.
Distributions with respect to this Series 1999-_ Certificate will be made
by the Trustee by, except as otherwise provided in the Pooling and
Servicing Agreement, check mailed to the address of each Series 1999-_
Certificateholder of record appearing in the Certificate Register and
except for the final distribution in respect of this Series 1999-_
Certificate, without the presentation or surrender of this Series 1999-_
Certificate or the making of any notation thereon; provided, however, that
with respect to Series 1999-_ Certificates registered in the name of the
nominee of a Clearing Agency, distributions will be made in the form of
immediately available funds.
This Class A Certificate represents an interest in only the
Wachovia Credit Card Master Trust. This Class A Certificate does not
represent an obligation of, or an interest in, the Transferor or the
Servicer, and neither the Series 1999-_ Certificates nor the Accounts or
Receivables are insured or guaranteed by the Federal Deposit Insurance
Corporation or any other governmental agency. This Series 1999-_
Certificate is limited in right of payment to certain collections
respecting the Receivables, all as more specifically set forth hereinabove
and in the Pooling and Servicing Agreement.
The Transfer of this Class A Certificate shall be registered in
the Certificate Register upon surrender of this agency maintained by the
Transfer Agent and Registrar accompanied by a written instrument of
transfer in a form satisfactory to the Trustee and the Transfer Agent and
Registrar duly executed by the Class A Certificateholder or such Class A
Certificateholder's attorney-in-fact duly authorized in writing, and
thereupon one or more new Class A Certificates of authorized denominations
and for the same aggregate Undivided Interests will be issued to the
designated transferee or transferees.
The Servicer, the Trustee and the Transfer Agent and Registrar,
and any agent of any of them, may treat the Person in whose name this Class
A Certificate is registered as the owner hereof for all purposes, and
neither the Servicer, the Trustee, the Paying Agent, the Transfer Agent and
Registrar, nor any agent of any of them or of any such agent shall be
affected by notice to the contrary except in certain circumstances
described in the Pooling and Servicing Agreement.
The Pooling and Servicing Agreement provides that the right of
the Series 1999-_ Certificateholders to receive payment from the Trust will
terminate on the first Business Day following the Series 1999-_ Termination
Date. Upon the termination of the Trust pursuant to Section 12.1 of the
Pooling and Servicing Agreement, the Trustee shall assign and convey to the
Holder of the Transferor Certificate (without recourse, representation or
warranty) all right, title and interest of the Trust in the Receivables,
whether then existing or thereafter created, and all proceeds of such
Receivables and Insurance Proceeds relating to such Receivables. The
Trustee shall execute and deliver such instruments of transfer and
assignment, in each case without recourse, as shall be prepared by the
Servicer reasonably requested by the Holder of the Transferor Certificate
to vest in such Holder all right, title and interest which the Trustee had
in the Receivables.
Unless the certificate of authentication hereon has been
executed by or on behalf of the Trustee, by manual signature, this Class A
Certificate shall not be entitled to any benefit under the Pooling and
Servicing Agreement, or be valid for any purpose.
IN WITNESS WHEREOF, The First National Bank of Atlanta has
caused this Class A Certificate to be duly executed by a duly authorized
officer.
By: _____________________
Authorized Officer
Date:___________________
Form of Trustee's Certificate of Authentication
CERTIFICATE OF AUTHENTICATION
This is one of the Class A Certificates referred to in the
within-mentioned Pooling and Servicing Agreement.
THE BANK OF NEW YORK (DELAWARE),
Trustee
By: ________________________________
Authorized Signatory
EXHIBIT A-2
FORM OF CERTIFICATE
CLASS B
EACH PURCHASER REPRESENTS AND WARRANTS FOR THE BENEFIT OF
THE FIRST NATIONAL BANK OF ATLANTA AND THE TRUSTEE THAT SUCH
PURCHASER IS NOT (I) AN EMPLOYEE BENEFIT PLAN (AS DEFINED IN
SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED ("ERISA")) THAT IS SUBJECT TO THE PROVISIONS
OF TITLE I OF ERISA, (II) A PLAN DESCRIBED IN SECTION
4975(E)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
(THE "CODE"), (III) A GOVERNMENTAL PLAN, AS DEFINED IN SECTION
3(32) OF ERISA, SUBJECT TO ANY FEDERAL, STATE OR LOCAL LAW
WHICH IS, TO A MATERIAL EXTENT, SIMILAR TO THE PROVISIONS OF
SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE, (IV) AN
ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS (AS DEFINED
IN 29 C.F.R. SECTION 2510.3-101 OR OTHERWISE UNDER ERISA) BY
REASON OF A PLAN'S INVESTMENT IN THE ENTITY OR (V) A PERSON
INVESTING PLAN ASSETS OF ANY SUCH PLAN (INCLUDING WITHOUT
LIMITATION, FOR PURPOSES OF CLAUSE (IV) AND THIS CLAUSE (V),
ANY INSURANCE COMPANY GENERAL ACCOUNT, BUT EXCLUDING ANY ENTITY
REGISTERED UNDER THE INVESTMENT COMPANY ACT OF 1940, AS
AMENDED).
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), TO THE FIRST NATIONAL BANK OF ATLANTA OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR
TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
No.__ $_______
CUSIP NO.
WACHOVIA CREDIT CARD MASTER TRUST
CLASS B FLOATING RATE
ASSET BACKED CERTIFICATE, SERIES 1999-_
Evidencing an Undivided Interest in a trust, the corpus of which consists
of a portfolio of MasterCard(R) and VISA(R)* credit card receivables
generated or acquired by The First National Bank of Atlanta and other
assets and interests constituting the Trust under the Pooling and Servicing
Agreement described below.
(Not an interest in or obligation of
The First National Bank of Atlanta
or any Affiliate thereof.)
This certifies that CEDE & CO. (the "Class B
Certificateholder") is the registered owner of an Undivided Interest in a
trust (the "Trust"), the corpus of which consists of a portfolio of
receivables (the "Receivables") now existing or hereafter created and
arising in connection with selected MasterCard and VISA credit card
accounts (the "Accounts") of The First National Bank of Atlanta, a national
banking association, all monies due or to become due in payment of the
Receivables (including all Finance Charge Receivables and recoveries on any
charged-off Receivables), the right to certain amounts received as
Intercharge and the Collateral Interest, all proceeds of the foregoing and
the other assets and interests constituting the Trust pursuant to an
Amended and Restated Pooling and Servicing Agreement dated as of June 4,
1999 as supplemented by the Series 1999-_ Supplement dated as of , 1999
(collectively, as amended from time to time, the "Pooling and Servicing
Agreement"), by and between The First National Bank of Atlanta, as
Transferor (the "Transferor") and as Servicer (the "Servicer"), and The
Bank of New York (Delaware), as Trustee (the "Trustee"), a summary of
certain of the pertinent provisions of which is set forth herein. To the
extent not defined herein, capitalized terms used herein have the
respective meanings assigned to them in the Pooling and Servicing
Agreement.
The Series 1999-_ Certificates are issued in two classes, the
Class A Certificates and the Class B Certificates (of which this
certificate is one), which are subordinated to the Class A Certificates in
certain rights of payment as described herein and in the Pooling and
Servicing Agreement.
The Transferor has structured the Pooling and Servicing
Agreement and the Series 1999-_ Certificates with the intention that the
Series 1999-_ Certificates will qualify under applicable tax law as
indebtedness, and each of the Transferor, the Holder of the Transferor
Certificate, the Servicer and each Series 1999-_ Certificateholder (or
Series 1999-_ Certificate Owner) by acceptance of its Series 1999-_
Certificate (or in the case of a Series 1999-_ Certificate Owner, by virtue
of such Series 1999-_ Certificate Owner's acquisition of a beneficial
interest therein), agrees to treat and to take no action inconsistent with
the treatment of the Series 1999-_ Certificates (or any beneficial interest
therein) as indebtedness for purposes of federal, state, local and foreign
income or franchise taxes and any other tax imposed on or measured by
- -----------
* MasterCard(R) and VISA(R) are federally registered service marks
of MasterCard International Inc. and of Visa U.S.A., Inc., respectively.
income. Each Series 1999-_ Certificateholder agrees that it will cause any
Series 1999-_ Certificate Owner acquiring an interest in a Series 1999-_
Certificate through it to comply with the Pooling and Servicing Agreement
as to treatment of the Series 1999-_ Certificates as indebtedness for
certain tax purposes.
This Class B Certificate is issued under and is subject to the
terms, provisions and conditions of the Pooling and Servicing Agreement, to
which Pooling and Servicing Agreement, as amended from time to time, the
Class B Certificateholder by virtue of the acceptance hereof assents and by
which the Class B Certificateholder is bound. This Class B Certificate is
one of a duly authorized Series of Investor Certificates entitled "Wachovia
Credit Card Master Trust Class B Floating Rate Asset Backed Certificates,
Series 1999-_" (the "Class B Certificates"), each of which represents an
Undivided Interest in the Trust, including the right to receive the
Collections and other amounts allocated to the Class B Certificates at the
times and in the amounts specified in the Pooling and Servicing Agreement
and to be deposited in the Investor Accounts, the Principal Funding Account
and the Reserve Account or paid to the Class B Certificateholders.
Also issued under the Pooling and Servicing Agreement are the
"Wachovia Credit Card Master Trust Class A Floating Rate Asset Backed
Certificates, Series 1999-_" (the "Class A Certificates"), which represent
an Undivided Interest in the Trust, and the "Wachovia Credit Card Master
Trust Collateral Interest, Series 1999-_" (the "Collateral Interest" and,
collectively with the Class A Certificates and the Class B Certificates,
the "Investor Certificates"), which is an undivided interest in the Trust
subordinated to the Class A Certificates and Class B Certificates. The
subordination of the Collateral Interest to the Class B Certificates shall
constitute the Credit Enhancement for the Class B Certificates. The Class B
Certificates are subordinated to the Class A Certificates.
The aggregate interest represented by the Class A Certificates
and the Class B Certificates at any time in the Principal Receivables in
the Trust shall not exceed an amount equal to the Class A Investor Interest
and the Class B Investor Interest, respectively, at such time. As of the
Closing Date, the Class A Initial Investor Interest is $ , the Class B
Initial Investor Interest is $ and the Collateral Initial Interest is $
. The Class B Investor Interest on any date of determination will be
an amount equal to (a) the Class B Initial Investor Interest minus (b) the
aggregate amount of payments of principal made to the Class B
Certificateholders prior to such date of determination, minus (c) the
aggregate amount of Class B Investor Charge-Offs pursuant to subsection
4.10(b) of the Pooling and Servicing Agreement, minus (d) the amount of
Reallocated Class B Principal Collections allocated pursuant to subsection
4.12(a) for which the Collateral Interest has not been reduced, minus (e)
an amount equal to the amount by which the Class B Investor Interest has
been reduced pursuant to subsection 4.10(a) and plus (f) the aggregate
amount of Excess Spread allocated and available pursuant to subsection
4.11(d) for the purpose of reimbursing amounts deducted pursuant to the
foregoing clauses (c), (d) and (e); provided, however, that the Class B
Investor Interest may not be reduced below zero.
The Class B Investor Interest together with the Class A
Investor Interest and the aggregate interest represented by the Collateral
Interest in the Principal Receivables in the Trust are sometimes
collectively referred to herein as the "Investor Interest."
In addition to the Class A Certificates, the Class B
Certificates and the Collateral Interest, a Transferor Certificate
representing an undivided interest in the Trust will be issued to the
Transferor pursuant to the Pooling and Servicing Agreement. The Transferor
Certificate will represent the interest in the Principal Receivables not
represented by all of the Series of Investor Certificates issued by the
Trust. The Transferor Certificate may be exchanged by the Transferor
pursuant to the Pooling and Servicing Agreement for a newly issued Series
of Investor Certificates and a reissued Transferor Certificate upon the
conditions set forth in the Pooling and Servicing Agreement.
Interest will accrue on the Class B Certificates from the
Closing Date through , 1999, from , 1999, through , 1999 and with respect
to each Interest Period thereafter, at the rate of LIBOR plus % per annum,
as more specifically set forth in the Pooling and Servicing Agreement (the
"Class B Certificate Rate"), and will be distributed on , 1999 and on the
15th day of each calendar month thereafter, or if such day is not a
Business Day, on the next succeeding Business Day (a "Distribution Date"),
to the Class B Certificateholders of record as of the last Business Day of
the calendar month preceding such Distribution Date (the "Record Date").
During the Rapid Amortization Period, in addition to Class B Monthly
Interest, following payment in full of the Class A Investor Interest, Class
B Monthly Principal will be distributed to the Class B Certificateholder on
each Distribution Date until the Class B Investor Interest has been paid in
full. With respect to the Controlled Accumulated Period following payment
in full of the Class A Investor Interest, Class B Monthly Principal will be
distributed to the Class B Certificateholders on the Distribution Date (the
"Class B Scheduled Payment Date"), unless distributed earlier as a result
of the occurrence of a Pay Out Event in accordance with the Pooling and
Servicing Agreement.
On or before each Transfer Date, the Servicer shall instruct
the Trustee in writing to withdraw and the Trustee, acting in accordance
with such instructions, shall withdraw on such Transfer Date, from the
Finance Charge Account to the extent of funds on deposit therein (i)
Collections of Finance Charge Receivables processed as of the end of the
preceding Monthly Period which have been allocated to the Series 1999-_
Certificates, (ii) with respect to the Class A Certificates, from other
amounts constituting Class A Available Funds, and (iii) with respect to the
Class B Certificates, from other amounts constituting Class B Available
Funds, the following amounts: (x) amounts up to the Class A Monthly
Interest; (y) an amount equal to the product of (i) (A) a fraction, the
numerator of which is the actual number of days in the related Interest
Period and the denominator of which is 360, times (B) the Class B
Certificate Rate for such Interest Period and (ii) the Class B Investor
Interest as of the close of business on the last day of the preceding
Monthly Period ("Class B Monthly Interest"), provided, however, that with
respect to the first Distribution Date, Class B Monthly Interest shall be
equal to the interest accrued on the Class B Initial Investor Interest at
the applicable Class A Certificate Rate for the period from the Closing
Date through , 1999 and the period from , 1999 through , 1999; and (z)
amounts up to the Collateral Monthly Interest, in the actual amounts and
manner described in the Pooling and Servicing Agreement.
On each Transfer Date, the Trustee shall apply the Class A
Available Funds withdrawn from the Finance Charge Account, as required by
the Pooling and Servicing Agreement, in the following order of priority:
(i) an amount equal to the Class A Monthly Interest for such Transfer Date,
plus the amount of any Class A Deficiency Amount for such Transfer Date,
plus the amount of any Class A Additional Interest for such Transfer Date,
(ii) an amount equal to the Class A Servicing Fee for such Transfer Date
plus the amount of any Class A Servicing Fee due but not paid on any prior
Transfer Date and (iii) an amount equal to the Class A Investor Default
Amount, if any, for the preceding Monthly Period. The Trustee on each
Transfer Date shall apply the Class B Available Funds withdrawn from the
Finance Charge Account, as required by the Pooling and Servicing Agreement,
in the following order of priority: (i) the Class B Monthly Interest for
such Transfer Date, plus the amount of any Class B Deficiency Amount for
such Transfer Date, plus the amount of any Class B Additional Interest for
such Transfer Date, and (ii) the Class B Servicing Fee for such Transfer
Date plus the amount of any Class B Servicing Fee due but not paid on any
prior Transfer Date. The balance of the amount withdrawn from the Finance
Charge Account allocable to the Series 1999-_ Certificates, if any, after
giving effect to the applications above (and, in certain circumstances,
payments in respect of the Collateral Interest Servicing Fee) shall
constitute "Excess Spread."
On or before the Transfer Date immediately succeeding the
Monthly Period in which the Controlled Accumulated Period or the Rapid
Amortization Period commences and on or before each Transfer Date
thereafter, the Servicer shall instruct the Trustee in writing to withdraw,
and the Trustee, acting in accordance with such instructions, shall
withdraw on such Transfer Date from the Principal Account an amount equal
to the Available Investor Principal Collections on deposit in the Principal
Account and from such amounts, (A) deposit an amount equal to Class A
Monthly Principal (i) during the Controlled Accumulation Period, into the
Principal Funding Account, and (ii) during the Rapid Amortization Period,
into the Distribution Account, (B) after the Class A Investor Interest has
been paid in full, deposit an amount equal to Class B Monthly Principal
into the Distribution Account, and (C) any remaining amounts in the
Principal Account shall be used for payment of Collateral Monthly
Principal.
On the Class B Scheduled Payment Date or on each Distribution
Date with respect to a Rapid Amortization Period, the Trustee shall pay
from amounts on deposit in the Distribution Account an amount equal to the
lesser of the Class B Investor Interest and the amount of Available
Investor Principal Collections on deposit in the Distribution Account with
respect to the related Monthly Period after payment of any Class A Monthly
Principal, and after the Class B Investor Interest has been paid in full
(after taking into account distributions to be made on the related
Distribution Date), Available Investor Principal Collections shall be
applied to the Collateral Interest as specified in the Pooling and
Servicing Agreement.
On each Distribution Date, the Trustee shall pay to the Class A
Certificateholders and the Class B Certificateholders the amount deposited
on the related Transfer Date into the Distribution Account in respect of
Class A Monthly Interest and Class B Monthly Interest, respectively. On
each Transfer Date, the Trustee shall pay to the Collateral Interest Holder
the Collateral Monthly Interest, to the extent funds are available.
Distributions with respect to this Series 1999-_ Certificate will be made
by the Trustee by, except as otherwise provided in the Pooling and
Servicing Agreement, check mailed to the address of each Series 1999-_
Certificateholder of record appearing in the Certificate Register and
except for the final distribution in respect of this Series 1999-_
Certificate, without the presentation or surrender of this Series 1999-_
Certificate or the making of any notation thereon; provided, however, that
with respect to Series 1999-_ Certificates registered in the name of the
nominee of a Clearing Agency, distributions will be made in the form of
immediately available funds.
This Class B Certificate represents an interest in only the
Wachovia Credit Card Master Trust. This Class B Certificate does not
represent an obligation of, or an interest in, the Transferor or the
Servicer, and neither the Series 1999-_ Certificates nor the Accounts or
Receivables are insured or guaranteed by the Federal Deposit Insurance
Corporation or any other governmental agency. This Series 1999-_
Certificate is limited in right of payment to certain collections
respecting the Receivables, all as more specifically set forth hereinabove
and in the Pooling and Servicing Agreement.
The Transfer of this Class B Certificate shall be registered in
the Certificate Register upon surrender of this agency maintained by the
Transfer Agent and Registrar accompanied by a written instrument of
transfer in a form satisfactory to the Trustee and the Transfer Agent and
Registrar duly executed by the Class B Certificateholder or such Class B
Certificateholder's attorney-in-fact duly authorized in writing, and
thereupon one or more new Class B Certificates of authorized denominations
and for the same aggregate Undivided Interests will be issued to the
designated transferee or transferees.
The Servicer, the Trustee and the Transfer Agent and Registrar,
and any agent of any of them, may treat the Person in whose name this Class
B Certificate is registered as the owner hereof for all purposes, and
neither the Servicer, the Trustee, the Paying Agent, the Transfer Agent and
Registrar, nor any agent of any of them or of any such agent shall be
affected by notice to the contrary except in certain circumstances
described in the Pooling and Servicing Agreement.
The Pooling and Servicing Agreement provides that the right of
the Series 1999-_ Certificateholders to receive payment from the Trust will
terminate on the first Business Day following the Series 1999-_ Termination
Date. Upon the termination of the Trust pursuant to Section 12.1 of the
Pooling and Servicing Agreement, the Trustee shall assign and convey to the
Holder of the Transferor Certificate (without recourse, representation or
warranty) all right, title and interest of the Trust in the Receivables,
whether then existing or thereafter created, and all proceeds of such
Receivables and Insurance Proceeds relating to such Receivables. The
Trustee shall execute and deliver such instruments of transfer and
assignment, in each case without recourse, as shall be prepared by the
Servicer reasonably requested by the Holder of the Transferor Certificate
to vest in such Holder all right, title and interest which the Trustee had
in the Receivables.
Unless the certificate of authentication hereon has been
executed by or on behalf of the Trustee, by manual signature, this Class B
Certificate shall not be entitled to any benefit under the Pooling and
Servicing Agreement, or be valid for any purpose.
IN WITNESS WHEREOF, The First National Bank of Atlanta has
caused this Class B Certificate to be duly executed by a duly authorized
officer.
By: ____________________________
Authorized Officer
Date:__________________
Form of Trustee's Certificate of Authentication
CERTIFICATE OF AUTHENTICATION
This is one of the Class B Certificates referred to in the
within-mentioned Pooling and Servicing Agreement.
THE BANK OF NEW YORK (Delaware),
Trustee
By:______________________________
Authorized Signatory
EXHIBIT B
FORM OF MONTHLY PAYMENT INSTRUCTIONS AND NOTIFICATION
TO THE TRUSTEE
THE BANK OF NEW YORK (DELAWARE)
WACHOVIA CREDIT CARD MASTER TRUST SERIES 1999-_
MONTHLY PERIOD ENDING __________ __, ____
Capitalized terms used in this notice have their respective meanings set
forth in the Pooling and Servicing Agreement. References herein to certain
sections and subsections are references to the respective sections and
subsections of the Pooling and Servicing Agreement as supplemented by the
Series 1999-_ Supplement. This notice is delivered pursuant to Section 4.9.
A) The First National Bank of Atlanta is the Servicer under the
Pooling and Servicing Agreement.
B) The undersigned is a Servicing Officer.
C) The date of this notice is on or before the related Transfer Date
under the Pooling and Servicing Agreement.
I. INSTRUCTION TO MAKE A WITHDRAWAL
Pursuant to Section 4.9, the Servicer does hereby instruct the Trustee (i)
to make withdrawals from the Finance Charge Account, the Principal Account,
the Principal Funding Account and the Distribution Account on ___________
__, ____, which date is a Transfer Date under the Pooling and Servicing
Agreement, in aggregate amounts set forth below in respect of the following
amounts and (ii) to apply the proceeds of such withdrawals in accordance
with accordance with subsection 3(a) of the Series 1999-_ Supplement and
Section 4.9 of the Pooling and Servicing Agreement:
A. Pursuant to subsection 3(a) of the Series 1999-_ Supplement:
1. Servicer Interchange $____________
B. Pursuant to subsection 4.9(a)(i):
1. Class A Monthly Interest at the Class A
Certificate Rate on the Class A Investor Interest $____________
2. Class A Deficiency Amount $____________
3. Class A Additional Interest $____________
C. Pursuant to subsection 4.9(a)(ii):
1. Class A Servicing Fee $____________
2. Accrued and unpaid Class A Servicing Fee $____________
D. Pursuant to subsection 4.9(a)(iii):
1. Class A Investor Default Amount $____________
E. Pursuant to subsection 4.9(a)(iv):
1. Portion of Excess Spread from Class A Available
Funds to be allocated and distributed as
provided in Section 4.11 $____________
F. Pursuant to subsection 4.9(b)(i):
1. Class B Monthly Interest at the Class B
Certificate Rate on the Class B Investor Interest $____________
2. Class B Deficiency Amount $____________
3. Class B Additional Interest $____________
G. Pursuant to subsection 4.9(b)(ii):
1. Class B Servicing Fee $____________
2. Accrued and unpaid Class B Servicing Fee $____________
H. Pursuant to subsection 4.9(b)(iii):
1. Portion of Excess Spread from Class B
Available Funds to be allocated and
distributed as provided in Section 4.11 $____________
I. Pursuant to subsection 4.9(c)(i):
1. Collateral Interest Servicing Fee, if applicable $____________
2. Accrued and unpaid Collateral Interest Servicing
Fee, if applicable $____________
J. Pursuant to subsection 4.9(c)(ii):
1. Portion of Excess Spread from Collateral
Available Funds to be allocated and distributed
as provided in Section 4.11 $____________
Total $
============
K. Pursuant to subsection 4.9(d)(i):
1. Collateral Monthly Principal, if any, applied in
accordance with the Loan Agreement $____________
L. Pursuant to subsection 4.9(d)(ii):
1. Amount to be treated as Shared Principal
Collections $____________
M. Pursuant to subsection 4.9(d)(iii):
1. Amount to be paid to the Holder of the Transferor
Certificate $____________
2. Amount to be deposited in the Excess Funding
Account $____________
N. Pursuant to subsection 4.9(e)(i):
1. Class A Monthly Principal $____________
O. Pursuant to subsection 4.9(e)(ii):
1. Class B Monthly Principal $____________
P. Pursuant to subsection 4.9(e)(iii):
1. Collateral Monthly Principal to be applied in
accordance with the Loan Agreement $____________
Q. Pursuant to subsection 4.9(e)(iv):
1. Amount to be treated as Shared Principal
Collections $____________
R. Pursuant to subsection 4.9(e)(v):
1. Amount to be paid to the Holder of the Transferor
Certificate $____________
2. Amount to be deposited in the Excess Funding
Account $____________
Total $____________
S. Pursuant to subsection 4.9(f):
1. Amount to be withdrawn from the Principal Funding
Account and deposited into the Distribution
Account
$____________
II. INSTRUCTION TO MAKE CERTAIN PAYMENTS
Pursuant to Section 4.9, the Servicer does hereby instruct the Trustee to
pay in accordance with Section 5.1 from the Distribution Account on
__________ __, ____, which date is a Distribution Date under the Pooling
and Servicing Agreement, amounts so deposited in the Distribution Account
pursuant to Section 4.9 as set forth below:
A. Pursuant to subsection 4.9(g):
1. Amount to be distributed to Class A
Certificateholders $____________
2. Amount to be distributed to Class B
Certificateholders $____________
B. Pursuant to subsection 4.9(h)(i):
1. Amount to be distributed to the Class A
Certificateholders $_____________
C. Pursuant to subsection 4.9(h)(ii):
1. Amount to be distributed to the Class B
Certificateholders
$____________
III. APPLICATION OF EXCESS SPREAD
Pursuant to Section 4.11, the Servicer does hereby instruct the Trustee to
apply the Excess Spread with respect to the related Monthly Period and to
make the following distributions in
the following priority:
A. The amount equal to the Class A
Required Amount, if any, which will be
used to fund the Class A Required
Amount and be applied in accordance
with, and in the priority set forth in,
subsection 4.9(a) $___________
B. The amount equal to the aggregate
amount of Class A Investor Charge-Offs
which have not been previously
reimbursed which will be treated as a
portion of Investor Principal
Collections and deposited into the
Principal Account on such Transfer Date $____________
C. The amount equal to the Class B
Required Amount, if any, which will be
used to fund the Class B Required
Amount and be applied first in
accordance with, and in the priority
set forth in, subsection 4.9(b) and
then any amount available to pay the
Class B Investor Default Amount shall
be treated as a portion of Investor
Principal Collections and deposited
into the Principal Account $____________
D. The amount equal to the aggregate
amount by which the Class B Investor
Interest has been reduced below the
initial Class B Investor Interest for
reasons other than the payment of
principal to the Class B
Certificateholders (but not in excess
of the aggregate amount of such
reductions which have not been
previously reimbursed) which will be
treated as a portion of Investor
Principal Collections and deposited
into the Principal Account $___________
E. The amount equal to the Collateral
Monthly Interest plus the amount of any
past due Collateral Monthly Interest
which will be paid to the Collateral
Interest Holder for application in
accordance with the Loan Agreement $___________
F. The amount equal to the aggregate
amount of accrued but unpaid Collateral
Interest Servicing Fees which will be
paid to the Servicer if the Transferor
an Affiliate thereof, The Bank of New
York (Delaware) or an Affiliate thereof
is the Servicer $___________
G. The amount equal to the Collateral
Default Amount, if any, for the prior
Monthly Period which will be treated as
a portion of Investor Principal
Collections and deposited into the
Principal Account $___________
H. The amount equal to the aggregate
amount by which the Collateral Interest
has been reduced below the Required
Collateral Interest for reasons other
than the payment of principal to the
Collateral Interest Holder (but not in
excess of the aggregate amount of such
reductions have not been previously
reimbursed) will be treated as a
portion of Investor Principal
Collections and deposited into the
Principal Account $____________
I. On each Transfer Date from and after
the Reserve Account Funding Date, but
prior to the date on which the Reserve
Account terminates as described in
subsection 4.16(f), the amount up to
the excess, if any, of the Required
Reserve Account Amount over the
Available Reserve Account Amount which
shall be deposited into the Reserve
Account $___________
J. The amount equal to the amounts
determined to be payable to the
Collateral Interest Holder for
application pursuant to the Loan
Agreement $___________
K. The balance, if any, after giving
effect to the payments made pursuant to
subparagraphs (a) through (j) above
which shall constitute "Shared Excess
Finance Charge Collections" with
respect to other Series in Group One.
$___________
IV. REALLOCATED PRINCIPAL COLLECTIONS
Pursuant to Section 4.12, the Servicer does hereby instruct the Trustee to
withdraw from the Principal Account and apply Reallocated Principal
Collections pursuant to Section 4.12 with respect to the related Monthly
Period in the following amounts:
A. Reallocated Collateral Principal Collections $_____________
B. Reallocated Class B Principal Collections
$_____________
V. ACCRUED AND UNPAID AMOUNTS
After giving effect to the withdrawals and transfers to be made in
accordance with this notice, the following amounts will be accrued and
unpaid with respect to all Monthly Periods preceding the current calendar
month
A. Subsection 4.9(a)(i) and (b)(i):
1. The aggregate amount of the Class A Deficiency
Amount $____________
2. The aggregate amount of Class B Deficiency Amount $____________
B. Subsections 4.9(a)(ii) and (b)(ii):
The aggregate amount of all accrued and unpaid Investor
Monthly Servicing Fees $_____________
C. Section 4.10:
The aggregate amount of all unreimbursed Investor
Charge Offs $_____________
IN WITNESS WHEREOF, the undersigned has duly executed this
certificate this ____ day of __________, ____.
THE FIRST NATIONAL BANK OF ATLANTA,
Servicer
By:____________________________
Name:
Title:
EXHIBIT C
FORM OF MONTHLY SERIES 1999-_ CERTIFICATEHOLDERS' STATEMENT
THE FIRST NATIONAL BANK OF ATLANTA
------------------------------------------------
WACHOVIA CREDIT CARD MASTER TRUST
------------------------------------------------
The information which is required to be prepared with respect
to the distribution date of ___________ __, ____ and with respect to the
performance of the Trust during the related Monthly period.
Capitalized terms used in this Statement have their respective
meanings set forth in the Pooling and Servicing Agreement.
D. Information Regarding the Current Monthly Distribution (Stated on
the Basis of $1,000 Original Certificate Principal Amount)
1. The amount of the current monthly
distribution in respect of Class A
Monthly Principal.................................$_________
2. The amount of the currently monthly
distribution in respect of Class B
Monthly Principal.................................$_________
3. The amount of the currently monthly
distribution in respect of Collateral
Monthly Principal.................................$_________
4. The amount of the currently monthly
distribution in respect of Class A
Monthly Interest..................................$_________
5. The amount of the currently monthly
distribution in respect of Class A
Deficiency Amounts................................$_________
6. The amount of the currently monthly
distribution in respect of Class A
Additional Interest...............................$_________
7. The amount of the currently monthly
distribution in respect of Class B
Monthly Interest..................................$_________
8. The amount of the currently monthly
distribution in respect of Class B
Deficiency Amounts................................$_________
9. The amount of the currently monthly
distribution in respect of Class B
Additional Interest...............................$_________
10. The amount of the currently monthly
distribution in respect of Collateral
Monthly Interest..................................$_________
11. The amount of the currently monthly
distribution in respect of any
accrued and unpaid Collateral
Monthly Interest..................................$_________
E. Information Regarding the Performance of the Trust
1. Collection of Principal Receivables
(a) The aggregate amount of Collections of Principal
Receivables processed during the related Monthly Period
which were allocated in respect
of the Class A Certificates.................$_________
(b) The aggregate amount of Collections of Principal
Receivables processed during the related Monthly Period
which were allocated in respect
of the Class B Certificates.................$_________
(c) The aggregate amount of Collections of Principal
Receivables processed during the related Monthly Period
which were allocated in respect
of the Collateral Interest..................$_________
2. Principal Receivables in the Trust
(a) The aggregate amount of
Principal Receivables in the
Trust as of the end of the
day on the last day of the
related Monthly Period......................$_________
(b) The amount of Principal Receivables in the Trust
represented by the Investor Interest of Series 1999-_ as
of the end of the day on the last day of the related
Monthly Period..............................$_________
(c) The amount of Principal Receivables in the Trust
represented by the Series 1999-_ Adjusted Investor
Interest as of the end of the day on the last day of
the related Monthly Period..................$_________
(d) The amount of Principal Receivables in the Trust
represented by the Class A Investor Interest as of the
end of the day on the last day of the related Monthly
Period......................................$_________
(e) The amount of Principal
Receivables in the Trust
represented by the Class A
Adjusted Investor Interest
as of the end of day on the
last day of the related Monthly
Period......................................$_________
(f) The amount of Principal Receivables in the Trust
represented by the Class B Investor Interest as of the
end of the day on the last day of the related Monthly
Period......................................$_________
(g) The amount of Principal Receivables in the Trust
represented by the Collateral Interest as of the end of
the date on the last day of
the related Monthly Period..................$_________
(h) The Floating Investor Percentage
with respect to the related
Monthly Period..............................$_________
(i) The Class A Floating Allocation
with respect to the related
Monthly Period................................._____%
(j) The Class B Floating Allocation
with respect to the related
Monthly Period................................._____%
(k) The Collateral Floating Allocation
with respect to the related
Monthly Period................................._____%
(l) The Fixed Investor Percentage
with respect to the related
Monthly Period................................._____%
(m) The Class A Fixed Allocation
with respect to the related
Monthly Period................................._____%
(n) The Class B Fixed Allocation
with respect to the related
Monthly Period................................._____%
(o) The Collateral Fixed Allocation
with respect to the related
Monthly Period................................._____%
3. Delinquent Balances
The aggregate amount of outstanding balances in the Accounts
which were delinquent as of the end of the day on the last day
of the related Monthly Period:
Aggregate Percentage
Account of Total
Balance Receivables
(a) 30 - 59 days: $___________ ____%
(b) 60 - 89 days: $___________ ____%
(c) 90 - or more days: $___________ ____%
Total: $___________ ____%
4. Investor Default Amount
(a) The Aggregate Investor Default
Amount for the related Monthly
Period......................................$_________
(b) The Class A Investor Default
Amount for the related Monthly
Period......................................$_________
(c) The Class B Investor Default
Amount for the related Monthly
Period......................................$_________
(d) The Collateral Default Amount
for the related Monthly Period..............$_________
5. Investor Charge Offs
(a) The aggregate amount of
Class A Investor Charge-Offs
for the related Monthly Period..............$_________
(b) The aggregate amount of Class A Investor Charge-Offs set
forth in 5(a) above per $1,000 of original Certificate
principal amount............................$_________
(c) The aggregate amount of Class B
Investor Charge-Offs for the re-
lated Monthly Period........................$_________
(d) The aggregate amount of Class B Investor Charge-Offs set
forth in 5(c) above per $1,000 of original certificate
principal
amount......................................$_________
(e) The aggregate amount of
Collateral Charge-Offs for the
related Monthly Period......................$_________
(f) The aggregate amount of Collateral Charge-Offs set forth
in 5(e) above per $1,000 of original certificate
principal
amount......................................$_________
(g) The aggregate amount of Class A Investor Charge-Offs
reimbursed on the Transfer Date immediately
preceding this Distribution Date............$_________
(h) The aggregate amount of Class A Investor Charge-Offs set
forth in 5(g) above per $1,000 original certificate
principal amount reimbursed on the Transfer Date
immediately preceding this
Distribution Date...........................$_________
(i) The aggregate amount of Class B Investor Charge-Offs
reimbursed on the Transfer Date immediately
preceding this Distribution Date............$_________
(j) The aggregate amount of Class B Investor Charge-Offs set
forth in 5(i) above per $1,000 original certificate
principal amount reimbursed on the Transfer Date
immediately preceding this
Distribution Date...........................$_________
(k) The aggregate amount of
Collateral Charge-Offs reimbursed
on the Transfer Date immediately
preceding this Distribution Date............$_________
(l) The aggregate amount of Collateral Charge-Offs
set forth in 5(k) above per $1,000 original
certificate principal amount reimbursed on
the Transfer Date immediately preceding
Distribution Date...........................$_________
6. Investor Servicing Fee
(a) The amount of the Class A
Servicing Fee payable by the
Trust to the Servicer for
the related Monthly Period..................$_________
(b) The amount of the Class B
Servicing Fee payable by the
Trust to the Servicer for
the related Monthly Period..................$_________
(c) The amount of the Collateral
Interest Servicing Fee payable
by the Trust to the Servicer for
the related Monthly Period..................$_________
7. Reallocations
(a) The amount of Reallocated
Collateral Principal
Collections with respect to
this Distribution Date......................$_________
(b) The amount of Reallocated Class B Principal
Collections with respect to this Distri-
bution Date.................................$_________
(c) The Collateral Interest as
of the close of business on
this Distribution Date......................$_________
(d) The Class B Investor Interest
as of the close of business
on this Distribution Date...................$_________
8. Collection of Finance Charge Receivables
(a) The aggregate amount of Collections of Finance Charge
Receivables processed during the related Monthly Period
which were allocated in respect of the
Class A Certificate.........................$_________
(b) The aggregate amount of Collections of Finance Charge
Receivables processed during the related Monthly Period
which were allocated in respect of
the Class B Certificates....................$_________
(c) The aggregate amount of Collections of Finance Charge
Receivables processed during the related Monthly Period
which were allocated in respect of
the Collateral Interest.....................$_________
9. Principal Funding Amount
(a) The principal amount on
deposit in the Principal
Funding Accounted on the
related Transfer Date.......................$_________
(b) The Accumulation Shortfall
with respect to the related
Monthly Period..............................$_________
(c) The Principal Funding In-
vestment Proceeds deposited
in the Finance Charge Account
on the related Transfer Date................$_________
(d) The amount of all or the portion
of the Reserve Draw Amount deposited
in the Finance Charge Account on the
related Transfer Date from
the Reserve Account.........................$_________
10. Reserve Draw Amount...............................$_________
11. Available Funds
(a) The amount of Class A
Available Funds on deposit
in the Finance Charge Account
on the related Transfer Date................$_________
(b) The amount of Class B
Available Funds on deposit
in the Finance Charge Account
on the related Transfer Date................$_________
(c) The amount of Collateral
Available Funds on deposit in
the Finance Charge Account on
the related Transfer Date...................$_________
12. Portfolio Yield
(a) The Portfolio Yield for the
related Monthly Period..........................____%
(b) The Portfolio Adjusted Yield
for the related Monthly Period..................____%
F. Floating Rate Determinations
1. LIBOR for the Interest Period
ending on this Distribution Date......................____%
THE FIRST NATIONAL BANK
OF ATLANTA
Servicer
By: __________________________
Name:
Title:
SCHEDULE TO EXHIBIT C
SCHEDULE TO MONTHLY SERVICER'S CERTIFICATE
MONTHLY PERIOD ENDING _________ __, ____
THE FIRST NATIONAL BANK OF ATLANTA
WACHOVIA CREDIT CARD MASTER TRUST SERIES 1999-_
1. The aggregate amount of the Investor
Percentage of Collections of Principal
Receivables.............................................$_________
2. The aggregate amount of the Investor
Percentage of Collections of Finance
Charge Receivables (excluding Interchange)..............$_________
3. The aggregate amount of the Investor
Percentage of Interchange...............................$_________
4. The aggregate amount of Servicer
Interchange.............................................$_________
5. The aggregate amount of funds on de-
posit in Finance Charge Account
allocable to the Series 1999-_
Certificates............................................$_________
6. The aggregate amount of funds on
deposit in the Principal Account
allocable to the Series 1999-_
Certificates............................................$_________
7. The aggregate amount of fund on
deposit in the Principal Funding
Account allocable to the Series 1999-_
Certificates............................................$_________
8. The aggregate amount to be withdrawn
from the Finance Charge Account and
paid in accordance with the Loan
Agreement pursuant to Section 4.11......................$_________
9. The excess, if any, of the Required
Collateral Interest over the sum of the
Collateral Interest.....................................$_________
10. The Collateral Interest on the Transfer
Date of the current calendar month, after
giving effect to the deposits and withdrawals
on such Transfer Date is
equal to................................................$_________
11. The amount of Monthly Interest,
Deficiency Amounts and Additional
Interest payable to the
(i) Class A Certificateholders..........................$_________
(ii) Class B Certificateholders.........................$_________
(iii) Collateral Interest Holder........................$_________
12. The amount of principal payable to the
(i) Class A Certificateholders..........................$_________
(ii) Class B Certificateholders.........................$_________
(iii) Collateral Interest Holder........................$_________
13. The sum of all amounts payable to the
(i) Class A Certificateholders..........................$_________
(ii) Class B Certificateholders.........................$_________
(iii) Collateral Interest Holder........................$_________
14. To the knowledge of the undersigned, no Series 1999-_ Pay Out Event
or Trust Pay Out Event has occurred except as
described below:
None
IN WITNESS WHEREOF, the undersigned has duly executed and
delivered this Certificate this ___th day of ______________, ____.
THE FIRST NATIONAL BANK OF ATLANTA
Servicer
By: __________________________
Name:
Title:
Exhibit 5.1
[Letterhead of Richards, Layton & Finger, P.A.]
July 12, 1999
The First National Bank of Atlanta d/b/a Wachovia Bank Card Services
77 Read's Way
New Castle Corporate Commons
New Castle, Delaware 19720
Re: Wachovia Credit Card Master Trust
Ladies and Gentlemen:
We have acted as special Delaware counsel for The First
National Bank of Atlanta d/b/a Wachovia Bank Card Services, a national
banking association (the "Bank"), in connection with the proposed issuance
and sale of series certificates (the "Certificates") by the Wachovia Credit
Card Master Trust (the "Trust") pursuant to an Amended and Restated Pooling
and Servicing Agreement, dated as of June 4, 1999 (the "Amended and
Restated Pooling and Servicing Agreement"), by and between the Bank, as
transferor and servicer, and The Bank of New York (Delaware), a Delaware
banking corporation, as trustee, included as Exhibit 4.1 to the Amendment
(as defined below), as to be supplemented from time to time by Supplements,
a form of which is included as Exhibit 4.2 to the Amendment (as defined
below) (a "Supplement") (the Amended and Restated Pooling and Servicing
Agreement as to be supplemented by a Supplement is hereinafter referred to
as the "Pooling and Servicing Agreement"). At your request, this opinion is
being furnished to you.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of executed or
conformed counterparts, or copies otherwise proved to our satisfaction, of
the following:
(a) The Pooling and Servicing Agreement;
(b) The Registration Statement (No. 333-79453) on Form S-3, as
filed by the Bank with the Securities and Exchange Commission (the "SEC")
on May 27, 1999 (the "Initial Registration Statement"), including a related
preliminary prospectus (the "Prospectus"), as amended by Amendment No. 1 to
the Initial Registration Statement, as proposed to be filed by the Bank
with the SEC on or about July 12, 1999 (the "Amendment") (the Initial
Registration Statement as amended by the Amendment is hereinafter referred
to as the "Registration Statement"); and
(c) A certificate of an officer of the Bank, dated July 12,
1999, certifying as to resolutions (the "Resolutions") adopted by the board
of directors of the Bank authorizing the transactions contemplated by the
Pooling and Servicing Agreement, including the issuance and sale of the
Certificates.
For purposes of this opinion, we have not reviewed any
documents other than the documents listed above, and we have assumed that
there exists no provision in any document not listed above that bears upon
or is inconsistent with the opinions stated herein. We have conducted no
factual investigation of our own but rather have relied solely upon the
foregoing documents, the statements and information set forth therein and
the additional matters recited or assumed herein, all of which we have
assumed to be true, complete and accurate in all material respects.
With respect to all documents examined by us, we have assumed
that (i) all signatures on documents examined by us are genuine, (ii) all
documents submitted to us as originals are authentic, and (iii) all
documents submitted to us as copies conform with the original copies of
those documents.
For purposes of this opinion, we have assumed that, at the time
of issuance and sale of the Certificates, (i) all documents examined by us
will be duly authorized, executed and delivered by all parties thereto,
(ii) the Trust will be duly formed and validly existing under laws of the
State of Delaware, (iii) the Bank will be a national banking association
duly formed and validly existing in good standing under the laws of the
United States of America, (iv) the Bank will have all necessary corporate
power and authority to cause the issuance and sale of the Certificates, (v)
the Bank will have taken all necessary corporate action to cause the
issuance and sale of the Certificates, (vi) the issuance and sale of the
Certificates, as the case may be, will not be contrary to any applicable
law, rule, regulation or order, and (vii) in connection with the documents
of which we have reviewed a form, all blanks contained in such documents
will be properly and appropriately completed, and optional provisions
included in such documents will be properly and appropriately selected, and
as executed, such documents will conform with the forms of the documents
reviewed by us.
This opinion is limited to the laws of the State of Delaware
and United States of America federal law, and we have not considered and
express no opinion on the laws of any other jurisdiction. Our opinions are
rendered only with respect to Delaware and United States of America federal
laws and rules, regulations and orders thereunder which are currently in
effect.
Based upon the foregoing, and upon our examination of such
questions of law and statutes as we have considered necessary or
appropriate, and subject to the assumptions, qualifications, limitations
and exceptions set forth herein, we are of the opinion that when issued and
sold in accordance with the terms of the Pooling and Servicing Agreement,
including when duly executed and authenticated by the trustee of the Trust
in accordance with the terms of the Pooling and Servicing Agreement and
issued and delivered against payment therefor, and assuming that authorized
representatives of the Bank have taken all actions necessary to be taken by
them under the Resolutions, the Certificates will be legally issued, fully
paid and nonassessable and entitled to the benefits of the Pooling and
Servicing Agreement.
We understand that you will file this opinion with the SEC as
an exhibit to the Registration Statement in connection with the filing by
the Bank of the Registration Statement under the Securities Act of 1933, as
amended. We hereby consent to the filing of this opinion with the SEC. This
opinion is rendered solely for your benefit in connection with the
foregoing. We hereby consent to the use of our name under the heading
"Legal Matters" in the Prospectus. In giving the foregoing consent, we do
not thereby admit that we come within the category of persons whose consent
is required under Section 7 of the Securities Act of 1933, as amended, or
the rules and regulations of the SEC thereunder. Except as stated above,
without our prior consent, this opinion may not be furnished or quoted to,
relied upon by, any other person or entity for any purpose.
Very truly yours,
MIL/JRS
Exhibit 8.1
[Letterhead of Skadden, Arps, Slate, Meagher & Flom LLP]
July 12, 1999
The First National Bank of Atlanta
77 Read's Way
New Castle Corporate Commons
New Castle, Delaware 19720
Re: Amendment No. 1 to the Registration
Statement on Form S-3 of The First
National Bank of Atlanta relating to
Wachovia Credit Card Master Trust
Ladies and Gentlemen:
In connection with the filing with the Securities and Exchange
Commission contemporaneously herewith of Amendment No. 1 to the
registration statement on Form S-3 (No. 333-79453) of The First National
Bank of Atlanta relating to Wachovia Credit Card Master Trust (together
with all amendments thereto, the "Registration Statement") to be
established pursuant to a Pooling and Servicing Agreement and various
Supplements thereto (each, a "Supplement") to be entered into from time to
time (collectively, the "Agreement")(*) between The First National Bank of
Atlanta, as transferor (in such capacity, the "Transferor"), and The Bank
of New York (Delaware), as trustee (the "Trustee"), you have requested our
opinion regarding certain descriptions of tax consequences contained in the
form of prospectus (the "Prospectus") included in the Registration
Statement.
- --------
(*) All capitalized terms used below that are not otherwise defined
have the same meaning as set forth in the Agreement.
Our opinion is based on an examination of the form of the
prospectus (the "Prospectus") included in the Registration Statement; the
form of Agreement included in the Registration Statement; the agreement
dated April 1, 1992 between the Transferor and Wachovia Bank of Georgia,
N.A., as amended; and such other documents as we have deemed material to
the opinions set forth herein. Our opinion is also based upon the Internal
Revenue Code of 1986, as amended, administrative rulings, judicial
decisions, Treasury regulations and other applicable authorities. The
statutory provisions, regulations and interpretations on which our opinion
is based are subject to changes, and such changes could apply retroactively.
In addition, there can be no assurance that positions contrary to those stated
in our opinion may not be taken by the Internal Revenue Service.
Based on the foregoing, we hereby confirm that the statements
in the Prospectus under the headings "Certain U.S. Federal Income Tax
Consequences," and "State and Local Taxation," subject to the
qualifications set forth therein, accurately describe the material federal
and Delaware income tax consequences to holders of the offered
Certificates, under existing law and the assumptions stated therein.
We also note that the Prospectus and the Agreement do not relate to a
specific transaction. Accordingly, the above-referenced description of
Federal and Delaware income tax consequences may require modification in
the context of an actual transaction.
We express no opinion with respect to the matters addressed in
this letter other than as set forth above.
We consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name under the heading "Legal
Matters" in the Prospectus.
Very truly yours,