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