AMERICAN EXPRESS RECEIVABLES FINANCING CORPORATION
and
AMERICAN EXPRESS CENTURION BANK,
as Transferors,
AMERICAN EXPRESS TRAVEL RELATED SERVICES COMPANY, INC.,
as Servicer,
and
THE BANK OF NEW YORK,
as Trustee on behalf of the Certificateholders
______________________________
SERIES 1998-1 SUPPLEMENT
Dated as of May 27, 1998
to
THE AMENDED AND RESTATED
MASTER POOLING AND SERVICING AGREEMENT
Dated as of May 1, 1998
______________________________
$1,000,000,000
AMERICAN EXPRESS MASTER TRUST
SERIES 1998-1
---------------------------------------------------------------
SERIES 1998-1 SUPPLEMENT, dated as of May 27, 1998 (this "Series
Supplement") among (i) AMERICAN EXPRESS RECEIVABLES FINANCING CORPORATION, a
corporation organized and existing under the laws of the State of Delaware,
and AMERICAN EXPRESS CENTURION BANK, a Utah-chartered industrial loan company,
as Transferors, (ii) AMERICAN EXPRESS TRAVEL RELATED SERVICES COMPANY, INC.,
a corporation organized under the laws of the State of New York, as Servicer,
and (iii) THE BANK OF NEW YORK, a banking corporation organized and existing
under the laws of the State of New York (together with its successors in trust
thereunder as provided in the Agreement referred to below, the "Trustee"), as
trustee under the Amended and Restated Master Pooling and Servicing Agreement
dated as of May 1, 1998, (as the same may be amended, supplemented or
otherwise modified from time to time, the "Agreement").
PRELIMINARY STATEMENT
Section 6.9 of the Agreement provides, among other things, that the
Transferors and the Trustee may at any time and from time to time enter into
one or more supplements to the Agreement for the purpose of authorizing the
issuance by the Trustee to the Transferors, for execution and redelivery to
the Trustee for authentication, one or more Series of Certificates. The
Transferors and the Servicer hereby enter into this Series 1998-1 Supplement
with the Trustee as required by Section 6.9(c) of the Agreement to provide for
the issuance, authentication and delivery of the Class A Floating Rate
Accounts Receivable Trust Certificates, Series 1998-1, and the 6.05% Class B
Accounts Receivable Trust Certificates, Series 1998-1. In the event that any
term or provision contained herein shall conflict with or be inconsistent with
any term or provision contained in the Agreement, the terms and provisions of
this Series Supplement shall govern.
All capitalized terms not otherwise defined herein are defined in the
Agreement. All Article, Section or subsection references herein shall mean
Article, Section or subsections of the Agreement, except as otherwise provided
herein. Unless otherwise stated herein, as the context otherwise requires or
if such term is otherwise defined in the Agreement, each capitalized term used
or defined herein shall relate only to the Series 1998-1 Certificates and no
other Series of Certificates issued by the Trust.
Section 1. Designation. The Certificates shall be designated
generally as the "Series 1998-1 Certificates;" and Series 1998-1 shall be an
Excess Allocation Series
Section 2. Definitions. The following words and phrases shall have
the following meaning with respect to the Series 1998-1 Certificates and the
definitions of such terms are applicable to the singular as well as the plural
form of such terms and to the
masculine as well as the feminine and neuter genders of such terms:
"Accumulation Date" shall mean the last day of the Due Period ending
in February 2003, or such later date as may be determined in accordance with
Section 4.13 of the Agreement.
"Available Series 1998-1 Reserve Account Amount" shall mean, with
respect to any Distribution Date, the lesser of (a) the amount on
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deposit in the Series 1998-1 Reserve Account on such date (before giving effect
to any deposit to be made to the Reserve Account on such date) and (b) the
Required Series 1998-1 Reserve Account Amount.
"Certificateholder" shall mean the Person in whose name a
Certificate is registered in the Certificate Register.
"Certificateholders' Interest" shall have the meaning specified in
Section 4.02 of the Agreement.
"Certificates" shall mean, collectively, the Class A Certificates
and the Class B Certificates.
"Class A Adjusted Invested Amount" for any date shall mean an amount
equal to the Class A Invested Amount, minus the aggregate principal amount on
deposit in the Principal Funding Account.
"Class A Certificate Rate" shall mean 5.90% per annum, calculated
on the basis of a 360-day year of twelve 30-day months.
"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 the Class A Floating Rate Accounts
Receivable Trust Certificates, Series 1998-1.
"Class A Initial Invested Amount" shall mean the aggregate initial
principal amount of the Class A Certificates, which is $1,000,000,000.
"Class A Invested Amount" for any date shall mean an amount equal
to (i) the initial principal balance of the Class A Certificates, minus (ii)
the amount of principal payments made to Class A Certificateholders prior to
such date, minus (iii) the aggregate amount of Class A Investor Charge-Offs
for all prior Distribution Dates and, if the date of determination is a
Distribution Date, for such Distribution Date, plus (iv) the aggregate amount
of Yield Collections and certain other amounts applied on all prior
Distribution Dates and, if the date of determination is a Distribution Date,
to be applied on the current
Distribution Date, in each case, for the purpose of reimbursing amounts
deducted pursuant to the foregoing clause (iii).
"Class A Investor Charge-Offs" shall have the meaning specified in
subsection 4.10(b) of the Agreement, as supplemented by this Series
Supplement.
"Class A Monthly Interest" shall mean the monthly interest
distributable in respect of the Class A Certificates as calculated in
accordance with subsection 4.4(a) of the Agreement, as supplemented by this
Series Supplement.
"Class A Monthly Principal" shall mean the monthly principal
distributable in respect of the Class A Certificates as calculated in
accordance with subsection 4.05(a) of the Agreement, as supplemented by this
Series Supplement.
2
"Class B Certificate Rate" shall mean 6.05% per annum, calculated
on the basis of a 360-day year of twelve 30-day months.
"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 the 6.05% Class B Accounts
Receivable Trust Certificates, Series 1998-1.
"Class B Initial Invested Amount" shall mean the aggregate initial
principal amount of the Class B Certificates which is $58,201,059.
"Class B Invested Amount" for any date shall mean an amount equal
to (i) the initial principal balance of the Class B Certificates, minus (ii)
the amount of principal payments made to Class B Certificateholders prior to
such date, minus (iii) the aggregate amount of Class B Investor Charge-Offs
for all prior Distribution Dates and, if the date of determination is a
Distribution Date, for such Distribution Date, plus (iv) the aggregate amount
of Yield Collections applied on all prior Distribution Dates and, if the date
of determination is a Distribution Date, to be applied on the current
Distribution Date, in each case, for the purpose of reimbursing amounts
deducted pursuant to the foregoing clause (iii).
"Class B Investor Charge-Offs" shall have the meaning specified in
subsection 4.10(a) of the Agreement, as supplemented by this Series
Supplement.
"Class B Monthly Interest" shall mean the monthly interest
distributable in respect of the Class B Certificates as calculated in
accordance with subsection 4.4(b) of the Agreement, as supplemented by this
Series Supplement.
"Class B Monthly Principal" shall mean the monthly principal
distributable in respect of the Class B Certificates as calculated in
accordance with subsection 4.05(b) of the Agreement, as supplemented by this
Series Supplement.
"Closing Date" shall mean, with respect to the Series 1998-1
Certificates, May 27, 1998.
"Controlled Accumulation Amount" shall mean $500,000,000, or if the
Servicer elects to postpone the commencement of the Controlled Accumulation
Period in accordance with Section 4.13 of the Agreement, as supplemented by
this Series Supplement, $1,000,000,000.
"Controlled Accumulation Period" shall mean, with respect to the
Class A Certificates, an Amortization Period commencing at the close of
business on the Accumulation Date and continuing to the earlier of (x) but not
including, the commencement of the Early Amortization Period, or (y) and
including, the earlier of (1) the last day of the Due Period ending in April
2003, or (2) the termination of the Trust.
"Controlled Deposit Amount" shall mean, with respect to any
Distribution Date with respect to the Controlled Accumulation Period, an
amount equal to the sum of the Controlled Accumulation Amount and any existing
Deficit Controlled Accumulation Amount.
3
"Covered Amount" shall mean, for any Distribution Date with respect
to the Controlled Accumulation Period or the first Special Payment Date, if
such Special Payment Date occurs prior to the date on which the Class A
Invested Amount is paid in full, an amount equal to one-twelfth of the product
of (i) the Class A Certificate Rate and (ii) the amount on deposit in the
Principal Funding Account, if any, as of the preceding Distribution Date.
"CRC" shall mean Credco Receivables Corp., a Delaware corporation.
"Deficit Controlled Accumulation Amount" shall mean, on the first
Distribution Date with respect to the Controlled Accumulation Period, the
excess, if any, of the Controlled Accumulation Amount over the amount
deposited in the Principal Funding Account as Class A Monthly Principal for
such Distribution Date and, on each subsequent Distribution Date with respect
to the Controlled Accumulation Period, the excess, if any, of the sum of the
Controlled Accumulation Amount for such Distribution Date plus any existing
Deficit Controlled Accumulation Amount over the amount of Class A Monthly
Principal deposited in the Principal Funding Account on such Distribution
Date.
"Distribution Date" shall mean the 15th day of each calendar month
(or, if such day is not a Business Day, the next succeeding Business Day),
commencing June 15, 1998.
"Early Amortization Period" shall mean, with respect to the Class
A Certificates, the Amortization Period commencing on the earlier of (x) the
Expected Final Payment Date if the Class A Invested Amount is not paid in full
on such date or (y) on the day on which a Pay Out Event occurs or is deemed
to have occurred, and continuing to and including the earlier of (i) the
payment in full to Class A Certificateholders of the Class A Invested Amount
and to Class B Certificateholders of the Class B Invested Amount and (ii) the
Series 1998-1 Termination Date.
"Excess Spread" shall have the meaning specified in subsection
4.08(i).
"Expected Final Payment Date" shall mean May 15, 2003, (or, if such
day is not a Business Day, the next succeeding Business Day).
"Fixed Allocation Percentage" shall mean, on any date of
determination with respect to any Distribution Date with respect to the
Controlled Accumulation Period or the Early Amortization Period, the
percentage equivalent of the ratio that (i) the Invested Amount as of the last
day of the Revolving Period bears to (ii) the greater of (a) the Trust
Principal Component on the last day of the prior Due Period and (b) the sum
of the numerators used to calculate the Invested Percentage with respect to
Principal Collections for all Series of certificates outstanding for the
current Distribution Date.
"Floating Allocation Percentage" shall mean, on any date of
determination with respect to any Distribution Date, the percentage equivalent
of the ratio of (i) the Invested Amount on the last day of the immediately
preceding Due Period to (ii) the Trust Principal Component on the last day of
such immediately preceding Due Period; provided, however, that during the
initial Due Period, the Floating Allocation Percentage will equal the
percentage equivalent of the ratio that the amount of the sum of the Class A
Initial Invested Amount and the Class B Initial Invested Amount bears to the
Trust Principal Component on the Series 1998-1 Cut Off Date.
4
"Initial Invested Amount" shall mean the sum of the Class A Initial
Invested Amount and the Class B Initial Invested Amount.
"Invested Amount" shall mean, when used with respect to any date
of determination, an amount equal to the sum of the Class A Adjusted Invested
Amount and the Class B Invested Amount.
"Invested Percentage" shall mean, on any date of determination with
respect to any Distribution Date, (a) when used with respect to Principal
Collections during the Revolving Period, the Floating Allocation Percentage;
(b) when used with respect to Principal Collections during the Controlled
Accumulation Period or an Early Amortization Period, the Fixed Allocation
Percentage; and (c) when used with respect to Yield Collections and Defaulted
Receivables at any time, the Floating Allocation Percentage.
"Investment Earnings" shall mean, with respect to a Distribution
Date, all interest and other investment income (net of losses and investment
expenses) earned on the funds, if any, on deposit in the Principal Funding
Account since the preceding Distribution Date.
"Investor Charge-Offs" shall mean, for any date of determination,
the sum of the Class A Investor Charge-Offs and the Class B Investor
Charge-Offs.
"Investor Default Amount" shall mean, with respect to each
Distribution Date, an amount equal to the product of the Default Amount for
such Distribution Date and the Floating Allocation Percentage applicable for
such Distribution Date.
"Principal Funding Account" shall have the meaning specified in
subsection 4.6(a) of the Agreement, as supplemented by this Series Supplement.
"Record Date" shall mean, with respect to any Distribution Date, the
last Business Day of the calendar month immediately preceding such
Distribution Date or Special Payment Date.
"Required Series 1998-1 Reserve Account Amount" shall mean, with
respect to any Distribution Date on or after the Series 1998-1 Reserve Account
Funding Date, an amount equal to (1) 0.5% of the Class A Invested Amount as
of the preceding Distribution Date (after giving effect to all changes therein
on such date) or (2) any other amount designated by the Transferors (provided
that, if such amount is less than the amount specified in clause (1), the
Transferors, the Servicer and the Trustee shall have received written
confirmation from each Rating Agency that such designation will not result in
such Rating Agency"s reducing or withdrawing its rating of the Class A
Certificates.
"Reserve Draw Amount" shall have the meaning specified in subsection
4.14(c).
"Revolving Period" shall mean, with respect to the Series 1998-1
Certificates, the period from and including the Closing Date, up to and
including the day prior to the day on which the Controlled Accumulation Period
or an Early Amortization Period commences.
5
"Series 1998-1" shall mean the Series of Certificates, the Principal
Terms of which are specified in this Series Supplement.
"Series 1998-1 Cut Off Date" shall mean the close of business on the
last day of the last Due Period to end prior to the Closing Date.
"Series 1998-1 Principal Shortfall" shall have the meaning specified
in subsection 4.05(c) of the Agreement, as supplemented by this Series
Supplement.
"Series 1998-1 Reserve Account" shall have the meaning specified in
subsection 4.14(a).
"Series 1998-1 Reserve Account Funding Date" shall mean the
Distribution Date with respect to the Due Period that commences three months
prior to the Distribution Date with respect to the first Due Period in the
Controlled Accumulation Period or such earlier date as the Transferors may
determine by written notice to the Trustee and the Servicer.
"Series 1998-1 Reserve Account Surplus" shall mean, as of any date
of determination, the amount, if any, by which the amount on deposit in the
Series 1998-1 Reserve Account exceeds the Required Series 1998-1 Reserve
Account Amount.
"Series 1998-1 Termination Date" shall mean the April 2004
Distribution Date.
"Series 1998-1 Undistributed Principal Collections" shall mean the
amount, if any, equal to the product of (a) a fraction, the numerator of which
is equal to the sum of the Class A Adjusted Invested Amount and the Class B
Invested Amount and the denominator of which is equal to the sum of the
invested amount of all Series then accumulating or amortizing principal (less
any amounts on deposit in any principal funding accounts) and (b)
Undistributed Principal Collections on deposit in the Collection Account on
such Distribution Date.
"Servicing Fee Percentage" shall mean 2.0% per annum.
"Special Payment Date" shall mean each Distribution Date with
respect to any Early Amortization Period and each Distribution Date following
the Expected Final Payment Date.
"Telerate Page 3750" shall mean the display page currently so
designated on the Dow Xxxxx Telerate Service (or such other page as may
replace that page on that service for the purpose of displaying comparable
rates or prices).
"Termination Payment Date" shall mean the earlier of the Expected
Final Payment Date, the first Distribution Date following the liquidation or
sale of the Receivables as a result of an insolvency event and the occurrence
of the Series 1998-1 Termination Date.
Section 3. Minimum Transferor Percentage and Minimum Trust
Principal Component. The Minimum Transferor Percentage applicable to the
Series 1998-1 Certificates shall be 15%. The Minimum Trust Principal Component
with respect to the Series 1998-1 Certificates shall be $1,139,000,000.
6
Section 4. Reassignment and Transfer Terms. The Series 1998-1
Certificates may be reassigned and transferred to the Transferors on any
Distribution Date on or after which the Invested Amount is reduced to an
amount less than or equal to 10% of the Initial Invested Amount, subject to
the provisions of Section 12.02 of the Agreement.
Section 5. Delivery and Payment for the Certificates. The Trustee
shall deliver the Series 1998-1 Certificates when authenticated in accordance
with Section 6.02 of the Agreement.
Section 6. Form of Delivery of the Series 1998-1 Certificates. The
Certificates shall be delivered as provided in Section 6.11 of the Agreement.
Section 7. Transfer of Class B Certificates; Consent to Transfer
of Participation.
(a) On the Closing Date, all of the Class B Certificates will
be issued to CRC. Prior to any transfer of a Class B Certificate by CRC
to any Affiliate of a Transferor, the Servicer shall provide to the
Trustee written confirmation from each Rating Agency that such transfer
will not result in the downgrade or withdrawal of any rating on the
Class A Certificates. Prior to any such transfer of a Class B
Certificate, each Transferor shall certify to the Trustee in writing
whether the proposed transferee of the Class B Certificate is an
Affiliate of such Transferor, and the Trustee shall be entitled to rely
conclusively on such certificate.
(b) The Class B Certificates have not been registered under
the Securities Act of 1933, as amended (the "Securities Act") or any
state securities law. No resale or other transfer of any Class B
Certificate or any interest therein or participation thereof shall be
made unless the Trustee, the Transfer Agent and Registrar shall have
received an Officer's Certificate certifying that such resale or
transfer is made (i) pursuant to an effective registration statement
under the Securities Act; (ii) in a transaction exempt from the
registration requirements of the Securities Act and applicable state
securities or "blue sky" laws; (iii) to a Transferor; (iv) to a person
who the transferor of the Class B Certificate reasonably believes is a
qualified institutional buyer (within the meaning thereof in Rule 144A
under the Securities Act) that is aware that such resale or other
transfer is being made in reliance upon Rule 144A; or (v) pursuant to
Regulation S under the Securities Act. Until the earlier of (i) such
time as the Class B Certificates shall be registered pursuant to a
registration statement filed under the Securities Act and (ii) the date
one year from the later of the Closing Date and the date any Class B
Certificate was acquired from a Transferor or an Affiliate of a
Transferor, the Class B Certificates shall bear a legend substantially
to the effect set forth in the preceding two sentences. None of the
Transferors, the Transfer Agent , the Registrar or the Trustee is
obligated to register the Class B Certificates under the Securities Act,
or to take any other action not otherwise required under this Agreement
to permit the transfer of Class B Certificates without registration.
Notwithstanding anything to the contrary contained herein, in
no event shall a Class B Certificate or any interest therein be sold,
transferred, assigned, exchanged, pledged, hypothecated, participated or
7
otherwise conveyed, or a security interest granted therein, unless the
Transferors shall have consented to such transfer and delivered to the Trustee
an Opinion of Counsel to the effect that the Class B Certificates, upon such
transfer, will be characterized as debt or an interest in a partnership (other
than a publicly traded partnership taxable as a corporation) for federal
income tax purposes. The Class B Certificates shall at all times bear a
legend substantially to the effect set forth in the preceding sentence.
(c) Each Transferor hereby covenants that it will not consent
to the transfer of an interest in any participation held by CRC in the
Exchangeable Transferor Certificate to any entity unless it has obtained
an Opinion of Counsel that such transfer will not cause the Trust to be
classified for federal income tax purposes as an association or publicly
traded partnership taxable as a corporation.
(d) The opinion described in subsection 6.09(b) to the effect
that the Class B Certificates will be characterized as either
indebtedness or an interest in a partnership under existing law for
Federal income tax purposes shall not be required to be delivered to the
Trustee in connection with the original issuance of the Class B
Certificates to CRC.
Section 8. Tax Treatment. It is the intention of the Transferors
and the Investor Certificateholders that the Class B Certificates (upon
transfer to an entity other than a Transferor) be characterized as either
indebtedness of the Transferors or an interest in a partnership (other than
a publicly traded partnership taxable as a corporation) for federal, state and
local income and franchise tax purposes and for purposes of any other tax
imposed on or measured by income. The Transferors and each Class B
Certificateholder by acceptance of its Class B Certificates agree to treat the
Class B Certificates for purposes of federal, state and local income or
franchise taxes and any other tax imposed on or measured by income, as such
indebtedness or such an interest and to report the transactions contemplated
by this Agreement on all applicable tax returns in a manner consistent with
such treatment.
To the extent that the Class B Certificates are determined to
represent interests in a partnership for federal income tax purposes, it is
the intention of the Transferors and the Class B Certificateholders that such
partnership interest represent an interest limited to a capital interest equal
to (or if the Class B Certificates are sold at a discount, that accretes to)
the principal balance of such Class B Certificates and a guaranteed payment
at a rate equal to the Certificate Rate on such capital.
Section 9. Article IV of the Agreement. Any provisions of Article
IV of the Agreement which provide for the distribution of Collections to the
Transferors on the basis of the Transferor Percentage shall continue to apply
irrespective of the issuance of the Certificates. Section 4.01 of the
Agreement shall read in its entirety as provided in the Agreement. Article
IV of the Agreement (except for Section 4.01) shall read in its entirety as
follows and shall be applicable to the Certificates:
8
ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS AND
ALLOCATION AND APPLICATION OF COLLECTIONS
SECTION 4.02 Rights of Certificateholders. The Class A
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 Class A Certificates at the times and in the amounts
specified in this Agreement, (a) the Invested 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 Principal Funding Account and
the Series 1998-1 Reserve Account. The Class B Certificates shall represent
undivided interests in the Trust, consisting of the right to receive, to the
extent necessary to make required payments with respect to such Class B
Certificates at the times and in the amounts specified in this Agreement, (x)
the Invested Percentage (as applicable from time to time) of Collections
received with respect to the Receivables and (y) funds on deposit in the
Collection Account, the Principal Funding Account. and the Series 1998-1
Reserve Account. The undivided interests in the Trust referred to in the two
immediately preceding sentences are collectively referred to for the Series
1998-1 Certificates as the "Certificateholders" Interest." The Exchangeable
Transferor Certificate shall not represent any interest in the Collection
Account, the Principal Funding Account or the Series 1998-1 Reserve Account,
except as specifically provided in this Article IV.
SECTION 4.03 Collections and Allocation. (a) Collections. The
Servicer shall apply or shall instruct the Trustee to apply all funds on
deposit in the Collection Account as described in this Article IV.
(b) Allocations of Collections and Payments. On each Date of
Processing, the Servicer shall determine whether a Pay Out Event has occurred
or is deemed to have occurred with respect to the Certificates, and the
Servicer shall allocate Collections with respect to such Date of Processing
as follows:
(i) During the Revolving Period. Allocate to the
Certificateholders" Interest (x) an amount equal to the Floating Allocation
Percentage as of the last day of the prior Due Period of the Principal
Collections for such Date of Processing, which amount shall be treated as
Excess Principal Collections and shall be deposited into the Collection
Account as and when required pursuant to subsection 4.0l(g) and (y) an amount
equal to the Floating Allocation Percentage as of the last day of the prior
Due Period of the Yield Collections for such Date of Processing and deposit
such amount into the Collection Account as and when required pursuant to
subsection 4.01(g);
(ii) During the Controlled Accumulation Period and any Early
Amortization Period. Allocate to the Certificateholders" Interest (x) an
amount equal to the Fixed Allocation Percentage as of the last day of the
prior Due Period of the Principal Collections for such Date of Processing and
deposit such amount into the Collection Account as and when required pursuant
to subsection 4.01(g), and (y) an amount equal to the Floating Allocation
Percentage as of the last day of the prior Due Period of the Yield Collections
for such Date of Processing and deposit such amount into the Collection
Account as and when required pursuant to subsection 4.01(g);
9
(iii) Allocations and Payments to the Holder of the Exchangeable
Transferor Certificate. Amounts to be allocated to the Holders of the
Exchangeable Transferor Certificate and payments with respect thereto shall
be determined and made only as provided in subsection 4.01(d).
(c) Additional Amounts.
(i) The allocations to be made pursuant to subsection 4.03(b) also
apply to deposits into the Collection Account that are treated as
Collections, payments made by the Transferors pursuant to subsection 2.04(d)
and payments made by the Servicer pursuant to Section 3.03, and, in certain
circumstances, net reinvestment income on the Collection Account. Such
deposits to be treated as Collections will be allocated as Yield Collections
or Principal Collections as indicated in the Agreement.
(ii) The amounts paid by the Transferors pursuant to subsection
2.04(e), Adjustment Payments, proceeds from the sale, disposition or
liquidation of the Receivables pursuant to Section 9.02, 10.02, 12.01 or 12.02
and Section 4 of the Series Supplement related to Series 1998-1 and amounts
obtained by the Trustee pursuant to any demand on any letter of credit, surety
bond or other similar instrument delivered pursuant to subsection 14(a) of
such Series Supplement or from any funds deposited with the Trustee pursuant
to subsection 14(b) of such Series Supplement, shall be allocated to the
Certificateholders" Interest and allocated as Yield Collections or Principal
Collections as provided in the Agreement.
SECTION 4.04 Determination of Monthly Interest for the
Certificates. (a) The amount of monthly interest distributable from the
Collection Account with respect to the Class A Certificates ("Class A Monthly
Interest") on any Distribution Date shall be an amount equal to one-twelfth
of the product of (i) the Class A Certificate Rate and (ii) the outstanding
principal balance of the Class A Certificates as of the related Record Date;
it being understood and agreed that with respect to the first Distribution
Date for the Class A Certificates, Class A Monthly Interest shall equal
$3,113,889.
(b) The amount of monthly interest distributable from the
Collection Account with respect to the Class B Certificates ("Class B Monthly
Interest") on any Distribution Date shall be an amount equal to one-twelfth
of the product of (i) the Class B Certificate Rate and (ii) the Class B
Invested Amount as of the preceding Distribution Date (after giving effect to
any increase or decrease in the Class B Invested Amount on such preceding
Distribution Date); it being agreed and understood that with respect to the
first Distribution Date for the Class B Certificates, Class B Monthly Interest
shall be equal to $185,840.
SECTION 4.05 Determination of Monthly Principal for the
Certificates. (a) The amount of monthly principal (the "Class A Monthly
Principal") distributable from the Collection Account with respect to the
Class A Certificates on each Distribution Date beginning with the earlier to
occur of (i) the first Special Payment Date of the Class A Certificates, if
any, (ii) the first Distribution Date to occur with respect to the Controlled
Accumulation Period and (iii) the Termination Payment Date, shall be equal to
an amount calculated as follows: the sum of (i) an amount equal to the Fixed
10
Allocation Percentage of all Principal Collections received during the Due
Period immediately preceding such Distribution Date, or, in the case of the
Distribution Date immediately following the occurrence of a Pay Out Event,
received during the period from the day such Pay Out Event occurred to the end
of such Due Period, (ii) the amount, if any, of Series 1998-1 Undistributed
Principal Collections for such Distribution Date, and (iii) the Investor
Default Amount with respect to such Distribution Date and any reimbursements
of unreimbursed Class A Investor Charge-Offs and Class B Investor Charge-Offs;
provided, however, that for each Distribution Date with respect to the
Controlled Accumulation Period (unless and until a Pay Out Event shall have
occurred) , Class A Monthly Principal may not exceed the Controlled Deposit
Amount for such Distribution Date; and provided further, that with respect
to any Distribution Date, Class A Monthly Principal may not exceed the Class
A Invested Amount.
(b) The amount of monthly principal distributable from the
Collection Account with respect to the Class B Certificates (the "Class B
Monthly Principal") on each Distribution Date, beginning with the Distribution
Date on which the Class A Certificates are paid in full, shall be equal to an
amount calculated as follows: the sum of (i) an amount equal to the Fixed
Allocation Percentage of all Principal Collections received during the Due
Period immediately preceding such Distribution Date, or, in the case of the
Distribution Date immediately following the occurrence of a Pay Out Event,
received during the period from the day such Pay Out Event occurred to the end
of such Due Period, (ii) the amount, if any, of Series 1998-1 Undistributed
Principal Collections for such Distribution Date, (iii) the Investor Default
Amount with respect to such Distribution Date and any reimbursements of
unreimbursed Class B Investor Charge-Offs and minus (iv) Class A Monthly
Principal, if any, with respect to such Distribution Date; provided, however,
that with respect to any Distribution Date, Class B Monthly Principal may not
exceed an amount equal to the Class B Invested Amount.
(c) With respect to any Distribution Date related to any
Amortization Period, if (a) the sum of (x) an amount equal to the Fixed
Allocation Percentage of all Principal Collections received during the Due
Period immediately preceding such Distribution Date, (y) the amount, if any,
of Series 1998-1 Undistributed Principal Collections for such Distribution
Date, and (z) the Investor Default Amount with respect to such Distribution
Date and any reimbursements of unreimbursed Class A Investor Charge-Offs and
Class B Investor Charge- Offs shall exceed (b) the sum of (i) Class A Monthly
Principal and (ii) Class B Monthly Principal with respect to any Distribution
Date, then such excess amount shall be treated as Excess Principal
Collections. The Series 1998-1 Principal Shortfall with respect to any
Distribution Date related to the Controlled Accumulation Period shall be the
Deficit Controlled Accumulation Amount, if any, for such Distribution Date.
If, with respect to a Distribution Date related to any Early Amortization
Period, the sum of the Class A Monthly Principal and the Class B Monthly
Principal, is less than the sum of the Class A Adjusted Invested Amount and
the Class B Invested Amount, the amount of such shortfall shall be the Series
1998-1 Principal Shortfall with respect to such Distribution Date.
SECTION 4.06 Establishment of the Principal Funding Account for the
Certificates. (a) The Trustee, for the benefit of the Certificateholders,
shall establish and maintain or cause to be established and maintained in the
name of the Trustee, on behalf of the Trust, with an Eligible Institution
(which initially shall be The Bank of New York) a segregated trust account
11
(the "Principal Funding Account"), bearing a designation clearly indicating
that the funds deposited therein are held for the benefit of the
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
Certificateholders. If, at any time, the institution at which the Principal
Funding Account is maintained ceases to be an Eligible Institution, the
Trustee (or the Servicer on its behalf) shall, within five Business Days,
establish a new Principal Funding Account meeting the conditions specified
above with an Eligible Institution, transfer any cash and/or any investments
to such new Principal Funding Account and from the date such new Principal
Funding Account is established, it shall be, for the Certificates, the
"Principal Funding Account" for all purposes hereof.
(b) On each Distribution Date with respect to the Controlled
Accumulation Period and with respect to any Special Payment Date, the
Servicer shall withdraw from the Principal Funding Account and deposit in the
Collection Account an amount equal to the Investment Earnings with respect to
such Distribution Date or Special Payment Date. Investment Earnings
(including reinvested interest) shall not be considered to be principal
amounts on deposit in the Principal Funding Account for purposes hereof.
(c) Any funds on deposit in the Principal Funding Account prior to
the Expected Final Payment Date shall be invested by the Trustee (or, at the
direction of the Trustee, by the Servicer on behalf of the Trustee) at the
direction of the Servicer.
(d) Pursuant to the authority granted to the Servicer in subsection
3.01(b), the Servicer shall have the power, revocable by the Trustee, to make
withdrawals and payments or to instruct the Trustee to make withdrawals and
payments from the Principal Funding Account for the purposes of carrying out
of the Servicer"s or Trustee"s duties hereunder. Pursuant to the authority
granted to the Paying Agent in Sections 5.01 and 6.06, the Paying Agent shall
have the power, revocable by the Trustee, to withdraw funds from the Principal
Funding Account for the purpose of making distributions to the
Certificateholders.
SECTION 4.07 [RESERVED]
SECTION 4.08 Application of Funds on Deposit in the Collection
Account for the Certificates. On each Determination Date, the Servicer shall
instruct the Trustee to withdraw or retain, and on the succeeding Distribution
Date the Trustee acting in accordance with such instructions shall withdraw
or retain, the amounts required to be withdrawn from or retained in the
Collection Account pursuant to subsections 4.08(a) through 4.08(j). The
distributions to be made to the Class B Certificateholders pursuant to this
Section 4.08 shall be subject to subsection 4.09(b) hereof.
(a) Class A Monthly Interest. On each Distribution Date, the
Trustee, acting in accordance with instructions from the Servicer, shall
withdraw from the Collection Account for distribution to the Class A
Certificateholders to the extent funds are available from the Floating
Allocation Percentage of Yield Collections for the Due Period immediately
preceding such Distribution Date, an amount equal to Class A Monthly Interest
for such Distribution Date plus the amount of any Class A Monthly Interest
12
previously due but not paid to the Class A Certificateholders on a prior
Distribution Date or Special Payment Date plus any additional interest at the
Class A Certificate Rate plus 2% per annum with respect to interest amounts
that were due but not paid on a prior Distribution Date or Special Payment
Date.
(b) Class B Monthly Interest. On each Distribution Date, the
Trustee, acting in accordance with instructions from the Servicer, shall
withdraw from the Collection Account for distribution to the Class B
Certificateholders to the extent funds are available from the Floating
Allocation Percentage of Yield Collections for the Due Period immediately
preceding such Distribution Date after giving effect to the withdrawal
pursuant to subsection 4.08(a), an amount equal to Class B Monthly Interest
for such Distribution Date plus the amount of any Class B Monthly Interest
previously due but not paid to the Class B Certificateholders on a prior
Distribution Date plus any additional interest at the Class B Certificate Rate
plus 2% per annum with respect to interest amounts that were due but not paid
on a prior Distribution Date. Interest on the Class B Certificates shall be
calculated on the basis of a 360-day year of twelve 30-day months.
(c) Investor Monthly Servicing Fee. On each Distribution Date, the
Trustee, acting in accordance with instructions from the Servicer, shall
withdraw from the Collection Account, to the extent funds are available from
the Floating Allocation Percentage of Yield Collections for the Due Period
immediately preceding such Distribution Date after giving effect to the
withdrawals pursuant to subsections 4.08(a) and (b), an amount equal to the
Investor Monthly Servicing Fee for such Distribution Date plus any Investor
Monthly Servicing Fee due with respect to any prior Due Periods but not
distributed to the Servicer, and distribute such amount to the Servicer
(unless such amounts shall have been previously netted against deposits to the
Collection Account).
(d) Reimbursement of Class A Investor Charge-Offs. Class A
Investor Charge-Offs shall be reimbursed as follows: On each Distribution
Date, the Trustee, acting in accordance with instructions of the Servicer,
shall set aside and retain in the Collection Account, to the extent funds are
available from the Floating Allocation Percentage of Yield Collections for the
Due Period immediately preceding such Distribution Date after giving effect
to the withdrawals pursuant to subsections 4.08(a), (b) and (c), an amount
equal to unreimbursed Class A Investor Charge-Offs, if any, which amount shall
be deemed to be Principal Collections and treated as Excess Principal
Collections with respect to Distribution Dates relating to the Revolving
Period, and thereafter will be set aside and retained in the Collection
Account and treated as a part of Class A Monthly Principal during any Early
Amortization Period or Controlled Accumulation Period and applied in
accordance with subsection 4.08(j).
(e) Investor Default Amount. On each Distribution Date, the
Trustee, acting in accordance with instructions from the Servicer, shall set
aside and retain in the Collection Account, to the extent funds are available
from the Floating Allocation Percentage of Yield Collections for the Due
Period immediately preceding such Distribution Date, after giving effect to
subsections 4.08(a), (b), (c), and (d), an amount equal to the aggregate
Investor Default Amount for such Distribution Date which amount shall be
deemed to be Principal Collections and treated as Excess Principal Collections
with respect to Distribution Dates relating to the Revolving Period, and
thereafter will be set aside and retained in the Collection Account and
treated as a part of Class A Monthly Principal during the Controlled
13
Accumulation Period or any Early Amortization Period and applied in accordance
with subsection 4.08(j) or, if applicable, will be set aside and retained in
the Collection Account and be applied as part of Class B Monthly Principal as
provided in subsection 4.08(j).
(f) Unpaid Class B Interest. On each Distribution Date, the
Trustee, acting in accordance with instructions from the Servicer, shall
withdraw from the Collection Account for distribution to the Class B
Certificateholders to the extent funds are available from the Floating
Allocation Percentage of Yield Collections for the Due Period immediately
preceding such Distribution Date, after giving effect to subsections 4.08(a),
(b), (c), (d) and (e), an amount equal to the amount of interest which has
accrued with respect to the outstanding aggregate principal amount of the
Class B Certificates at the Class B Certificate Rate but has not been paid to
the Class B Certificateholders either on such Distribution Date or on a prior
Distribution Date plus any additional interest at the Class B Certificate Rate
plus 2% per annum with respect to such interest amounts that were due but not
paid to Class B Certificateholders on any previous Distribution Date.
Interest on the Class B Certificates shall be calculated on the basis of a
360- day year of twelve 30-day months.
(g) Reimbursement of Class B Investor Charge-Offs. Class B
Investor Charge-Offs shall be reimbursed as follows: on each Distribution
Date, the Trustee, acting in accordance with instructions from the Servicer,
shall set aside and retain in the Collection Account to the extent funds are
available from the Floating Allocation Percentage of Yield Collections for the
Due Period immediately preceding such Distribution Date, after giving effect
to subsections 4.08(a), (b), (c), (d), (e) and (f), an amount equal to
unreimbursed Class B Investor Charge- Offs, if any, which amount shall be
deemed to be Principal Collections and treated as Excess Principal Collections
with respect to Distribution Dates with respect to the Revolving Period and
thereafter will be set aside and retained in the Collection Account and
treated as a part of Class A Monthly Principal during the Controlled
Accumulation Period or any Early Amortization Period and applied in accordance
with subsection 4.08(j) or, if applicable, will be set aside and retained in
the Collection Account and be applied as part of Class B Monthly Principal as
provided in subsection 4.08(j).
(h) Funding of Series 1998-1 Reserve Account. On each Distribution
Date from and after the Series 1998-1 Reserve Account Funding Date, but prior
to the date on which the Series 1998-1 Reserve Account terminates pursuant to
subsection 4.14(f), an amount up to the excess, if any, of the Required Series
1998-1 Reserve Account Amount over the Available Series 1998-1 Reserve Account
Amount shall be deposited into the Series 1998-1 Reserve Account.
(i) Excess Yield Collections. On each Distribution Date, the
Trustee, acting in accordance with instructions from the Servicer, shall
withdraw from the Collection Account and allocate and distribute, to the
extent that such amount shall be available, an amount ("Excess Spread") equal
to the Floating Allocation Percentage of Yield Collections for the Due Period
immediately preceding such Distribution Date remaining after giving effect to
subsections 4.08 (a) through (h) above (A) to the Holders of the Exchangeable
Transferor Certificate or (B) to other Excess Allocation Series in accordance
with the terms of subsection 4.15.
(j) Principal. (A) For each Distribution Date with respect to the
14
Revolving Period, the remaining funds on deposit in the Collection Account
with respect to such Distribution Date will be treated as Excess Principal
Collections and applied as provided in subsection 4.01(f).
(B) For each Distribution Date with respect to the Controlled
Accumulation Period or any Early Amortization Period and thereafter, the
remaining funds on deposit in the Collection Account with respect to such
Distribution Date will be distributed in the following priority:
(i) an amount equal to Class A Monthly Principal for such
Distribution Date plus the amount of Excess Principal Collections allocated
to the Series 1998-1 Certificates in accordance with Section 4.12, will be
deposited into the Principal Funding Account; and
(ii) an amount equal to Class B Monthly Principal for such
Distribution Date plus the amount of Excess Principal Collections allocated
to the Series 1998-1 Certificates in accordance with Section 4.12 (to the
extent that such Excess Principal Collections remain after clause (i) above),
will be distributed pursuant to subsection 4.09(a)(iv); and
(iii) an amount equal to the balance of any such remaining funds on
deposit in the Collection Account will be treated as Excess Principal
Collections and applied as provided in subsection 4.01(f);
provided that, with respect to the amounts distributable pursuant to clauses
(i) and (ii) above, Excess Principal Collections shall be available to make
such distributions only to the extent of the Excess Principal Collections
allocated to the Series 1998-1 Certificates.
SECTION 4.09 Distributions to Certificateholders. (a) The
Servicer shall make or shall cause the Trustee to make the following
distributions at the following times and in the following priority from the
Collection Account and the Principal Funding Account:
(i) on each Distribution Date, on each Special Payment Date and on
the Expected Final Payment Date, the amount provided in subsection 4.08(a)
shall be distributed by the Servicer or the Trustee to the Paying Agent for
payment to the Class A Certificateholders;
(ii) on each Distribution Date, the amount provided in subsections
4.08(b) and 4.08(f) shall be distributed by the Servicer or the Trustee to the
Paying Agent for payment to the Class B Certificateholders;
(iii) on each Special Payment Date and on the Expected Final Payment
Date, all amounts on deposit in the Principal Funding Account, up to a maximum
amount on any such date equal to the unpaid Class A Invested Amount on such
date, shall be distributed by the Servicer or the Trustee to the Paying Agent
for payment to the Class A Certificateholders and any funds remaining in the
Principal Funding Account after the Class A Certificates have been paid in
full shall be withdrawn by the Trustee from the Principal Funding Account and
deposited in the Collection Account; and
(iv) on each Special Payment Date and on the Expected Final Payment
Date on and after the Class A Certificates have been paid in full, all amounts
15
on deposit in the Collection Account, up to a maximum amount on any such date
equal to the unpaid Class B Invested Amount on such date, shall be distributed
by the Servicer or the Trustee to the Paying Agent for payment to the Class
B Certificateholders.
(b) The distributions to be made pursuant to this Section 4.09 and
Section 4.08 are subject to the provisions of Sections 2.04(e), 9.02, 10.01,
12.01 and 12.02 and Section 4 of the Series Supplement for Series 1998-1.
SECTION 4.10 Investor Charge-Offs. (a) If, on any Distribution
Date, the Floating Allocation Percentage of Yield Collections on deposit in
the Collection Account remaining after the withdrawals and retentions required
pursuant to subsections 4.08(a), (b), (c) and (d) is less than the Investor
Default Amount for such Distribution Date, the Class B Invested Amount will
be reduced by the amount by which such Investor Default Amount exceeds such
remaining Yield Collections (a "Class B Investor Charge-Off").
(b) In the event that any such reduction of the Class B Invested
Amount would cause the Class B Invested Amount to be a negative number, the
Class B Invested Amount will be reduced to zero, and the Class A Invested
Amount will be reduced by the amount by which the Class B Invested Amount
would have been reduced below zero, but not more than the Investor Default
Amount for such Distribution Date (a "Class A Investor Charge-Off"). To the
extent that on any subsequent Distribution Date there remains any Floating
Allocation Percentage of Yield Collections on deposit in the Collection
Account after giving effect to subsections 4.08(a), (b) and (c), the Servicer
will apply such excess Yield Collections as provided in subsection 4.08(d) to
reimburse the aggregate amount of Class A Investor Charge-Offs not previously
reimbursed, up to the amount so available.
(c) To the extent that on any subsequent Distribution Date there
remains any Floating Allocation Percentage of Yield Collections on deposit in
the Collection Account after giving effect to subsections 4.08(a), (b), (c),
(d), (e) and (f), the Servicer will apply such excess Yield Collections as
provided in subsection 4.08(g) to reimburse the aggregate amount of Class B
Investor Charge-Offs not previously reimbursed, up to the amount so available.
SECTION 4.11 Servicer Permitted to Make Net Deposits. For so long
as TRS is the Servicer and TRS is entitled to remit Collections to the
Collection Account on a monthly basis, TRS may make remittances to the
Collection Account net of amounts to be distributed to TRS or the Holder of
the Transferor Certificate. Nonetheless, TRS as Servicer shall account for
all of such remittances and distributions in the Monthly Servicer's
Certificate as if all such amounts were deposited and/or distributed
separately.
SECTION 4.12 Excess Principal Collections. Excess Principal
Collections allocated to the Series 1998-1 Certificates for any Distribution
Date pursuant to subsection 4.01(f) and available for distribution to the
Certificateholders pursuant to subsection 4.08(j)(B) shall mean an amount
equal to the product of (x) Excess Principal Collections for all Series for
such Distribution Date and (y) a fraction, the numerator of which is the
Series 1998-1 Principal Shortfall for such Distribution Date and the
denominator of which is the aggregate amount of Principal Shortfalls for all
series for such Distribution Date. For any Distribution Date with respect
16
to the Revolving Period, Excess Principal Collections allocated to the Series
1998-1 Certificates shall be zero.
SECTION 4.13. Controlled Accumulation Period Postponement. The
Controlled Accumulation Period is scheduled to commence at the close of
business on the Accumulation Date; provided, however, that if the
Accumulation Period Length (determined as described below) shall equal one on
the Determination Date immediately preceding the December 2002_Distribution
Date, then, upon notice to the Trustee, the Transferors, and the Rating
Agency, the Servicer, at its option, may elect to postpone the Accumulation
Date to the last day of the Due Period ending in March 2003, and the
Controlled Accumulation Period shall commence at the close of business on the
last day of the Due Period ending in March 2003. On the Determination Date
immediately preceding the December 2002_Distribution Date, the Servicer will
determine the "Accumulation Period Length," which will be equal to one if:
[(A) times (B)] + [(A) times (C)] + [(A) times (D)] is greater than (E),
where:
(A) = the product of (i) the lowest monthly payment rate on the Accounts
for the previous twelve Due Periods and (ii) the Trust Principal
Component on such Determination Date.
(B) = a fraction, the numerator of which is equal to the sum of the
Invested Amounts of all outstanding Series other than the Series
1998-1 Certificates (including all classes of all such outstanding
Series) which are expected to be in their respective revolving
periods during the Due Period preceding the Expected Final Payment
Date and which provide for Principal Collections to be treated as
Excess Principal Collections allocable to other Series, and the
denominator of which is equal to the Trust Principal Component on
such Determination Date.
(C) = a fraction, the numerator of which is equal to the sum of the
Class A Invested Amount and Class B Invested Amount, and the
denominator of which is equal to the sum of the Invested Amounts
of all outstanding Series including the Series 1998-1 Certificates
(including all classes of such outstanding Series) which are
expected to no longer be in their respective revolving periods
during the Due Period preceding the Expected Final Payment Date.
(D) = a fraction, the numerator of which is equal to the sum of the
Class A Invested Amount and Class B Invested Amount, and the
denominator of which is the Trust Principal Component on such
Determination Date.
(E) = the Class A Invested Amount.
SECTION 4.14 The Series 1998-1 Reserve Account. (a) The Servicer
shall establish and maintain, in the name of the Trustee, on behalf of the
Trust, for the benefit of the Class A Certificateholders, a trust account at
an Eligible Institution (the "Series 1998-1 Reserve Account") bearing a
designation clearly indicating that the funds deposited therein are held for
the benefit of the Class A Certificateholders. The Series 1998-1 Reserve
Account shall initially be established with the Trustee. The Trustee shall
possess all right, title and interest in all funds on deposit from time to
time in the Series 1998-1 Reserve Account and in all proceeds thereof. The
17
Series 1998-1 Reserve Account shall be under the sole dominion and control of
the Trustee for the benefit of the Class A Certificateholders. If at any time
the depositary institution at which the Series 1998-1 Reserve Account is
maintained ceases to be an Eligible Institution, the Trustee (or the Servicer
on its behalf) shall within 10 Business Days (or such longer period, not to
exceed 30 calendar days, as to which each Rating Agency shall consent)
establish a new Series 1998-1 Reserve Account at an Eligible Institution, and
shall transfer any cash or any investments to such new Series 1998-1 Reserve
Account. The Trustee, at the direction of the Servicer, shall (i) make
withdrawals from the Series 1998-1 Reserve Account from time to time in an
amount up to the Available Series 1998-1 Reserve Account Amount at such time,
for the purposes set forth in this Series Supplement, and (ii) on each
Distribution Date (from and after the Series 1998-1 Reserve Account Funding
Date) prior to the termination of the Series 1998-1 Reserve Account make a
deposit into the Series 1998-1 Reserve Account in the amount specified in, and
otherwise in accordance with, subsection 4.08(h).
(b) Funds on deposit in the Series 1998-1 Reserve Account shall be
invested at the written direction of the Servicer by the Trustee in Eligible
Investments. Funds on deposit in the Series 1998-1 Reserve Account on any
Distribution Date, after giving effect to any withdrawals from the Series
1998-1 Reserve Account on such Distribution 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 Distribution Date. The Trustee shall
maintain for the benefit of the Class A Certificateholders possession of the
negotiable instruments or securities, if any, evidencing such Eligible
Investments. No such Eligible Investment shall be disposed of prior to its
maturity; provided, however, that the Trustee may sell, liquidate or dispose
of any such Eligible Investment before its maturity, at the written direction
of the Servicer, if such sale, liquidation or disposal would not result in a
loss of all or part of the principal portion of such Eligible Investment or
if, prior to the maturity of such Eligible Investment, a default occurs in the
payment of principal, interest or any other amount with respect to such
Eligible Investment. On each Distribution Date, all interest and earnings
(net of losses and investment expenses) accrued since the preceding
Distribution Date on funds on deposit in the Series 1998-1 Reserve Account
shall be retained in the Series 1998-1 Reserve Account (to the extent that the
Available Series 1998-1 Reserve Account Amount is less than the Required
Series 1998-1 Reserve Account Amount) and the balance, if any, shall be
deposited in the Collection Account and treated as Yield Collections of
allocable to Series 1998-1. For purposes of determining the availability of
funds or the balance in the Series 1998-1 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 the Determination Date preceding each Distribution Date with
respect to the Controlled Accumulation Period and the first Special Payment
Date, the Servicer shall calculate the "Reserve Draw Amount" which shall be
equal to the excess, if any, of the Covered Amount with respect to such
Distribution Date or Special Payment Date over the amount of Investment
Earnings with respect to such Distribution Date or Special Payment Date;
provided that such amount will be reduced to the extent that funds otherwise
would be available for deposit in the Series 1998-1 Reserve Account under
subsection 4.08(h) with respect to such Distribution Date or Special Payment
Date.
18
(d) In the event that for any Distribution Date the Reserve Draw
Amount is greater than zero, the Reserve Draw Amount, up to the Available
Series 1998-1 Reserve Account Amount, shall be withdrawn from the Series
1998-1 Reserve Account on the related Distribution Date by the Trustee (acting
in accordance with the instructions of the Servicer), deposited into the
Collection Account and included in amounts distributable on such Distribution
Date pursuant to Section 4.09.
(e) In the event that the Series 1998-1 Reserve Account Surplus on
any Distribution Date, after giving effect to all deposits to, and withdrawals
from, the Series 1998-1 Reserve Account with respect to such Distribution
Date, is greater than zero, the Trustee, acting in accordance with the written
instructions of the Servicer, shall withdraw from the Series 1998- 1 Reserve
Account, and pay to the Holders of the Exchangeable Transferor Certificate an
amount equal to such Series 1998-1 Reserve Account Surplus.
(f) Upon the earliest to occur of (i) the day on which the Class A
Invested Amount is paid in full to the Class A Certificateholders, (ii) if the
Controlled Accumulation Period has not commenced, the occurrence of a Pay Out
Event with respect to Series 1998-1, (iii) if the Controlled Accumulation
Period has commenced, the earlier of the first Special Payment Date and the
Expected Final Payment Date, and (iv) the termination of the Trust pursuant
to the Agreement, the Trustee, acting in accordance with the instructions of
the Servicer, after the prior payment of all amounts owing to the Class A
Certificateholders which are payable from the Series 1998-1 Reserve Account
as provided herein, shall withdraw from the Series 1998-1 Reserve Account and
pay to the Holders of the Exchangeable Transferor Certificate all amounts, if
any, on deposit in the Series 1998-1 Reserve Account, and the Series 1998-1
Reserve Account shall be deemed to have terminated for purposes of this
Supplement.
SECTION 4.15 Excess Allocation Series. Series 1998-1 shall be an
Excess Allocation Series. On each Distribution Date, (a) the Trustee, acting
in accordance with instructions from the Servicer, shall allocate the
aggregate amount for all outstanding Excess Allocation Series that the Series
Supplements related to such Series specify are to be treated as Excess Spread
for such Distribution Date (collectively, "Excess Yield Collections") pro rata
in proportion to the respective Yield Collection Shortfalls (as such term is
defined below with respect to Series 1998- 1 and in the Series Supplement for
each other Excess Allocation Series), if any, of such Excess Allocation Series
and (b) the Trustee, acting in accordance with instructions from the Servicer,
shall withdraw from the Collection Account and pay to the Holders of the
Exchangeable Transferor Certificate an amount equal to the excess, if any, of
(x) the Excess Yield Collections for such Distribution Date over (y) the
aggregate amount of Yield Collection Shortfalls for such Distribution Date;
provided, however, that the sharing of Excess Yield Collections among Excess
Allocation Series will cease if the Transferors shall deliver to the Trustee
an Officer"s Certificate to the effect that, in the reasonable belief of the
Transferors, the continued sharing of Excess Yield Collections among Excess
Allocation Series would have adverse regulatory implications with respect to
the Transferors or any Account Originator. Following the delivery of such an
Officer"s Certificate to the Trustee, there will not be any further sharing
of Excess Yield Collections among Excess Allocation Series. The "Yield
Collections Shortfall" for Series 1998-1 for any Distribution Date will be
equal to the excess, if any, of (a) the full amount required to be paid,
without duplication, with respect to the Class A Certificates pursuant to
subsections 4.08(a), (b), (d) and (e) on such Distribution Date over (b) the
19
sum of (i) if such Monthly Period relates to a Distribution Date with respect
to the Controlled Accumulation Period or Early Amortization Period, the amount
of Investment Earnings, if any, with respect to such Distribution Date and
(ii) the amount of funds, if any, to be withdrawn from the Series 1998-1
Reserve Account which, pursuant to subsection 4.14(d), are distributable on
such Distribution Date pursuant to Section 4.09.
[END OF ARTICLE IV]
20
Section 10. Article V of the Agreement. Article V of the Agreement
shall read in its entirety as follows:
ARTICLE V
DISTRIBUTIONS AND REPORTS TO
CERTIFICATEHOLDERS
SECTION 5.1 Distributions. (a) On each Distribution Date, each
Special Payment Date, the Expected Final Payment Date and the Termination
Payment Date, the Paying Agent shall distribute to each Class A
Certificateholder of record as of the preceding Record Date (other than as
provided in Section 12.02 respecting a final distribution) such Class A
Certificateholder"s pro rata share (based on the aggregate Undivided Interests
represented by Class A Certificates held by such Class A Certificateholder)
of the amounts payable to the Class A Certificateholders pursuant to
subsections 4.09 (a) (i) and (iii).
(b) On each Distribution Date, the Paying Agent shall distribute
to each Class B Certificateholder of record as of the preceding Record Date
(other than as provided in Section 12.02 respecting a final distribution) such
Class B Certificateholder's pro rata share (based on the aggregate Undivided
Interests represented by Class B Certificates held by such Class B
Certificateholder) of the amounts payable to the Class B Certificateholders
pursuant to Section 4.09 (a) (ii).
(c) On and after the date on which the Class A Certificateholders
have been paid in full, on each Special Payment Date and the Termination
Payment Date, the Paying Agent shall distribute to each Class B
Certificateholder of record as of the preceding Record Date (other than as
provided in Section 12.02 respecting a final distribution) such Class B
Certificateholder's pro rata share (based on the aggregate Undivided Interests
represented by Class B Certificates held by such Class B Certificateholder)
of the amounts payable to the Class B Certificateholders pursuant to Section
4.09 (a) (iv).
(d) Except as provided in Section 12.02 with respect to a final
distribution, distributions to Certificateholders hereunder shall be made by
check mailed to each such Certificateholder at such Certificateholder's
address appearing in the Certificate Register without presentation or
surrender of any such Certificate or the making of any notation thereon;
provided, however, that with respect to such Certificates registered in the
name of a Clearing Agency, such distributions shall be made to such Clearing
Agency in immediately available funds.
SECTION 5.2 Statements to Certificateholders. On each Distribution
Date, the Paying Agent, on behalf of the Trustee, shall forward to each
Certificateholder a statement substantially in the form of Exhibit C prepared
by the Servicer setting forth certain information relating to the Trust and
the Certificates.
On or before January 31 of each calendar year, beginning with
calendar year 1998, the Paying Agent, on behalf of the Trustee, shall furnish
21
or cause to be furnished to each Person who at any time during the preceding
calendar year was a Certificateholder of Series 1998-1, a statement prepared
by the Servicer containing the information which is required to be contained
in the statement to the Certificateholders, aggregated for such calendar year
or the applicable portion thereof during which such Person was a
Certificateholder of such Series, together with other information as is
required to be provided by an issuer of indebtedness under the Internal
Revenue Code and such other customary information as is necessary to enable
the Certificateholders of such Series to prepare their tax returns. Such
obligation of the Servicer shall be deemed to have been satisfied to the
extent that substantially comparable information shall be provided by the
Paying Agent pursuant to any requirements of the Internal Revenue Code as
from time to time in effect.
[END OF ARTICLE V]
Section 11. Pay Out Events. (a) if any one of the events
specified in Section 9.01 of the Agreement (after any grace periods or
consents applicable thereto) or any one of the following events shall occur
during either the Revolving Period or the Controlled Accumulation Period with
respect to the Series 1998-1 Certificates:
(i) failure on the part of a Transferor or TRS (a) to make
any payment or deposit on the date required under the Agreement, this
Series Supplement or the RFC Receivable Purchase Agreement, as
applicable (or within the applicable grace period which will not exceed
five Business Days), (b) duly to observe or perform in any material
respect the covenant of such Transferor or TRS not to sell, pledge,
assign or transfer to any person, or grant any unpermitted lien on, any
Receivable, or (c) duly to observe or perform in any material
respect any other covenants or agreements of such Transferor or TRS in
the Agreement or, to the extent assigned to the Trust, in the RFC
Receivable Purchase Agreement, which in the case of subclause (c)
hereof, continues unremedied for a period of 60 days after written
notice to such Transferor or TRS, as applicable, and continues to affect
materially and adversely the interests of the Certificateholders for
such period; provided, however, that a Pay Out Event described in clause
(b) or (c) shall not be deemed to occur if such Transferor has accepted
the transfer of the related Receivable during such period (or such
longer period as the Trustee may specify not to exceed an additional 60
days) in accordance with the provisions of the Agreement;
(ii) any representation or warranty made by a Transferor in
the Agreement or this Series Supplement or any representation or
warranty made by TRS in the RFC Receivable Purchase Agreement or any
information required to be given by a Transferor or the Servicer to the
Trustee to identify the Designated Accounts proves to have been
incorrect in any material respect when made and continues to be
incorrect in any material respect for a period of 60 days after written
notice to such Transferor or the Servicer, as applicable, and as a
result of which the interests of the Certificateholders are materially
and adversely affected and which continues to materially and adversely
affect the interests of the Certificateholders for such period;
provided, however, that a Pay Out Event described in this clause (ii)
shall not be deemed to occur if such Transferor has accepted the
transfer of the related Receivable or all such Receivables, if
applicable, during such period (or such longer period as the Trustee may
specify not to exceed an additional 60 days) in accordance with the
provisions of the Agreement;
22
(iii) there will have been three consecutive Distribution
Dates on which the Class B Invested Amount is less than the Initial
Class B Invested Amount;
(iv) any Servicer Default occurs which would have a material
adverse effect on the Certificateholders;
(v) on any Determination Date, the Class B Invested Amount
as of the last day of the prior Due Period is less than 2% of the Class
A Invested Amount as of the last day of the prior Due Period;
then (A) in the case of any event described in clause (i), (ii) or (iv), a Pay
Out Event will be deemed to have occurred with respect to the Series 1998-1
Certificates only if, after any applicable grace period described in the
clauses, either the Trustee or certificateholders of such Series evidencing
undivided interests aggregating more than 50% of the invested amount of such
Series, by written notice to the Transferor and the Servicer (and to the
Trustee, if given by such certificateholders) declare that a Pay Out Event has
occurred as of the date of such notice; and (B) in the case of any event
described in Section 9.01 of the Agreement, a Pay Out Event with respect to
all Series, and in the case of any event described in clause (iii) or (v), a
Pay Out Event with respect to only the Series 1998-1 Certificates, will be
deemed to have occurred without any notice or other action on the part of the
Trustee or the Certificateholders or all certificateholders, as appropriate,
immediately upon the occurrence of such event.
(b) In the case of any event described in the first sentence of
Section 9.01(a) of the Agreement, if after 90 days from the Publication Date,
the Trustee shall not have received written instructions of (i)
Certificateholders representing Undivided Interests aggregating in excess of
50% of each of the Class A Invested Amount and the Class B Invested Amount
(other than any holder who is the subject of the bankruptcy or insolvency
which resulted in a Pay Out Event) and (ii) holders representing Undivided
Interests aggregating in excess of 50% of the Transferor Interest (other than
any holder who is the subject of the bankruptcy or insolvency which resulted
in a Pay Out Event), to the effect that the Trustee shall not instruct the
Servicer to sell, dispose of, or otherwise liquidate the Receivables and to
instruct the Servicer to reconstitute the Trust upon the same terms and
conditions as set forth in the Agreement, the Trustee shall instruct the
Servicer to proceed to sell, dispose of or otherwise liquidate the Receivables
as provided in the third sentence of Section 9.1 (a) of the Agreement.
Section 12. Global Offering of Class A Certificates. The Class A
Certificates may be held by Investor Certificateholders through The Depository
Trust Company in the United States or Cedel or the Euroclear System in Europe.
Application will be made by the Transferors to list the Class A Certificates
on the Luxembourg Stock Exchange.
In addition to the Paying Agent listed in Section 6.6, with respect
to the Class A Certificates the following co-Paying Agents are also appointed:
Kredietbank S.A. Luxembourgeoise, 00 Xxxxxxxxx Xxxxx, Xxxxxxxxxx Xxxx,
Xxxxxxxxxx ("Kredietbank") and The Bank of New York (London), 00 Xxxxxxxx
Xxxxxx, Xxxxxx, XXX-0XX, Xxxxxxx. Kredietbank shall also serve as co-Transfer
Agent and co-Registrar, so long as the Class A Certificates are outstanding.
Kredietbank shall also serve as listing agent for the Class A Certificates on
the Luxembourg Stock Exchange (the "Listing Agent").
23
The Trustee will publish or will cause to be published (at the
expense of the Servicer) following each Distribution Date in a daily newspaper
in Luxembourg (which initially shall be the Luxemburger Wort) a notice to the
effect that the information required to be sent to Investor Certificateholders
pursuant to Section 5.02 hereof will be available for review at the main
office of Kredietbank in Luxembourg City, Luxembourg.
Notices to Class A Certificateholders pursuant to the Agreement will
be given by publication in a daily newspaper in Luxembourg (which initially
shall be the Luxemburger Wort). In the event that Definitive Certificates are
issued, notices to Class A Certificateholders will also be given by mail to
the addresses of such holders as they appear in the Certificate Register.
Section 13. Series Specific Transferor Covenants. Each Transferor
hereby covenants and agrees, for so long as the Series 1998-1 Certificates
remain outstanding and Moody's or Standard & Poor's shall be a "Rating
Agency," as follows:
(a) such Transferor shall not assume or guarantee the
liabilities of any other entity;
(b) such Transferor shall observe all corporate formalities
in connection with all dealings between itself and its affiliates;
(c) such Transferor shall pay its own liabilities and
expenses with its own funds, and not those of its parent;
(d) such Transferor shall only cause certificates to be
issued by other trusts which may be formed by it and shall only issue
indebtedness secured or collateralized by accounts receivable if Xxxxx"s
and Standard & Poor"s shall have confirmed in writing that any such
issuance will not result in a downgrade or withdrawal of Xxxxx"s or
Standard & Poor"s rating of any outstanding certificates issued by
trusts formed by such Transferor or outstanding indebtedness of such
Transferor secured or collateralized by accounts receivable; and
Such Transferor shall, for as long as the Class A Certificates are
listed on the Luxembourg Stock Exchange, cause each Monthly Servicer's
Certificate to be filed with the Luxembourg Stock Exchange, for so long as
required by the Luxembourg Stock Exchange.
Section 14. Remittance Processing Procedures. (a) In the event
that the short-term credit rating of TRS is reduced below A-1 by Standard &
Poor"s or P-1 by Moody's, the Trustee shall, at the close of business on the
fifth Business Day following notification to the Trustee of such downgrade,
complete and deliver the Lock Box Notices to the Remittance Banks; provided,
however, that in the event that within such five Business Day period (or such
longer period as Standard & Poor's and Moody's shall notify the Trustee is the
period within which the following arrangements may be put into place without
causing Standard & Poor's and Moody's to downgrade or withdraw their
respective ratings of the Class A Certificates, in which case the Trustee
shall not deliver the Lock Box Notices until the expiration of such period),
there shall have been delivered to the Trustee for the benefit of Investor
Certificateholders either:
24
(i) (a) a letter of credit, surety bond or other similar
instrument acceptable to Standard & Poor's and Xxxxx"s providing that
an amount equal to 4% of the initial Invested Amount is available
thereunder to the Trustee in the event that TRS as Servicer fails to
deposit funds into the Collection Account as required under the
Agreement, and (b) opinions of counsel acceptable to Standard & Poor's
and Moody's substantially to the effect that such letter of credit,
surety bond or other instrument is a legal, valid and binding obligation
of the issuer thereof and that any funds obtained by the Trustee
thereunder would not constitute an avoidable transfer of TRS under
Section 547 of the Bankruptcy Code; or
(ii) (a) cash in the amount of 4% of the initial Invested
Amount (the "Deposit"), which funds will be deposited into a segregated
trust account held in the name of the Trustee for the benefit of
Investor Certificateholders and shall be available to the Trustee in the
event that TRS as Servicer fails to deposit funds into the Collection
Account as required under the Agreement, (b) opinions of counsel
acceptable to Standard & Poor"s and Xxxxx"s substantially to the effect
that such funds would not be considered property of TRS" bankruptcy
estate, that the deposit of such funds with the Trustee would not
constitute an avoidable transfer of TRS under Section 547 of the
Bankruptcy Code and that Section 362(a) of the Bankruptcy Code would not
apply to stay the withdrawal by the Trustee of such funds from such
account, and (c) an Opinion of Counsel substantially in the form of
Exhibit L to the Agreement; or
(iii) written confirmation from Standard & Poor's and Moody's
that other arrangements satisfactory to them have been put into place,
then the Trustee shall not complete or deliver the Lock Box Notices to the
Remittance Banks and the Lock Box Letters shall be cancelled and of no force
and effect and shall be returned by the Trustee to TRS. In the event that the
Lock Box Notices shall have been delivered by the Trustee, such Lock Box
Notices shall be cancelled by the Trustee and of no further force and effect
from and after such time as TRS shall have put other arrangements into place
and delivered to the Trustee written confirmation from Standard & Poor's of
the ratings of the Class A Certificates.
(b) The Trustee agrees that, in the event that the Trustee is
required to deliver the Lock Box Notices pursuant to subsection 14(a) above
to the Remittance Banks, the Trustee shall provide in such notices that TRS
shall continue to have the right, on behalf of the Trustee, to instruct the
Remittance Banks as to transfers and withdrawals to be made from the accounts
subject to the Lock Box Letters. The Trustee may only revoke this right of
TRS, as Servicer, in connection with the termination and replacement of TRS
as Servicer hereunder. There shall be remitted to TRS daily all funds on
deposit in each account subject to the Lock Box Letters which are identified
by the Servicer as not being payments made by Obligors in respect of Accounts.
As provided in Section 4.01(d) of the Agreement, the Servicer shall continue
to allocate to the Holders of the Exchangeable Transferor Certificate the
amounts allocable to such Holders pursuant to such Section 4.1(d) or pursuant
to any Supplement and such amounts shall not be deposited into the Collection
Account but shall be paid as collected to the Holders of the Exchangeable
Transferor Certificate. Payments by Obligors in respect of Accounts to be
distributed to Certificateholders shall be remitted directly from accounts
subject to the Lock Box Letters to the Collection Account, subject, however,
25
to distribution on a daily basis to the Transferors as provided in and
pursuant to Section 4.01(g) of the Agreement.
Section 15. Ratification of Master Pooling and Servicing Agreement.
As supplemented by this Series Supplement, the Agreement is in all respects
ratified and confirmed and the Agreement as so supplemented by this Series
Supplement shall be read, taken, and construed as one and the same instrument.
Section 16. 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 17. GOVERNING LAW. THIS SERIES SUPPLEMENT SHALL CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
26
IN WITNESS WHEREOF, the Transferors, the Servicer and the Trustee
have caused this Series 1998-1 Supplement to be duly executed by their
respective officers thereunto duly authorized as of the day and year first
above written.
AMERICAN EXPRESS RECEIVABLES
FINANCING CORPORATION,
as Transferor
By /s/ Xxxxxx X. Xxxxxxxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxxxxxxx
Title: Vice President
AMERICAN EXPRESS CENTURION BANK,
as Transferor
By /s/ Xxxxxx Xxxxxxx
--------------------------------
Name:
Title:
AMERICAN EXPRESS TRAVEL RELATED
SERVICES COMPANY, INC.,
as Servicer
By /s/ X.X. Xxxxxxxxx
--------------------------------
Name: X. X. Xxxxxxxxx
Title: Senior Vice President
THE BANK OF NEW YORK,
as Trustee and Paying Agent
By /s/ Wuhan Xxxxxx
--------------------------------
Name: Wuhan Xxxxxx
Title: Assistant Vice President
27
EXHIBIT A TO THE
SERIES 1998-1 SUPPLEMENT
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC") TO THE
ISSUER 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 IS 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. R-_ $__________
Registered CUSIP No._______________
AMERICAN EXPRESS MASTER TRUST
5.90% CLASS A ACCOUNTS RECEIVABLE
TRUST CERTIFICATE, SERIES 1998-1
Each $1,000 minimum denomination represents a 1/1,000,000th interest
in the Series 1998-1 Class A Certificateholders' undivided interest in the
American Express Master Trust.
Evidencing an undivided interest in a trust, the corpus of which consists of
receivables generated or to be generated in a portfolio of the pay in full
portion of designated American Express-R- Card, American Express-R- Gold Card
and Platinum Card-R- Accounts.
(Not an interest in or recourse obligation of American Express
Receivables Financing Corporation, American Express Centurion Bank, American
Express Travel Related Services Company, Inc. ("TRS"), American Express
Company or any of their affiliates.)
This certifies that CEDE & CO. (the "Certificateholder") is the
registered owner of an Undivided Interest in the American Express Master Trust
(the "Trust") issued pursuant to the Amended and Restated Master Pooling and
Servicing Agreement, dated as of May 1, 1998 (the "Pooling and Servicing
Agreement"; such term to include any amendment or Supplement thereto) by and
among American Express Centurion Bank, as transferor and American Express
Receivables Financing Corporation, as Transferor (together, the
"Transferors"), TRS, as Servicer (in such capacity, the Servicer"), and The
Bank of New York, as Trustee (the "Trustee"), and the Series 1998-1
Supplement, dated May 27, 1998, among the Transferors, the Servicer and the
Trustee. The corpus of the Trust consists of all of the Transferors" right,
title and interest in a portfolio of receivables now existing and hereafter
created (the "Receivables"), arising under certain charge card accounts owned
by TRS identified in the Pooling and Servicing Agreement from time to time
A-1
(collectively, the "Accounts"), all monies due or to become due with respect
thereto (including Recoveries) on and after the Cut Off Date, all proceeds of
such Receivables, all right, title and interest of the Transferors in, to and
under the Receivable Purchase Agreement, all monies as are from time to time
deposited in the Collection Account and any other account or accounts
maintained for the benefit of the Certificateholders and all monies as are
from time to time available under any Enhancement for any Series for payment
to Certificateholders. The holder of this Certificate is not entitled to the
benefit of any Enhancement for any other Series which may be a part of the
Trust's assets. The Receivables arise generally from the purchase of
merchandise and services, annual membership fees and other administrative fees
billed to obligors, as more fully specified in the Pooling and Servicing
Agreement.
A portion of the Collections on the Receivables received in any Due
Period equal to the product of the aggregate amount of such Collections and
the Yield Factor will be treated as Yield Collections. The remainder of such
Collections will be treated as Principal Collections. Recoveries will not be
considered Collections but will be used as an offset to Defaulted Receivables.
The Yield Factor will initially be equal to 3.0%, and, subject to certain
limitations, may be changed from time to time by the Transferor.
Although a summary of certain provisions of the Pooling and
Servicing Agreement is set forth below, this Certificate does not purport to
summarize the Pooling and Servicing Agreement and reference is made to the
Pooling and Servicing Agreement, as amended and as supplemented by the Series
1998-1 Supplement, for information with respect to the interests, rights,
benefits, obligations, proceeds, and duties evidenced hereby and the rights,
duties and obligations of the Trustee. A copy of the Pooling and Servicing
Agreement and the Series 1998-1 Supplement may be requested from the Trustee
by writing to the Trustee at The Bank of New York, 000 Xxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Corporate Trust Division. To the extent not
defined herein, the capitalized terms used herein have the meanings ascribed
to them in the Pooling and Servicing Agreement as supplemented by the Series
1998-1 Supplement. This Certificate is one of a series of Certificates
entitled "American Express Master Trust 5.90% Class A Accounts Receivable
Trust Certificates, Series 1998-1" (the "Class A Certificates"), each of which
represents a fractional undivided interest in the Trust, including the right
to receive the Collections and other amounts at the times and in the amounts
specified in the Pooling and Servicing Agreement to be paid to the holder of
a Class A Certificate, and is issued under and is subject to the terms,
provisions and conditions of the Pooling and Servicing Agreement, to which
Pooling and Servicing Agreement, as amended from time to time, the
Certificateholder by virtue of the acceptance hereof assents and by which the
Certificateholder is bound.
The Transferor has structured the Pooling and Servicing Agreement
and the Investor Certificates with the intention that the Investor
Certificates (other than those held by the Transferor) will qualify under
applicable tax law as indebtedness and the Transferor and each Investor
Certificateholder (or Certificate Owner) by acceptance of its Class A
Certificate (or, in the case of a Certificate Owner, by virtue of such
Certificate Owner's acquisition of a beneficial interest therein) or
participation herein, agrees to treat the Investor Certificates (other than
those held by the Transferor) (and any beneficial interest therein) for
purposes of Federal, state and local income or franchise taxes and any other
tax imposed on or measured by income, as indebtedness. Each Certificateholder
A-2
Agrees that it will cause any Certificate Owner acquiring an interest in a
Certificate through it to comply with the Pooling and Servicing Agreement as
to treatment as indebtedness for certain tax purposes.
The aggregate interest in the Trust represented by the Series 1998-1
Investor Certificates at any time shall not exceed an amount equal to the
Invested Amount at such time. The initial Invested Amount is $1,058,201,059.
The aggregate interest in the Trust represented by the Class A Certificates
at any time shall not exceed an amount equal to the Class A Invested Amount
at such time. The Class A Initial Invested Amount is $1,000,000,000. The
Class A Invested Amount on any date of determination will be an amount equal
to (a) the Class A Initial Invested Amount minus (b) the amount of payments
of principal paid to the Class A Certificateholders prior to such date of
determination, minus (c) the aggregate amount of Class A Investor Charge-Offs
for all prior Distribution Dates and, if the date of determination is a
Distribution Date, the current Distribution Date, plus (d) the aggregate
amount of Yield Collections and certain other amounts applied on all prior
Distribution Dates for reimbursing amounts deducted pursuant to the foregoing
clause (c) and, if the date of determination is a Distribution Date, the
aggregate amount of Yield Collections and certain other amounts applied for
such Distribution Date for reimbursing amounts deducted pursuant to the
foregoing clause (c). In addition to the Investor Certificates, an
Exchangeable Transferor Certificate has been issued to the Transferor pursuant
to the Pooling and Servicing Agreement which will represent an Undivided
Interest in the Trust. The Exchangeable Transferor Certificate will represent
the interest in the Receivables not represented by the Investor Certificates.
The Exchangeable Transferor Certificate may be exchanged by the Transferor
pursuant to the Pooling and Servicing Agreement for one or more Series of
Investor Certificates and a reissued Exchangeable Transferor Certificate upon
the conditions set forth in the Pooling and Servicing Agreement.
Interest will accrue on the unpaid principal amount of the Class A
Certificates at a per annum rate equal to 5.90% (the "Class A Certificate
Rate") and, except as otherwise provided herein, will be distributed to
Certificateholders on the fifteenth day of each month (or, if such day is not
a Business Day, on the next succeeding Business Day) (each, a "Distribution
Date") and on the Expected Final Payment Date, commencing June 15, 1998. If
(a) a Pay Out Event occurs or (b) the final principal payment on the Class A
Certificates is not made on the Expected Final Payment Date, then thereafter
interest will be distributed to the Class A Certificateholders monthly on each
Special Payment Date. Interest for any Distribution Date will include accrued
interest in an amount equal to the product of (i) the Class A Certificate Rate
and (ii) the outstanding principal balance of the Class A Certificates as of
the related Record Date (or, in the case of the first Distribution Date, as
of the Closing Date). Interest for any Distribution Date or Special Payment
Date due but not paid on any Distribution Date or Special Payment Date will
be due on the next succeeding Distribution Date or Special Payment Date together
with, to the extent permitted by applicable law, additional interest on such
amount at the Class A Certificate Rate plus 2% per annum. Interest will be
calculated on the basis of a 360-day year comprised of twelve 30-day months.
No principal will be payable to the Class A Certificateholders until
the Expected Final Payment Date or, upon the occurrence of a Pay Out Event as
described in the Pooling and Servicing Agreement, on the first Special Payment
Date. No principal will be payable to the Class B Certificateholders until
all principal payments have been made to the Class A Certificateholders. For
each Due Period during the period beginning on the Closing Date and ending on
A-3
the day prior to the day on which the Controlled Accumulation Period or the
Early Amortization Period commences (the "Revolving Period"), all Principal
Collections allocable to the Investor Interest will be treated as Excess
Principal Collections. The Servicer will allocate Excess Principal
Collections as provided in the Pooling and Servicing Agreement which may
include any principal distributions to Investor Certificateholders and
deposits to principal funding accounts for any Series which are either
scheduled or permitted and which have not been covered out of the Principal
Collections allocable to such other Series.
The Servicer shall deposit Collections into the Collection Account
in the amounts and at the time required by the Pooling and Servicing
Agreement. The Servicer shall apply or shall cause the Trustee to apply the
funds on deposit in the Collection Account with respect to each Distribution
Date as provided in the Pooling and Servicing Agreement.
TRS, as Servicer, is entitled to receive as servicing compensation
a monthly servicing fee in an amount equal to the sum of, with respect to all
Series, one-twelfth of the product of the applicable Servicing Fee
Percentages with respect to each Series and the sum of an allocable portion
of the Transferor Interest and the aggregate Invested Amount with respect to
each Series with respect to the related Due Period. The portion of the
servicing fee for each Due Period allocable to the Certificateholders'
Interest shall be equal to one- twelfth of the product of (A) 2.0% (the
Servicing Fee Percentage for the Series 1998-1 Investor Certificates) and (B)
the amount of the Class A Adjusted Invested Amount and the Class B Invested
Amount, on the last day of the second preceding Due Period or, in the case of
the first Distribution Date, the initial principal amount of the Class A
Certificates and the Class B Certificates.
With respect to the Class A Certificates, the Servicer shall
instruct the Trustee or the Paying Agent to make the following distributions
at the following times and in the following priority from the Collection
Account and the Principal Funding Account:
(a) on each Distribution Date, on each Special Payment Date
and on the Expected Final Payment Date, Class A Monthly Interest and
unpaid Class A Monthly Interest, plus additional interest thereon, to
the extent available from the Floating Allocation Percentage of Yield
Collections, shall be distributed to the Class A Certificateholders; and
(b) on each Special Payment Date and on the Expected Final
Payment Date, all amounts on deposit in the Principal Funding Account,
up to a maximum amount on any such date equal to the unpaid Class A
Invested Amount on such date, shall be distributed to the Class A
Certificateholders.
If Yield Collections allocable to the Certificateholders' Interest
for any Due Period are insufficient to pay the Investor Default Amount for
such Due Period in accordance with the priorities set forth in the Pooling and
Servicing Agreement, then the Class B Invested Amount will be reduced by an
amount equal to such insufficiency. If the Class B Invested Amount is reduced
to zero, any further insufficiency will reduce the Class A Invested Amount,
but not in excess of the Investor Default Amount for such Due Period, and the
Class A Certificateholders will bear directly the credit and other risks
associated with their undivided interest in the Trust.
A-4
The amount in respect of interest payments to be paid on each
Distribution Date, Special Payment Date or Expected Final Payment Date to the
holder of this Certificate will be equal to the product of the aggregate
Undivided Interest evidenced by this Certificate and the aggregate of all
payments of interest to be made to the Class A Certificateholders on such
date. The amount in respect of principal payments on each Special Payment
Date or Expected Final Payment Date with respect to the holder of this
Certificate will be equal to the product of the aggregate Undivided Interest
evidenced by this Certificate and the aggregate of all payments of principal
to be made to Class A Certificateholders on such date. Distributions with
respect to this Certificate will be made by the Paying Agent by check mailed
to the address of the Class A Certificateholder of record appearing in the
Certificate Register (except for the final distribution in respect of this
Certificate) without the presentation or surrender of this Certificate or the
making of any notation thereon, except that with respect to Certificates
registered in the name of the nominee of a Clearing Agency, distributions will
be made in the form of wire transfer of immediately available funds.
This Certificate does not represent a recourse obligation of, or an
interest in, the Transferors, the Servicer or any of their affiliates and is
not insured or guaranteed by any governmental agency. This Certificate is
limited in right of payment to certain Collections with respect to the
Receivables all as more specifically set forth in the Pooling and Servicing
Agreement.
Pursuant to the Pooling and Servicing Agreement, the Transferors
have the right (subject to certain limitations and conditions), and in some
circumstances is obligated, to designate additional eligible accounts to be
included as Accounts (the "Additional Accounts") and to convey to the Trust
all of the Receivables in the Additional Accounts, whether such Receivables
are then existing or thereafter created.
The Transferors may, and in some circumstances is obligated to,
designate (subject to the terms and conditions of the Pooling and Servicing
Agreement), Accounts for deletion and removal from the Accounts previously
designated as Accounts.
The Pooling and Servicing Agreement may be amended from time to time
by the Servicer, the Transferors and the Trustee, without the consent of any
of the Investor Certificateholders, to cure any ambiguity, to correct or
supplement any provisions therein which may be inconsistent with any other
provisions therein or to add, modify or eliminate such provisions as the
Transferors may deem necessary, in order to enable all or a portion of the
Trust to (i) qualify as, and to permit an election to be made to cause the
Trust to be treated as a "financial asset securitization investment trust" as
described in Section 860L of the Code and (ii) to avoid the imposition of
state or local income or franchise taxes imposed on the Trust"s property or
its income and to add any other provisions with respect to matters or
questions raised under the Pooling and Servicing Agreement which shall not be
inconsistent with the provisions of the Pooling and Servicing Agreement;
provided, however, that such action shall not adversely affect in any material
respect the interests of any of the Investor Certificateholders.
Additionally, the Pooling and Servicing Agreement may be amended from time to
time by the Servicer, the Transferors and the Trustee, without the consent of
any of the Certificateholders, to add to or change any of the provisions of
A-5
the Pooling and Servicing Agreement to provide that Bearer Certificates may
be registrable as to principal, to change or eliminate any restrictions on the
payment of principal of (or premium, if any) or any interest on Bearer
Certificates to comply with the Bearer Rules, to permit Bearer Certificates
to be issued in exchange for Registered Certificates (if then permitted by the
Bearer Rules), to permit Bearer certificates to be issued in exchange for
Bearer Certificates of other authorized denominations or to permit the
issuance of Investor Certificates in uncertificated form, provided any such
action shall not adversely affect the interest of the Holders of Bearer
Certificates of any Series or any related Coupons in any material respect
unless such amendment is necessary to comply with the Bearer Rules. The
Trustee may, but shall not be obligated to, enter into any such amendment
which affects the Trustee's own rights, duties or immunities under the
Agreement or otherwise.
The Pooling and Servicing Agreement may also be amended from time
to time by the Servicer, the Transferor and the Trustee, without the consent
of any of the Investor Certificateholders, for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions
of the Agreement, or of modifying in any manner the rights of the Holders of
Investor Certificates; provided that (i) the Servicer shall have provided an
Opinion of Counsel to the Trustee to the effect that such amendment will not
materially and adversely affect the interests of the Investor
Certificateholders of any outstanding Series (or l00% of the lass of
Certificateholders so affected have consented), (ii) such amendment shall not,
as evidenced by an Opinion of Counsel, cause the Trust to be characterized for
Federal income tax purposes as an association taxable as a corporation or
otherwise have any material adverse impact on the Federal income taxation of
any outstanding Series of Investor Certificates or any Certificate Owner and
(iii) the Rating Agencies shall confirm that such amendment shall not cause
a reduction or withdrawal of the rating of any outstanding Series of
Certificates; provided, further, that such amendment shall not reduce in any
manner the amount of, or delay the timing of, distributions which are required
to be made on any Investor Certificate of such Series without the consent of
the related Investor Certificateholder, change the definition of or the manner
of calculating the interest of any Investor Certificateholder of such Series
without the consent of the related Investor Certificateholder or reduce the
aforesaid percentage required to consent to any such amendment, in each case
without the consent of all such Investor Certificateholders.
The Pooling and Servicing Agreement may also be amended from time
to time by the Servicer, the Transferor and the Trustee with the consent of
the Holders of Investor Certificates evidencing Undivided Interests
aggregating not less than 66-2/3% of the Invested Amount of all Series
adversely affected, for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of the Agreement or of
modifying in any manner the rights of the Investor Certificateholders of any
Series then issued and outstanding; provided, however, that no such amendment
shall (i) reduce in any manner the amount of, or delay the timing of,
distributions which are required to be made on any Investor Certificate of
such Series without the consent of the related Investor Certificateholder;
(ii) change the definition of or the manner of calculating the Invested
Amount, the Invested Percentage, the applicable available amount under any
Enhancement or the Investor Default Amount of such Series without the consent
of each related Investor Certificateholder; or (iii) reduce the aforesaid
percentage required to consent to any such amendment, without the consent of
each related Investor Certificateholder.
A-6
The transfer of this Certificate shall be registered in the
Certificate Register upon surrender of this Certificate for registration of
transfer at any office or agency maintained by the Transfer Agent and
Registrar accompanied by a written instrument of transfer in a form
satisfactory to the Trustee and the Transfer Agent and Registrar duly executed
by the Certificateholder or such Certificateholder's attorney duly authorized
in writing, and thereupon one or more new Certificates of authorized
denominations and for the same aggregate Undivided Interests will be issued
to the designated transferee or transferees.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, Certificates are exchangeable for new
Certificates evidencing like aggregate Undivided Interests, as requested by
the Certificateholder surrendering such Certificates. No service charge may
be imposed for any such exchange but the Trustee or Transfer Agent and
Registrar may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith.
The Transferors, Servicer, the Trustee, the Paying Agent, and the
Transfer Agent and Registrar, and any agent of any of them, may treat the
person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Transferors, the Servicer, the Trustee, the
Paying Agent, and the Transfer Agent and Registrar, nor any agent of any of
them or of any such agent shall be affected by notice to the contrary except
in certain circumstances described in the Pooling and Servicing Agreement.
At the option of the Transferors, but subject to certain conditions
set forth in the Pooling and Servicing Agreement, the aggregate principal
amount of the Class A Certificates is subject to retransfer to the Transferor
on any Distribution Date on or after which the Invested Amount is less than
or equal to $105,820,105 (10% of the Class A Initial Invested Amount and the
Class B Initial Invested Amount). The retransfer price will be equal to the
applicable Invested Amount plus accrued and unpaid interest on the Class A
Certificates and the Class B Certificates through the day preceding the
Distribution Date on which the retransfer occurs.
Subject to certain conditions in the Pooling and Servicing
Agreement, if the Invested Amount of the Series 1998-1 Certificates is greater
than zero on the April 2004 Distribution Date (the "Series 1998-1 Termination
Date"), the Trustee shall sell or cause to be sold an amount of Receivables
up to 110% of the applicable Invested Amount at the close of business on such
date, but not more than the total amount of Receivables allocable to the
Series 1998-1 Certificates, and apply the proceeds of such sale as provided
in the Pooling and Servicing Agreement.
Following the termination of the Trust pursuant to Section 12.1 of
the Pooling and Servicing Agreement and the surrender of this Certificate, the
Trustee shall assign and convey to the Transferors (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
thereof, except for amounts held by the Paying Agent. The Trustee shall
execute and deliver such instruments of transfer and assignment, in each case
without recourse, as shall be reasonably requested by the Transferor to vest
in the Transferors all right, title and interest which the Trustee had in the
applicable Receivables.
A-7
Unless the certificate of authentication hereon has been executed
by or on behalf of the Trustee, by manual signature, this Certificate shall
not be entitled to any benefit under the Pooling and Servicing Agreement, or
be valid for any purpose.
IN WITNESS WHEREOF, American Express Receivables Financing
Corporation and American Express Centurion Bank have caused this American
Express Master Trust 5.90% Class A Accounts Receivable Trust Certificate,
Series 1998-1 to be duly executed under its official seal.
AMERICAN EXPRESS RECEIVABLES
FINANCING CORPORATION
By:-------------------------------
Authorized Signatory
[SEAL]
AMERICAN EXPRESS CENTURION BANK
By:-------------------------------
Authorized Signatory
[SEAL]
A-8
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Series 1998-1 Class A Certificates referred to
in the within- mentioned Pooling and Servicing Agreement.
Dated: May 27, 0000 XXX XXXX XX XXX XXXX
as Trustee
By:-------------------------------
Authorized Signatory
A-9
EXHIBIT B to
the Series 1998-1 Supplement
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), IN RELIANCE UPON EXEMPTIONS
PROVIDED BY THE SECURITIES ACT. NO RESALE OR OTHER TRANSFER OF THIS
CERTIFICATE MAY BE MADE EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, (B) IN A TRANSACTION EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE
SECURITIES OR "BLUE SKY" LAWS, (C) TO THE TRANSFEROR, (D) TO A PERSON WHO THE
SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE
MEANING THEREOF IN RULE 144A UNDER THE SECURITIES ACT THAT IS AWARE THAT THE
RESALE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, OR (E)
PURSUANT TO REGULATION S UNDER THE SECURITIES ACT. NEITHER THE ISSUER NOR THE
TRUSTEE IS OBLIGATED TO REGISTER THE CERTIFICATES UNDER THE SECURITIES ACT OR
ANY OTHER SECURITIES OR "BLUE SKY" LAW.
NO RESALE OR TRANSFER OR PLEDGE OF THIS CERTIFICATE MAY BE MADE
EXCEPT WITH THE EXPRESS CONSENT OF AMERICAN EXPRESS RECEIVABLES FINANCING
CORPORATION AND AMERICAN EXPRESS CENTURION BANK. THIS CERTIFICATE DETAILS
OTHER CONDITIONS TO THE TRANSFER THEREOF.
No. R-_ $__________
Registered CUSIP No._______________
AMERICAN EXPRESS MASTER TRUST
6.05% CLASS B ACCOUNTS RECEIVABLE
TRUST CERTIFICATE, SERIES 1998-1
Each $1,000 minimum denomination represents a 1/58,201.059th
interest in the Series 1998-1 Class B Certificateholders' undivided interest
in the American Express Master Trust.
Evidencing an Undivided Interest in a trust, the corpus of which consists of
receivables generated or to be generated in a portfolio of the pay in full
portion of designated American Express-R- Card, American Express-R- Gold Card
and Platinum Card-R- Accounts.
(Not an interest in or recourse obligation of American Express
Receivables Financing Corporation, American Express Travel Related Services
Company, Inc. ("TRS"), American Express Centurion Bank, American Express
Company or any of their affiliates.)
This certifies that American Express Receivables Financing
Corporation (the "Certificateholder") is the registered owner of an
Undivided Interest in the American Express Master Trust (the "Trust")
issued pursuant to the Amended and Restated Master Pooling and
B-1
Servicing Agreement, dated as of May 1, 1998 (the "Pooling and Servicing
Agreement"; such term to include any amendment or Supplement thereto) by
and among American Express Centurion Bank, as Transferor, American Express
Receivables Financing Corporation, as Transferor (together, the "Transferors"),
TRS, as Servicer (the "Servicer"), and The Bank of New York, as Trustee
(the "Trustee"), and the Series 1998-1 Supplement, dated May 27, 1998,
among the Transferors, the Servicer and the Trustee. The corpus of the
Trust consists of all of the Transferors' right, title and interest in a
portfolio of receivables now existing and hereafter created (the "Receivables")
arising under certain charge card accounts owned by TRS identified in the
Pooling and Servicing Agreement from time to time (collectively, the
"Accounts"), all monies due or to become due with respect thereto (including
Recoveries) on and after the Cut Off Date, all proceeds of such
Receivables, all right, title and interest of the Transferors in, to and
under the Receivable Purchase Agreement, all monies as are from time to time
deposited in the Collection Account and any other account or accounts
maintained for the benefit of the Certificateholders and all monies as are
from time to time available under any Enhancement for any Series for payment
to Certificateholders. The holder of this Certificate is not entitled to the
benefit of any Enhancement for any other Series which may be a part of the
Trust's assets. The Receivables arise generally from the purchase of
merchandise and services, annual membership fees and certain other
administrative fees billed to Obligors, as more fully specified in the Pooling
and Servicing Agreement.
A portion of the Collections on the Receivables received in any Due
Period equal to the product of the aggregate amount of such Collections and
the Yield Factor will be treated as Yield Collections. The remainder of such
Collections will be treated as Principal Collections. Recoveries will not be
considered Collections but will be used as an offset to Defaulted Receivables.
The Yield Factor will initially be equal to 3.0%, and, subject to certain
limitations, may be changed from time to time by the Transferors.
Although a summary of certain provisions of the Pooling and
Servicing Agreement is set forth below, this Certificate does not purport to
summarize the Pooling and Servicing Agreement and reference is made to the
Pooling and Servicing Agreement, as amended and as supplemented by the Series
1998-1 Supplement, for information with respect to the interests, rights,
benefits, obligations, proceeds, and duties evidenced hereby and the rights,
duties and obligations of the Trustee. A copy of the Pooling and Servicing
Agreement and the Series 1998-1 Supplement may be requested from the Trustee
by writing to the Trustee at The Bank of New York, 000 Xxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Corporate Trust Division. To the extent not
defined herein, capitalized terms used herein have the meanings ascribed to
them in the Pooling and Servicing Agreement, as supplemented by the Series
1998-1 Supplement. This Certificate is one of a series of Certificates
entitled "American Express Master Trust 6.05% Class B Accounts Receivable
Trust Certificates, Series 1998-1" (the "Certificates"), each of which
represents a fractional undivided interest in the Trust, including the right
to receive the Collections and other amounts at the times and in the amounts
specified in the Pooling and Servicing Agreement to be paid to the holder of
a Class B Certificate, and is issued under and is subject to the terms,
provisions and conditions of the Pooling and Servicing Agreement, to which
Pooling and Servicing Agreement, as amended from time to time, the
Certificateholder by virtue of the acceptance hereof assents and by which the
Certificateholder is bound. The Class B Certificates represent subordinated
interests in the Trust.
B-2
The Transferor has structured the Pooling and Servicing Agreement
and the Investor Certificates with the intention that the Investor
Certificates (other than those held by the Transferor) will qualify under
applicable tax law as indebtedness and the Transferor and each Investor
Certificateholder by acceptance of its Certificate or participation herein,
agrees to treat the Investor Certificates (other than those held by the
Transferor) (and any beneficial interest therein) for purposes of Federal,
state and local income or franchise taxes and any other tax imposed on or
measured by income, as indebtedness.
The aggregate interest in the Trust represented by the Series 1998-1
Investor Certificates at any time shall not exceed an amount equal to the
Invested Amount at such time. The initial Invested Amount is $1,058,201,059.
The aggregate interest represented by the Class B Certificates at any time in
the Receivables in the Trust shall not exceed an amount equal to the Class B
Invested Amount at such time. The Class B Initial Invested Amount is
$58,201,059. The Class B Invested Amount on any date of determination will
be an amount equal to (a) the Class B Initial Invested Amount minus (b) the
amount of payments of principal paid to the Class B Certificateholders prior
to such date of determination, minus (c) the aggregate amount of Class B
Investor Charge-Offs for all prior Distribution Dates and, if the date of
determination is a "Distribution Date" the current Distribution Date, plus (d)
the aggregate amount of Yield Collections and certain other amounts applied
on all prior Distribution Dates for reimbursing amounts deducted pursuant to
the foregoing clause (c) and, if the date of determination is a Distribution
Date, the aggregate amount of Yield Collections and certain other amounts
applied for such Distribution Date for reimbursing amounts deducted pursuant
to the foregoing clause (c). If Yield Collections allocable to the
Certificateholders Interest for any Due Period are insufficient to pay the
Investor Default Amount for such Due Period in accordance with the priorities
set forth in the Pooling and Servicing Agreement listed below, then the Class
B Invested Amount will be reduced by an amount equal to such insufficiency.
The Class B Invested Amount may be reinstated under certain circumstances
described in the Pooling and Servicing Agreement. In addition to the Investor
Certificates, an Exchangeable Transferor Certificate has been issued to the
Transferor pursuant to the Pooling and Servicing Agreement which will
represent an Undivided Interest in the Trust. The Exchangeable Transferor
Certificate will represent the interest in the Trust not represented by the
Investor Certificates. The Exchangeable Transferor Certificate may be
exchanged by the Transferor pursuant to the Pooling and Servicing Agreement
for one or more Series of Investor Certificates and a reissued Exchangeable
Transferor Certificate upon the conditions set forth in the Pooling and
Servicing Agreement.
Interest will accrue on the unpaid principal amount of the Class B
Certificates at a per annum rate equal to 6.05% per annum (the "Class B
Certificate Rate") and, except as otherwise provided herein, will be
distributed to Certificateholders on the fifteenth day of each month (or, if
such day is not a Business Day, on the next succeeding Business Day) (each,
a ("Distribution Date") , commencing June 15, 1998. Any. accrued interest at
the Class B Certificate Rate from and including the preceding Distribution
Date or, in the case of the first Distribution Date from and including the
Closing Date, to but excluding such Distribution Date shall be paid in
accordance with the priorities set forth below. Interest for any Distribution
Date due but not paid on any Distribution Date will be due on the next
succeeding Distribution Date together with, to the extent permitted by
applicable law, additional interest on such amount at the Class B Certificate
Rate plus 2% per annum. Interest will be calculated on the basis of a 360-day
B-3
year comprised of twelve 30-day months. The right of the Class B
Certificateholders to receive interest payments on the Class B Certificates
each month, including interest due but not paid on a prior Distribution Date
or Special Payment Date, will be subordinated under all circumstances to the
right of the Class A Certificateholders to receive monthly allocations of
interest with respect to the Class A Certificates.
No principal will be payable to the Class B Certificateholders until
all principal payments have been made to the Class A Certificateholders. For
each Due Period during the period beginning on the Closing Date and ending on
the day prior to the day on which the Controlled Accumulation Period or Early
Amortization Period commences (the "Revolving Period"), all Principal
Collections allocable to the Investor Interest will be treated as Excess
Principal Collections. The Servicer will allocate Excess Principal
Collections as provided in the Pooling and Servicing Agreement which may
include any principal distributions to Investor Certificateholders and
deposits to principal funding accounts for any Series which are either
scheduled or permitted and which have not been covered out of Principal
Collections allocable to such other Series.
The Servicer shall deposit Collections into the Collection Account
in the amounts and at the times required by the Pooling and Servicing
Agreement. The Servicer shall apply or shall cause the Trustee to apply the
funds on deposit in the Collection Account with respect to each Distribution
Date as provided in the Pooling and Servicing Agreement.
TRS, as Servicer, is entitled to receive as servicing compensation
a monthly servicing fee in an amount equal to the sum of, with respect to all
Series, one-twelfth of the product of the applicable Servicing Fee
Percentages with respect to each Series and the sum of an allocable portion
of the Transferor Interest and the applicable Invested Amount with respect to
each Series with respect to the related Due Period. The portion of the
servicing fee for each Due Period allocable to the Certificateholders'
Interest shall be equal to one- twelfth of the product of (A) 2.0% (the
Servicing Fee Percentage for the Series 1998-1 Investor Certificates) and (B)
the amount of the Class A Invested Amount and the Class B Invested Amount, on
the last day of the second preceding Due Period or, in the case of the first
Distribution Date, the initial principal amount of the Class A Certificates
and the Class B Certificates.
Payments to Class B Certificateholders will be made from the
Collection Account and the Principal Funding Account. The proceeds of any
optional repurchase of the Class B Certificates by the Transferor will be
deposited into the Collection Account and the Principal Funding Account, as
applicable, on the Distribution Date on which such purchase occurs. The
Servicer shall instruct the Trustee or the Paying Agent to make the following
distributions at the following times and in the following priority from the
Collection Account and the Principal Funding Account:
(a) on each Distribution Date, on each Special Payment Date
and on the Expected Final Payment Date, Class A Monthly Interest and
unpaid Class A Monthly interest, plus additional interest thereon, to
the extent available from the Floating Allocation Percentage of Yield
Collections, shall be distributed to the Class A Certificateholders;
B-4
(b) on each Distribution Date, Class B Monthly Interest and
unpaid Class B Monthly Interest, plus additional interest thereon, to
the extent available from the Floating Allocation Percentage of Yield
Collections, shall be distributed to the Class B Certificateholders;
(c) on each Special Payment Date and on the Expected Final
Payment Date, all amounts on deposit in the Principal Funding Account,
up to a maximum amount on any such date equal to the unpaid Class A
Invested Amount on such date, shall be distributed to the Class A
Certificateholders and any funds remaining in the Principal Funding
Account after the Class A Certificates have been paid in full shall be
deposited in the Collection Account; and
(d) on the Expected Final Payment Date and each Special
Payment Date on and after which the Class A Certificates have been paid
in full, all amounts on deposit in the Collection Account, up to a
maximum amount on any such date equal to the unpaid Class B Invested
Amount on such date, shall be distributed to the Class B
Certificateholders.
The amount in respect of interest to be distributed on each
Distribution Date to the holder of this Certificate will be equal to the
product of the aggregate Undivided Interest evidenced by this Certificate and
the aggregate of all payments to be made to the Class B Certificateholders on
such Distribution Date. The amount in respect of principal to be distributed
on each Special Payment Date or Expected Final Payment Date with respect to
the holder of this Certificate will be equal to the product of the aggregate
Undivided Interest evidenced by this Certificate and the aggregate of all
payments of principal to be made to the Class B Certificateholders on such
date. Distributions with respect to this Certificate will be made by the
Paying Agent by check mailed to the address of the Class B Certificateholder
of record appearing in the Certificate Register (except for the final
distribution in respect of this Certificate) without the presentation or
surrender of this Certificate or the making of any notation thereon.
This Certificate does not represent a recourse obligation of, or an
interest in, the Transferors, the Servicer or any of their affiliates and is
not insured or guaranteed by any governmental agency. This Certificate is
limited in right of payment to certain Collections with respect to the
Receivables all as more specifically set forth in the Pooling and Servicing
Agreement.
Pursuant to the Pooling and Servicing Agreement, the Transferors
have the right (subject to certain limitations and conditions), and in some
circumstances is obligated, to designate additional eligible accounts to be
included as Accounts (the "Additional Accounts") and to convey to the Trust
all of the Receivables in the Additional Accounts, whether such Receivables
are then existing or thereafter created.
The Transferors may, and in some circumstances is obligated to,
designate (subject to the terms and conditions of the Pooling and Servicing
Agreement) Accounts for deletion and removal from the Accounts previously
designated as Accounts.
B-5
The Pooling and Servicing Agreement may be amended from time to time
by the Servicer, the Transferors and the Trustee, without the consent of any
of the Investor Certificateholders, to cure any ambiguity, to correct or
supplement any provisions therein which may be inconsistent with any other
provisions therein or to add, modify or eliminate such provisions as the
Transferors may deem necessary, in order to enable all or a portion of the
Trust to (i) qualify as, and to permit an election to be made to cause the
Trust to be treated as a "financial asset securitization investment trust" as
described in Section 860L of the Code and (ii) to avoid the imposition of
state or local income or franchise taxes imposed on the Trust"s property or
its income and to add any other provisions with respect to matters or
questions raised under the Pooling and Servicing Agreement which shall not be
inconsistent with the provisions of the Pooling and Servicing Agreement;
provided, however, that such action shall not adversely affect in any material
respect the interests of any of the Investor Certificateholders.
Additionally, the Pooling and Servicing Agreement may be amended from time to
time by the Servicer, the Transferors and the Trustee, without the consent of
any of the Certificateholders, to add to or change any of the provisions of
the Pooling and Servicing Agreement to provide that Bearer Certificates may
be registrable as to principal, to change or eliminate any restrictions on the
payment of principal of (or premium, if any) or any interest on Bearer
Certificates to comply with the Bearer Rules, to permit Bearer Certificates
to be issued in exchange for Registered Certificates (if then permitted by the
Bearer Rules), to permit Bearer Certificates to be issued in exchange for
Bearer Certificates of other authorized denominations or to permit the
issuance of Investor Certificates in uncertificated form, provided any such
action shall not adversely affect the interest of the Holders of Bearer
Certificates of any Series or any related Coupons in any material respect
unless such amendment is necessary to comply with the Bearer Rules. The
Trustee may, but shall not be obligated to, enter into any such amendment
which affects the Trustee's own rights, duties or immunities under the
Agreement or otherwise.
The Pooling and Servicing Agreement may also be amended from time
to time by the Servicer, the Transferors and the Trustee, without the consent
of any of the Investor Certificateholders, for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions
of the Agreement, or of modifying in any manner the rights of the Holders of
Investor Certificates; provided that (i) the Servicer shall have provided an
Opinion of Counsel to the Trustee to the effect that such amendment will not
materially and adversely affect the interests of the Investor
Certificateholders of any outstanding Series (or 100% of Certificateholders
so affected have consented), (ii) such amendment shall not, as evidenced by
an Opinion of Counsel, cause the Trust to be characterized for Federal income
tax purposes as an association taxable as a corporation or otherwise have any
material adverse impact on the Federal income taxation of any outstanding
Series of Investor Certificates or any Certificate Owner and (iii) the Rating
Agencies shall confirm that such amendment shall not cause a reduction or
withdrawal of the rating of any outstanding Series of Certificates; provided,
further, that such amendment shall not reduce in any manner the amount of, or
delay the timing of, distributions which are required to be made on any
Investor Certificate of such Series without the consent of the related
Investor Certificateholder, change the definition of or the manner of
calculating the interest of any Investor Certificateholder of such Series
without the consent of the related Investor Certificateholder or reduce the
aforesaid percentage required to consent to any such amendment, in each case
without the consent of all such Investor Certificateholders.
B-6
The Pooling and Servicing Agreement may also be, amended from time
to time by the Servicer, the Transferor and the Trustee with the consent of
the Holders of Investor Certificates evidencing Undivided Interests
aggregating not less than 66-2/3% of the Invested Amount of all Series
adversely affected, for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of the Agreement or of
modifying in any manner the rights of the Investor Certificateholders of any
Series then issued and outstanding; provided, however, that no such amendment
shall (i) reduce in any manner the amount of, or delay the timing of,
distributions which are required to be made on any Investor Certificate of
such Series without the consent of the related Investor Certificateholder;
(ii) change the definition of or the manner of calculating the Invested
Amount, the Invested Percentage, the applicable available amount under any
Enhancement or the Investor Default Amount of such Series without the consent
of each related Investor Certificateholder; or (iii) reduce the aforesaid
percentage required to consent to any such amendment, without the consent of
each related Investor Certificateholder.
Each purchaser of a Class B Certificate from the Transferor shall
represent and warrant to the Transferors that it is acquiring such Class B
Certificate without a view to any distribution or resale or other transfer
thereof except, with respect to any Certificate or any interest or
participation thereof, as contemplated in the next succeeding sentence. The
purchaser of this Class B Certificate will not resell or otherwise transfer
any of the Class B Certificates except (A) in accordance with Section 6.3 of
the Pooling and Servicing Agreement and (B)(i) pursuant to an effective
registration statement under the Securities Act; (ii) in a transaction exempt
from the registration requirements of the Securities Act and applicable state
securities or "blue sky" laws; (iii) to the Transferors; (iv) to a person who
the Purchaser reasonably believes is a qualified institutional buyer (within
the meaning of Rule 144A under the Securities Act) that is aware that the
resale or other transfer is being made in reliance upon Rule 144A; or (v)
pursuant to Regulation S under the Securities Act.
As a condition to the initial transfer or any pledge of this
Certificate to any entity other than a corporation that is a member of the
consolidated tax group of which RFC is a member, the holder hereof shall be
required to deliver to the Trustee an Opinion of Counsel to the effect that
this Certificate, upon transfer, will be characterized as debt or an interest
in a partnership for federal income tax purposes. Prior to the transfer of
this Certificate to any Affiliate of the Transferor, the Servicer shall
provide to the Trustee written confirmation from each Rating Agency that such
transfer will not result in the downgrade or withdrawal of any rating on the
Class A Certificates. Prior to any such transfer of this Certificate, the
Transferor shall certify to the Trustee in writing whether the proposed
transferee of this Certificate is an Affiliate of the Transferor and the
Trustee shall be entitled to rely conclusively on such certificate.
The transfer of this Certificate shall be registered in the
Certificate Register upon surrender of this Certificate for registration of
transfer at any office or agency maintained by the Transfer Agent and
Registrar accompanied by a written instrument of transfer in a form
satisfactory to the Trustee and the Transfer Agent and Registrar duly executed
by the Certificateholder or such Certificateholder's attorney duly authorized
in writing, and thereupon one or more new Certificates of authorized
denominations and for the same aggregate Undivided Interests will be issued
to the designated transferee or transferees.
B-7
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, Class B Certificates are exchangeable
for new Class B Certificates evidencing like aggregate Undivided Interests,
as requested by the Certificateholder surrendering such Class B Certificates.
No service charge may be imposed for any such exchange but the Trustee or
Transfer Agent and Registrar may require payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection
therewith.
The Transferors, Servicer, the Trustee, the Paying Agent, and the
Transfer Agent and Registrar, and any agent of any of them, may treat the
person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Transferor, the Servicer, the Trustee, the
Paying Agent, and the Transfer Agent and Registrar, nor any agent of any of
them or of any such agent shall be affected by notice to the contrary except
in certain circumstances described in the Pooling and Servicing Agreement.
At the option of the Transferors, but subject to certain conditions
set forth in the Pooling and Servicing Agreement, the aggregate principal
amount of the Class A and Class B Certificates is subject to retransfer to the
Transferor on any Distribution Date on or after which the Invested Amount is
less than or equal to $105,820,105 (10% of the Class A Initial Invested Amount
and the Class B Initial Invested Amount). The retransfer price will be equal
to the applicable Invested Amount plus accrued and unpaid interest on the
Class A Certificates and the Class B Certificates through the day preceding
the Distribution Date on which the retransfer occurs.
Subject to certain conditions in the Pooling and Servicing
Agreement, if the Invested Amount of the Series 1998-1 Certificates is greater
than zero on the April 2004 Distribution Date (the "Series 1998-1 Termination
Date"), the Trustee shall sell or cause to be sold an amount of Receivables
up to 110% of the applicable Invested Amount at the close of business on such
date, but not more than the total amount of Receivables allocable to the
Series 1998-1 Investor Certificates, and apply the proceeds of such sale as
provided in the Pooling and Servicing Agreement.
Following the termination of the Trust pursuant to Section 12.1 of
the Pooling and Servicing Agreement and the surrender of this Certificate, the
Trustee shall assign and convey to the Transferors (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
thereof, except for amounts held by the Paying Agent. The Trustee shall
execute and deliver such instruments of transfer and assignment, in each case
without recourse, as shall be reasonably requested by the Transferors to vest
in the Transferors all right, title and interest which the Trustee had in the
applicable Receivables.
Unless the certificate of authentication hereon has been executed
by or on behalf of the Trustee, by manual signature, this Certificate shall
not be entitled to any benefit under the Pooling and Servicing Agreement, or
be valid for any purpose.
B-8
IN WITNESS WHEREOF, American Express Receivables Financing
Corporation and American Express Centurion Bank have caused this American
Express Master Trust 6.05% Class B Accounts Receivable Trust Certificate,
Series 1998-1 to be duly executed under its official seal.
AMERICAN EXPRESS RECEIVABLES
FINANCING CORPORATION
By:-------------------------------
Authorized Signatory
[SEAL]
AMERICAN EXPRESS CENTURION BANK
By:-------------------------------
Authorized Signatory
[SEAL]
TRUSTEES' CERTIFICATE OF AUTHENTICATION
This is one of the Series 1998-1 Class B Certificates referred to
in the within-mentioned Pooling and Servicing Agreement.
Dated: May 27, 0000 XXX XXXX XX XXX XXXX
as Trustee
By:-------------------------------
Authorized Signatory
B-9
Exhibit C-1 to The
Series 1998-1 Supplement
Payment Date Statement
American Express Travel Related Services Company, Inc.
------------------------------------------
American Express Master Trust
------------------------------------------
Class A Floating Rate Accounts Receivable Trust Certificates
The undersigned, a duly authorized representative of American
Express Travel Related Services Company, Inc. ("TRS") as Servicer pursuant to
the Amended and Restated Master Pooling and Servicing Agreement, dated as of
May 1, 1998, as amended and as sup- plemented by the Series 1998-1 Supplement,
dated May 27, 1998 (as supplemented, the "Agreement"), between TRS, American
Express Centurion Bank, as Transferor, American Express Receivables Financing
Corporation, as Transferor, and The Bank of New York, as Trustee, does hereby
certify the information set forth below.
1. Capitalized terms used in this Payment Date Statement have their
respective meanings as set forth in the Agreement. This Payment Date
Statement is delivered pursuant to Section 5.2 of the Agreement.
References herein to certain sections and subsections are references to
the respective sections and subsections in the Agreement.
2. TRS is Servicer under the Agreement.
3. The undersigned is a Servicing Officer.
4. The "Record Date" referred to herein is _______, ____.
Information Regarding the Current Distribution Date, Special Payment
Date or Expected Final Payment Date to Class A Certificateholders.
(Also, stated on the Basis of $1,000 Original Certificate Principal
Amount).
C-1-1
1. Total Class A distributions . . . . . . . . . . . $________
2. Class A principal distributions . . . . . . . . . $________
3. Class A interest distributions. . . . . . . . . . $________
4. Class A Certificate Rate for Interest Period
related to Current Distribution Date. . . . . . . ________%
5. Interest Period related to Current Distribution
Date. . . . . . . . . . . . . . . . . . . . . . . $________
6. Excess of Class A principal balance over Class A
Invested Amount as of the Record Date . . . . . . $________
7. Class A Invested Amount as of the Record
Date/Class A Initial Invested Amount
(determined after taking into account any
increase or decrease in the Invested Amount
which will occur upon the current distribution) . $_______
Attached hereto is the Monthly Servicer's Certificate for the
related Due Period.
IN WITNESS WHEREOF, the undersigned have caused this Payment Date
Statement to be duly executed and delivered by its respective duly authorized
officer on the _____ day of __________, ____.
AMERICAN EXPRESS TRAVEL RELATED
SERVICES COMPANY, INC.
as Servicer
By:_______________________________
Name:
Title:
C-1-2
Exhibit C-2 to The
Series 1998-1 Supplement
Payment Date Statement
American Express Travel Related Services Company, Inc.
-----------------------------------------
American Express Master Trust
-----------------------------------------
Class B Floating Rate Accounts Receivable Trust Certificates
The undersigned, a duly authorized representative of American
Express Travel Related Services Company, Inc. ("TRS") as Servicer pursuant to
the Amended and Restated Master Pooling and Servicing Agreement, dated as of
May 1, 1998, as amended and as supplemented by the Series 1998-1 Supplement,
dated May 27, 1998 (as supplemented, the "Agreement"), between TRS, American
Express Centurion Bank, as Transferor, American Express Receivables Financing
Corporation, as Transferor, and The Bank of New York, as Trustee, does hereby
certify the information set forth below.
1. Capitalized terms used in this Payment Date Statement have their
respective meanings as set forth in the Agreement. This Payment Date
Statement is delivered pursuant to Section 5.2 of the Agreement.
References herein to certain sections and subsections are references to
the respective sections and subsections in the Agreement.
2. TRS is Servicer under the Agreement.
3. The undersigned is a Servicing Officer.
4. The "Record Date" referred to herein is __________, ____.
Information Regarding the Current Distribution Date, Special Payment
Date or Expected Final Payment Date to Class A Certificateholders.
(Also, stated on the Basis of $1,000 Original Certificate Principal
Amount).
C-2-1
1. Total Class B distributions . . . . . . . . . . . $________
2. Class B principal distributions . . . . . . . . . $________
3. Class B interest distributions. . . . . . . . . . $________
4. Class B Certificate Rate for Interest Period
related to Current Distribution Date. . . . . . . ________%
5. Interest Period related to Current Distribution
Date. . . . . . . . . . . . . . . . . . . . . . . $________
6. Excess of Class B principal balance over Class B
Invested Amount as of the Record Date . . . . . . $________
7. Class B Invested Amount as of the Record
Date/Class B Initial Invested Amount
(determined after taking into account any
increase or decrease in the Invested Amount
which will occur upon the current distribution) . $_______
C-2-2
Attached hereto is the Monthly Servicer's Report.
IN WITNESS WHEREOF, the undersigned have caused this Payment Date
Statement to be duly executed and delivered by its respective duly authorized
officer on the ____ day of__________, ____.
AMERICAN EXPRESS TRAVEL RELATED
SERVICES COMPANY, INC.
as Servicer
By:_______________________________
Name:
Title:
C-2-3
