<PAGE>
EXHIBIT 4.1
================================================================================
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.
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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
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"Class B Investor Charge-Offs" shall have the meaning specified
in
subsection 4.06(b).
"Class B Investor Default Amount" shall mean, with respect to
each
Distribution Date, an amount equal to the
product of (i) the Investor Default
Amount for such Distribution Date and (ii)
the Class B Floating Percentage for
such Monthly Period.
"Class B Monthly Interest" shall have the meaning specified in
subsection 4.02(b).
"Class B Principal Percentage" shall mean, with respect to any
Monthly
Period, (i) during the Revolving Period,
the percentage equivalent (which
percentage shall never exceed 100%) of a
fraction, the numerator of which is the
Class B Invested Amount as of the last day
of the immediately preceding Monthly
Period and the denominator of which is the
Invested Amount as of such day and
(ii) during the Controlled Accumulation
Period, the Early Amortization Period or
any Partial Amortization Period, the
percentage equivalent (which percentage
shall never exceed 100%) of a fraction, the
numerator of which is the Class B
Invested Amount as of the close of business
on the date on which the Revolving
Period shall have terminated and the
denominator of which is the Invested Amount
as of the close of business on the date on
which the Revolving Period shall have
terminated; provided, however, that with
respect to the first Monthly Period,
the Class B Principal Percentage shall mean
the percentage equivalent of a
fraction, the numerator of which is the
Class B Initial Invested Amount and the
denominator of which is the Initial
Invested Amount.
"Class B Required Amount" shall have the meaning set forth in
subsection 4.04(b).
"Class B Servicing Fee" shall have the meaning specified in
Section
3.01.
"Closing Date" shall mean March 24, 2005; provided that, for
purposes
of determining the date on which the first
Monthly Period begins, the Closing
Date shall be deemed to be the close of
business on the last day of the seventh
billing cycle applicable to the Accounts
ending in February 2005.
"Collateral Additional Interest" shall have the meaning specified
in
subsection 4.02(c).
"Collateral Available Funds" shall mean with respect to any
Distribution Date, the Collateral Floating
Percentage of Reallocated Investor
Finance Charge Collections with respect to
the preceding Monthly Period.
"Collateral Charge-Offs" shall have the meaning specified in
subsection
4.06(c).
"Collateral Default Amount" shall mean, with respect to any
Distribution Date, the product of the
Investor Default Amount for such
Distribution Date and the Collateral
Floating Percentage.
"Collateral Floating Percentage" shall mean, with respect to
any
Distribution Date, the percentage
equivalent (which percentage shall never
exceed 100%) of a fraction, the numerator
of which is equal to the Collateral
Invested Amount as of the close of business
on the last day of the preceding
Monthly Period and the denominator of which
is the Adjusted Invested Amount as
of the close of business on such last day;
provided, however, that with respect
to the first Monthly Period, the Collateral
Floating Percentage shall mean the
percentage equivalent of a fraction, the
numerator of which is the Collateral
Initial Invested Amount and the denominator
of which is the Initial Invested
Amount.
"Collateral Initial Invested Amount" shall mean $54,000,000.
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.
6
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"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.
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<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).
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<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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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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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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(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;
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(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;
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<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.
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(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
