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<PAGE>
EXHIBIT 4.2
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SERIES 2005-2 SUPPLEMENT
Dated as of March 24, 2005
to
POOLING AND SERVICING AGREEMENT
Dated as of May 16, 1996,
as amended and restated as of April 16, 2004
$600,000,000
---------------
AMERICAN EXPRESS CREDIT ACCOUNT MASTER TRUST
Series 2005-2
---------------
among
AMERICAN EXPRESS RECEIVABLES FINANCING CORPORATION II
AMERICAN EXPRESS RECEIVABLES FINANCING CORPORATION III LLC
AMERICAN EXPRESS RECEIVABLES FINANCING CORPORATION IV LLC
as Transferors
AMERICAN EXPRESS TRAVEL RELATED SERVICES COMPANY, INC.
as Servicer
and
THE BANK OF NEW YORK
as Trustee
on behalf of the Series 2005-2 Certificateholders
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TABLE OF CONTENTS
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ARTICLE I Creation of the Series 2005-2
Certificates...................................................1
Section 1.01.
Designation.......................................................................1
ARTICLE II
Definitions..................................................................................2
Section 2.01.
Definitions.......................................................................2
ARTICLE III Servicing
Fee...............................................................................14
Section 3.01. Servicing
Compensation...........................................................14
ARTICLE IV Rights of Series 2005-2 Certificateholders and
Allocation and Application of
Collections...................................................15
Section 4.01. Collections and
Allocations......................................................15
Section 4.02. Determination of Monthly
Interest................................................17
Section 4.03. Principal Funding Account; Controlled Accumulation
Period........................18
Section 4.04. Required
Amount..................................................................20
Section 4.05. Application of Class A Available Funds, Class B
Available
Funds, Collateral Available Funds and Available Principal
Collections............20
Section 4.06. Defaulted Amounts; Investor
Charge-Offs..........................................22
Section 4.07. Excess Spread; Excess Finance Charge
Collections.................................23
Section 4.08. Reallocated Principal
Collections................................................24
Section 4.09. Excess Finance Charge
Collections................................................25
Section 4.10. Reallocated Investor Finance Charge
Collections..................................26
Section 4.11. Shared Principal
Collections.....................................................26
Section 4.12. Reserve
Account..................................................................27
Section 4.13. Investment
Instructions..........................................................28
Section 4.14. Determination of
LIBOR...........................................................29
ARTICLE V Distributions and Reports to Series 2005-2
Certificateholders...............................30
Section 5.01.
Distributions....................................................................30
Section 5.02. Reports and Statements to Series 2005-2
Certificateholders.......................31
ARTICLE VI Pay-Out
Events..............................................................................31
Section 6.01. Pay-Out
Events...................................................................31
ARTICLE VII Optional Repurchase; Series
Termination.....................................................33
Section 7.01. Optional
Repurchase..............................................................33
Section 7.02. Series
Termination...............................................................33
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TABLE OF CONTENTS
(CONTINUED)
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ARTICLE VIII Final
Distributions.........................................................................34
Section 8.01. Sale of Receivables or Certificateholders'
Interest pursuant to Section
2.06 or 10.01 of the Agreement and Section 7.01 or 7.02 of
this
Supplement.......................................................................34
Section 8.02. Distribution of Proceeds of Sale, Disposition or
Liquidation of the
Receivables pursuant to Section 9.01 of the
Agreement............................35
ARTICLE IX Miscellaneous
Provisions....................................................................36
Section 9.01. Ratification of
Agreement........................................................36
Section 9.02.
Counterparts.....................................................................36
Section 9.03. Governing
Law....................................................................36
Section 9.04.
[Reserved].................................................................................36
Section 9.05.
[Reserved].................................................................................36
Section 9.06. Uncertificated
Securities..................................................................36
Section 9.07. Transfers of the Collateral
Interest.......................................................36
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SERIES 2005-2 SUPPLEMENT, dated as of March 24, 2005 (the
"Supplement"),
among AMERICAN EXPRESS RECEIVABLES FINANCING CORPORATION II, a
Delaware
corporation, AMERICAN EXPRESS RECEIVABLES FINANCING CORPORATION
III LLC, a
Delaware limited liability company, and AMERICAN EXPRESS
RECEIVABLES
FINANCING CORPORATION IV LLC, a Delaware limited liability
company, as
Transferors, AMERICAN EXPRESS TRAVEL RELATED SERVICES COMPANY,
INC., a New
York corporation, as Servicer, and THE BANK OF NEW YORK, a
banking
corporation organized and existing under the laws of the State
of New
York, not in its individual capacity, but solely as Trustee.
Pursuant to the Pooling and Servicing Agreement, dated as of May
16, 1996,
as amended and restated as of April 16, 2004 (as amended and
restated and as
otherwise amended and supplemented, the "Agreement"), among the
Transferors, the
Servicer and the Trustee, the AMERICAN EXPRESS CREDIT ACCOUNT
MASTER TRUST (the
"Trust") has been created. Section 6.03 of the Agreement
provides that the
Transferors may from time to time direct the Trustee to
authenticate one or more
new Series of Investor Certificates representing fractional
undivided interests
in the Trust. The Principal Terms of any new Series are to be
set forth in a
Supplement to the Agreement.
Pursuant to this Supplement, the Transferors and the Trustee
shall create
a new Series of Investor Certificates and specify the Principal
Terms thereof.
ARTICLE I
Creation of the Series 2005-2 Certificates
Section 1.01. Designation.
(a) There is hereby created a Series of Investor Certificates to
be issued
pursuant to the Agreement and this Supplement to be known as
"American Express
Credit Account Master Trust, Series 2005-2." The Series 2005-2
Certificates
shall be issued in two Classes, the first of which shall be
known as the "Class
A Series 2005-2 Floating Rate Asset Backed Certificates" and the
second of which
shall be known as the "Class B Series 2005-2 Floating Rate Asset
Backed
Certificates." In addition, there is hereby created a third
Class of
uncertificated interests in the Trust which shall be known as
the "Collateral
Interest, Series 2005-2" and which shall be deemed to be
"Investor Certificates"
for all purposes under the Agreement and this Supplement other
than for purposes
of the definition of the term "Tax Opinion" in Section 1.01 of
the Agreement.
The Collateral Interest shall be considered a Class of Series
2005-2 for all
purposes of the Agreement and this Supplement, including for
purposes of voting
concerning the liquidation of the Trust pursuant to Section 9.01
of the
Agreement. The Collateral Interest Holder shall be deemed to be
the Series
Enhancer for all purposes under the Agreement and this
Supplement.
(b) Series 2005-2 shall be included in Group II and shall be a
Principal
Sharing Series. Series 2005-2 shall be an Excess Allocation
Series. Series
2005-2 shall not be subordinated to any other Series.
Notwithstanding any
provision in the Agreement or in this Supplement to the
contrary, the first
Distribution Date with respect to Series 2005-2 shall be the
April 2005
Distribution Date and the first Monthly Period shall begin on
and include the
Closing Date and end on and include March 27, 2005.
(c) Except as expressly provided herein, (i) the provisions of
Article VI
and Article XII of the Agreement relating to the registration,
authentication,
delivery, presentation, cancellation and surrender of Registered
Certificates
shall not be applicable to the Collateral Interest, and (ii) the
provisions of
Section 3.07 of the Agreement shall not cause the Collateral
Interest to be
treated as debt for federal, state and local income and
franchise tax purposes,
but rather the Transferors intend, and together with the
Collateral Interest
Holder, agree to treat the Collateral Interest for federal,
state and local
income and franchise tax purposes as representing an equity
interest in the
assets of the Trust.
1
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ARTICLE II
Definitions
Section 2.01. Definitions.
(a) Whenever used in this Supplement, the following words and
phrases
shall have the following meanings, and the definitions of such
terms are
applicable to the singular as well as the plural forms of such
terms and the
masculine as well as the feminine and neuter genders of such
terms.
"Additional Interest" means, with respect to any Distribution
Date, the
Class A Additional Interest, the Class B Additional Interest and
the Collateral
Additional Interest for such Distribution Date.
"Adjusted Invested Amount" shall mean, with respect to any date
of
determination, an amount equal to the Invested Amount less the
Principal Funding
Account Balance on such date of determination.
"Assignee" shall have the meaning specified in subsection
9.07(a).
"Available Principal Collections" shall mean, with respect to
any Monthly
Period, an amount equal to the sum of (a) (i) an amount equal to
the Principal
Allocation Percentage of Series 2005-2 Allocable Principal
Collections received
during such Monthly Period minus (ii) the amount of Reallocated
Principal
Collections with respect to such Monthly Period which pursuant
to Section 4.08
are required to fund the Required Amount for the related
Distribution Date, (b)
any Shared Principal Collections with respect to other Series
that are allocated
to Series 2005-2 in accordance with Section 4.04 of the
Agreement and Section
4.11 of this Supplement, and (c) any other amounts which
pursuant to Section
4.05 or 4.07 of this Supplement are to be treated as Available
Principal
Collections with respect to the related Distribution Date.
"Available Reserve Account Amount" shall mean, with respect to
any
Distribution Date, the lesser of (a) the amount on deposit in
the 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 Reserve
Account Amount.
"Base Rate" shall mean, with respect to any Monthly Period, the
annualized
percentage equivalent of a fraction, the numerator of which is
equal to the sum
of the Class A Monthly Interest, the Class B Monthly Interest
(calculated as if
the Class B Invested Amount equals the outstanding principal
balance of the
Class B Certificates), the Collateral Minimum Monthly Interest
and the Monthly
Servicing Fee with respect to the related Distribution Date and
the denominator
of which is the Invested Amount as of the last day of the
preceding Monthly
Period.
"Class A Additional Interest" shall have the meaning specified
in
subsection 4.02(a).
"Class A Adjusted Invested Amount" shall mean, with respect to
any date of
determination, an amount equal to the Class A Invested Amount
less the Principal
Funding Account Balance (but not in excess of the Class A
Invested Amount) on
such date.
2
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"Class A Available Funds" shall mean, with respect to any
Monthly Period,
an amount equal to the sum of (a) if such Monthly Period relates
to a
Distribution Date with respect to the Controlled Accumulation
Period, the Class
A Floating Percentage of Principal Funding Account Investment
Proceeds, if any,
with respect to such Distribution Date, (b) the Class A Floating
Percentage of
the Reallocated Investor Finance Charge Collections and (c) the
amount of funds,
if any, to be withdrawn from the Reserve Account which, pursuant
to subsection
4.12(d), are required to be included in Class A Available Funds
with respect to
such Distribution Date.
"Class A Certificate Rate" shall mean, for any Interest Accrual
Period
with respect to the Class A Certificates, a per annum rate equal
to LIBOR plus
0.10%.
"Class A Certificateholder" shall mean the Person in whose name
a Class A
Certificate is registered in the Certificate Register.
"Class A Certificates" shall mean any one of the Certificates
executed by
the Transferors and authenticated by or on behalf of the
Trustee, substantially
in the form of Exhibit A-l.
"Class A Floating Percentage" shall mean, with respect to any
Monthly
Period, the percentage equivalent (which percentage shall never
exceed 100%) of
a fraction, the numerator of which is equal to the Class A
Adjusted Invested
Amount as of the close of business on the last day of the
preceding Monthly
Period and the denominator of which is equal to the Adjusted
Invested Amount as
of such day; provided, however, that with respect to the first
Monthly Period,
the Class A Floating Percentage shall mean the percentage
equivalent of a
fraction, the numerator of which is the Class A Initial Invested
Amount and the
denominator of which is the Initial Invested Amount.
"Class A Initial Invested Amount" shall mean $501,000,000.
"Class A Interest Shortfall" shall have the meaning specified
in
subsection 4.02(a).
"Class A Invested Amount" shall mean, on any date of
determination, an
amount equal to (a) the Class A Initial Invested Amount, minus
(b) the aggregate
amount of principal payments made to the Class A
Certificateholders on or prior
to such date, minus (c) the excess, if any, of (i) the aggregate
amount of Class
A Investor Charge-Offs for all prior Distribution Dates over
(ii) Class A
Investor Charge-Offs reimbursed pursuant to subsection 4.07(b)
prior to such
date.
"Class A Investor Charge-Offs" shall have the meaning specified
in
subsection 4.06(a).
"Class A Investor Default Amount" shall mean, with respect to
each
Distribution Date, an amount equal to the product of (i) the
Investor Default
Amount for such Distribution Date and (ii) the Class A Floating
Percentage for
such Monthly Period.
"Class A Monthly Interest" shall have the meaning specified in
subsection
4.02(a).
"Class A Principal Percentage" shall mean, with respect to any
Monthly
Period (i) during the Revolving Period, the percentage
equivalent (which
percentage shall never exceed 100%) of a fraction, the numerator
of which is the
Class A Invested Amount as of the last day of the immediately
preceding Monthly
Period and the denominator of which is the Invested Amount as of
such day and
(ii) during the Controlled Accumulation Period, the Early
Amortization Period or
any Partial Amortization Period, the percentage equivalent
(which percentage
shall never exceed 100%) of a fraction, the numerator of which
is the Class A
Invested Amount as of the close of business on the date on which
the Revolving
Period shall have terminated and the denominator of which is the
Invested Amount
as of the close of business on the date on which the Revolving
Period shall have
terminated; provided, however, that with respect to the first
Monthly Period,
the Class A Principal Percentage shall mean the percentage
equivalent of a
fraction, the numerator of which is the Class A Initial Invested
Amount and
denominator of which is the Initial Invested Amount.
3
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"Class A Required Amount" shall have the meaning specified in
subsection
4.04(a).
"Class A Servicing Fee" shall have the meaning specified in
Section 3.01.
"Class B Additional Interest" shall have the meaning specified
in
subsection 4.02(b).
"Class B Adjusted Invested Amount" shall mean, with respect to
any date of
determination, an amount equal to the Class B Invested Amount
less the positive
difference, if any, between the Principal Funding Account
Balance and the Class
A Invested Amount on such date.
"Class B Available Funds" shall mean, with respect to any
Monthly Period,
an amount equal to the sum of (a) the Class B Floating
Percentage of the
Reallocated Investor Finance Charge Collections and (b) if such
Monthly Period
relates to a Distribution Date with respect to the Controlled
Accumulation
Period, the Class B Floating Percentage of the Principal Funding
Account
Investment Proceeds, if any, with respect to such Distribution
Date.
"Class B Certificate Rate" shall mean, for any Interest Accrual
Period
with respect to the Class B Certificates, a per annum rate equal
to LIBOR plus
0.28%.
"Class B Certificateholder" shall mean the Person in whose name
a Class B
Certificate is registered in the Certificate Register.
"Class B Certificates" shall mean any one of the Certificates
executed by
the Transferors and authenticated by or on behalf of the
Trustee, substantially
in the form of Exhibit A-2.
"Class B Floating Percentage" shall mean, with respect to any
Monthly
Period, the percentage equivalent (which percentage shall never
exceed 100%) of
a fraction, the numerator of which is equal to the Class B
Adjusted Invested
Amount as of the close of business on the last day of the
preceding Monthly
Period and the denominator of which is equal to the Adjusted
Invested Amount as
of the close of business on such day; provided, however, that
with respect to
the first Monthly Period, the Class B Floating Percentage shall
mean the
percentage equivalent of a fraction, the numerator of which is
the Class B
Initial Invested Amount and the denominator of which is the
Initial Invested
Amount.
"Class B Initial Invested Amount" shall mean $45,000,000.
"Class B Interest Shortfall" shall have the meaning specified
in
subsection 4.02(b).
"Class B Invested Amount" shall mean, on any date of
determination, an
amount equal to (a) the Class B Initial Invested Amount, minus
(b) the aggregate
amount of principal payments made to the Class B
Certificateholders prior to
such date, minus (c) the aggregate amount of Class B Investor
Charge-Offs for
all prior Distribution Dates, minus (d) the amount of
Reallocated Principal
Collections allocated on all prior Distribution Dates pursuant
to subsection
4.08(a) (excluding any Reallocated Principal Collections that
have resulted in a
reduction in the Collateral Invested Amount pursuant to Section
4.08), minus (e)
an amount equal to the amount by which the Class B Invested
Amount has been
reduced on all prior Distribution Dates pursuant to subsection
4.06(a) and plus
(f) the amount of Excess Spread and Excess Finance Charge
Collections allocated
and available on all prior Distribution Dates pursuant to
subsection 4.07(e) for
the purpose of reimbursing amounts deducted pursuant to the
foregoing clauses
(c), (d) and (e); provided, however, that the Class B Invested
Amount may not be
reduced below zero.
4
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"Class B Investor Charge-Offs" shall have the meaning specified
in
subsection 4.06(b).
"Class B Investor Default Amount" shall mean, with respect to
each
Distribution Date, an amount equal to the product of (i) the
Investor Default
Amount for such Distribution Date and (ii) the Class B Floating
Percentage for
such Monthly Period.
"Class B Monthly Interest" shall have the meaning specified in
subsection
4.02(b).
"Class B Principal Percentage" shall mean, with respect to any
Monthly
Period, (i) during the Revolving Period, the percentage
equivalent (which
percentage shall never exceed 100%) of a fraction, the numerator
of which is the
Class B Invested Amount as of the last day of the immediately
preceding Monthly
Period and the denominator of which is the Invested Amount as of
such day and
(ii) during the Controlled Accumulation Period, the Early
Amortization Period or
any Partial Amortization Period, the percentage equivalent
(which percentage
shall never exceed 100%) of a fraction, the numerator of which
is the Class B
Invested Amount as of the close of business on the date on which
the Revolving
Period shall have terminated and the denominator of which is the
Invested Amount
as of the close of business on the date on which the Revolving
Period shall have
terminated; provided, however, that with respect to the first
Monthly Period,
the Class B Principal Percentage shall mean the percentage
equivalent of a
fraction, the numerator of which is the Class B Initial Invested
Amount and the
denominator of which is the Initial Invested Amount.
"Class B Required Amount" shall have the meaning set forth in
subsection
4.04(b).
"Class B Servicing Fee" shall have the meaning specified in
Section 3.01.
"Closing Date" shall mean March 24, 2005; provided that, for
purposes of
determining the date on which the first Monthly Period begins,
the Closing Date
shall be deemed to be the close of business on the last day of
the seventh
billing cycle applicable to the Accounts ending in February
2005.
"Collateral Additional Interest" shall have the meaning
specified in
subsection 4.02(c).
"Collateral Available Funds" shall mean with respect to any
Distribution
Date, the Collateral Floating Percentage of Reallocated Investor
Finance Charge
Collections with respect to the preceding Monthly Period.
"Collateral Charge-Offs" shall have the meaning specified in
subsection
4.06(c).
"Collateral Default Amount" shall mean, with respect to any
Distribution
Date, the product of the Investor Default Amount for such
Distribution Date and
the Collateral Floating Percentage.
"Collateral Floating Percentage" shall mean, with respect to
any
Distribution Date, the percentage equivalent (which percentage
shall never
exceed 100%) of a fraction, the numerator of which is equal to
the Collateral
Invested Amount as of the close of business on the last day of
the preceding
Monthly Period and the denominator of which is the Adjusted
Invested Amount as
of the close of business on such last day; provided, however,
that with respect
to the first Monthly Period, the Collateral Floating Percentage
shall mean the
percentage equivalent of a fraction, the numerator of which is
the Collateral
Initial Invested Amount and the denominator of which is the
Initial Invested
Amount.
"Collateral Initial Invested Amount" shall mean $54,000,000.
"Collateral Interest" shall mean a fractional undivided interest
in the
Trust which shall consist of the right to receive, (i) to the
extent necessary
to make the required payments to the Collateral Interest Holder
under this
Supplement, the portion of Collections allocable thereto under
the Agreement and
this Supplement and funds on deposit in the Collection Account
allocable thereto
pursuant to the Agreement and this Supplement and (ii) amounts
available for
payment to the Collateral Interest Holder pursuant to
subsections 4.07(k),
4.12(e), 4.12(f), 8.01(b), 8.02(a) and 8.02(b) or any other
provision of this
Supplement.
5
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"Collateral Interest Holder" shall mean the entity so designated
in the
Transfer Agreement.
"Collateral Interest Shortfall" shall have the meaning specified
in
subsection 4.02(c).
"Collateral Invested Amount" shall mean, when used with respect
to any
date, an amount equal to (a) the Collateral Initial Invested
Amount, minus (b)
the aggregate amount of principal payments made to the
Collateral Interest
Holder prior to such date, minus (c) the aggregate amount of
Collateral
Charge-Offs for all prior Distribution Dates pursuant to
subsection 4.06(c),
minus (d) the aggregate amount of Reallocated Principal
Collections allocated on
all prior Distribution Dates pursuant to Section 4.08 allocable
to the
Collateral Invested Amount, minus (e) an amount equal to the
amount by which the
Collateral Invested Amount has been reduced on all prior
Distribution Dates
pursuant to subsections 4.06(a) and (b), and plus (f) the amount
allocated and
available on all prior Distribution Dates pursuant to subsection
4.07(i), for
the purpose of reimbursing amounts deducted pursuant to the
foregoing clauses
(c), (d) and (e); provided, however, that the Collateral
Invested Amount may not
be reduced below zero.
"Collateral Minimum Interest Rate" shall mean the rate specified
in the
Transfer Agreement; provided that for purposes of this
Supplement, such rate
shall not exceed LIBOR plus 0.49% per annum.
"Collateral Minimum Monthly Interest" shall have the meaning
specified in
subsection 4.02(c).
"Collateral Principal Percentage" shall mean, with respect to
any Monthly
Period, (i) during the Revolving Period, the percentage
equivalent (which
percentage shall never exceed 100%) of a fraction, the numerator
of which is the
Collateral Invested Amount as of the last day of the immediately
preceding
Monthly Period and the denominator of which is the Invested
Amount as of such
day and (ii) during the Controlled Accumulation Period, the
Early Amortization
Period or any Partial Amortization Period, the percentage
equivalent (which
percentage shall never exceed 100%) of a fraction, the numerator
of which is the
Collateral Invested Amount as of the close of business on the
date on which the
Revolving Period shall have terminated and the denominator of
which is the
Invested Amount as of the close of business on the date on which
the Revolving
Period shall have terminated; provided, however, that with
respect to the first
Monthly Period, the Collateral Principal Percentage shall mean
the percentage
equivalent of a fraction, the numerator of which is the
Collateral Initial
Invested Amount and the denominator of which is the Initial
Invested Amount.
"Collateral Servicing Fee" shall have the meaning set forth in
Section
3.01.
"Controlled Accumulation Amount" shall mean, for any
Distribution Date
with respect to the Controlled Accumulation Period, $45,500,000;
provided,
however, that, if the Controlled Accumulation Period Length is
determined to be
less than 12 months, the Controlled Accumulation Amount for each
Distribution
Date with respect to the Controlled Accumulation Period will be
equal to (i) the
product of (x) the sum of the Class A Initial Invested Amount
and the Class B
Initial Invested Amount and (y) the Controlled Accumulation
Period Factor for
the related Monthly Period divided by (ii) the Required
Accumulation Factor
Number.
"Controlled Accumulation Period" shall mean, unless a Pay-Out
Event shall
have occurred prior thereto, the period commencing at the close
of business on
the last day of the February 2014 Monthly Period or such later
date as is
determined in accordance with subsection 4.03(c) and ending on
the first to
occur of (a) the commencement of the Early Amortization Period,
(b) the payment
in full of the Invested Amount and (c) the Expected Final
Payment Date.
6
<PAGE>
"Controlled Accumulation Period Factor" shall mean, for each
Monthly
Period, a fraction, the numerator of which is equal to the sum
of the series
invested amounts as of the last day of the prior Monthly Period
of all
outstanding Series, and the denominator of which is equal to the
sum (without
duplication) of (a) the Series Invested Amount as of the last
day of the prior
Monthly Period, (b) the series invested amounts as of the last
day of the prior
Monthly Period of all outstanding Series (other than Series
2005-2) that are not
expected to be in their revolving periods, and (c) the series
invested amounts
as of the last day of the prior Monthly Period of all other
outstanding Series
that are not Principal Sharing Series and are in their revolving
periods.
"Controlled Accumulation Period Length" has the meaning
specified in
subsection 4.03(c).
"Controlled Deposit Amount" shall mean, for any Distribution
Date with
respect to the Controlled Accumulation Period, an amount equal
to the sum of the
Controlled Accumulation Amount for such Distribution Date and
any Deficit
Controlled Accumulation Amount for the immediately preceding
Distribution Date.
"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 the Class A
Invested Amount is
paid in full, an amount equal to the sum of (x) with respect to
the Class A
Certificates, the product of (i) the Class A Certificate Rate,
(ii) a fraction,
the numerator of which is the actual number of days from and
including the prior
Distribution Date to but excluding the then current Distribution
Date and the
denominator of which is 360 and, (iii) the Principal Funding
Account Balance, if
any, as of the preceding Distribution Date that is allocable to
the principal of
the Class A Certificates and (y) with respect to the Class B
Certificates, the
product of (i) the Class B Certificate Rate, (ii) a fraction,
the numerator of
which is the actual number of days from and including the prior
Distribution
Date to but excluding the then current Distribution Date and the
denominator of
which is 360 and (iii) the Principal Funding Account Balance, if
any, as of the
preceding Distribution Date that is allocable to the principal
of the Class B
Certificates.
"Deficit Controlled Accumulation Amount" shall mean (a) on the
first
Distribution Date with respect to the Controlled Accumulation
Period, the
excess, if any, of the Controlled Accumulation Amount for such
Distribution Date
over the amount deposited in the Principal Funding Account on
such Distribution
Date and (b) on each subsequent Distribution Date with respect
to the Controlled
Accumulation Period, the excess, if any, of the Controlled
Deposit Amount for
such subsequent Distribution Date over the amount deposited in
the Principal
Funding Account on such subsequent Distribution Date.
"Distribution Date" shall mean April 15, 2005, and the 15th day
of each
calendar month thereafter, or if such 15th day is not a Business
Day, the next
succeeding Business Day.
"Early Amortization Period" shall mean the period commencing at
the close
of business on the Business Day immediately preceding the day on
which a Pay-Out
Event with respect to Series 2005-2 is deemed to have occurred,
and ending on
the first to occur of (i) the payment in full of the Invested
Amount or (ii) the
Series 2005-2 Termination Date.
"Excess Finance Charge Collections" shall mean collections of
Finance
Charge Receivables and certain other amounts allocable to
the
Certificateholders' Interest of any Excess Allocation Series in
excess of the
amounts necessary to make required payments with respect to such
series
(including payments to the provider of any related Series
Enhancement) that are
payable out of collections of Finance Charge Receivables.
7
<PAGE>
"Excess Spread" shall mean, with respect to any Distribution
Date, the sum
of the amounts, if any, specified pursuant to subsections
4.05(a)(iv),
4.05(b)(iii) and 4.05(c)(ii) with respect to such Distribution
Date.
"Expected Final Payment Date" shall mean the March 2015
Distribution Date.
"Finance Charge Shortfall" shall have the meaning specified in
Section
4.09.
"Floating Allocation Percentage" shall mean, with respect to any
Monthly
Period, the percentage equivalent (which percentage shall never
exceed 100%) of
a fraction, the numerator of which is the Adjusted Invested
Amount as of the
last day of the preceding Monthly Period (or with respect to the
first Monthly
Period, the Initial Invested Amount) and the denominator of
which is the product
of (x) the Series 2005-2 Allocation Percentage with respect to
such Monthly
Period and (y) the sum of (i) the total amount of Principal
Receivables in the
Trust as of such day (or with respect to the first Monthly
Period, the total
amount of Principal Receivables in the Trust on the Closing
Date) and (ii) the
principal amount on deposit in the Special Funding Account as of
such last day
(or with respect to the first Monthly Period, as of the Closing
Date); provided,
however, that with respect to any Monthly Period in which an
Addition Date for
an Aggregate Addition or a Removal Date occurs the amount in
(y)(i) above shall
be (1) the aggregate amount of Principal Receivables in the
Trust at the end of
the day on the last day of the prior Monthly Period for the
period from and
including the first day of such Monthly Period to but excluding
the related
Addition Date or Removal Date and (2) the aggregate amount of
Principal
Receivables in the Trust at the end of the day on the related
Addition Date or
Removal Date for the period from and including the related
Addition Date or
Removal Date to and including the last day of such Monthly
Period.
"Group II" shall mean Series 2005-2 and each other Series
specified in the
related Supplement to be included in Group II.
"Group II Investor Additional Amounts" shall mean, with respect
to any
Distribution Date, the sum of (a) Series 2005-2 Additional
Amounts for such
Distribution Date and (b) for all other Series included in Group
II, the sum of
(i) the aggregate net amount by which the Invested Amounts of
such Series have
been reduced as a result of investor charge-offs, subordination
of principal
collections and funding the investor default amounts in respect
of any Class or
Series Enhancement interests of such Series as of such
Distribution Date and
(ii) if the applicable Supplements so provide, the aggregate
unpaid amount of
interest at the applicable certificate rates that has accrued on
the amounts
described in the preceding clause (i) for such Distribution
Date.
"Group II Investor Default Amount" shall mean, with respect to
any
Distribution Date, the sum of (a) the Investor Default Amount
for such
Distribution Date and (b) the aggregate amount of the investor
default amounts
for all other Series included in Group II for such Distribution
Date.
"Group II Investor Finance Charge Collections" shall mean, with
respect to
any Distribution Date, the sum of (a) Investor Finance Charge
Collections for
such Distribution Date and (b) the aggregate amount of the
investor finance
charge collections for all other Series included in Group II for
such
Distribution Date.
"Group II Investor Monthly Fees" shall mean with respect to
any
Distribution Date, the sum of (a) Series 2005-2 Monthly Fees for
such
Distribution Date and (b) the aggregate amount of the servicing
fees, investor
fees, fees payable to any Series Enhancer and any other similar
fees, which are
payable out of reallocated investor finance charge collections
pursuant to the
related Supplements, for all other Series included in Group II
for such
Distribution Date.
8
<PAGE>
"Group II Investor Monthly Interest" shall mean, with respect to
any
Distribution Date, the sum of (a) Series 2005-2 Monthly Interest
for such
Distribution Date and (b) the aggregate amount of monthly
interest, including
overdue monthly interest and interest on such overdue monthly
interest, if such
amounts are payable out of reallocated investor finance charge
collections
pursuant to the related Supplements, for all other Series
included in Group II
for such Distribution Date.
"Initial Invested Amount" shall mean $600,000,000.
"Interest Accrual Period" shall mean, with respect to any
Distribution
Date, the period (a) from and including the Distribution Date
immediately
preceding such Distribution Date (or, in the case of the first
Distribution
Date, from and including the Closing Date) and (b) to but
excluding such
Distribution Date.
"Invested Amount" shall mean, as of any date of determination,
an amount
equal to the sum of (a) the Class A Invested Amount as of such
date, (b) the
Class B Invested Amount as of such date and (c) the Collateral
Invested Amount
as of such date.
"Investment Letter" shall have the meaning specified in
subsection
9.07(a).
"Investor Charge-Offs" shall mean Class A Investor Charge-Offs,
Class B
Investor Charge-Offs and Collateral Charge-Offs.
"Investor Default Amount" shall mean, with respect to any
Distribution
Date, an amount equal to the product of (a) the Series 2005-2
Allocable
Defaulted Amount for the related Monthly Period and (b) the
Floating Allocation
Percentage for such Monthly Period.
"Investor Finance Charge Collections" shall mean with respect to
any
Distribution Date, an amount equal to the product of (a) the
Floating Allocation
Percentage for the related Monthly Period and (b) Series 2005-2
Allocable
Finance Charge Collections deposited in the Collection Account
for the related
Monthly Period.
"LIBOR" shall mean, for any Interest Accrual Period, a per annum
interest
rate determined by the Trustee for such Interest Accrual Period
in accordance
with the provisions of Section 4.14.
"LIBOR Determination Date" shall mean March 22, 2005 for the
period from
and including the Closing Date to but excluding April 15, 2005,
and for every
other Interest Accrual Period, the second London Business Day
prior to the
commencement of such Interest Accrual Period.
"London Business Day" shall mean any day on which dealings in
deposits in
United States dollars are transacted in the London interbank
market.
"Monthly Interest" means, with respect to any Distribution Date,
the Class
A Monthly Interest, the Class B Monthly Interest and the
Collateral Minimum
Monthly Interest for such Distribution Date.
"Monthly Receivables Percentage" shall mean, for any day, the
percentage
equivalent of a fraction, the numerator of which is an amount
equal to the sum
of the aggregate amount of Principal Receivables outstanding in
the Trust
attributable to the Transferor or Account Owner with respect to
which an
Insolvency Event or a Transfer Restriction Event has occurred,
and the
denominator of which is an amount equal to the sum of the
aggregate amount of
Principal Receivables outstanding in the Trust, in each as of
the last day of
the immediately preceding Monthly Period.
9
<PAGE>
"Monthly Servicing Fee" shall have the meaning specified in
subsection
3.01.
"Pay-Out Event" shall mean any Pay-Out Event specified in
Section 6.01.
"Permitted Assignee" shall mean any Person who, if it were the
Collateral
Interest Holder or a holder of an interest in the Trust, as
applicable, would
not cause the Trust to be taxable as a publicly traded
partnership for federal
income tax purposes.
"Principal Allocation Percentage" shall mean, with respect to
any day
during a Monthly Period, the percentage equivalent (which
percentage shall never
exceed 100%) of a fraction, the numerator of which is (a) during
the Revolving
Period, the Series Adjusted Invested Amount for Series 2005-2 as
of the last day
of the immediately preceding Monthly Period (or, in the case of
the first
Monthly Period, the Initial Invested Amount) and (b) during the
Controlled
Accumulation Period, the Early Amortization Period or any
Partial Amortization
Period, the Series Adjusted Invested Amount for Series 2005-2 as
of the close of
business on the date on which the Revolving Period shall have
terminated and the
denominator of which is the product of (x) the sum of (i) the
total amount of
Principal Receivables in the Trust as of the last day of the
immediately
preceding Monthly Period (or with respect to the first Monthly
Period, the total
amount of Principal Receivables in the Trust as of the Closing
Date) and (ii)
the principal amount on deposit in the Special Funding Account
as of such last
day (or with respect to the first Monthly Period, the Closing
Date) and (y) the
Series 2005-2 Allocation Percentage as of the last day of the
immediately
preceding Monthly Period; provided, however, that with respect
to any Monthly
Period in which an Addition Date for an Aggregate Addition or a
Removal Date
occurs the amount in (x)(i) above shall be (1) the aggregate
amount of Principal
Receivables in the Trust at the end of the day on the last day
of the prior
Monthly Period for the period from and including the first day
of such Monthly
Period to but excluding the related Addition Date or Removal
Date and (2) the
aggregate amount of Principal Receivables in the Trust at the
end of the day on
the related Addition Date or Removal Date for the period from
and including the
related Addition Date or Removal Date to and including the last
day of such
Monthly Period; and provided further, that if after the
commencement of the
Controlled Accumulation Period a Pay-Out Event occurs with
respect to another
Series that was designated in the Supplement therefor as a
Series that is a
"Paired Series" with respect to Series 2005-2, the Transferors
may, by written
notice delivered to the Trustee and the Servicer, designate a
different
numerator for the foregoing fraction, provided that (x) such
numerator is not
less than the Adjusted Invested Amount as of the last day of the
revolving
period for such Paired Series, (y) the Transferors shall have
received written
notice from each Rating Agency that the Rating Agency Condition
has been
satisfied with respect to such designation and shall have
delivered copies of
each such written notice to the Servicer and the Trustee and (z)
each Transferor
shall have delivered to the Trustee an Officer's Certificate of
such Transferor
to the effect that, based on the facts known to such officer at
such time, in
the reasonable belief of such Transferor, such designation will
not cause a
Pay-Out Event or an event that, after the giving of notice or
the lapse of time,
would constitute a Pay-Out Event, to occur with respect to
Series 2005-2.
"Principal Funding Account" shall have the meaning specified in
subsection
4.03(a)(i).
"Principal Funding Account Balance" shall mean, with respect to
any date
of determination during the Controlled Accumulation Period, the
principal
amount, if any, on deposit in the Principal Funding Account on
such date of
determination.
"Principal Funding Account Investment Proceeds" shall have the
meaning
specified in subsection 4.03(a)(ii).
10
<PAGE>
"Principal Funding Account Investment Shortfall" shall mean,
with respect
to each Distribution Date during the Controlled Accumulation
Period, the amount,
if any, by which the Principal Funding Account Investment
Proceeds are less than
the Covered Amount.
"Reallocated Investor Finance Charge Collections" shall mean
that portion
of Group II Investor Finance Charge Collections allocated to
Series 2005-2
pursuant to Section 4.10.
"Reallocated Principal Collections" shall mean, with respect to
any
Monthly Period, the product of (a) the Series 2005-2 Allocable
Principal
Collections deposited in the Collection Account for such Monthly
Period and (b)
the sum of the Class B Principal Percentage and the Collateral
Principal
Percentage.
"Reassignment Amount" shall mean, with respect to any
Distribution Date,
after giving effect to any deposits and distributions otherwise
to be made on
such Distribution Date, the sum of (i) the Adjusted Invested
Amount on such
Distribution Date, plus (ii) Monthly Interest for such
Distribution Date and any
Monthly Interest previously due but not distributed to the
Series 2005-2
Certificateholders on a prior Distribution Date, plus (iii) the
amount of
Additional Interest, if any, for such Distribution Date and any
Additional
Interest previously due but not distributed to the Series
2005-2
Certificateholders on a prior Distribution Date.
"Reference Banks" shall mean four major banks in the London
interbank
market selected by the Servicer.
"Required Accumulation Factor Number" shall be equal to a
fraction,
rounded upwards to the nearest whole number, the numerator of
which is one and
the denominator of which is equal to the lowest monthly
principal payment rate
on the Accounts, expressed as a decimal, for the three months
preceding the date
of such calculation.
"Required Amount" shall mean, with respect to any Monthly
Period, the sum
of the Class A Required Amount and the Class B Required
Amount.
"Required Reserve Account Amount" shall mean, with respect to
any
Distribution Date on or after the Reserve Account Funding Date,
an amount equal
to (1) 0.50% 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
percentage (which may be 0%) of the Class A Invested Amount
designated by the
Transferors, provided that if such percentage is less than the
percentage
specified in clause (1) above, the Transferors shall have
received the prior
written consent of the Collateral Interest Holder and written
notice from each
Rating Agency that the Rating Agency Condition shall have been
satisfied with
respect to such designation and shall have delivered copies of
each such written
notice to the Servicer and the Trustee.
"Reserve Account" shall have the meaning specified in subsection
4.12(a).
"Reserve Account Funding Date" shall mean the Distribution Date
which
occurs not later than the earliest of (a) the Distribution Date
with respect to
the Monthly Period that commences not later than three months
prior to the
Distribution Date with respect to the first Monthly Period in
the Controlled
Accumulation Period, (b) in the event that the average Excess
Spread Percentage
for any three consecutive Monthly Periods ending in the March
2013 Monthly
Period or any Monthly Period thereafter is less than 2%, the
Distribution Date
with respect to such Monthly Period, (c) in the event that the
average Excess
Spread Percentage for any three consecutive Monthly Periods
ending in the
September 2013 Monthly Period or any Monthly Period thereafter
is less than 3%,
the Distribution Date with respect to such Monthly Period and
(d) such earlier
Distribution Date as the Transferors may determine by written
notice to the
Trustee and the Servicer. For this purpose, the "Excess Spread
Percentage" for
any Monthly Period shall be equal to the Series Adjusted
Portfolio Yield for
such Monthly Period minus the Base Rate for such Monthly
Period.
11
<PAGE>
"Reserve Account Surplus" shall mean, as of any date of
determination, the
amount, if any, by which the amount on deposit in the Reserve
Account exceeds
the Required Reserve Account Amount.
"Reserve Draw Amount" shall have the meaning specified in
subsection
4.12(c).
"Revolving Period" shall mean the period beginning at the close
of
business on the Series Cut-Off Date and ending on the earlier of
(a) the close
of business on the day immediately preceding the day the
Controlled Accumulation
Period commences and (b) the close of business on the day
immediately preceding
the day the Early Amortization Period commences.
"Series Adjusted Portfolio Yield" shall mean, with respect to
any Monthly
Period, the annualized percentage equivalent of a fraction, (A)
the numerator of
which is equal to (a) Reallocated Investor Finance Charge
Collections with
respect to such Monthly Period, plus (b) the amount of any
Principal Funding
Account Investment Proceeds for the related Distribution Date,
plus (c) provided
that each Rating Agency has consented in writing to the
inclusion thereof in
calculating the Series Adjusted Portfolio Yield, any Excess
Finance Charge
Collections that are allocated to Series 2005-2 with respect to
such Monthly
Period, plus (d) the amount of funds, if any, withdrawn from the
Reserve Account
which pursuant to subsection 4.12(d) are required to be
deposited into the
Collection Account and included as Class A Available Funds for
the Distribution
Date with respect to such Monthly Period, minus (e) the Investor
Default Amount
for the Distribution Date with respect to such Monthly Period,
and (B) the
denominator of which is the Invested Amount as of the last day
of the preceding
Monthly Period.
"Series Cut-Off Date" shall mean the close of business on March
24, 2005.
"Series 2005-2" shall mean the Series of Certificates the terms
of which
are specified in this Supplement.
"Series 2005-2 Additional Amounts" shall mean, with respect to
any
Distribution Date, the sum of the amounts determined pursuant to
subsections
4.07(b), (e) and (i) for such Distribution Date.
"Series 2005-2 Allocable Defaulted Amount" shall mean the Series
Allocable
Defaulted Amount with respect to Series 2005-2.
"Series 2005-2 Allocable Finance Charge Collections" shall mean
the Series
Allocable Finance Charge Collections with respect to Series
2005-2.
"Series 2005-2 Allocable Principal Collections" shall mean the
Series
Allocable Principal Collections with respect to Series
2005-2.
"Series 2005-2 Allocation Percentage" shall mean the Series
Allocation
Percentage with respect to Series 2005-2.
"Series 2005-2 Certificate" shall mean a Class A Certificate or
a Class B
Certificate or the Collateral Interest.
"Series 2005-2 Certificateholder" shall mean a Class A
Certificateholder
or a Class B Certificateholder or the Collateral Interest
Holder.
"Series 2005-2 Certificateholders' Interest" shall mean the
Certificateholders' Interest for Series 2005-2, including the
Collateral
Interest.
12
<PAGE>
"Series 2005-2 Monthly Fees" shall mean, with respect to any
Distribution
Date, the amount determined pursuant to subsections 4.05(a)(ii),
(b)(ii) and
(c)(i) and subsection 4.07(g).
"Series 2005-2 Monthly Interest" shall mean the amounts
determined
pursuant to subsections 4.02(a), (b) and (c).
"Series 2005-2 Principal Shortfall" shall have the meaning
specified in
Section 4.11.
"Series 2005-2 Termination Date" shall mean the October 2017
Distribution
Date.
"Series Invested Amount" shall mean the Initial Invested
Amount.
"Series Required Transferor Amount" shall mean an amount equal
to 7% of
the Invested Amount.
"Servicing Base Amount" shall have the meaning specified in
Section 3.01.
"Servicing Fee Rate" shall mean 2.0% per annum.
"Special Payment Date" shall mean each Distribution Date with
respect to
the Early Amortization Period.
"Telerate Page 3750" shall mean the display page currently so
designated
on the Moneyline Telerate Service (or such other page as may
replace that page
on that service for the purpose of displaying comparable rates
or prices).
"Transfer" shall have the meaning specified in subsection
9.07(a).
"Transfer Agreement" shall mean the Transfer and Administration
Agreement,
dated as of March 24, 2005, among RFC II, RFC III and RFC IV, as
transferors,
TRS, as administrator, and the American Express Credit Account
Secured Note
Trust 2005-2, as issuer, as the same may be amended,
supplemented or otherwise
modified from time to time.
"Transferor Percentage" shall mean 100% minus (a) the Floating
Allocation
Percentage, when used at any time with respect to Finance Charge
Receivables and
Defaulted Receivables, or (b) the Principal Allocation
Percentage, when used at
any time with respect to Principal Receivables.
(b) Notwithstanding anything to the contrary in this Supplement
or the
Agreement, the term "Rating Agency" shall mean, whenever used in
this Supplement
or the Agreement with respect to Series 2005-2, Moody's and
Standard & Poor's.
As used in this Supplement and in the Agreement with respect to
Series 2005-2,
"highest investment category" shall mean (i) in the case of
Standard & Poor's,
AAA or A-1+, as applicable and (ii) in the case of Moody's, Aaa
or P-1, as
applicable.
(c) Each capitalized term defined herein shall relate to the
Series 2005-2
Certificates and no other Series of Certificates issued by the
Trust, unless the
context otherwise requires. All capitalized terms used herein
and not otherwise
defined herein have the meanings ascribed to them in the
Agreement. 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 Supplement shall govern.
(d) The words "hereof," "herein" and "hereunder" and words of
similar
import when used in this Supplement shall refer to this
Supplement as a whole
and not to any particular provision of this Supplement;
references to any
Article, subsection, Section or Exhibit are references to
Articles, subsections,
Sections and Exhibits in or to this Supplement unless otherwise
specified; and
the term "including" means "including without limitation."
13
<PAGE>
ARTICLE III
Servicing Fee
Section 3.01. Servicing Compensation. The share of the Servicing
Fee
allocable to the Series 2005-2 Certificateholders with respect
to any
Distribution Date (the "Monthly Servicing Fee") shall be equal
to one-twelfth of
the product of (a) the Servicing Fee Rate and (b) (i) the
Adjusted Invested
Amount as of the last day of the Monthly Period preceding such
Distribution Date
minus (ii) the product of the amount, if any, on deposit in the
Special Funding
Account as of the last day of the Monthly Period preceding such
Distribution
Date and the Series 2005-2 Allocation Percentage with respect to
such Monthly
Period (the amount calculated pursuant to this clause (b) is
referred to as the
"Servicing Base Amount"). The share of the Monthly Servicing Fee
allocable to
the Class A Certificateholders with respect to any Distribution
Date (the "Class
A Servicing Fee") shall be equal to one-twelfth of the product
of (a) the Class
A Floating Percentage, (b) the Servicing Fee Rate and (c) the
Servicing Base
Amount. The share of the Monthly Servicing Fee allocable to the
Class B
Certificateholders with respect to any Distribution Date (the
"Class B Servicing
Fee") shall be equal to one-twelfth of the product of (a) the
Class B Floating
Percentage, (b) the Servicing Fee Rate and (c) the Servicing
Base Amount. The
share of the Monthly Servicing Fee allocable to the Collateral
Interest with
respect to any Distribution Date (the "Collateral Servicing
Fee") shall be equal
to one-twelfth of the product of the (a) Collateral Floating
Percentage, (b) the
Servicing Fee Rate and (c) the Servicing Base Amount. The
remainder of the
Servicing Fee shall be paid by the Holders of the Transferor
Certificates or the
investor certificateholders of other Series (as provided in the
related
Supplements) and in no event shall the Trust, the Trustee or the
Series 2005-2
Certificateholders be liable for the share of the Servicing Fee
to be paid by
the Holders of the Transferor Certificates or the investor
certificateholders of
any other Series. To the extent that the Class A Servicing Fee,
the Class B
Servicing Fee and the Collateral Servicing Fee are not paid in
full pursuant to
the preceding provisions of this Section 3.01, and Sections 4.05
and 4.07, they
shall be paid by the Holders of the Transferor Certificates.
ARTICLE IV
Rights of Series 2005-2 Certificateholders and
Allocation and Application of Collections
Section 4.01. Collections and Allocations.
(a) Allocations. Collections of Finance Charge Receivables and
Principal
Receivables and Defaulted Receivables allocated to Series 2005-2
pursuant to
Article IV of the Agreement (and, as described herein,
Collections of Finance
Charge Receivables reallocated from other Series in Group II)
shall be allocated
and distributed or reallocated as set forth in this Article.
(b) Payments to the Transferor. The Servicer shall on each
Deposit Date
withdraw from the Collection Account and pay to the Holders of
the Transferor
Certificates the following amounts:
(i) an amount equal to the Transferor Percentage for the
related
Monthly Period of Series 2005-2 Allocable Finance Charge
Collections to
the extent such amount is deposited in the Collection Account;
and
(ii) an amount equal to the Transferor Percentage for the
related
Monthly Period of Series 2005-2 Allocable Principal Collections
deposited
in the Collection Account, if the Transferor Amount (determined
after
giving effect to any Principal Receivables transferred to the
Trust on
such Deposit Date) exceeds zero.
14
<PAGE>
The withdrawals to be made from the Collection Account pursuant
to this
subsection 4.01(b) do not apply to deposits into the Collection
Account that do
not represent Collections, including payment of the purchase
price for the
Certificateholders' Interest pursuant to Section 2.06 or 10.01
of the Agreement,
payment of the purchase price for the Series 2005-2
Certificateholders' Interest
pursuant to Section 7.01 of this Supplement and proceeds from
the sale,
disposition or liquidation of Receivables pursuant to Section
9.01 or 12.02 of
the Agreement.
(c) Allocations to the Series 2005-2 Certificateholders. The
Servicer
shall, prior to the close of business on each Deposit Date,
allocate to the
Series 2005-2 Certificateholders the following amounts as set
forth below:
(i) Allocations of Finance Charge Collections. The Servicer
shall
allocate to the Series 2005-2 Certificateholders and retain in
the
Collection Account for application as provided herein an amount
equal to
the product of (A) the Floating Allocation Percentage and (B)
the Series
2005-2 Allocation Percentage and (C) the aggregate amount of
Collections
of Finance Charge Receivables deposited in the Collection
Account on such
Deposit Date.
(ii) Allocations of Principal Collections. The Servicer
shall
allocate to the Series 2005-2 Certificateholders the following
amounts as
set forth below:
(x) Allocations During the Revolving Period. During the
Revolving Period (A) an amount equal to the product of (I) the
sum
of the Class B Principal Percentage and the Collateral
Principal
Percentage and (II) the Principal Allocation Percentage and
(III)
the Series 2005-2 Allocation Percentage and (IV) the
aggregate
amount of Collections of Principal Receivables deposited in
the
Collection Account on such Deposit Date, shall be allocated to
the
Series 2005-2 Certificateholders and retained in the
Collection
Account until applied as provided herein and (B) an amount equal
to
the product of (I) the Class A Principal Percentage and (II)
the
Principal Allocation Percentage and (III) the Series 2005-2
Allocation Percentage and (IV) the aggregate amount of
Collections
of Principal Receivables deposited in the Collection Account on
such
Deposit Date shall be allocated to the Series 2005-2
Certificateholders and first, if any other Principal Sharing
Series
is outstanding and in its amortization period or
accumulation
period, retained in the Collection Account for application, to
the
extent necessary, as Shared Principal Collections on the
related
Distribution Date, and second paid to the Holders of the
Transferor
Certificates; provided, however, that such amount to be paid to
the
Holders of the Transferor Certificates on any Deposit Date shall
be
paid to such Holders only if the Transferor Amount on such
Deposit
Date is greater than the Required Transferor Amount (after
giving
effect to all Principal Receivables transferred to the Trust on
such
day) and otherwise shall be deposited in the Special Funding
Account.
15
<PAGE>
(y) Allocations During the Controlled Accumulation Period.
During the Controlled Accumulation Period (A) an amount equal to
the
product of (I) the sum of the Class B Principal Percentage and
the
Collateral Principal Percentage and (II) the Principal
Allocation
Percentage and (III) the Series 2005-2 Allocation Percentage
and
(IV) the aggregate amount of Collections of Principal
Receivables
deposited in the Collection Account on such Deposit Date, shall
be
allocated to the Series 2005-2 Certificateholders and retained
in
the Collection Account until applied as provided herein and (B)
an
amount equal to the product of (I) the Class A Principal
Percentage
and (II) the Principal Allocation Percentage and (III) the
Series
2005-2 Allocation Percentage and (IV) the aggregate amount
of
Collections of Principal Receivables deposited in the
Collection
Account on such Deposit Date (the product specified in this
clause
(B) for any such date is hereinafter referred to as a
"Percentage
Allocation") shall be allocated to the Series
---------------------
2005-2 Certificateholders and retained in the Collection
Account
until applied as provided herein; provided, however, that if the
sum
of such Percentage Allocation and all preceding Percentage
Allocations with respect to the same Monthly Period exceeds
the
Controlled Deposit Amount during the Controlled Accumulation
Period
for the related Distribution Date, then such excess shall not
be
treated as a Percentage Allocation and shall be first, if any
other
Principal Sharing Series is outstanding and in its
amortization
period or accumulation period, retained in the Collection
Account
for application, to the extent necessary, as Shared
Principal
Collections on the related Distribution Date, and second paid to
the
Holders of the Transferor Certificates only if the Transferor
Amount
on such Deposit Date is greater than the Required Transferor
Amount
(after giving effect to all Principal Receivables transferred to
the
Trust on such day) and otherwise shall be deposited in the
Special
Funding Account.
(z) Allocations During the Early Amortization Period. During
the Early Amortization Period, an amount equal to the product of
(A)
the Principal Allocation Percentage and (B) the Series
2005-2
Allocation Percentage and (C) the aggregate amount of
Collections of
Principal Receivables deposited in the Collection Account on
such
Deposit Date, shall be allocated to the Series 2005-2
Certificateholders and retained in the Collection Account
until
applied as provided herein; provided, however, that after the
date
on which an amount of such Collections equal to the Adjusted
Invested Amount has been deposited into the Collection Account
and
allocated to the Series 2005-2 Certificateholders, the
remainder
that has not been so deposited and allocated shall be first, if
any
other Principal Sharing Series is outstanding and in its
amortization period or accumulation period, retained in the
Collection Account for application, to the extent necessary,
as
Shared Principal Collections on the related Distribution Date,
and
second paid to the Holders of the Transferor Certificates only
if
the Transferor Amount on such date is greater than the
Required
Transferor Amount (after giving effect to all Principal
Receivables
transferred to the Trust on such day) and otherwise shall be
deposited in the Special Funding Account.
Section 4.02. Determination of Monthly Interest.
(a) The amount of monthly interest ("Class A Monthly
Interest")
distributable from the Collection Account with respect to the
Class A
Certificates on any Distribution Date shall be an amount equal
to the product of
(i) a fraction, the numerator of which is the actual number of
days in the
period from (and including) the immediately preceding
Distribution Date (or in
the case of the first Distribution Date, the Closing Date) to
(but excluding)
such Distribution Date and the denominator of which is 360, (ii)
the Class A
Certificate Rate for such Distribution Date and (iii) the
outstanding principal
balance of the Class A Certificates as of close of business on
the immediately
preceding Record Date.
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On the Determination Date preceding each Distribution Date, the
Servicer
shall determine the excess, if any (the "Class A Interest
Shortfall"), of (x)
the Class A Monthly Interest for such Distribution Date over (y)
the aggregate
amount of funds allocated and available to pay such Class A
Monthly Interest on
such Distribution Date. If the Class A Interest Shortfall with
respect to any
Distribution Date is greater than zero, on each subsequent
Distribution Date
until such Class A Interest Shortfall is fully paid, an
additional amount
("Class A Additional Interest") equal to the product of (i) a
fraction, the
numerator of which is the actual number of days in the period
from (and
including) the immediately preceding Distribution Date (or in
the case of the
first Distribution Date, the Closing Date) to (but excluding)
such Distribution
Date and the denominator of which is 360, (ii) the sum of (x)
the Class A
Certificate Rate and (y) 2.0% per annum and (iii) such Class A
Interest
Shortfall (or the portion thereof which has not been paid to the
Class A
Certificateholders) shall be payable as provided herein with
respect to the
Class A Certificates. Notwithstanding anything to the contrary
herein, Class A
Additional Interest shall be payable or distributed to the Class
A
Certificateholders only to the extent permitted by applicable
law.
(b) The amount of monthly interest ("Class B Monthly
Interest")
distributable from the Collection Account with respect to the
Class B
Certificates on any Distribution Date shall be an amount equal
to the product of
(i) a fraction, the numerator of which is the actual number of
days in the
period from (and including) the immediately preceding
Distribution Date (or in
the case of the first Distribution Date, the Closing Date) to
(but excluding)
such Distribution Date and the denominator of which is 360, (ii)
the Class B
Certificate Rate for such Distribution Date and (iii) the Class
B Invested
Amount as of the close of business on the immediately preceding
Record Date.
On the Determination Date preceding each Distribution Date, the
Servicer
shall determine the excess, if any (the "Class B Interest
Shortfall"), of (x)
the Class B Monthly Interest for such Distribution Date over (y)
the aggregate
amount of funds allocated and available to pay such Class B
Monthly Interest on
such Distribution Date. If the Class B Interest Shortfall with
respect to any
Distribution Date is greater than zero, on each subsequent
Distribution Date
until such Class B Interest Shortfall is fully paid, an
additional amount
("Class B Additional Interest") equal to the product of (i) a
fraction, the
numerator of which is the actual number of days in the period
from (and
including) the immediately preceding Distribution Date (or in
the case of the
first Distribution Date, the Closing Date) to (but excluding)
such Distribution
Date and the denominator of which is 360, (ii) the sum of (x)
the Class B
Certificate Rate and (y) 2.0% per annum and (iii) such Class B
Interest
Shortfall (or the portion thereof which has not been paid to the
Class B
Certificateholders) shall be payable as provided herein with
respect to the
Class B Certificates. Notwithstanding anything to the contrary
herein, Class B
Additional Interest shall be payable or distributed to the Class
B
Certificateholders only to the extent permitted by applicable
law.
(c) The amount of monthly interest ("Collateral Minimum Monthly
Interest")
distributable from the Collection Account with respect to the
Collateral
Invested Amount on any Distribution Date shall be an amount
equal to the product
of (i) (A) a fraction, the numerator of which is the actual
number of days in
the period from (and including) the immediately preceding
Distribution Date (or
in the case of the first Distribution Date, the Closing Date) to
(but excluding)
such Distribution Date and the denominator of which is 360 and
(B) the
Collateral Minimum Interest Rate in effect with respect to the
period from (and
including) the immediately preceding Distribution Date (or in
the case of the
first Distribution Date, the Closing Date) to (but excluding)
such Distribution
Date, and (ii) the Collateral Initial Invested Amount less the
aggregate amount
of principal payments distributed to the Collateral Interest
Holder on all prior
Distribution Dates.
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<PAGE>
On the Determination Date preceding each Distribution Date, the
Servicer
shall determine an amount (the "Collateral Interest Shortfall")
equal to (x) the
aggregate Collateral Minimum Monthly Interest for such
Distribution Date minus
(y) the aggregate amount of funds allocated and available to pay
such Collateral
Minimum Monthly Interest on such Distribution Date. If the
Collateral Interest
Shortfall with respect to any Distribution Date is greater than
zero, on each
subsequent Distribution Date until such Collateral Interest
Shortfall is fully
paid, an additional amount ("Collateral Additional Interest")
shall be payable
as provided herein with respect to the Collateral Invested
Amount equal to the
product of (i) (A) a fraction, the numerator of which is the
actual number of
days in the period from (and including) the immediately
preceding Distribution
Date to (but excluding) such Distribution Date and the
denominator of which is
360 and (B) the Collateral Minimum Interest Rate in effect
during the period
from (and including) the immediately preceding Distribution Date
to (but
excluding) such Distribution Date, and (ii) such Collateral
Interest Shortfall
(or the portion thereof which has not been paid to the
Collateral Interest
Holder). Notwithstanding anything to the contrary herein,
Collateral Additional
Interest shall be payable or distributed to the Collateral
Interest Holder only
to the extent permitted by applicable law.
Section 4.03. Principal Funding Account; Controlled Accumulation
Period.
(a) (i) The Servicer, for the benefit of the Series 2005-2
Certificateholders, shall establish and maintain in the name of
the Trustee, on
behalf of the Trust, an Eligible Deposit Account (the "Principal
Funding
Account"), bearing a designation clearly indicating that the
funds deposited
therein and the property credited thereto are held for the
benefit of the Series
2005-2 Certificateholders. The Principal Funding Account shall
initially be
established with The Bank of New York.
(ii) At the written direction of the Servicer, funds on deposit
in the
Principal Funding Account shall be invested by the Trustee in
Eligible
Investments selected by the Servicer. All such Eligible
Investments shall be
held by the Trustee for the benefit of the Series 2005-2
Certificateholders;
provided that on each Distribution Date all interest and other
investment income
(net of losses and investment expenses) ("Principal Funding
Account Investment
Proceeds") on funds on deposit therein shall be applied as set
forth in
paragraph (iii) below. Funds on deposit in the Principal Funding
Account shall
be invested in Eligible Investments that will mature so that
such funds will be
available at the close of business on the Transfer Date
preceding the following
Distribution Date. Unless the Servicer directs otherwise, funds
deposited in the
Principal Funding Account on a Transfer Date (which immediately
precedes a
Distribution Date) upon the maturity of any Eligible Investments
are not
required to be invested overnight. No such Eligible Investment
shall be disposed
of prior to its maturity; provided, however, that the Trustee
shall sell,
liquidate or dispose of any such Eligible Investment 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; provided
further, however, that the Servicer shall deliver prompt written
notice to the
Trustee of any such default; and provided further that, subject
to Section 11.01
of the Agreement, the Trustee will not in any way be held liable
by reason of
any insufficiency in such Principal Funding Account resulting
from any loss on
any Eligible Investment included therein except for losses
attributable to the
Trustee's failure to make payments on such Eligible Investments
issued by the
Trustee, in its commercial capacity, in accordance with their
terms.
(iii) On each Distribution Date with respect to the
Controlled
Accumulation Period, the Servicer shall direct the Trustee in
writing to
withdraw from the Principal Funding Account and deposit into the
Collection
Account all Principal Funding Account Investment Proceeds then
on deposit in the
Principal Funding Account and such Principal Funding Account
Investment Proceeds
shall be treated as a portion of Class A Available Funds and
Class B Available
Funds.
(iv) Reinvested interest and other investment income on funds
deposited
in the Principal Funding Account shall not be considered to be
principal amounts
on deposit therein for purposes of this Supplement.
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<PAGE>
(b) (i) The Trustee shall possess all right, title and interest
in all
funds and property from time to time deposited in or credited to
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
Series 2005-2 Certificateholders. If, at any time, the Principal
Funding Account
ceases to be an Eligible Deposit Account, 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 may consent)
establish a new
Principal Funding Account meeting the conditions specified in
paragraph (a)(i)
above as an Eligible Deposit Account and shall transfer any cash
or any
investments to such new Principal Funding Account.
(ii) Pursuant to the authority granted to the Servicer in
subsection
3.01(b) of the Agreement, the Servicer shall have the power 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
the Servicer's or
Trustee's duties hereunder. Pursuant to the authority granted to
the Paying
Agent in Section 5.01 of this Supplement and Section 6.07 of the
Agreement, the
Paying Agent shall have the power to withdraw funds from the
Principal Funding
Account for the purpose of making distributions to the Series
2005-2
Certificateholders.
(c) The Controlled Accumulation Period is scheduled to commence
at the
close of business on the last day of the February 2009 Monthly
Period; provided,
however, that if the Controlled Accumulation Period Length
(which shall be
determined as described below) is less than 12 months, the date
on which the
Controlled Accumulation Period actually commences will be
delayed to the close
of business on the last day of the month preceding the month
that is the number
of months prior to the Expected Final Payment Date at least
equal to the
Controlled Accumulation Period Length and, as a result, the
number of Monthly
Periods in the Controlled Accumulation Period will at least
equal the Controlled
Accumulation Period Length. On the Determination Date
immediately preceding the
February 2009 Distribution Date, and on each Determination Date
thereafter that
occurs prior to the Determination Date occurring in the Monthly
Period in which
the Controlled Accumulation Period commences, the Servicer will
determine the
"Controlled Accumulation Period Length" which will equal the
number of months
such that the sum of the Controlled Accumulation Period Factors
for each month
during such period will be equal to or greater than the Required
Accumulation
Factor Number; provided, however, that the Controlled
Accumulation Period Length
shall not be less than one month. Notwithstanding the foregoing,
if the
Controlled Accumulation Period Length shall have been determined
to be less than
12 months and, after the date on which such determination is
made, a Pay-Out
Event or Reinvestment Event (as those terms are defined in the
Supplement for
such Series) shall occur with respect to any outstanding
Principal Sharing
Series other than Series 2005-2, the Controlled Accumulation
Period will
commence on the earlier of (i) the first day of the Monthly
Period immediately
succeeding the date that such Pay-Out Event or Reinvestment
Event shall have
occurred with respect to such Series and (ii) the date on which
the Controlled
Accumulation Period is then scheduled to commence.
Section 4.04. Required Amount.
(a) With respect to each Distribution Date, on the related
Determination
Date, the Servicer shall determine the amount (the "Class A
Required Amount"),
if any, by which (x) the sum of (i) Class A Monthly Interest for
such
Distribution Date, (ii) any Class A Monthly Interest previously
due but not paid
to the Class A Certificateholders on a prior Distribution Date,
(iii) any Class
A Additional Interest for such Distribution Date and (iv) any
Class A Additional
Interest previously due but not paid to the Class A
Certificateholders on a
prior Distribution Date, (v) if TRS or an Affiliate of TRS is no
longer the
Servicer, the Class A Servicing Fee for such Distribution Date,
(vi) if TRS or
an Affiliate of TRS is no longer the Servicer, any Class A
Servicing Fee
previously due but not paid to the Servicer, and (vii) the Class
A Investor
Default Amount, if any, for such Distribution Date exceeds (y)
the Class A
Available Funds. In the event that the difference between (x)
the Class A
Required Amount for such Distribution Date and (y) the amount of
Excess Spread
and Excess Finance Charge Collections applied with respect
thereto pursuant to
subsection 4.07(a) on such Distribution Date is greater than
zero, the Servicer
shall give written notice to the Transferors and the Trustee of
such excess
Class A Required Amount on the date of computation.
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<PAGE>
(b) With respect to each Distribution Date, on the related
Determination
Date, the Servicer shall determine the amount (the "Class B
Required Amount"),
if any, equal to the sum of (x) the amount, if any, by which (A)
the sum of (i)
Class B Monthly Interest for such Distribution Date, (ii) any
Class B Monthly
Interest previously due but not paid to the Class B
Certificateholders, (iii)
Class B Additional Interest, if any, for such Distribution Date,
(iv) any Class
B Additional Interest previously due but not paid to the Class
B
Certificateholders on a prior Distribution Date, (v) if TRS or
an Affiliate of
TRS is no longer the Servicer, the Class B Servicing Fee for
such Distribution
Date and (vi) if TRS or an Affiliate of TRS is no longer the
Servicer, any Class
B Servicing Fee previously due but not paid to the Servicer
exceeds (B) the
Class B Available Funds and (y) the Class B Investor Default
Amount for such
Distribution Date. In the event that the difference between (x)
the Class B
Required Amount for such Distribution Date and (y) the amount of
Excess Spread
and Excess Finance Charge Collections applied with respect
thereto pursuant to
subsection 4.07(d) on such Distribution Date is greater than
zero, the Servicer
shall give written notice to the Transferors and the Trustee of
such excess
Class B Required Amount on the date of computation.
Section 4.05. Application of Class A Available Funds, Class B
Available
Funds, Collateral Available Funds and Available Principal
Collections. The
Servicer shall apply, or shall cause the Trustee to apply by
written instruction
to the Trustee, on each Distribution Date, Class A Available
Funds, Class B
Available Funds, Collateral Available Funds and Available
Principal Collections
on deposit in the Collection Account with respect to such
Distribution Date to
make the following distributions:
(a) On each Distribution Date, an amount equal to the Class A
Available
Funds with respect to such Distribution Date will be distributed
or deposited in
the following priority:
(i) an amount equal to Class A Monthly Interest for such
Distribution Date, plus the amount of any Class A Monthly
Interest
previously due but not distributed to Class A Certificateholders
on a
prior Distribution Date, plus the amount of any Class A
Additional
Interest for such Distribution Date and any Class A Additional
Interest
previously due but not distributed to Class A Certificateholders
on a
prior Distribution Date, shall be distributed to the Paying
Agent for
payment to the Class A Certificateholders;
(ii) if TRS or an Affiliate of TRS is no longer the Servicer,
an
amount equal to the Class A Servicing Fee for such Distribution
Date, plus
the amount of any Class A Servicing Fee previously due but not
distributed
to the Servicer on a prior Distribution Date, shall be
distributed to the
Servicer;
(iii) an amount equal to the Class A Investor Default Amount
for
such Distribution Date shall be treated as a portion of
Available
Principal Collections for such Distribution Date; and
(iv) the balance, if any, shall constitute Excess Spread and
shall
be allocated and distributed or deposited as set forth in
Section 4.07.
(b) On each Distribution Date, an amount equal to the Class B
Available
Funds with respect to such Distribution Date will be distributed
or deposited in
the following priority:
(i) an amount equal to Class B Monthly Interest for such
Distribution Date, plus the amount of any Class B Monthly
Interest
previously due but not distributed to Class B Certificateholders
on a
prior Distribution Date, plus the amount of any Class B
Additional
Interest for such Distribution Date and any Class B Additional
Interest
previously due but not distributed to Class B Certificateholders
on a
prior Distribution Date, shall be distributed to the Paying
Agent for
payment to the Class B Certificateholders;
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<PAGE>
(ii) if TRS or an Affiliate of TRS is no longer the Servicer,
an
amount equal to the Class B Servicing Fee for such Distribution
Date, plus
the amount of any Class B Servicing Fee previously due but not
distributed
to the Servicer on a prior Distribution Date, shall be
distributed to the
Servicer; and
(iii) the balance, if any, shall constitute Excess Spread and
shall
be allocated and distributed or deposited as set forth in
Section 4.07.
(c) On each Distribution Date, an amount equal to the Collateral
Available
Funds with respect to such Distribution Date will be distributed
or deposited in
the following priority:
(i) if TRS or an Affiliate of TRS is no longer the Servicer,
an
amount equal to the Collateral Servicing Fee for such
Distribution Date,
plus the amount of any Collateral Servicing Fee previously due
but not
distributed to the Servicer on a prior Distribution Date, shall
be
distributed to the Servicer; and
(ii) the balance, if any, shall constitute Excess Spread and
shall
be allocated and distributed or deposited as set forth in
Section 4.07.
(d) On each Distribution Date with respect to the Revolving
Period, an
amount equal to the Available Principal Collections deposited in
the Collection
Account for the related Monthly Period shall be treated as
Shared Principal
Collections and applied in accordance with Section 4.04 of the
Agreement.
(e) On each Distribution Date with respect to the Controlled
Accumulation
Period, an amount equal to the Available Principal Collections
deposited in the
Collection Account for the related Monthly Period shall be
distributed in the
following order of priority:
(i) an amount equal to the lesser of (x) the Controlled
Deposit
Amount and (y) the sum of the Class A Adjusted Invested Amount
and the
Class B Adjusted Invested Amount shall be deposited in the
Principal
Funding Account;
(ii) for each Distribution Date beginning on the Distribution
Date
on which the Class B Invested Amount shall have been paid in
full, an
amount up to the Collateral Invested Amount shall be distributed
to the
Collateral Interest Holder; and
(iii) the balance of such Available Principal Collections shall
be
treated as Shared Principal Collections and applied in
accordance with
Section 4.04 of the Agreement.
(f) On each Distribution Date with respect to the Early
Amortization
Period, an amount equal to Available Principal Collections
deposited in the
Collection Account for the related Monthly Period shall be
distributed or
deposited in the following order of priority:
(i) an amount up to the Class A Adjusted Invested Amount on
such
Distribution Date shall be deposited in the Principal Funding
Account for
distribution to the Class A Certificateholders;
(ii) for each Distribution Date beginning on the Distribution
Date
on which the Class A Invested Amount is paid in full, an amount
up to the
Class B Adjusted Invested Amount on such Distribution Date shall
be
deposited in the Principal Funding Account for distribution to
the Class B
Certificateholders;
21
<PAGE>
(iii) for each Distribution Date beginning on the Distribution
Date
on which the Class B Invested Amount is paid in full, an amount
up to the
Collateral Invested Amount on such Distribution Date shall be
distributed
to the Collateral Interest Holder; and
(iv) for each Distribution Date, after giving effect to
paragraphs
(i), (ii) and (iii) above, an
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