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<PAGE>
EXHIBIT 4.1
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SERIES 2005-1 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 2005-1
----------
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 2005-1 Certificateholders
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TABLE OF CONTENTS
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ARTICLE I Creation of the Series 2005-1
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 2005-1 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..................................25
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...........................................................28
ARTICLE V Distributions and Reports to Series 2005-1
Certificateholders....................29
Section 5.01.
Distributions....................................................................29
Section 5.02. Reports and Statements to Series 2005-1
Certificateholders.......................30
ARTICLE VI Pay-Out
Events...................................................................31
Section 6.01. Pay-Out
Events...................................................................31
ARTICLE VII Optional Repurchase; Series
Termination..........................................32
Section 7.01. Optional
Repurchase..............................................................32
Section 7.02. Series
Termination...............................................................32
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TABLE OF CONTENTS
(CONTINUED)
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ARTICLE VIII Final
Distributions..............................................................33
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............................33
Section 8.02. Distribution of Proceeds of Sale, Disposition or
Liquidation of the
Receivables pursuant to Section 9.01 of the
Agreement............................34
ARTICLE IX Miscellaneous
Provisions.........................................................35
Section 9.01. Ratification of
Agreement........................................................35
Section 9.02.
Counterparts.....................................................................35
Section 9.03. Governing
Law....................................................................35
Section 9.04.
[Reserved].......................................................................35
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 2005-1 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 2005-1 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 2005-1." The Series
2005-1
Certificates shall be issued in two Classes, the first of which
shall be known
as the "Class A Series 2005-1 Floating Rate Asset Backed
Certificates" and the
second of which shall be known as the "Class B Series 2005-1
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 2005-1" 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
2005-1 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 2005-1 shall be included in Group II and shall be
a
Principal Sharing Series. Series 2005-1 shall be an Excess
Allocation Series.
Series 2005-1 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 2005-1 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.
1
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(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.
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 2005-1 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 2005-1 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
0.03%.
"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
0.12%.
"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
<PAGE>
"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.
5
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"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.
"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 0.33% 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.
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<PAGE>
"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 2009 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.
"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
2005-1) 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 2005-1 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 2005-1 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 2010
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 2005-1 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 2005-1 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 2005-1 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 2005-1 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 2005-1 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 2005-1
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 2005-1
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 2005-1 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 2005-1 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 2005-1 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 2005-1, 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 2005-1.
"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
2005-1 pursuant to Section 4.10.
"Reallocated Principal Collections" shall mean, with respect to
any
Monthly Period, the product of (a) the Series 2005-1 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 2005-1
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
2005-1
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.
11
<PAGE>
"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
2008 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 2008 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.
"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 2005-1
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 2005-1" shall mean the Series of Certificates the terms
of
which are specified in this Supplement.
"Series 2005-1 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 2005-1 Allocable Defaulted Amount" shall mean the
Series
Allocable Defaulted Amount with respect to Series 2005-1.
"Series 2005-1 Allocable Finance Charge Collections" shall mean
the
Series Allocable Finance Charge Collections with respect to
Series 2005-1.
"Series 2005-1 Allocable Principal Collections" shall mean the
Series
Allocable Principal Collections with respect to Series
2005-1.
"Series 2005-1 Allocation Percentage" shall mean the Series
Allocation
Percentage with respect to Series 2005-1.
"Series 2005-1 Certificate" shall mean a Class A Certificate or
a Class
B Certificate or the Collateral Interest.
"Series 2005-1 Certificateholder" shall mean a Class A
Certificateholder or a Class B Certificateholder or the
Collateral Interest
Holder.
"Series 2005-1 Certificateholders' Interest" shall mean the
Certificateholders' Interest for Series 2005-1, including the
Collateral
Interest.
12
<PAGE>
"Series 2005-1 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 2005-1 Monthly Interest" shall mean the amounts
determined
pursuant to subsections 4.02(a), (b) and (c).
"Series 2005-1 Principal Shortfall" shall have the meaning
specified in
Section 4.11.
"Series 2005-1 Termination Date" shall mean the October 2012
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 2005-1, 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 2005-1,
Moody's and Standard
& Poor's. As used in this Supplement and in the Agreement
with respect to Series
2005-1, "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 2005-1 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 2005-1 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 2005-1 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 2005-1
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 2005-1 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 2005-1
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 2005-1 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 2005-1 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 2005-1
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 2005-1 Certificateholders. The
Servicer shall, prior to the close of business on each Deposit
Date, allocate to
the Series 2005-1 Certificateholders the following amounts as
set forth below:
(i) Allocations of Finance Charge Collections. The
Servicer shall allocate to the Series 2005-1 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 2005-1 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 2005-1 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 2005-1 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 2005-1
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
2005-1 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 2005-1 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 2005-1 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 2005-1 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 2005-1 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 2005-1
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 2005-1 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 2005-1 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 2005-1 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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<PAGE>
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.
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.
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<PAGE>
Section 4.03. Principal Funding Account; Controlled
Accumulation
Period.
(a) (i) The Servicer, for the benefit of the Series 2005-1
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
2005-1 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 2005-1 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.
(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 2005-1 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.
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<PAGE>
(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
2005-1
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 2005-1, 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;
20
<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 amount equal to the
balance,
if any, of such Available Principal Collections will be treated
as
Shared Principal Collections and applied in accordance with
Section
4.04 of the Agreement.
Section 4.06. Defaulted Amounts; Investor Charge-Offs.
(a) On each Determination Date, the Servicer shall calculate
the
Class A Investor Default Amount, if any, for the related
Distribution Date. If,
on any Distribution Date, the Class A Required Amount for the
related Monthly
Period exceeds the sum of (x) the amount of Reallocated
Principal Collections
allocated to Series 2005-1 with respect to such Monthly Period
and (y) the
amount of Excess Spread and the Excess Finance Charge
Collections allocable to
Series 2005-1 with respect to such Monthly Period, the
Collateral Invested
Amount, if any, will be reduced by the amount of such excess,
but not by more
than the Class A Investor Default Amount for such Distribution
Date. In the
event that such reduction would cause the Collateral Invested
Amount to be a
negative number, the Collateral Invested Amount will be reduced
to zero and the
Class B Invested Amount shall be reduced by the amount by which
the Collateral
Invested Amount would have been reduced below zero, but not by
more than the
excess, if any, of the Class A Investor Default Amount for such
Distribution
Date over the amount of such reduction, if any, of the
Collateral Invested
Amount with respect to such Distribution Date. In the event that
such reduction
would cause the Class B Invested Amount to be a negative number,
the Class B
Invested Amount shall be reduced to zero, and the Class A
Invested Amount shall
be reduced by the amount by which the Class B Invested Amount
would have been
reduced below zero, but not by more than the excess, if any, of
the Class A
Investor Default Amount for such Distribution Date over the
aggregate amount of
the reductions, if any, of the Collateral Invested Amount and
the Class B
Invested Amount for such Distribution Date (a "Class A Investor
Charge-Off").
Class A Investor Charge-Offs shall thereafter be reimbursed and
the Class A
Invested Amount increased (but not by an amount in excess of the
aggregate
unreimbursed Class A Investor Charge-Offs) on any Distribution
Date by the
amount of Excess Spread and Excess Finance Charge Collections
allocated and
available for that purpose pursuant to subsection 4.07(b).
References to
"negative numbers" above shall be determined without regard to
the requirement
that the Invested Amount of a Class not be reduced below
zero.
(b) On each Determination Date, the Servicer shall calculate
the
Class B Investor Default Amount, if any, for the related
Distribution Date. If,
on any Distribution Date, the Class B Required Amount for such
Distribution Date
exceeds the sum of (x) the amount of Excess Spread and Excess
Finance Charge
Collections allocated to Series 2005-1 with respect to the
related Monthly
Period which are allocated and available to pay such amount
pursuant to
subsection 4.07(d) and (y) the Reallocated Principal Collections
allocable to
the Collateral Interest and not required to pay the Class A
Required Amount with
respect to such Distribution Date, then the Collateral Invested
Amount shall be
reduced by the amount of such excess. In the event that such
reduction would
cause the Collateral Invested Amount to be a negative number,
the Collateral
Invested Amount shall be reduced to zero, and the Class B
Invested Amount shall
be reduced by the amount by which the Collateral Invested Amount
would have been
reduced below zero, but not by more than the excess, if any, of
the Class B
Investor Default Amount for such Distribution Date over the
amount of such
reduction, if any, of the Collateral Invested Amount with
respect to such
Distribution Date (a "Class B Investor Charge-Off"). Class B
Investor
Charge-Offs shall thereafter be reimbursed and the Class B
Invested Amount
increased (but not by an amount in excess of the aggregate
unreimbursed Class B
Investor Charge-Offs) on any Distribution Date by the amount of
Excess Spread
and Excess Finance Charge Collections allocated and available
for that purpose
pursuant to subsection 4.07(e). References to "negative numbers"
above shall be
determined without regard to the requirement that the Invested
Amount of a Class
not be reduced below zero.
22
<PAGE>
(c) On each Determination Date, the Servicer shall calculate
the
Collateral Default Amount. If on any Distribution Date the
Collateral Default
Amount for the previous Monthly Period exceeds the amount of
Excess Spread and
Excess Finance Charge Collections allocated to Series 2005-1
with respect to the
related Monthly Period which are allocated and available to pay
such amount
pursuant to subsection 4.07(h), the Collateral Invested Amount
will be reduced
by the amount of such excess but not by more than the lesser of
the Collateral
Default Amount and the Collateral Invested Amount for such
Distribution Date (a
"Collateral Charge-Off"). The Collateral Invested Amount will be
reimbursed
after any reduction pursuant to this Section 4.06 on any
Distribution Date by
the amount of Excess Spread and Excess Finance Charge
Collections allocated and
available on such Distribution date for that purpose as
described under
subsection 4.07(i).
Section 4.07. Excess Spread; Excess Finance Charge Collections.
The
Servicer shall apply, or shall cause the Trustee to apply by
written instruction
to the Trustee, on each Distribution Date, Excess Spread and
Excess Finance
Charge Collections allocated to Series 2005-1 with respect to
the related
Monthly Period, to make the following distributions or deposits
in the following
order of priority:
(a) an amount equal to the Class A Required Amount, if any,
with
respect to such Distribution Date shall be distributed by the
Trustee to fund
the Class A Required Amount in accordance with, and in the
priority set forth
in, subsections 4.05(a)(i), (ii) and (iii);
(b) an amount equal to the aggregate amount of Class A
Investor
Charge-Offs which have not been previously reimbursed shall be
treated as a
portion of Available Principal Collections for such Distribution
Date;
(c) an amount equal to interest on the aggregate outstanding
principal balance of the Class B Certificates not otherwise
distributed to the
Class B Certificateholders pursuant to Section 4.05(b)(i), at a
rate per annum
equal to the Class B Certificate Rate, shall be distributed to
the Class B
Certificateholders, except that interest previously due but not
paid will accrue
interest at a rate per annum equal to the Class B Certificate
Rate plus 2% per
annum;
(d) an amount equal to the Class B Required Amount, if any,
with
respect to such Distribution Date will be (i) used to fund the
Class B Required
Amount and be applied in accordance with subsections 4.05(b)(i)
and 4.05(b)(ii),
and then (ii) an amount up to the Class B Investor Default
Amount will be
treated and applied as Available Principal Collections for such
Distribution
Date;
(e) an amount equal to the aggregate amount by which the Class
B
Invested Amount has been reduced pursuant to clauses (c), (d)
and (e) of the
definition of "Class B Invested Amount" in Section 2.01 of this
Supplement (but
not in excess of the aggregate amount of such reductions which
have not been
previously reimbursed) shall be treated as a portion of
Available Principal
Collections for such Distribution Date;
(f) an amount equal to Collateral Minimum Monthly Interest
for
such Distribution Date, plus the amount of any Collateral
Minimum Monthly
Interest previously due but not distributed to the Collateral
Interest Holder on
a prior Distribution Date, plus the amount of any Collateral
Additional Interest
for such Distribution D
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