-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, EpqkPB9tlWHkEtqxmMRFXclvTT6N2MVIsMlq53PfDkavqvC4iPuCbJK5hON5GGYA 2hrbBhdXFUez4yZsDqh3Yw== 0000893220-00-000107.txt : 20000207 0000893220-00-000107.hdr.sgml : 20000207 ACCESSION NUMBER: 0000893220-00-000107 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 6 REFERENCES 429: 333-52583 REFERENCES 429: 333-52583-01 FILED AS OF DATE: 20000204 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FLEET BANK NATIONAL ASSOCIATION /RI/ CENTRAL INDEX KEY: 0001056909 STANDARD INDUSTRIAL CLASSIFICATION: ASSET-BACKED SECURITIES [6189] IRS NUMBER: 050495490 STATE OF INCORPORATION: RI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: SEC FILE NUMBER: 333-96199 FILM NUMBER: 524370 BUSINESS ADDRESS: STREET 1: 111 WESTMINSTER STREET CITY: PROVIDENCE STATE: RI ZIP: 02903 BUSINESS PHONE: 4012785451 MAIL ADDRESS: STREET 1: 101 GIBRALTAR ROAD CITY: HORSHAM STATE: PA ZIP: 19044-2303 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FLEET CREDIT CARD MASTER TRUST II CENTRAL INDEX KEY: 0000924992 STANDARD INDUSTRIAL CLASSIFICATION: ASSET-BACKED SECURITIES [6189] STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: SEC FILE NUMBER: 333-96199-01 FILM NUMBER: 524371 BUSINESS ADDRESS: STREET 1: 111 WESTMINSTER STREET STREET 2: 1 RIGHTER PARKWAY CITY: PROVIDENCE STATE: RI ZIP: 02903 BUSINESS PHONE: 2154446800 MAIL ADDRESS: STREET 1: 101 GIBRALTER RD STREET 2: 1 RIGHTER PARKWAY CITY: HORSHAM STATE: PA ZIP: 19044 FORMER COMPANY: FORMER CONFORMED NAME: ADVANTA CREDIT CARD MASTER TRUST II DATE OF NAME CHANGE: 19940609 S-3 1 FORM S-3 FOR FLEET BANK 1 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 4, 2000 REGISTRATION NOS. 333- AND 333- -01 AND POST EFFECTIVE AMENDMENT NO. 1 TO REGISTRATION STATEMENT NOS. 333-52583 AND 333-52583-01 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ------------------------ FLEET CREDIT CARD MASTER TRUST II (ISSUER OF SECURITIES) FLEET BANK (RI), NATIONAL ASSOCIATION (DEPOSITOR TO THE TRUST DESCRIBED HEREIN) (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) UNITED STATES 050495490 (STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER OF ORGANIZATION) IDENTIFICATION NUMBER) 111 WESTMINSTER STREET PROVIDENCE, RHODE ISLAND 02903 (401) 278-5451 (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES) ------------------------ LINDA MORRIS, ESQ. VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL FLEET BANK (RI), NATIONAL ASSOCIATION PA HR GO1F 101 GIBRALTAR ROAD HORSHAM, PENNSYLVANIA 19044 (215) 444-2339 (NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE) ------------------------ COPIES TO: CAMERON L. COWAN, ESQ. ORRICK, HERRINGTON & SUTCLIFFE LLP WASHINGTON HARBOUR 3050 K STREET, N.W. WASHINGTON, D.C. 20007 (202) 339-8400 ------------------------ Approximate date of commencement of proposed sale to the public: From time to time after this Registration Statement becomes effective as determined by market conditions. If any of the securities being registered on this Form are to be offered pursuant to dividend or interest reinvestment plans, please check the following box. [ ] If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. [X] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act Registration Statement number of the earlier effective Registration Statement for the same offering. [ ] - --------------- If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act Registration Statement number of the earlier effective Registration Statement for the same offering. [ ] - --------------- If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [ ] ------------------------ CALCULATION OF REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ PROPOSED PROPOSED AMOUNT TO BE MAXIMUM AGGREGATE MAXIMUM AGGREGATE AMOUNT OF TITLE OF SECURITIES TO BE REGISTERED REGISTERED(2) PRICE PER UNIT(1) OFFERING PRICE(1) REGISTRATION FEE(2) - ------------------------------------------------------------------------------------------------------------------------------------ Asset-Backed Certificates.... $4,800,000,000 100% $4,800,000,000 $1,267,200 - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------
(1) Estimated solely for the purpose of calculating the registration fee. (2) In addition, $530,000,000 of unissued Asset-Backed Certificates previously registered under Registration Statement Nos. 333-52583 and 333-52583-01 are being carried forward. A registration fee of $156,350 was previously paid with respect to this amount. ---------------------------- The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall subsequently become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. IN ACCORDANCE WITH RULE 429 of the General Rules and Regulations under the Securities Act of 1933, as amended, the Prospectus included herein is a combined prospectus which also relates to $530,000,000 of unissued Asset-Backed Certificates registered under Registration Statement Nos. 333-52583 and 333-52583-01. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 2 THE INFORMATION IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY NOT SELL THESE CERTIFICATES UNTIL WE DELIVER A FINAL PROSPECTUS SUPPLEMENT AND AN ACCOMPANYING PROSPECTUS. THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS ARE NOT AN OFFER TO SELL NOR ARE THEY SEEKING AN OFFER TO BUY THESE CERTIFICATES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED. [REPRESENTATIVE FORM OF PROSPECTUS SUPPLEMENT] SUBJECT TO COMPLETION DATED , 2000 PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED , 2000 [FLEET LOGO] FLEET CREDIT CARD MASTER TRUST II ISSUER FLEET BANK (RI), NATIONAL ASSOCIATION SELLER AND SERVICER $ CLASS A ASSET-BACKED CERTIFICATES, SERIES 2000- $ CLASS B ASSET-BACKED CERTIFICATES, SERIES 2000-
CLASS A CERTIFICATES CLASS B CERTIFICATES -------------------- -------------------- Certificate rate One-Month LIBOR One-Month LIBOR plus % annually plus % annually Interest paid Monthly, beginning Monthly, beginning , 2000 , 2000 Expected final distribution date , 2000 , 2000 Legal final maturity , 2000 , 2000 Price to public per certificate % % Underwriting discount per % % certificate Proceeds to seller per certificate % %
The total price to public is $ . The total amount of the underwriting discount is $ . The total amount of proceed plus accrued interest and before deduction of expenses is $ . CONSIDER CAREFULLY THE RISK FACTORS BEGINNING ON PAGE S-9 IN THIS PROSPECTUS SUPPLEMENT AND PAGE 8 IN THE PROSPECTUS. The certificates are not deposits and neither the certificates nor the underlying accounts or receivables are insured or guaranteed by the Federal Deposit Insurance Corporation or any other governmental agency. The certificates will represent interests in the trust only and will not represent interests in or obligations of Fleet Bank (RI), National Association or any of its affiliates. CREDIT ENHANCEMENT: - - The Class B certificates will be subordinated to the Class A certificates. - - The trust is also issuing a collateral interest in the amount of $ . The collateral interest will be subordinated to both the Class A certificates and the Class B certificates. NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED THESE CERTIFICATES OR DETERMINED THAT THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. Underwriters of the Class A Certificates A CO. B CO. C CO. Underwriters of the Class B Certificates A CO. B CO. , 2000 3 IMPORTANT NOTICE ABOUT INFORMATION PRESENTED IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS We provide information to you about the certificates in two separate documents that progressively provide more detail: (a) the accompanying prospectus, which provides general information, some of which may not apply to your series and (b) this prospectus supplement, which describes the specific terms of your series. This prospectus supplement may be used to sell the Class A certificates and the Class B certificates only if accompanied by the prospectus. This prospectus supplement and the prospectus relate to the offering of Class A certificates and Class B certificates only. The collateral interest is not offered by this prospectus supplement and prospectus. IF THE TERMS OF YOUR CERTIFICATES DESCRIBED IN THIS PROSPECTUS SUPPLEMENT VARY FROM THE TERMS DESCRIBED IN THE ACCOMPANYING PROSPECTUS, YOU SHOULD RELY ON THE INFORMATION IN THIS PROSPECTUS SUPPLEMENT. We include cross references in this prospectus supplement and the accompanying prospectus to captions in these materials where you can find further related discussions. The following table of contents and the table of contents in the accompanying prospectus provide the pages on which these captions are located. You can find a listing of the pages where terms used in this prospectus supplement and the accompanying prospectus are defined under the caption "Index of Principal Terms" beginning on page S- in this document and under the caption "Index of Principal Terms" on page in the accompanying prospectus. ---------------------- S-2 4 TABLE OF CONTENTS
PAGE ---- Summary of Terms...................... S-4 The Trust........................... S-4 The Trustee......................... S-4 Seller And Servicer................. S-4 Seller........................... S-4 Servicer......................... S-4 The Bank......................... S-4 The Receivables..................... S-4 Offered Securities.................. S-4 Certificates..................... S-4 Distribution Dates............... S-4 Interest......................... S-4 Principal........................ S-5 The Collateral Interest............. S-5 Credit Enhancement.................. S-5 Subordination of Classes......... S-5 The Sellers' Interest............... S-5 Allocations......................... S-6 Among Series..................... S-6 Among Classes.................... S-6 Application Of Collections.......... S-6 Finance Charge Collections....... S-6 Excess Spread and Excess Finance Charges........................ S-6 Principal Collections............ S-7 Pay Out Events...................... S-7 Optional Repurchase................. S-8 Registration........................ S-8 Tax Status.......................... S-8 ERISA Considerations................ S-8 Certificate Ratings................. S-8 Exchange Listing.................... S-8 Additional Information.............. S-8 Risk Factors.......................... S-9 Ability To Resell Series 2000- Certificates Not Assured......... S-9 Credit Enhancement May Not Be Sufficient To Prevent Loss....... S-9 Class B Certificates Are Subordinated To The Class A Certificates; Trust Assets May Be Diverted From Class B To Pay Class A.......................... S-9 Ratings Can Be Lowered Or Withdrawn After You Purchase Your Certificates And The Market Value Of Your Certificates May Be Reduced.......................... S-10 Introduction.......................... S-11
PAGE ---- The Bank's Credit Card Activities..... S-12 General............................. S-12 Finance Charges..................... S-12 Delinquency and Loss Experience..... S-12 Interchange......................... S-14 Litigation.......................... S-14 The Receivables....................... S-14 Maturity Assumptions.................. S-17 Receivable Yield Considerations....... S-19 Description of the Certificates....... S-21 General............................. S-21 Registration of Certificates........ S-22 Interest Payments................... S-22 Principal Payments.................. S-25 Postponement of Accumulation Period........................... S-27 Subordination....................... S-28 Allocation Percentages.............. S-28 Reallocation of Cash Flows.......... S-32 Application of Collections.......... S-33 Principal Funding Account........... S-39 Reserve Account..................... S-39 Paired Series....................... S-40 Shared Collections of Principal Receivables...................... S-41 Allocation of Investor Default Amount........................... S-41 Optional Repurchase................. S-43 Pay Out Events...................... S-43 Servicing Compensation and Payment of Expenses...................... S-45 Federal Income Tax Consequences....... S-46 ERISA Considerations.................. S-46 General............................. S-46 Class A Certificates................ S-46 Class B Certificates................ S-49 Consultation with Counsel........... S-49 Underwriting.......................... S-50 Legal Matters......................... S-51 Index of Principal Terms.............. S-52 ANNEX I: OTHER SERIES ISSUED.......... I-1 ANNEX II: RECEIVABLES IN ADDITIONAL ACCOUNTS CONVEYED TO THE TRUST...... II-1
S-3 5 SUMMARY OF TERMS This summary highlights selected information from this document and does not contain all of the information that you need to consider in making your investment decision. This summary provides general, simplified descriptions of matters which, in some cases, are highly technical and complex. More detail is provided in other sections of this document and in the prospectus. Do not rely upon this summary for a full understanding of the matters you need to consider in connection with any potential investment in the certificates. To understand all of the terms of the offering of the Series 2000- certificates, read carefully this entire document and the accompanying prospectus. THE TRUST Fleet Credit Card Master Trust II will issue the certificates. The trust has issued numerous series of certificates, will issue the Series 2000- certificates and expects to issue additional series. The certificates of each series will represent an ownership interest in the assets of the trust. THE TRUSTEE The trustee is Bankers Trust Company. SELLER AND SERVICER SELLER Fleet Bank (RI), National Association originates and acquires credit card accounts. As seller, the bank sells the receivables to the trust. SERVICER The bank also is the servicer. As the servicer, the bank collects payments on the receivables and allocates the collections among the interests in the trust. THE BANK The bank is a special purpose credit card bank. Its principal offices are located at 111 Westminster Street, Providence, Rhode Island 02903. The telephone number is (401) 278-5451. THE RECEIVABLES The primary assets of the trust are receivables in MasterCard(R) and VISA(R)(1) revolving credit card accounts. The receivables consist of principal receivables and finance charge receivables. - --------------- (1) MasterCard(R) and VISA(R) are federally registered servicemarks of MasterCard International Inc. and VISA U.S.A., Inc. respectively. The following information is as of , 2000: - - Principal receivables in the trust: $ . - - Finance charge receivables in the trust: $ . - - Accounts designated to the trust: . See "The Receivables" in this prospectus supplement. OFFERED SECURITIES CERTIFICATES Fleet Credit Card Master Trust II is offering: - - $ of Class A certificates; and - - $ of Class B certificates. The Series 2000- certificates include both Class A and Class B. Beneficial interests in these certificates may be purchased in minimum denominations of $1,000 and integral multiples of $1,000. The seller expects that the trust will issue the Series 2000- certificates on , 2000. DISTRIBUTION DATES The first distribution date will be , 2000. Distribution dates for the Series 2000- certificates will be the 15th day of each month if the 15th day is a business day. If the 15th is not a business day, the distribution date will be the following business day. INTEREST Interest on the Series 2000- certificates will be paid on each distribution date. You may obtain the interest rates for the current interest period and the immediately preceding interest period by telephoning the trustee at (800) 735-7777. S-4 6 Class A The Class A certificates will bear interest at LIBOR as determined each month plus % per annum. Class B The Class B certificates will bear interest at LIBOR as determined each month plus % per annum. See "Description of the Certificates--Interest Payments" in this prospectus supplement for a description of how and when LIBOR will be determined. PRINCIPAL The seller expects that principal on the Series 2000- certificates will be distributed on the date noted below; however, principal may, in fact, be distributed earlier or later. You will not be entitled to any premium for early or late payment of principal. If certain adverse events known as pay out events occur, principal may be distributed earlier than expected. If collections of the credit card receivables are less than expected or are collected more slowly than expected, then principal repayment may be delayed. Class A The seller expects that principal of the Class A certificates will be distributed on the 200 distribution date. Class B The seller expects that principal of the Class B certificates will be distributed on the 200 distribution date; however, no principal will be paid on the Class B certificates unless the Class A certificates are paid in full. Accumulation Period We are scheduled to begin accumulating collections of principal receivables on , 200 for later distribution to you. The servicer may, however, elect to delay the beginning of the accumulation period to a date not later than , 200 . See "Description of the Certificates--Principal Payments," and "--Postponement of Accumulation Period" in this prospectus supplement. Legal Final Maturity If the Series 2000- certificates are not paid on their expected final distribution dates, collections of receivables will continue to be used to pay principal on the Series 2000- certificates until the certificates are paid or until 200 , whichever occurs first. 200 is the legal final maturity date for Series 2000- . See "Maturity Assumptions," and "Description of the Certificates--Allocation Percentages," and "--Principal Payments" in this prospectus supplement. THE COLLATERAL INTEREST At the same time as the Series 2000- certificates are issued, the trust will issue an undivided interest in the trust called a collateral interest in the amount of $ as part of Series 2000- . The holder of the collateral interest will have voting and certain other rights as if the collateral interest were a subordinated class of certificates. The collateral interest is not offered by this document. CREDIT ENHANCEMENT SUBORDINATION OF CLASSES The collateral interest and the Class B certificates are subordinated to the Class A certificates. The collateral interest is also subordinated to the Class B certificates. See "Description of the Certificates--Reallocation of Cash Flow" and "--Allocation of Investor Default Amount" in this prospectus supplement. THE SELLERS' INTEREST The interest in the trust not represented by your series or by any other series is the sellers' interest. The sellers' interest is represented by the seller certificates, including the bank certificate and any supplemental certificates. The bank certificate is held by the bank. The bank may sell a portion of the sellers' interest to other investors. If a portion of the sellers' interest is sold to anyone other than the seller or its affiliates, the interest will be represented by a supplemental certificate. No supplemental certificates are currently outstanding. The sellers' interest does not provide credit enhancement for your series or any other series. S-5 7 ALLOCATIONS AMONG SERIES Each month the bank, as servicer, will allocate collections received among: - - Series 2000- ; - - other outstanding series; and - - the sellers' interest in the trust. The amount allocated to your series will be determined based mainly upon the ratio of the invested amount of your series to the total amount of principal receivables in the trust. You are entitled to receive payments of interest and principal only from collections and other trust assets allocated to your series. The invested amount is the primary basis for allocations to your series. The invested amount is the sum of the Class A invested amount, the Class B invested amount and the collateral invested amount. At the time of issuance of the Series 2000- certificates, the invested amount for Series 2000- will be $ . AMONG CLASSES From the amounts allocated to your series, the servicer will further allocate among the Class A certificates, the Class B certificates and the collateral interest on the basis of the invested amount of each class and the invested amount of the collateral interest. Initially the invested amount of each class will be equal to the original principal amount of that class and the initial invested amount of the collateral interest will be equal to the original principal amount of the collateral interest. See "Description of the Certificates--Allocation Percentages" in this prospectus supplement. The invested amount of a series or a class will decline as a result of the accumulation of principal collections in the principal funding account or principal payments. The invested amount also may decline if collections of receivables allocated to your series are not sufficient to make certain required payments. If the invested amount of your series or class declines, there may be a reduction in amounts allocated and available for payment to you. For a description of the events which may lead to these reductions, see "Description of the Certificates--Reallocation of Cash Flows" in this prospectus supplement. APPLICATION OF COLLECTIONS FINANCE CHARGE COLLECTIONS - - Collections of finance charge receivables and certain other amounts allocated to the Class A certificates will be used to pay interest on the Class A certificates, to pay Class A's portion of the servicing fee and to cover Class A's portion of receivables that are written off as uncollectible. Any remaining amount will become excess spread and be applied as described below. - - Collections of finance charge receivables allocated to the Class B certificates will be used to pay interest on the Class B certificates and to pay Class B's portion of the servicing fee. Any remaining amount will become excess spread and be applied as described below. - - Collections of finance charge receivables allocated to the collateral interest will be used to pay the collateral interest's portion of the servicing fee if the bank or the trustee is no longer the servicer. Any remaining amount will become excess spread and be applied as described below. See "Description of the Certificates--Application of Collections--Payment of Interest, Fees and Other Items" in this prospectus supplement. EXCESS SPREAD AND EXCESS FINANCE CHARGES Each month the excess spread and excess finance charges will be used in the following order of priority: - - first to make up deficiencies for Class A, - - then to make up deficiencies for Class B, including covering Class B's portion of receivables written off as uncollectible, - - then to pay interest on the collateral interest at the collateral minimum interest rate, - - then to pay the collateral interest's portion of the servicing fee, or, if the bank or the trustee is no longer the servicer, then to pay any portion of the collateral interest's servicing fee not paid as described above under "--Finance Charge Collections," - - then to cover the collateral interest's portion of receivables that are written off as uncollectible, S-6 8 - - then to reimburse any previous reductions in the collateral invested amount, - - then, in limited circumstances, to fund a reserve account to cover interest payment shortfalls for Class A, and - - finally to make payments to the holder of the collateral interest. See "Description of the Certificates--Application of Collections--Excess Spread; Excess Finance Charges" in this prospectus supplement. PRINCIPAL COLLECTIONS So long as no pay out event has occurred, your series' share of principal collections, including shared principal collections from other series, will be applied each month as follows: - - First, principal collections allocated to the collateral interest and the Class B certificates may be reallocated, if necessary, to make required payments on the Class A certificates and the Class B certificates which were not made from finance charge collections, excess spread or excess finance charges. - - During the revolving period, no principal will be paid to you or accumulated in a trust account. - - During the accumulation period, principal collections allocated or available to the Class A certificates and the Class B certificates will be deposited in the principal funding account, up to a controlled deposit amount, for payment first to the Class A certificateholders and then to the Class B certificateholders on the expected final distribution date. - - Upon payment in full of the Class A certificates and the Class B certificates, principal collections allocated or available to the collateral interest, up to the collateral invested amount, will be paid to the collateral interest holder. - - Any remaining principal collections will be first made available to other series and then paid to the holders of the seller certificates or deposited in the excess funding account. If a pay out event occurs, the rapid amortization period will begin and all of the principal collections allocated or available to the Class A certificates and the Class B certificates, except amounts required to be reallocated, will be applied each month to pay principal on your series. Class A will be paid first, and then Class B. See "Description of the Certificates--Principal Payments," "--Application of Collections" and "--Shared Collections of Principal Receivables" in this prospectus supplement. PAY OUT EVENTS Pay out events are adverse events that result in the end of the revolving period or the accumulation period and the beginning of a rapid amortization period. The following are pay out events: - - the seller fails to make required payments, fails to make required deposits, or violates other covenants and agreements; - - the representations and warranties of the seller are materially incorrect; - - the seller does not transfer additional assets to the trust when required; - - the percentage obtained from your series allocation of the yield on the trust portfolio and investment earnings from the principal funding account and withdrawals from the reserve account, after taking into account the amount of the receivables that are written off as uncollectible allocated to Series 2000- , averaged over any three consecutive months is less than the weighted average interest rate for Series 2000- , calculated by taking into account the interest rate for Class A, Class B and the collateral minimum interest rate, plus the servicing fee rate for Series 2000- averaged over the same three months; - - certain defaults of the servicer; - - the Class A certificates, the Class B certificates or the collateral interest are not paid in full on their expected final distribution date; - - the occurrence of certain events of insolvency or receivership relating to the seller, including any additional sellers; - - the seller is unable to transfer receivables to the trust as required under the pooling and servicing agreement; or - - the trust becomes an "investment company" under the Investment Company Act of 1940. For a more detailed discussion of the pay out events, see "Description of the Certificates--Pay Out Events" in this prospectus supplement. In addition, see "Description of the S-7 9 Certificates--Trust Pay Out Events" in the accompanying prospectus. OPTIONAL REPURCHASE The bank has the option to repurchase your certificates when the investor amount for your series has been reduced to 5% or less of the initial invested amount. See "Description of the Certificates--Optional Repurchase" in this prospectus supplement and "Risk Factors--If Optional Repurchase Occurs, it Will Result in an Early Return of Principal and a Reinvestment Risk" in the accompanying prospectus. REGISTRATION The Series 2000- certificates will be in book-entry form and will be registered in the name of Cede & Co., as the nominee of The Depository Trust Company. Except in certain limited circumstances, you will not receive a definitive certificate representing your interest. See "Description of the Certificates--Definitive Certificates" in the accompanying prospectus. You may elect to hold your certificates through DTC in the United States, or Cedelbank, societe anonyme or the Euroclear System in Europe. See "Description of the Certificates--Book-Entry Registration" and "--Definitive Certificates" in the accompanying prospectus. TAX STATUS Orrick, Herrington & Sutcliffe LLP, as special tax counsel to the bank, is of the opinion that under existing law your certificates will be characterized as debt for federal income tax purposes. By your acceptance of a Series 2000- certificate, you will agree to treat your certificates as debt for federal, state and local income and franchise tax purposes. See "Federal Income Tax Consequences" in the accompanying prospectus for additional information concerning the application of federal income tax laws. ERISA CONSIDERATIONS Subject to important considerations described under "ERISA Considerations" in this prospectus supplement and in the accompanying prospectus, the Class A certificates are eligible for purchase by persons investing assets of employee benefit plans or individual retirement accounts. For the reasons discussed under "ERISA Considerations" in this prospectus supplement and the accompanying prospectus, the Class B certificates are not eligible for purchase by persons investing assets of employee benefit plans or individual retirement accounts other than an insurance company investing assets of its general account. CERTIFICATE RATINGS The Class A certificates will be rated in the highest rating category by at least one nationally recognized rating organization and the Class B certificates will be rated in one of the three highest rating categories by at least one nationally recognized rating organization. See "Risk Factors--Ratings Can Be Lowered or Withdrawn After You Purchase Your Certificates And The Market Value Of Your Certificates May Be Reduced" in this prospectus supplement. EXCHANGE LISTING We will apply to list the Class A certificates and the Class B certificates on the Luxembourg Stock Exchange. We cannot guaranty that the application for the listing will be accepted. You should consult with Bankers Trust Luxembourg S.A., the Luxembourg listing agent for the certificates, 14 Boulevard F.D. Roosevelt, L-2450 Luxembourg, phone number (352) 46 02 41, to determine whether or not the Series 2000- certificates are listed on the Luxembourg Stock Exchange. ADDITIONAL INFORMATION For more information, you can call (215) 444-6800 and direct your inquiries to the Fleet Credit Card Securitization Department. S-8 10 RISK FACTORS In the accompanying prospectus you will find a section called "Risk Factors." The information in that section applies generally to all series, including yours. The information in this section applies more specifically to your series. You should consider the risk factors discussed under the caption "Risk Factors" in the prospectus and the risk factors discussed below in this section before deciding whether to purchase any of the Series 2000- certificates. ABILITY TO RESELL SERIES 2000- If you purchase Series 2000- certificates, you may not CERTIFICATES NOT ASSURED be able to sell them. There is currently no secondary market for the certificates. A secondary market for your certificates may not develop. If a secondary market does develop, it may not continue or it may not provide sufficient liquidity to allow you to resell all or a part of your certificates if you want to do so. The underwriters of the Class A certificates and the underwriter of the Class B certificates may assist in resales of the certificates, but they are not required to do so. CREDIT ENHANCEMENT MAY NOT BE SUFFICIENT Credit enhancement provided for your series of TO PREVENT LOSS certificates is limited. The only sources of payment for your certificates are the assets of the trust allocated to your series. If problems develop with the receivables, such as an increase in losses on the receivables or if there are problems in the collection and transfer of the receivables to the trust, it is possible that you may not receive the full amount of interest and principal that you would otherwise receive. See "Description of the Certificates--Subordination," "--Allocation Percentages," "--Reallocation of Cash Flows" and "--Allocation of Investor Default Amount" in this prospectus supplement. CLASS B CERTIFICATES ARE SUBORDINATED TO If you purchase a Class B certificate, your right to THE CLASS A CERTIFICATES; TRUST ASSETS MAY receive principal payments is subordinated to the BE DIVERTED FROM CLASS B TO PAY CLASS A payment in full of the Class A certificates. No principal will be paid to you until the full amount of principal has been paid on the Class A certificates. In addition, if Class A's share of collections of finance charge receivables and certain other amounts allocated to Series 2000- , excess spread, excess finance charges and the collateral interest's share of principal collections are not sufficient to make all required payments for the Class A certificates, collections of principal receivables allocated to Class B may be diverted to Class A. If this occurs, the Class B invested amount and future allocations to Class B would be reduced. Also, if Class A's share of losses on the receivables exceeds the collections and credit enhancement available to cover those losses, and the collateral invested amount is reduced to zero, the Class B invested amount will be reduced to avoid reducing the Class A invested amount. If this occurs, the Class B invested amount and future allocations to Class B would be reduced.
S-9 11 As a result of the subordination, you may receive payments of interest or principal later than you expect or you may not receive the full amount of expected principal and interest. RATINGS CAN BE LOWERED OR WITHDRAWN AFTER The ratings assigned to the Series 2000- certificates YOU PURCHASE YOUR CERTIFICATES AND THE are based upon many factors, including the credit MARKET VALUE OF YOUR CERTIFICATES MAY BE quality of the receivables and the amount of credit REDUCED enhancement provided. The ratings are not a recommendation to purchase, hold or sell any of the Series 2000- certificates. The ratings also are not intended and should not be relied upon to determine the marketability of the Series 2000- certificates, the market value of the Series 2000-certificates or whether the Series 2000- certificates are a suitable investment for you. Any rating agency may lower its rating or withdraw its rating entirely if, in the sole judgment of the rating agency, the credit quality of the certificates has declined or is in question. If any rating assigned to your certificates is lowered or withdrawn, the market value of your certificates may be reduced.
S-10 12 INTRODUCTION The following provisions of this prospectus supplement contain more detailed information concerning the asset backed certificates offered hereby. The certificates will be issued by Fleet Credit Card Master Trust II (the "TRUST") pursuant to the terms of a Pooling and Servicing Agreement dated as of December 1, 1993. The Pooling and Servicing Agreement was amended and restated as of May 23, 1994 and has been amended four times since that date. The Pooling and Servicing Agreement, as amended, is in this prospectus supplement called the "MASTER POOLING AND SERVICING AGREEMENT." The Master Pooling and Servicing Agreement is between Fleet Bank (RI), National Association, as seller and servicer, and Bankers Trust Company, as trustee. Fleet Bank (RI), National Association (the "BANK"), in its capacity as seller under the Master Pooling and Servicing Agreement and the series supplement, is referred to as the seller, and, in its capacity as servicer, the bank is referred to as the servicer. The term "seller" also includes any additional sellers as described under the caption "Description of the Certificates--The Bank Certificate; Additional Sellers" in the prospectus. The term "servicer" also refers to any successor to the bank, as servicer. The bank is an indirect, wholly-owned subsidiary of Fleet Boston Corporation, doing business as FleetBoston Financial Corporation ("FLEET"). Fleet is the bank holding company which came into existence on October 1, 1999 as a result of the merger of Fleet Financial Group, Inc. and BankBoston Corporation. Prior to the merger of Fleet Financial Group, Inc. and the BankBoston Corporation, the bank was an indirect wholly-owned subsidiary of Fleet Financial Group, Inc. See "The Bank and Fleet Boston Corporation" in the accompanying prospectus. The trust will issue $ of its Class A Floating Rate Asset-Backed Certificates, Series 2000- (the "CLASS A CERTIFICATES") and $ of its Class B Floating Rate-Asset Backed Certificates, Series 2000- (the "CLASS B CERTIFICATES"). There will also be created, as part of Series 2000- , a third class of interests in the trust which shall be in the amount of $ and be known as the Collateral Interest, Series 2000- ("COLLATERAL INTEREST"). The Class A Certificates and the Class B Certificates are, collectively, the "SERIES 2000- CERTIFICATES." The registered holders of the Class A Certificates are referred to as the "CLASS A CERTIFICATEHOLDERS." The registered holders of the Class B Certificates are referred to as the "CLASS B CERTIFICATEHOLDERS." The registered holder of the Collateral Interest is the "COLLATERAL INTEREST HOLDER." The Class A Certificateholders and the Class B Certificateholders, together with the Collateral Interest Holder are, collectively, the "SERIES 2000- HOLDERS." The Series 2000- Certificates and the Collateral Interest are, collectively, the "SERIES 2000- INTERESTS." The series in which the Series 2000- Interests are issued is known as "SERIES 2000- ." The closing date on which the Series 2000- Interests will be issued is expected to be , 2000. The Series 2000- Interests will be issued pursuant to the Master Pooling and Servicing Agreement and a series supplement designated as the Series 2000- Supplement. The Master Pooling and Servicing Agreement together with the series supplement is, in this prospectus supplement, the "POOLING AND SERVICING AGREEMENT." Series 2000- will be the series issued by the trust. Of these series, , including Series 2000- , will be outstanding on the closing date. Series 2000- will be the series outstanding included in the group of series issued by the trust from time to time and designated as Group One. See Annex I. Annex I is hereby incorporated into this prospectus supplement by reference. Additional series are expected to be issued from time to time by the trust. The certificates offered by this prospectus supplement and the accompanying prospectus are investment grade asset backed securities within the meaning of the Securities Exchange Act of 1933, as amended and the rules promulgated under it. S-11 13 THE BANK'S CREDIT CARD ACTIVITIES GENERAL The bank was the survivor of a merger on November 14, 1997 between the bank and Fleet Bank (Delaware), National Association. The bank's credit card portfolio at that time consisted of credit card accounts originated or acquired by the bank or its predecessor. As discussed in the prospectus under the caption "Transfer and Assignment" and "The Bank's Credit Card Activities," on February 20, 1998, Advanta National Bank transferred to the bank the ownership interest in substantially all of the accounts in the Advanta consumer credit card portfolio. The bank's credit card portfolio existing at the time of the transfer plus the consumer credit card portfolio acquired from Advanta National Bank plus new originations or acquisitions made since February 20, 1998 constitute the "FLEET CREDIT CARD PORTFOLIO." Accounts have been designated for inclusion in the trust from time to time as set forth in Annex II. Annex II is hereby incorporated into this prospectus supplement by reference. The bank is a member of VISA U.S.A. Inc. and MasterCard International Incorporated. FINANCE CHARGES The majority of the accounts in the Fleet Credit Card Portfolio are subject to finance charges at London interbank offered rate indexed variable rates ranging from 3.9% to 22.9% for purchases, balance transfers and cash advances. There is also a portion of the portfolio subject to finance charges set at a fixed rate for purchases only. For more information, see "The Bank's Credit Card Activities--Billing and Payments" in the accompanying prospectus. DELINQUENCY AND LOSS EXPERIENCE The following tables show the delinquency and loss experience for the Fleet Credit Card Portfolio beginning on February 20, 1998. Information prior to February 20, 1998 is shown pro forma as if the bank had purchased the Advanta consumer credit card portfolio as of the beginning of 1997. The trust portfolio is made up of the accounts which have been designated to the trust and the receivables in these accounts as of any date of determination. In each case, the accounts designated to the trust must be Eligible Accounts. See "Description of the Certificates--Representations, Warranties and Covenants" and "--Addition of Accounts" in the accompanying prospectus. See also "The Receivables" in this prospectus supplement. The trust portfolio is only a portion of the Fleet Credit Card Portfolio; therefore, actual delinquency and gross charge-off experience for the receivables in the trust may be different from that shown in the following tables which include information for the entire Fleet Credit Card Portfolio. There can be no assurance that the delinquency and loss experience for the receivables in the trust will be similar to the historical experience shown in the following tables. S-12 14 DELINQUENCY EXPERIENCE FLEET CREDIT CARD PORTFOLIO (DOLLARS IN THOUSANDS)
AS OF DECEMBER 31, ----------------------------------------- AS OF , 1999 1998 1997 --------------- ----------- ----------- ----------- Receivables Outstanding(1)(2)....... $ $14,278,212 $14,524,541 $13,937,589 Receivables Contractually Delinquent as a Percentage of Receivables Outstanding(1): 30-59 days........................ % 1.44% 1.58% 1.77% 60-89 days........................ % 1.09% 1.07% 1.13% 90 or more days................... % 2.35% 2.29% 2.39% ----------- ----------- ----------- ----------- Total............................... % 4.88% 4.94% 5.29% =========== =========== =========== ===========
- ------------ (1) Information prior to February 20, 1998 is shown pro forma as if the bank had purchased the Advanta consumer credit card portfolio as of the beginning of 1997. Receivables Outstanding and Receivables Contractually Delinquent related to the credit card portfolio acquired by Fleet Financial Group, Inc. as a result of the purchase of NatWest Bank, N.A. are included beginning in June, 1997. (2) Receivables Outstanding consists of all amounts due from cardholders as posted to the accounts. LOSS EXPERIENCE FLEET CREDIT CARD PORTFOLIO (DOLLARS IN THOUSANDS)
MONTHS, YEAR ENDED DECEMBER 31, ENDED ------------------------------------------- , 1999 1998 1997 ------------ ----------- ----------- ----------- Average Receivables Outstanding(1)(2)............. $ $13,065,414 $14,380,316 $13,950,913 Gross Losses(1)(3).............. $ $ 967,611 $ 1,034,996 $ 1,052,527 Recoveries(1)................... $ $ 75,883 $ 91,664 $ 84,439 Net Losses...................... $ $ 891,728 $ 943,332 $ 968,088 Net Losses as a Percentage of Average Receivables Outstanding................... %(4)(5) 6.83%(5) 6.56%(5) 6.94%
- ------------ (1) Information prior to February 20, 1998 is shown pro forma as if the bank had purchased the Advanta consumer credit card portfolio as of the beginning of 1997. Average Receivables Outstanding, Gross Losses and Recoveries related to the credit card portfolio acquired by Fleet Financial Group, Inc. as a result of the purchase of NatWest Bank, N.A. are included beginning in June, 1997. (2) Average Receivables Outstanding is the sum of receivables outstanding at the beginning and end of each month during the period indicated, divided by twice the number of months in the period indicated. (3) Gross Losses are presented net of adjustments made pursuant to the bank's normal servicing procedures, including removal of incorrect or disputed finance charges and reversal of annual cardholder fees on cardholder accounts which have been closed. Losses do not include accrued finance charges that have been charged-off or fraud losses. (4) Annualized. (5) As, of October 1, 1998, the bank implemented a revised policy relating to the charge-off of bankrupt credit card accounts and the charge-off of delinquent accounts. See "The Bank's Credit Card Activities--Delinquencies" in the accompanying prospectus. S-13 15 INTERCHANGE In respect of interchange attributed to the cardholder charges for merchandise and services in those accounts included in the trust, the bank is required to transfer to the trust each month prior to the distribution date an amount equal to one-twelfth of 1.25% of the outstanding balance of the principal receivables allocable to Series 2000- at the end of the preceding month. LITIGATION On January 22, 1999, Fleet Financial Group, Inc. (the predecessor to FleetBoston Financial Corporation), Fleet National Bank, Fleet Bank (RI), National Association, Fleet Credit Card Services, L.P. and Fleet Credit Card Holdings, Inc. brought suit against Advanta Corp., and certain of its subsidiaries. The action arose out of a February 1998 transaction in which Fleet Financial Group, Inc. and Fleet Credit Card LLC, the predecessor in interest to Fleet Credit Card Services, L.P., acquired most of the consumer credit card business of Advanta National Bank. The Advanta entities answered the Fleet entities' complaint, denying the principal allegations and asserting a variety of counterclaims. The litigation is presently in the discovery process. Due to the nature of the Advanta entities' pleadings, the limited discovery that has occurred to date concerning the Advanta entities' claims, and the general unpredictability of the litigation process, it is impossible, at this time, to predict the ultimate outcome of the litigation. However, the Fleet entities' intend to vigorously pursue their claims and contest the claims asserted by the Advanta entities. Fleet does not expect this action to have any material adverse impact on its business. THE RECEIVABLES The receivables in the initial accounts designated to the trust were conveyed to the trust on December 3, 1993. Since that date, accounts have been added to the trust from time to time as set forth in Annex II. The additional accounts were selected from the Advanta consumer credit card portfolio prior to February 20, 1998, and from the Fleet Credit Card Portfolio on and after February 20, 1998. The bank has broad discretion in selecting accounts that will be designated as additional accounts; however, each additional account must, as of the relevant cut-off date for those accounts, qualify as an Eligible Account. In order to be an Eligible Account, each account must on the relevant cut-off date, among other things, be in existence and maintained by the bank, have a cardholder with a billing address in the United States, its territories or possessions or a military address, and, except under limited circumstances, not be an account the credit card or cards for which have been reported as having been lost or stolen. See "Description of the Certificates--Representations, Warranties and Covenants" in the accompanying prospectus. Cardholders whose accounts are included in the Fleet Credit Card Portfolio have billing addresses in all 50 states, the District of Columbia, Puerto Rico, Guam, the Virgin Islands and certain foreign countries. As noted above, Eligible Accounts must, as of the relevant cut-off date, have a billing address in the United States, its territories or possessions or a military address and, as shown in this section in the table captioned "Geographic Distribution of Accounts and Receivables--Trust Portfolio," as of , % of the accounts designated to the trust and % of the receivables in the trust had billing addresses in one of the 50 states or the District of Columbia. Pursuant to the Pooling and Servicing Agreement, the seller may be obligated to designate additional accounts to the trust and to convey all receivables of these additional accounts to the trust. Also, the seller may in its discretion, from time to time, designate additional accounts to the trust. In each case, all of the receivables in the designated accounts are conveyed to the trust whether these receivables are then existing or are subsequently created. See "Description of the Certificates--General" and "--Addition of Accounts" in the accompanying prospectus. As of the relevant cut-off date and on the date any new receivables are created, the seller represents and warrants that the receivables in the accounts are Eligible Receivables. S-14 16 See "Description of Certificates--Representations, Warranties and Covenants" in the accompanying prospectus. As of the date of this prospectus supplement, the accounts from which the receivables in the trust arise are the existing MasterCard and VISA accounts. However, any new accounts designated to the trust are not required to be MasterCard and VISA accounts. The receivables in the trust, including receivables in the additional accounts which have been or are expected to be conveyed to the trust during the period from , through the date of issuance of Series 2000- , as of , , totaled $ in accounts. The accounts had an average credit limit of $ . The percentage of the aggregate total receivables balance to the aggregate total credit limit was %. The average age of the accounts designated to the trust was approximately months. The receivables balance in the trust as of , , totaled $ . The receivables balance in the trust as of , totaled $ . As of , , the balance of receivables in the trust which were 30 days or more contractually delinquent was $ . The following tables summarize the trust portfolio, including receivables in the additional accounts the receivables of which have been or are expected to be conveyed to the trust during the period from through the closing date, by various criteria as of the close of business on . Because the future composition of the trust portfolio may change over time, these tables are not necessarily indicative of future results. COMPOSITION BY ACCOUNT BALANCE TRUST PORTFOLIO
PERCENTAGE OF TOTAL PERCENTAGE NUMBER OF NUMBER OF OF TOTAL ACCOUNT BALANCE RANGE ACCOUNTS ACCOUNTS RECEIVABLES RECEIVABLES - --------------------- --------- ---------- ----------- ----------- Credit balance.............................. % $ % $0.00....................................... $0.01 to $1,000.00.......................... $1,000.01 to $2,500.00...................... $2,500.01 to $5,000.00...................... $5,000.01 to $7,500.00...................... Over $7,500.00.............................. --------- ----- ----------- ----- Total....................................... % $ % ========= ===== =========== =====
S-15 17 COMPOSITION BY CREDIT LIMIT TRUST PORTFOLIO
PERCENTAGE OF TOTAL PERCENTAGE NUMBER OF NUMBER OF OF TOTAL CREDIT LIMIT BALANCE ACCOUNTS ACCOUNTS RECEIVABLES RECEIVABLES - -------------------- --------- ---------- ----------- ----------- $0.00 to $1,000.00.......................... % $ % $1,000.01 to $2,500.00...................... $2,500.01 to $5,000.00...................... $5,000.01 to $7,500.00...................... Over $7,500.00.............................. --------- ----- ----------- ----- Total....................................... % $ % ========= ===== =========== =====
COMPOSITION BY PERIOD OF DELINQUENCY TRUST PORTFOLIO
PERCENTAGE OF TOTAL PERCENTAGE PERIOD OF DELINQUENCY NUMBER OF NUMBER OF OF TOTAL (DAYS CONTRACTUALLY DELINQUENT) ACCOUNTS ACCOUNTS RECEIVABLES RECEIVABLES - ------------------------------- --------- ---------- ----------- ----------- Not Delinquent................................. % $ % 1 to 29 days................................... 30 to 59 days.................................. 60 to 89 days.................................. 90 to 119 days................................. 120 to 149 days................................ 150 to 179 days................................ 180 or more.................................... -------- ---- -------- ---- Total.......................................... % $ % ======== ==== ======== ====
COMPOSITION BY ACCOUNT AGE TRUST PORTFOLIO
PERCENTAGE OF TOTAL PERCENTAGE NUMBER OF NUMBER OF OF TOTAL AGE (IN MONTHS) ACCOUNTS ACCOUNTS RECEIVABLES RECEIVABLES - --------------- --------- ---------- ----------- ----------- Not more than 6 Months......................... % $ % Over 6 to 12 Months............................ Over 12 to 24 Months........................... Over 24 to 36 Months........................... Over 36 to 48 Months........................... Over 48 to 60 Months........................... Over 60 to 84 Months........................... Over 84 Months................................. -------- ---- -------- ---- Total.......................................... % $ % ======== ==== ======== ====
S-16 18 GEOGRAPHIC DISTRIBUTION OF ACCOUNTS AND RECEIVABLES TRUST PORTFOLIO(1)
PERCENTAGE OF TOTAL PERCENTAGE NUMBER OF NUMBER OF OF TOTAL STATE ACCOUNTS ACCOUNTS RECEIVABLES RECEIVABLES - ----- --------- ---------- ----------- ----------- California..................................... New York....................................... Texas.......................................... Florida........................................ Pennsylvania................................... Massachusetts.................................. Ohio........................................... New Jersey..................................... Illinois....................................... Michigan....................................... Others......................................... -------- ------- -------- ------- Total.......................................... % $ % ======== ======= ======== =======
- --------------- (1) All data as of , (including receivables then in the trust and receivables in additional accounts to be added in the future through the date of issuance of Series 2000- ). MATURITY ASSUMPTIONS The Pooling and Servicing Agreement provides that, unless a Pay Out Event occurs, the Class A Certificateholders will not receive payments of principal until the , 200 distribution date (the "CLASS A EXPECTED FINAL DISTRIBUTION DATE"). The bank expects that the full principal amount of the Class A Certificates will be paid on the Class A Expected Final Distribution Date. However, if a Pay Out Event occurs, principal payments may begin prior to that date. The Pooling and Servicing Agreement also provides that the Class B Certificateholders will not receive payments of principal until the , 200 distribution date (the "CLASS B EXPECTED FINAL DISTRIBUTION DATE"). The bank expects that the full principal amount of the Class B Certificates will be paid on the Class B Expected Final Distribution Date. However, if a Pay Out Event occurs, principal payments may begin prior to that date. No principal payments will be made to the Class B Certificateholders unless the Class A Investor Amount is paid in full. Series 2000- will have a period of time called the "ACCUMULATION PERIOD" when monthly deposits are made into the principal funding account. During the accumulation period, amounts deposited in the principal funding account will accumulate in an amount calculated to be sufficient to pay the Class A Certificates on the Class A Expected Final Distribution Date and to pay the Class B Certificates on the Class B Expected Final Distribution Date. Unless and until a Pay Out Event occurs, on each distribution date for the accumulation period, monthly deposits of principal will be made into the principal funding account in an amount equal to the least of: (a) Available Investor Principal Collections; (b) the sum of: (1) the Controlled Accumulation Amount for that distribution date; and (2) any Deficit Controlled Accumulation Amount for the immediately preceding distribution date; or S-17 19 (c) the Invested Amount. It is anticipated that a single principal payment will be made to Class A Certificateholders in an amount equal to the Class A Investor Amount on the Class A Expected Final Distribution Date and that a single principal payment will also be made to Class B Certificateholders in an amount equal to the Class B Investor Amount on the Class B Expected Final Distribution Date. However, payment rates vary and we cannot assure you that Available Investor Principal Collections will always be sufficient to make required payments to the principal funding account or to make payments on your certificates when you expect. On the other hand, the occurrence of a Pay Out Event may result in principal being paid to you earlier than expected. Pay Out Events which apply to all series are described in the prospectus. See "Description of the Certificates--Trust Pay Out Events" in the accompanying Prospectus. Series Pay Out Events for Series 2000- are described in this prospectus supplement under the caption "Description of the Certificates--Pay Out Events." A Pay Out Event occurs, with respect to Series 2000- and all other series, automatically upon: (a) the occurrence of an insolvency event relating to the seller, including any additional seller; (b) the trust becoming an "investment company" within the meaning of the Investment Company Act of 1940, as amended; or (c) the inability of the seller, including any additional seller, to transfer receivables to the trust in accordance with the Pooling and Servicing Agreement. There can be no assurance that a Pay Out Event will not occur. See "Description of the Certificates--Pay Out Events" in this Prospectus Supplement. Upon the occurrence of a Pay Out Event which applies to Series 2000- or to all series, a "RAPID AMORTIZATION PERIOD" will begin. The rapid amortization period means the period beginning with the occurrence of a Pay Out Event and ending on the earlier of: (a) the payment in full of the Class A Investor Amount, the Class B Investor Amount and the Collateral Invested Amount; and (b) the Series 2000- Termination Date. During the rapid amortization period, first the Class A Certificateholders and then, following the payment in full of the Class A Investor Amount, the Class B Certificateholders will be entitled to receive monthly payments of principal. The monthly payments will be equal to the Available Investor Principal Collections received by the trust during the related monthly period, plus the principal amount on deposit in the principal funding account, until the Class A Investor Amount or Class B Investor Amount, as applicable, is paid in full. Allocations of collections of principal receivables will be made to Series 2000- based on the Principal Allocation Percentage. See "Description of the Certificates--Allocation Percentages" in this Prospectus Supplement. The following table shows the highest and lowest cardholder monthly payment rates and the average of the cardholder monthly payment rates for the Fleet Credit Card Portfolio. Information prior to February 20, 1998 is pro forma as if the bank had purchased the Advanta consumer credit card portfolio as of the beginning of 1997. The rates are calculated as a percentage of the total opening monthly account balances during the periods shown. Payments shown in the table include amounts which would be deemed payments of principal receivables and finance charge receivables on the accounts. S-18 20 MONTHLY PAYMENT RATES FLEET CREDIT CARD PORTFOLIO (1)
YEAR ENDED DECEMBER 31, MONTHS ENDED ----------------------------- , 1999 1998 1997 -------------- ------- ------- ------- Lowest........................................... % 11.20% 10.84% 9.93% Highest.......................................... % 13.64% 12.36% 12.29% Monthly Average.................................. % 12.06% 11.57% 11.09%
- --------------- (1) Information prior to February 20, 1998 is shown pro forma as if the bank had purchased the Advanta consumer credit card portfolio as of the beginning of 1997. Collections related to the credit card portfolio acquired by Fleet Financial Group, Inc. as a result of the purchase of NatWest Bank, N.A. are included beginning in June, 1997. The amount of collections on receivables from the trust may vary from month to month due to seasonal variations, general economic conditions, changes in tax law and payment habits of individual cardholders. There can be no assurance that collections of principal receivables from the trust portfolio, and thus the rate at which you can expect to accumulate or receive payments of principal on your certificates during the accumulation period or the rapid amortization period, will be similar to the historical experience set forth above. In addition, the ability to pay the Class A Investor Amount or the Class B Investor Amount on the Class A Expected Final Distribution Date and the Class B Expected Final Distribution Date, respectively, may be dependent upon the availability of Shared Principal Collections. Since the trust, as a master trust, may issue additional series from time to time, there can be no assurance that the issuance of additional series or the terms of any additional series might not have an impact on the timing of payments made to you. Further, if a Pay Out Event occurs, the average life and maturity of the Series 2000- Certificates could be significantly reduced. RECEIVABLE YIELD CONSIDERATIONS The following table provides yield information for the months ended , and each of the years ended December 31, 1999, 1998 and 1997. Information prior to February 20, 1998 is shown pro forma as if the bank had purchased the Advanta consumer credit card portfolio as of the beginning of 1997. The historical yield figures in the table are calculated on an accrual basis. Collections on the receivables in the trust will be on a cash basis and may not reflect the historical yield experience in the table. For example, during periods of increasing delinquencies accrual yields may exceed cash yields as amounts collected on credit card receivables lag behind amounts accrued and billed to cardholders. Conversely, as delinquencies decrease, cash yields may exceed accrual yields as amounts collected in a current period may include amounts accrued during prior periods. Yield on both an accrual and a cash basis will be affected by numerous factors, including the finance charges on the receivables in the trust, the amount of the annual cardholder fees and other fees and charges, changes in the delinquency rate on the receivables in the trust, the percentage of cardholders who pay their balances in full each month and do not incur finance charges and any restrictions which may be imposed by future legislation or regulations. There can be no assurance that the revenue from finance charges and fees for the receivables in the trust will be similar to the historical experience set forth below. See "Risk Factors" in the accompanying Prospectus. S-19 21 REVENUE FROM FINANCE CHARGES AND FEES FLEET CREDIT CARD PORTFOLIO
MONTHS ENDED , YEAR ENDED DECEMBER 31, ----------- ------------------------------ 1999 1998 1997 ----------- ------ ------ ------ Average Monthly Accrued Fees and Charges(2)(3)(4)............................. $ --(6) $42.76(6) $36.07(1) $36.99(1) Average Account Balance(2)(5).................. -- $2,699 $2,798 $2,783 Yield From Fees and Charges(3)(4).............. --%(6) 19.01%(6) 15.47%(1) 15.95%(1)
- --------------- (1) The amounts shown for the years ended December 31, 1998 and 1997 do not include revenue attributed to Interchange. (2) Information prior to February 20, 1998 is shown pro forma as if the bank had purchased the Advanta consumer credit card portfolio as of the beginning of 1997. Fees, charges and account balances related to the credit card portfolio acquired by Fleet Financial Group, Inc. as a result of the purchase of NatWest Bank, N.A. are included beginning in June, 1997. (3) Fees and Charges for each of the years ended December 31, 1997, 1998 and 1999 are comprised of finance charges, annual cardholder fees and certain other service charges. Fees and Charges for the year ended December 31, 1999 and for the months ended , are comprised of finance charges, annual cardholder fees and all other service charges plus revenue attributed to Interchange. (4) Average Monthly Accrued Fees and Charges and Yield from Fees and Charges are presented net of adjustments made pursuant to normal servicing procedures, including removal of incorrect or disputed finance charges and reversal of finance charges accrued on charged-off accounts. (5) Average Account Balance includes purchases, cash advances and billed and unpaid finance and other charges, and is calculated based on the average of the opening monthly account balances for accounts with balances during the periods shown. (6) Beginning January 1, 1999 revenue from Interchange and fees not previously included have been included in fees and charges and in calculating the yield from fees and charges. For the year ended December 31, 1999 and for months ended , , if fees and charges had not included revenue attributed to Interchange and the additional fees, the average monthly accrued fees and charges would have been $36.84 and $ , respectively, and the yield from fees and charges would have been 16.38% and %, respectively. The yields shown in the above table are comprised of three components: finance charges, annual cardholder fees and other service charges, such as late charges. In addition, for the year ended December 31, 1999 and for the months ended , the yield includes interchange and fees not previously included. The yield related to annual cardholder fees, on those accounts that assess annual fees, and other service charges varies with the type and volume of activity in and the balance of each account. The bank currently assesses annual cardholder fees of $10 to $50 for some of its credit card accounts. Most accounts included in the Fleet Credit Card Portfolio and originated since March 1987 do not carry an annual cardholder fee. See "The Bank's Credit Card Activities" in the accompanying Prospectus. As account balances increase, an annual cardholder fee, which remains constant, represents a smaller percentage of the aggregate account balance. [The increase in yields demonstrated in the above table from December 31, 1998 to December 31, 1999 is the result of several changes implemented by the bank. As of January 1, 1999, the bank, in calculating fees and charges has included Interchange and service charges not previously included. Other factors affecting the increase include the bank's continued use of risk based repricing.] S-20 22 DESCRIPTION OF THE CERTIFICATES The following summary, together with information contained elsewhere in this Prospectus Supplement and the Prospectus, describes the material terms of the certificates contained in the Pooling and Servicing Agreement. The following summary is qualified in its entirety by reference to the Pooling and Servicing Agreement. GENERAL The Series 2000- Certificates and the Collateral Interest will represent undivided interests in the assets of the Fleet Credit Card Master Trust II. See "--Allocation Percentages" in this Prospectus Supplement. The rights represented by the Series 2000- Certificates and the Collateral Interest include the right to a percentage of the collections of the receivables in the trust. The percentage used to allocate collections to Series 2000- is the "SERIES PERCENTAGE." When allocating finance change receivables and defaulted receivables, the Series Percentage is the Floating Allocation Percentage. When allocating principal receivables, the Series Percentage is the Principal Allocation Percentage. For any monthly period, the portion of the principal receivables and any amounts in the excess funding account represented by the Series 2000- Certificates and the Collateral Interest will be equal to: - $ , which will be the "INITIAL INVESTED AMOUNT" of the certificates and the Collateral Interest on the date of issuance of Series 2000- ; minus - the principal amount on deposit in the principal funding account; minus - the amount of principal payments paid to the certificateholders and the Collateral Interest Holder; and minus - any unreimbursed reductions in the Invested Amount. See "Description of the Certificates--Defaulted Receivables; Rebates and Fraudulent Charges" in the accompanying Prospectus and "Description of the Certificates--Allocation of Investor Default Amount" in this Prospectus Supplement. Each Series 2000- Certificate represents the right to receive monthly payments of interest at the Class A Certificate Rate or Class B Certificate Rate, as applicable, from: - collections of finance charge receivables; - amounts withdrawn from the reserve account; provided that amounts from the reserve account will be available only to the Class A Certificates; and - reallocated principal collections. The Series 2000- Certificates also represent the right to deposits or payments of principal during the Accumulation Period or the Rapid Amortization Period. Deposits to the Principal Funding Account to be used to pay principal on the Class A Certificates and the Class B Certificates or amounts otherwise used to pay principal on the Class A Certificates or the Class B Certificates will be funded from Available Investor Principal Collections. During the Accumulation Period, Available Investor Principal Collections will include collections of principal receivables otherwise allocable to other series, but which are not needed by the other series. The seller holds the interest in the principal receivables and the amounts in the excess funding account not represented by the Series 2000- Certificates, the Collateral Interest or the certificates and uncertificated interests represented by other series. The interest held by the seller is the "SELLERS' INTEREST." The sellers' interest includes an undivided interest in the assets of the trust including the right to a S-21 23 percentage of collections of receivables. The seller percentage of receivables is 100% minus both the Series Percentage for Series 2000- and the series percentage for all other series. During the Revolving Period, the Invested Amount will remain constant except in limited circumstances. See "Description of the Certificates--Defaulted Receivables; Rebates and Fraudulent Charges" in the accompanying Prospectus and "Description of the Certificates--Allocation of Investor Default Amount" in this prospectus supplement. The amount of principal receivables, however, will vary each day as new principal receivables are created and others are paid. The "SELLER AMOUNT," being the amount of principal receivables and amounts in the excess funding account not represented by the investor certificates of any series, will fluctuate daily to reflect the changes in the amount of the principal receivables. During the accumulation period or the rapid amortization period, the Invested Amount will decline for each monthly period as cardholder payments of principal receivables are collected and deposited in the principal funding account or paid to the certificateholders or the Collateral Interest Holder. The interest of the certificateholders in the trust will terminate following the "SERIES 2000- TERMINATION DATE," which is the earliest of: - the day after the distribution date on which the Investor Amount is paid in full; - the 200 distribution date; and - the termination of the trust. All principal and interest on your certificates will be due and payable no later than the Series 2000- Termination Date. See "Description of the Certificates--Final Payment of Principal and Interest; Termination" in the accompanying prospectus. REGISTRATION OF CERTIFICATES The certificates initially will be represented by certificates registered in the name of Cede & Co., as the nominee of The Depository Trust Company. No person acquiring a beneficial interest in the certificates--called a "CERTIFICATE OWNER"--will be entitled to receive a "DEFINITIVE CERTIFICATE" representing the person's interest, except in the event that definitive certificates are issued to certificate owners under the limited circumstances described in the prospectus. Investor certificateholders may elect to hold their investor certificates through The Depository Trust Company, in the United States or Cedelbank or Euroclear, in Europe. See "Description of the Certificates--Definitive Certificates" in the accompanying prospectus. INTEREST PAYMENTS Interest will accrue on the certificates at the applicable Class A Certificate Rate or Class B Certificate Rate from the date of the initial issuance of the certificates. Interest payments on the certificates will be made on distribution dates. The "DISTRIBUTION DATES" will be , 2000 and the subsequent 15th day of each month, or if the 15th day is not a business day, on the next succeeding business day. Interest payments on the certificates on any distribution date will be calculated on the outstanding principal amount of the Class A Certificates or the Class B Certificates, as applicable, as of the preceding record date or, in the case of the first distribution date, as of the date of issuance of Series 2000- . Interest payments will be based upon the applicable certificate rate for the related interest period. Class A Monthly Interest and Class B Monthly Interest due but not paid on any distribution date will be payable on the next succeeding distribution date together with additional interest on the due and unpaid amount at the Class A Certificate Rate or Class B Certificate Rate, as applicable, plus %. Interest on the Class A Certificates and the Class B Certificates will be calculated on the basis of the actual number of days in the related interest period and a 360-day year. The Class A Certificates will bear interest at the rate of % per annum above the London interbank offered quotations for United States S-22 24 dollar deposits ("LIBOR") for a period of the Designated Maturity determined as set forth below (the "CLASS A CERTIFICATE RATE"). The Class B Certificates will bear interest at the rate of % per annum above LIBOR for a period of the Designated Maturity determined as set forth below (the "CLASS B CERTIFICATE RATE"). The "INTEREST PERIOD" for any distribution date will be the period from the previous distribution date through the day preceding that distribution date, except that the initial interest period will be the period from the date of issuance of Series 2000- through , 2000, the day preceding the initial distribution date. The term "BUSINESS DAY" means any day other than a Saturday, Sunday or day on which banking institutions in New York, New York, Providence, Rhode Island or any other state where the principal executive offices of the bank or any additional seller or the trustee are located, are authorized or obligated by law, executive order or governmental decree to be closed. The "MONTHLY PERIOD" for any distribution date will be the immediately preceding calendar month, except for the initial monthly period, which will begin on the date of issuance of Series 2000- and end on , 2000. The "RECORD DATE" for any distribution date will be the last business day of the month preceding that distribution date. The trustee will determine LIBOR on , 2000 for the period from the date of issuance of Series 2000- through , 2000, and for each future interest period, on the second business day prior to the distribution date on which the interest period begins (each a "LIBOR DETERMINATION DATE") commencing with the , 2000 distribution date. The determination of LIBOR by the trustee and the trustee's subsequent calculation of the applicable certificate rate for the relevant interest periods shall, in the absence of manifest error, be final and binding on each certificateholder. "LIBOR" means, as of any LIBOR determination date, the rate for deposits in United States dollars for a period of the Designated Maturity which appears on Telerate Page 3750 as of 11:00 a.m., London time on that date. If the rate does not appear on Telerate Page 3750, the rate for that LIBOR determination date will be determined on the basis of the rates at which deposits in United States dollars are offered by the reference banks at approximately 11:00 a.m., London time, on that day to prime banks in the London interbank market for a period of the Designated Maturity. The trustee will request the principal London office of each of the reference banks to provide a quotation of its rate. If at least two such quotations are provided, the rate for that LIBOR determination date will be the arithmetic mean of the quotations. If fewer than two quotations are provided as requested, the rate for that LIBOR determination date will be the arithmetic mean of the rates quoted by the reference banks, selected by the servicer, at approximately 11:00 a.m., New York City time, on that day for loans in United States dollars to leading European banks for a period of the Designated Maturity. For purposes of calculating LIBOR, the "DESIGNATED MATURITY" means, as of any LIBOR determination date, one month; provided, that LIBOR for the initial interest period will be determined by straight-line interpolation, based on the actual number of days in the period from the date of issuance of Series 2000- through , 2000, between two rates determined in accordance with the definition of LIBOR, one of which will be determined for a Designated Maturity of one month and the other of which will be determined for a Designated Maturity of two months. "TELERATE PAGE 3750" means the display page currently so designated on the Bridge Telerate Markets Report or a page that may replace that page on that service for the purpose of displaying comparable rates or prices. "REFERENCE BANKS" means three major banks in the London interbank market selected by the servicer. The Class A Certificate Rate or Class B Certificate Rate applicable to the then current and the immediately preceding interest periods may be obtained by telephoning the trustee at (800) 735-7777. S-23 25 On each distribution date, Class A Monthly Interest and Class A Monthly Interest previously due but not distributed to the Class A Certificateholders will be paid to the Class A Certificateholders from Class A Available Funds for the related monthly period. To the extent Class A Available Funds for the related monthly period are insufficient to pay the interest, then one or all of the following will be used to make the interest payments due on the Class A Certificates: - Excess Spread; and - if necessary, Excess Finance Charges; and - if necessary, Reallocated Principal Collections first from amounts allocated to the collateral invested amount and then from amounts allocated to the Class B Invested Amount. "CLASS A AVAILABLE FUNDS" means, for any monthly period, the sum of: - the Class A Floating Percentage of collections of finance charge receivables allocated to the Series 2000- Certificates for the related monthly period, including other amounts that are to be treated as collections of finance charge receivables in accordance with the Pooling and Servicing Agreement; - the amount of earnings on the principal funding account, if any, for the related distribution date; and - the amount of funds, if any, to be withdrawn from the reserve account and included in Class A Available Funds for the distribution date. "CLASS A MONTHLY INTEREST" means, for any distribution date, the product of: - (a) a fraction, the numerator of which is the actual number of days in the period from and including the preceding distribution date to but excluding that distribution date and the denominator of which is 360; times (b) the Class A Certificate Rate; and - the outstanding principal amount of the Class A Certificates as of the preceding record date; provided however, for the first distribution date, Class A Monthly Interest shall be equal to the interest accrued on the outstanding principal amount of the Class A Certificates at the applicable Class A Certificate Rate for the period from the date of issuance of Series 2000- through , 2000 calculated on the basis of the actual number of days in the period and a year of 360 days. On each distribution date, Class B Monthly Interest and Class B Monthly Interest previously due but not distributed to the Class B Certificateholders will be paid to Class B Certificateholders from Class B Available Funds for the related monthly period. To the extent Class B Available Funds for the related monthly period are insufficient to pay the interest, then one or all of the following, to the extent not used to make distributions for the Class A Certificates, will be used to make the interest payments due on the Class B Certificates: - Excess Spread; and - if necessary, Excess Finance Charges allocated to Series 2000- ; and - if necessary, Reallocated Principal Collections allocable to the collateral invested amount. "CLASS B AVAILABLE FUNDS" means, for any monthly period, an amount equal to the Class B Floating Percentage of collections of finance charge receivables allocated to the Series 2000- Certificates for the related monthly period, including other amounts that are to be treated as collections of finance charge receivables in accordance with the Pooling and Servicing Agreement. S-24 26 "CLASS B MONTHLY INTEREST" means, for any distribution date, an amount equal to the product of: - (a) a fraction, the numerator of which is the actual number of days in the period from and including the preceding distribution date to but excluding that distribution date and the denominator of which is 360; times (b) the Class B Certificate Rate; and - the outstanding principal amount of the Class B Certificates as of the preceding record date; provided however, for the first distribution date, Class B Monthly Interest shall be equal to the interest accrued on the outstanding principal amount of the Class B Certificates at the applicable Class B Certificate Rate for the period from the date of issuance of Series 2000- through , 2000 calculated on the basis of the actual number of days in the period and a year of 360 days. "COLLATERAL AVAILABLE FUNDS" means, for any monthly period, an amount equal to the Collateral Floating Percentage of the collections of finance charge receivables allocated to Series 2000- including any amounts that are to be treated as collections of finance charge receivables in accordance with the Pooling and Servicing Agreement. "COLLATERAL MINIMUM MONTHLY INTEREST" means, for any distribution date, an amount equal to one-twelfth of the product of: - the Collateral Minimum Interest Rate; and - the outstanding principal amount of the Collateral Interest as of the preceding record date; provided, however, for the first distribution date, Collateral Minimum Monthly Interest will be equal to the interest accrued on the initial principal amount of the Collateral Interest at the Collateral Minimum Interest Rate for the period from and including the date issuance of Series 2000- through , 2000. "COLLATERAL MINIMUM INTEREST RATE" means a rate specified in the agreement between the bank and the Collateral Interest Holder relating to the transfer of the Collateral Interest to the Collateral Interest Holder not to exceed % per annum. "EXCESS FINANCE CHARGES" are collections of finance charge receivables for a monthly period which are allocated to series in Group One other than Series 2000- and are, under the documents governing the other series, designated as Excess Finance Charges. PRINCIPAL PAYMENTS During the Series 2000- revolving period no principal payments will be made to or for the benefit of the certificateholders or deposited into the principal funding account to be accumulated and subsequently paid to the certificateholders. During the revolving period, collections of principal receivables allocable to Series 2000- will, except to the extent used as Reallocated Principal Collections, be treated as Shared Principal Collections. Any Shared Principal Collections will be made available to other series in Group One which are in an amortization period. If the collections of principal receivables allocable to Series 2000- during the revolving period are not needed by other series, the collections will be paid to the holders of the seller's certificates or, if required by the Pooling and Servicing Agreement, retained in the excess funding account. See "Description of the Certificates--Shared Principal Collections" in the accompanying prospectus. The accumulation period for the Series 2000- Interests is scheduled to begin at the close of business on , 200 . The beginning of the accumulation period may, however, be delayed to no later than the close of business on , 200 . The first principal payment will be made to the Class A Certificateholders on the earlier of the (i) 200 distribution date, the "CLASS A EXPECTED FINAL DISTRIBUTION DATE" or (ii) the distribution date in the month following the month in which the rapid amortization period begins. Principal is also expected to be paid to the Class B S-25 27 Certificateholders on the 200 distribution date, the "CLASS B EXPECTED FINAL DISTRIBUTION DATE"; however, if the amount on deposit in the principal funding account is not sufficient to pay the certificates in full, it will be applied first to pay the Class A Certificates. No principal will be payable to the Class B Certificateholders unless the Class A Investor Amount is paid in full or funds are available to make full payment. On each distribution date for the accumulation period, prior to the date on which the Class A Investor Amount and the Class B Investor Amount are paid in full, an amount equal to the least of one of the following will be deposited in the principal funding account: - Available Investor Principal Collections on deposit in the collection account for the distribution date; - the applicable Controlled Deposit Amount for the distribution date; and - the sum of the Class A Invested Amount and the Class B Invested Amount. Amounts deposited into the principal funding account during the accumulation period will be paid first to the Class A Certificateholders and then Class B Certificateholders, on the Class A Expected Final Distribution Date and the Class B Expected Final Distribution Date or, if earlier, the first distribution date for the rapid amortization period. "AVAILABLE INVESTOR PRINCIPAL COLLECTIONS" means, for any monthly period, an amount equal to the sum of: - (a) an amount equal to the Principal Allocation Percentage of all collections of principal receivables received during the related monthly period; minus (b) the amount of Reallocated Principal Collections for the related monthly period used to fund the Class A Required Amount or the Class B Required Amount; plus - any Shared Principal Collections from other series in Group One that are allocated to Series 2000- ; plus - any other amounts which pursuant to the series supplement are to be treated as Available Investor Principal Collections for the related distribution date. On each distribution date for the rapid amortization period until the Class A Investor Amount is paid in full or the Series 2000- Termination Date occurs, the Class A Certificateholders will be entitled to receive Available Investor Principal Collections in an amount up to the Class A Investor Amount. After payment in full of the Class A Investor Amount, the Class B Certificateholders will be entitled to receive, on each distribution date, Available Investor Principal Collections until the earlier of the date the Class B Investor Amount is paid in full and the Series 2000- Termination Date. "CLASS A MONTHLY PRINCIPAL" for any distribution date for the accumulation period or the rapid amortization period will equal the least of: - the Available Investor Principal Collections on deposit in the collection account for that distribution date; - for each distribution date for the accumulation period, on or prior to the Class A Expected Final Distribution Date, the Controlled Deposit Amount for that distribution date; and - the Class A Invested Amount on the related distribution date. "CLASS B MONTHLY PRINCIPAL" for any distribution date, beginning with the first distribution date for the accumulation period on which the full amount of the Class A Investor Amount is on deposit in the S-26 28 principal funding account or has been paid to the Class A Certificateholders or, if earlier, the first distribution date in the rapid amortization period, will equal the least of: - the Available Investor Principal Collections on deposit in the collection account for that distribution date, minus the portion of the Available Investor Principal Collections applied to Class A Monthly Principal on that distribution date; - for each distribution date with respect to the accumulation period, the Controlled Deposit Amount for that distribution date, minus the portion of the Controlled Deposit Amount for that distribution date applied to Class A Monthly Principal; and - the Class B Invested Amount on that distribution date. "COLLATERAL MONTHLY PRINCIPAL" means beginning with the later of the Collateral Expected Final Distribution Date and the distribution date on which the Class B Investor Amount is paid in full, or, if earlier, the first distribution date in the rapid amortization period, an amount equal to the lesser of: - that Available Investor Principal Collections for that distribution date, minus the portion of the Available Investor Principal Collections applied to Class A Monthly Principal and Class B Monthly Principal on that distribution date; and - the Collateral Invested Amount for that distribution date. "CONTROLLED ACCUMULATION AMOUNT" means for any distribution date for the accumulation period, the sum of the Class A Initial Invested Amount and the Class B Initial Invested Amount divided by nine, subject to adjustment if the beginning of the accumulation period is postponed. "DEFICIT CONTROLLED ACCUMULATION AMOUNT" means: - on the first distribution date for the accumulation period the excess, if any, of the Controlled Accumulation Amount for that distribution date over the amount distributed from the collection account as Class A Monthly Principal and Class B Monthly Principal for that distribution date; and - on each subsequent distribution date for the accumulation period the excess, if any, of the Controlled Deposit Amount for the subsequent distribution date over the amount distributed from the collection account as Class A Monthly Principal and Class B Monthly Principal for the subsequent distribution date. "CONTROLLED DEPOSIT AMOUNT" means, for any distribution date relating to the accumulation period, an amount equal to the sum of: - the Controlled Accumulation Amount on that distribution date; and - any Deficit Controlled Accumulation Amount for the immediately preceding distribution date. POSTPONEMENT OF ACCUMULATION PERIOD The servicer may elect to postpone the start of the accumulation period and extend the length of the revolving period. The servicer may make this election only if the length of the accumulation period is less than nine months. On each determination date, until the accumulation period begins, the servicer will determine the number of months expected to be required to fully fund the principal funding account and be able to pay the Class A Investor Amount no later than the Class A Expected Final Distribution Date and the Class B Investor Amount no later than the Class B Expected Final Distribution Date. The servicer will determine the length of the period required on the basis of: - the monthly collections of principal receivables expected to be distributable to the certificateholders of all principal sharing series in Group One, assuming a principal payment rate no greater than the lowest monthly principal payment rate on the receivables for the preceding 12 months; and S-27 29 - the amount of principal expected to be distributable to certificateholders of principal sharing series in Group One which are not expected to be in their revolving periods during the accumulation period. If the servicer determines that the period needed to fund the accumulation period is less than nine months, the servicer may, at its option, postpone the start of the accumulation period so that the number of months included in the accumulation period will be equal to or exceed the period needed. The effect of the foregoing calculation is to permit the reduction of the length of the accumulation period based on the investor interest of certain other principal sharing series in Group One that are scheduled to be in their revolving periods during the accumulation period and on increases in the principal payment rate occurring after the date of issuance of Series 2000- . The length of the accumulation period will not be less than one month. SUBORDINATION The Class B Certificateholders' interest and the Collateral Interest will be subordinated to the extent necessary to fund certain payments for the Class A Certificates. In addition, the Collateral Interest will be subordinated to the extent necessary to fund certain payments for the Class B Certificates. Also collections of principal receivables otherwise allocable to the Class B Certificateholders may be reallocated to the Class A Certificateholders and the Class B Invested Amount may be reduced. Similarly, collections of principal receivables allocable to the Collateral Interest may be reallocated to the Class A Certificateholders and the Class B Certificateholders and the Collateral Invested Amount may be reduced. To the extent the Class B Invested Amount is reduced, the percentage of collections of finance charge receivables allocated to the Class B Certificateholders in subsequent monthly periods will be reduced. Moreover, to the extent the amount of this reduction in the Class B Invested Amount is not reimbursed, the amount of principal distributable to the Class B Certificateholders will be reduced. See "--Allocation Percentages," "--Reallocation of Cash Flows," and "--Application of Collections--Excess Spread; Excess Finance Charges" in this prospectus supplement. ALLOCATION PERCENTAGES The servicer will allocate among the Class A Certificates, the Class B Certificates, the Collateral Interest, the Certificateholders' interest for all other outstanding series and the sellers' interest, all collections of finance charge receivables, principal receivables and the defaulted amount for each monthly period. Collections of finance charge receivables and the defaulted amount for any monthly period will be allocated to Series 2000- based on the Floating Allocation Percentage. The "FLOATING ALLOCATION PERCENTAGE" means, for any monthly period, the percentage equivalent, which shall never exceed 100%, of a fraction, the numerator of which is the Invested Amount as of the last day of the preceding monthly period, or for the first monthly period, the Initial Invested Amount as of the date of issuance of Series 2000- , and the denominator of which is the greater of: (1) the sum of: - the total amount of principal receivables in the trust as of the last day of the monthly period, or, for the first monthly period, the total amount of principal receivables in the trust on the date of issuance of Series 2000- ; and - the principal amount on deposit in the excess funding account as of the last day of the monthly period; and (2) the sum of the numerators used to calculate the series percentages for finance charge receivables or defaulted receivables, for all series of certificates then outstanding; provided however, that this ratio is subject to adjustment to give effect to designations of additional accounts. S-28 30 These amounts will be further allocated among the Class A Certificateholders, the Class B Certificateholders and the Collateral Interest Holder in accordance with the Class A Floating Percentage, the Class B Floating Percentage and the Collateral Floating Percentage, respectively. The "CLASS A FLOATING PERCENTAGE" means, for 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 Invested Amount as of the close of business on the last day of the preceding monthly period, or with respect to the first monthly period, the Class A Initial Invested Amount and the denominator of which is equal to the Invested Amount as of the close of business on that day or for the first monthly period, the Initial Invested Amount. The "CLASS B FLOATING PERCENTAGE" means, for 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 Invested Amount as of the close of business on the last day of the preceding monthly period, or with respect to the first monthly period, the Class B Initial Invested Amount and the denominator of which is equal to the Invested Amount as of the close of business on that day or for the first monthly period, the Initial Invested Amount. The "COLLATERAL FLOATING PERCENTAGE" means, for any monthly period, 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 or with respect to the first monthly period, the Collateral Initial Invested Amount and the denominator of which is equal to the Invested Amount as of the close of business on that day, or for the first monthly period, the Initial Invested Amount. Collections of principal receivables will be allocated to Series 2000- based on a percentage equivalent to a fraction, for any monthly period, called the "PRINCIPAL ALLOCATION PERCENTAGE." (a) The numerator of the fraction is: - during the revolving period, the Invested Amount as of the last day of the immediately preceding monthly period, or, if it is first monthly period, then the date of issuance of Series 2000- ; and - during the accumulation period or the rapid amortization period, the invested amount as of the last day of the revolving period or if the numerator has been reduced during an accumulation period as described in the following paragraph and a rapid amortization period begins, the Invested Amount as of the last day of the accumulation period; and (b) the denominator of the fraction is the greater of: - the sum of the total amount of principal receivables in the trust as of the last day of the immediately preceding monthly period and the principal amount on deposit in the excess funding account as of the same day, or, if it is the first monthly period, as of the date of issuance of Series 2000- ; and - the sum of the numerators used to calculate the series percentage applicable to principal receivables for all series outstanding as of the date for which the determination is being made. During the accumulation period, on any date, at the option of the servicer, the numerator of the Principal Allocation Percentage may be reduced below the numerator used in the previous monthly period, to an amount not less than the greater of: - the Invested Amount as of the last day of the immediately preceding monthly period, less the amount of any distributions of principal deposited in the principal funding account since the last day of the immediately preceding monthly period; and - an amount that if used as the numerator of the Principal Allocation Percentage for the remainder of the accumulation period, based on assumptions set forth in the series supplement, would assure S-29 31 that Available Investor Principal Collections for Series 2000- would equal at least 125% of the Controlled Accumulation Amount for each monthly period for so long as the Invested Amount is greater than zero. The Principal Floating Percentage is also subject to adjustment to give effect to designations of additional accounts. Amounts allocated to Series 2000- on the basis of the Principal Allocation Percentage will be further allocated among the Class A Certificates, the Class B Certificates and the Collateral Interest based on the Class A Principal Percentage, the Class B Principal Percentage and the Collateral Interest Percentage. The "CLASS A PRINCIPAL PERCENTAGE" means, for any monthly period: (1) during the revolving period, the percentage equivalent of a fraction, the numerator of which is the Class A Invested Amount as of the last day of the immediately preceding monthly period or, if it is the first monthly period, as of the date of issuance of Series 2000- , and the denominator of which is the Invested Amount as of the last day of the preceding monthly period, or, if it is the first monthly period, the date of issuance of Series 2000- ; and (2) after the revolving period, the percentage equivalent of a fraction, the numerator of which is the Class A Invested Amount as of the last day of the revolving period, and the denominator of which is the Invested Amount as of that last day. The "CLASS B PRINCIPAL PERCENTAGE" means, for any monthly period: (1) during the revolving period, the percentage equivalent of a fraction, the numerator of which is the Class B Invested Amount as of the last day of the immediately preceding monthly period or, if it is the first monthly period, the date of issuance of Series 2000- and the denominator of which is the Invested Amount as of the last day of the preceding monthly period, or, in the case of the first monthly period, the date of issuance of Series 2000- ; and (2) after the revolving period, the percentage equivalent of a fraction, the numerator of which is the Class B Invested Amount as of the last day of the revolving period, and the denominator of which is the Invested Amount as of the same day. "COLLATERAL PRINCIPAL PERCENTAGE" means, for any monthly period: (1) during the revolving period, the percentage equivalent 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 the last day of the preceding monthly period; and (2) after the revolving period, the percentage equivalent of a fraction, the numerator of which is the Collateral Invested Amount as of the last day of the revolving period, and the denominator of which is the Invested Amount as of the same day. As used in this prospectus supplement, the following terms have the meanings indicated: "CLASS A INVESTED AMOUNT" for any date means: (1) $ , the "CLASS A INITIAL INVESTED AMOUNT;" minus (2) the aggregate amount of principal payments made to the Class A Certificateholders on or prior to the date; minus (3) the excess, if any, of the aggregate amount of Class A Investor Charge-Offs for all prior dates over the aggregate amount of any reimbursements of Class A Investor Charge-Offs for all distribution dates prior to the date; and minus (4) the principal amount on deposit in the principal funding account on the date, but not in excess of the Initial Invested Amount. S-30 32 "CLASS B INVESTED AMOUNT" for any date means: (1) $ , the "CLASS B INITIAL INVESTED AMOUNT;" minus (2) the aggregate amount of principal payments made to Class B Certificateholders on or prior to the date; minus (3) the excess, if any, of the aggregate amount of Class B Investor Charge-Offs for all prior distribution dates over the aggregate amount of reimbursement of Class B Investor Charge-Offs for all distribution dates prior to the date; minus (4) the aggregate amount of Reallocated Principal Collections for all prior distribution dates which have been used to fund the Class A Required Amount for prior distribution dates, excluding any Reallocated Principal Collections that have resulted in a reduction of the Collateral Invested Amount; minus (5) the amount by which the Class B Invested Amount has been reduced to fund the Class A Investor Default Amount on all prior distribution dates as described under "--Allocation of Investor Default Amount," in this prospectus supplement; plus (6) the aggregate amount of Excess Spread and Excess Finance Charges allocated to Series 2000- and applied on all prior distribution dates for the purpose of reimbursing amounts deducted pursuant to the foregoing clauses (3), (4) and (5); and minus (7) the positive difference, if any, between the principal funding account balance and the Class A Investor Amount on the date; provided however, that the Class B Invested Amount may not be reduced below zero. "COLLATERAL INVESTED AMOUNT" for any date means: (1) $ , the "COLLATERAL INITIAL INVESTED AMOUNT;" minus (2) the aggregate amount of principal payments made on the Collateral Interest prior to the date; minus (3) the aggregate amount of Reallocated Principal Collections allocable to the Collateral Invested Amount for all prior distribution dates which have been used to fund the Class A Required Amount or the Class B Required Amount; minus (4) the aggregate amount by which the Collateral Invested Amount has been reduced to fund the Class A Investor Default Amount and the Class B Investor Default Amount on all prior distribution dates as described under "--Allocation of Investor Default Amount," in this prospectus supplement; minus (5) an amount equal to the product of the Collateral Floating Percentage and the Investor Default Amount (the "COLLATERAL DEFAULT AMOUNT") for any distribution date that is not funded out of Excess Spread and Excess Finance Charges allocated to Series 2000- and available for this purpose on the related distribution date; and plus (6) the aggregate amount of Excess Spread and Excess Finance Charges allocated and available to reimburse amounts deducted pursuant to the foregoing clauses (3), (4) and (5); provided however, that the Collateral Invested Amount may not be reduced below zero. The "INVESTED AMOUNT," for any date means the sum of the Class A Invested Amount, the Class B Invested Amount and the Collateral Invested Amount. The "INITIAL INVESTED AMOUNT," means $ the Invested Amount on the date of issuance of Series 2000- . S-31 33 "CLASS A INVESTOR AMOUNT" for any date means the sum of the Class A Invested Amount plus the principal amount on deposit in the principal funding account, but not in excess of the Class A Initial Invested Amount. "CLASS B INVESTOR AMOUNT" for any date means the sum of the Class B Invested Amount plus the positive difference, if any, between the principal amount on deposit in the principal funding account, and the Class A Investor Amount on that date but not in excess of the Class B Initial Invested Amount. "INVESTOR AMOUNT," for any date means the sum of the Class A Investor Amount, the Class B Investor Amount and the Collateral Invested Amount. "SERIES INVESTOR AMOUNT," for any date means the numerator of the Principal Allocation Percentage on that date. REALLOCATION OF CASH FLOWS On each determination date, the servicer will determine the "CLASS A REQUIRED AMOUNT" which will be the amount, if any, by which the sum of the following exceeds the Class A Available Funds for the distribution date: - Class A Monthly Interest for the distribution date; - any Class A Monthly Interest previously due but not paid to the Class A Certificateholders on a prior distribution date; - any Class A Additional Interest and any Class A Additional Interest previously due but not paid to the Class A Certificateholders on a prior distribution date; - the Class A Servicing Fee for the distribution date and any unpaid Class A Servicing Fee; and - the Class A Investor Default Amount, if any, for the distribution date. If the Class A Required Amount is greater than zero, Excess Spread and Excess Finance Charges allocated to Series 2000- and available for this purpose will be used to fund the Class A Required Amount for the distribution date. If the Excess Spread and Excess Finance Charges are insufficient to fund the Class A Required Amount, collections of principal receivables allocable first to the Collateral Interest and then to the Class B Certificates for the related monthly period will then be used to fund the remaining Class A Required Amount. "REALLOCATED PRINCIPAL COLLECTIONS" means an amount of collections of principal receivables with respect to any monthly period equal to the product of: - the Principal Allocation Percentage for the monthly period; - the aggregate amount of collections of principal receivables for the monthly period; and - the sum of the Class B Principal Percentage and the Collateral Principal Percentage for the monthly period. If Reallocated Principal Collections for a related monthly period together with Excess Spread and Excess Finance Charges allocated to Series 2000- are insufficient to fund the Class A Required Amount for the related monthly period, then the Collateral Invested Amount will be reduced by the amount of this excess, but not by more than the Class A Investor Default Amount for the distribution date. In the event that this 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 will be reduced by the amount by which the Collateral Invested Amount would have been reduced below zero. However, the Class B Invested Amount cannot be reduced by more than the excess of the Class A Investor Default Amount, if any, for the distribution date over the amount of the reduction, if any, of the Collateral Invested Amount on the distribution date. In the event that the reduction would cause the Class B Invested Amount to be a negative number, the Class B Invested Amount will be reduced to zero, and the Class A Invested Amount S-32 34 will be reduced by the amount by which the Class B Invested Amount would have been reduced below zero. However, the Class A Invested Amount cannot be reduced by more than the excess, if any, of the Class A Investor Default Amount for the distribution date over the amount of the reductions, if any, of the Collateral Invested Amount and the Class B Invested Amount with respect to the distribution date as described above. Any such reduction in the Class A Invested Amount may have the effect of slowing or reducing the return of principal and interest to the Class A Certificateholders. In this case, the Class A Certificateholders will bear directly the credit and other risks associated with their interest in the trust. See "--Allocation of Investor Default Amount" in this prospectus supplement. On each determination date, the servicer will determine the "CLASS B REQUIRED AMOUNT," which will be the sum of the Class B Investor Default Amount for the distribution date plus the amount by which, if any, following amounts exceed the Class B Available Funds for the distribution date: - Class B Monthly Interest for the distribution date; - any Class B Monthly Interest previously due but not paid to the Class B Certificateholders on a prior distribution date; - any Class B Additional Interest and any Class B Additional Interest previously due but not paid to the Class B Certificateholders on a prior distribution date; and - the Class B Servicing Fee for the distribution date and any unpaid Class B Servicing Fee. If the Class B Required Amount is greater than zero, Excess Spread and Excess Finance Charges allocated to Series 2000- not required to pay the Class A Required Amount or reimburse Class A Investor Charge-Offs will be used to fund the Class B Required Amount for that distribution date. If the Excess Spread and Excess Finance Charges available to fund the remaining Class B Required Amount for that distribution date are insufficient to pay the Class B Required Amount, then Reallocated Principal Collections allocable to the Collateral Interest and not required to pay the Class A Required Amount will be used to fund the remaining Class B Required Amount. If the Reallocated Principal Collections allocable to the Collateral Interest are insufficient to fund the remaining Class B Required Amount, then the Collateral Invested Amount remaining after any adjustments made for the benefit of the Class A Certificateholders will be reduced by the amount of the insufficiency, but not by more than the Class B Investor Default Amount for the distribution date. In the event that this 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 will be reduced by the amount by which the Collateral Invested Amount would have been reduced below zero. However the Collateral Invested Amount cannot be reduced by more than the excess of the Class B Investor Default Amount for the distribution date over the amount of the reduction of the Collateral Invested Amount. Any reduction in the Class B Invested Amount may have the effect of slowing or reducing the return of principal and interest to the Class B Certificateholders. In this case, the Class B Certificateholders will bear directly the credit and other risks associated with their interests in the trust. See "--Allocation of Investor Default Amount" in this prospectus supplement. Reductions of the Class A Invested Amount or Class B Invested Amount will then be reimbursed and the Class A Invested Amount or Class B Invested Amount increased to the extent of Excess Spread and Excess Finance Charges available for these purposes on each distribution date. See "--Application of Collections--Excess Spread; Excess Finance Charges" in this prospectus supplement. When these reductions of the Class A Invested Amount and Class B Invested Amount have been fully reimbursed, reductions of the Collateral Invested Amount will be reimbursed until reimbursed in full in a similar manner. APPLICATION OF COLLECTIONS Application of Collections to the Collection Account. Except under the conditions described in the accompanying prospectus under "Description of the Certificates--Application of Collections," the servicer S-33 35 will apply, or will instruct the trustee to apply, on or prior to the close of business on the second business day following the date of processing of any collections, all collections and other funds to be deposited into the collection account that are allocated to the Series 2000- Certificates and the Collateral Interest as follows: (1) during the revolving period, an amount equal to the Floating Allocation Percentage of the collections of finance charge receivables processed on that date will be allocated to the Series 2000- Holders, and of that allocation, the following amounts will be deposited and retained in the collection account: (a) prior to the LIBOR determination date occurring in the current monthly period, the entire amount of the allocation; and (b) on and after the LIBOR determination date, the difference between: - monthly interest for the related distribution date plus, if the bank is not the servicer, the Monthly Servicing Fee for the monthly period; and - the amounts previously deposited in the collection account for the monthly period pursuant to this clause (1); (2) during the accumulation period or rapid amortization period, an amount equal to the Floating Allocation Percentage of the collections of finance charge receivables processed on this date will be allocated to the Series 2000- Holders and deposited and retained in the collection account; (3) during the revolving period, an amount equal to the Principal Allocation Percentage of collections of principal receivables processed on that date will be allocated to the Series 2000- Holders. If any other principal sharing series in Group One is outstanding and in its amortization period or accumulation period, then it will be retained in the collection account for application, to the extent necessary, to other series in Group One on the related distribution date. Any remaining funds will be paid to the holders of the Seller Certificates. However, these remaining funds will be paid to the holders of the Seller Certificates only if the Seller Amount is greater than the Required Seller Amount and the aggregate amount of principal receivables in the trust is greater than the Required Principal Balance. If this is not the case, these remaining funds be will be deposited in the excess funding account until the Seller Amount is greater than the Required Seller Amount and the aggregate amount of principal receivables is greater than the required principal balance and any remaining funds will be paid to the holders of the Seller Certificates; (4) during the accumulation period, an amount, called a "PERCENTAGE ALLOCATION" for any date, equal to the Principal Allocation Percentage of collections of principal receivables processed on that date will be allocated to the Series 2000- Holders and deposited and retained in the collection account. However, if the sum of Percentage Allocations for the same monthly period exceeds the Controlled Deposit Amount for the related distribution date, or the Collateral Invested Amount on the Collateral Expected Final Distribution Date, then this excess shall not be treated as a Percentage Allocation and shall be: (a) retained in the collection account for application, as necessary, as Shared Principal Collections to other series in Group One on the related distribution date, if any other principal sharing series in Group One is outstanding and in its amortization period or accumulation period; and (b) paid to the holders of the Seller Certificates only if the Seller Amount, on the date of processing, is greater than the Required Seller Amount and the aggregate amount of principal receivables in the trust is greater than the Required Principal Balance and otherwise will be deposited in the excess funding account until the Seller Amount is greater than the Required Seller Amount and the aggregate amount of principal S-34 36 receivables in the trust is greater than the Required Principal Balance and the remainder will be paid to the holders of the Seller Certificates; and (5) during the rapid amortization period, an amount equal to the Principal Allocation Percentage of the collections of principal receivables processed on that date will be allocated to the Series 2000- Holders and deposited and retained in the collection account. However, after the date on which an amount of the collections equal to the Invested Amount has been deposited into the Collection Account and allocated to the Series 2000- Holders, the amount in excess of the Invested Amount will be: (a) retained in the collection account for application, as necessary, as Shared Principal Collections to other series in Group One on the related distribution date, if any other principal sharing series in Group One is outstanding and in its amortization period or accumulation period; and (b) paid to the holders of the Seller Certificates only if the Seller Amount is greater than the Required Seller Amount and the aggregate amount of principal receivables in the trust is greater than the Required Principal Balance and otherwise will be deposited in the excess funding account until the Seller Amount is greater than the Required Seller Amount and the aggregate amount of principal receivables in the trust is greater than the Required Principal Balance and the remainder will be paid to the holders of the Seller Certificates. Withdrawals from Series Accounts. On or before each distribution date, the servicer will direct the trustee to make the following withdrawals from the following series accounts: (1) on each distribution date all principal funding account investment proceeds then on deposit in the principal funding account will be withdrawn and deposited into the collection account for distribution as a portion of Class A Available Funds for that distribution date; (2) on each distribution date after the reserve account funding date, all net investment income accrued since the preceding distribution date on the reserve account will be retained in the reserve account to the extent that the amount on deposit in the reserve account is less than the required reserve account amount and the balance, if any, will be deposited in the collection account for distribution as collections of finance charge receivables allocable to the certificateholders and the Collateral Interest Holder; and (3) on or before each distribution date for the accumulation period and on the first distribution date for the rapid amortization period, if applicable, an amount equal to the lesser of: (a) the available reserve account amount for such distribution date; and (b) the excess, if any, of a portion of the Class A Monthly Interest determined in accordance with the series supplement over the principal funding account investment proceeds for that distribution date will be withdrawn from the reserve account and deposited in the collection account for distribution as a portion of Class A Available Funds for that distribution date; provided, that the amount of the withdrawal from the reserve account under this clause (3) will be reduced to the extent that funds otherwise would be available to be deposited in the reserve account on such distribution date. S-35 37 Payment of Interest, Fees and Other Items. On each distribution date, the trustee, acting pursuant to the servicer's instructions, will apply the Class A Available Funds, Class B Available Funds and Collateral Available Funds in the following priority: (1) On each distribution date, an amount equal to the Class A Available Funds for the distribution date will be withdrawn from the collection account and distributed in the following priority: (a) the Class A Monthly Interest for the distribution date, plus the amount of any Class A Monthly Interest previously due but not paid to the Class A Certificateholders on a prior distribution date, plus any additional interest with respect to Class A Monthly Interest that was due but not paid to the Class A Certificateholders on a prior distribution date at a rate equal to the Class A Certificate Rate plus 2% per annum (the "CLASS A ADDITIONAL INTEREST") and any Class A Additional Interest previously due but not distributed to the Class A Certificateholders on a prior distribution date will be distributed to the Class A Certificateholders; (b) the Class A Servicing Fee for the distribution date, plus the amount of any Class A Servicing Fee previously due but not distributed to the servicer on a prior distribution date, will be distributed to the servicer; (c) the Class A Investor Default Amount for the distribution date will be treated as a portion of Available Investor Principal Collections for the distribution date; and (d) the balance, if any, shall constitute Excess Spread and shall be allocated and distributed as described under "--Excess Spread; Excess Finance Charges" below. (2) On each distribution date, an amount equal to the Class B Available Funds for the distribution date will be withdrawn from the collection account and distributed in the following priority: (a) the Class B Monthly Interest for the distribution date, plus the amount of any Class B Monthly Interest previously due but not paid to the Class B Certificateholders on a prior distribution date, plus any additional interest with respect to Class B Monthly Interest that was due but not paid to the Class B Certificateholders on a prior distribution date at a rate equal to the Class B Certificate Rate plus 2% per annum (the "CLASS B ADDITIONAL INTEREST") and any Class B Additional Interest previously due but not distributed to the Class B Certificateholders on a prior distribution date will be distributed to the Class B Certificateholders; (b) the Class B Servicing Fee for the distribution date, plus the amount of any Class B Servicing Fee previously due but not distributed to the servicer on a prior distribution date, will be distributed to the servicer; and (c) the balance, if any, shall constitute Excess Spread and shall be allocated and distributed as described under "--Excess Spread; Excess Finance Charges" below. (3) On each distribution date, an amount equal to the Collateral Available Funds for the distribution date will be withdrawn from the collection account and distributed in the following priority: (a) if the bank or the trustee is no longer the servicer, the Collateral Servicing Fee for the distribution date, plus the amount of any Collateral Servicing Fee previously due but not distributed to the servicer on a prior distribution date, will be distributed to the servicer; and (b) the balance, if any, shall constitute Excess Spread and shall be allocated and distributed as described under "--Excess Spread; Excess Finance Charges" below. S-36 38 "EXCESS SPREAD" means, for any distribution date, the sum of the amounts described in clause (2)(c) above, clause (2)(c) above and clause (3)(b) immediately above. Excess Spread; Excess Finance Charges. On each distribution date, the trustee, acting pursuant to the servicer's instructions, will apply Excess Spread and Excess Finance Charges allocated to Series 2000- for the related monthly period to make the following distributions in the following priority: (1) an amount equal to any deficiency pursuant to clauses (1)(a), (b) and (c) above under "--Payment of Interest, Fees and Other Items" will be used to fund the deficiency, provided, that in the event the deficiency exceeds the amount of Excess Spread and Excess Finance Charges allocated to Series 2000- , the Excess Spread and Excess Finance Charges shall be applied: (a) first, to pay amounts due on the distribution date pursuant to clause (1)(a) above under "--Payment of Interest, Fees and Other Items;" (b) second, to pay the Class A Servicing Fee pursuant to clause (1)(b) above under "--Payment of Interest, Fees and Other Items;" and (c) third, to pay the Class A Investor Default Amount for the distribution date pursuant to clause (1)(c) above under "--Payment of Interest, Fees and Other Items;" (2) an amount equal to the aggregate amount of Class A Investor Charge-Offs which have not been previously reimbursed will be treated as a portion of Available Investor Principal Collections for the distribution date as described under "--Payments of Principal" below; (3) an amount equal to any deficiency pursuant to clauses (2)(a) and (b) above under "--Payment of Interest, Fees and Other Items" will be used to fund this deficiency, provided, that in the event the deficiency for this distribution date exceeds the remaining amount of Excess Spread and Excess Finance Charges allocated to Series 2000- , the Excess Spread and Excess Finance Charges will be applied first to pay amounts due on the distribution date pursuant to clause (2)(a) above under "--Payment of Interest, Fees and Other Items," and second to pay the Class B Servicing Fee pursuant to clause (2)(b) above under "--Payment of Interest, Fees and Other Items;" (4) an amount equal to the Class B Investor Default Amount for the distribution date will be treated as a portion of Available Investor Principal Collections for the distribution date as described under "--Payments of Principal" below; (5) an amount equal to the aggregate amount by which the Class B Invested Amount has been reduced pursuant to clauses (3), (4) and (5) of the definition of "Class B Invested Amount" under "--Allocation Percentages" above, (but not in excess of the aggregate amount of the reductions which have not been previously reimbursed, will be treated as a portion of Available Investor Principal Collections for the distribution date; (6) an amount equal to the Collateral Minimum Monthly Interest for the distribution date, plus the amount of any Collateral Minimum Monthly Interest previously due but not paid to the Collateral Interest Holder on a prior Distribution Date, plus any additional interest with respect to Collateral Minimum Monthly Interest that was due but not paid to the Collateral Interest Holder on a prior distribution date at a rate equal to the Collateral Minimum Interest Rate (the "COLLATERAL ADDITIONAL INTEREST") and any Collateral Additional Interest previously due but not distributed to the Collateral Interest Holder on a prior distribution date will be distributed to the Collateral Interest Holder; (7) an amount equal to the Collateral Servicing Fee for the distribution date or if neither the bank nor the trustee is the servicer, the amount of any Collateral Servicing Fee due but not paid from Collateral Available Funds and the amount of any Collateral Servicing Fee due but not paid to the servicer on a prior distribution date will be paid to the servicer; S-37 39 (8) an amount equal to the Collateral Default Amount for the distribution date will be treated as a portion of Available Investor Principal Collections for the distribution date; (9) an amount equal to the aggregate amount by which the Collateral Invested Amount has been reduced pursuant to clauses (3), (4) and (5) of the definition of "Collateral Invested Amount" under "--Allocation Percentages" above, but not in excess of the aggregate amount of those reductions which have not been previously reimbursed, will be treated as a portion of Available Investor Principal Collections for the distribution date; (10) an amount up to the excess, if any, of the Required Reserve Account Amount over the principal amount on deposit in the reserve account will be deposited in the reserve account; and (11) the balance, if any, will be distributed to the Collateral Interest Holder. Reallocated Principal Collections. On or before each distribution date after giving effect to the distributions above under "--Excess Spread; Excess Finance Charges," the trustee, acting pursuant to the servicer's instructions, will apply Reallocated Principal Collections for the related monthly period to make the following distributions in the following priority: (1) if the amount of Excess Spread and Excess Finance Charges allocated to Series 2000- for the related monthly period is less than the Class A Required Amount, Reallocated Principal Collections, up to the amount of the deficiency, will be withdrawn from the collection account and distributed to fund the deficiency in the order of priority set forth in clause (1) above under "--Excess Spread; Excess Finance Charges;" (2) if the amount of Excess Spread and Excess Finance Charges allocated to Series 2000- for the related monthly period and not required to fund the Class A Required Amount or reimburse Class A Investor Charge-Offs is less than the Class B Required Amount, Reallocated Principal Collections allocable to the Collateral Interest not required to fund the Class A Required Amount, up to the amount of the deficiency, will be withdrawn from the collection account and distributed to fund the deficiency in the order of priority set forth in clauses (3) and (4) above under "--Excess Spread; Excess Finance Charges." Payments of Principal. On each distribution date, the trustee, acting pursuant to the servicer's instructions, will distribute Available Investor Principal Collections in the following priority: (1) on each distribution date for the revolving period, all the Available Investor Principal Collections will be treated as Shared Principal Collections and applied as described under "Description of the Certificates--Shared Principal Collections" in the accompanying prospectus; (2) on each distribution date for the accumulation period or the rapid amortization period, all Available Investor Principal Collections will be distributed or deposited in the following priority: (a) an amount equal to Class A Monthly Principal will, during the accumulation period, be deposited in the principal funding account for payment to the Class A Certificateholders on each distribution date beginning on the earlier of the Class A Expected Final distribution date and the first distribution date for the rapid amortization period and, will, during the rapid amortization period, be paid to the Class A Certificateholders; (b) after giving effect to the distribution referred to in clause (a) above, an amount equal to the Class B Monthly Principal will, during the accumulation period, be deposited in the principal funding account for payment to the Class B Certificateholders on each distribution date beginning on the earlier of the Class B Expected Final Payment Date, but only if the Class A Investor Amount is paid in full on that date, and the first distribution date for the rapid amortization period on which the Class A Investor S-38 40 Amount is paid in full and, will during the rapid amortization period, be paid to the Class B Certificateholders; (c) after giving effect to the distributions referred to in clauses (a) and (b) above, an amount equal to Collateral Monthly Principal will be paid to the Collateral Interest Holder on each distribution date beginning on the earlier of the Collateral Expected Final Distribution Date, but only if the Class B Investor Amount is paid in full on or prior to that date, and the first distribution date for the rapid amortization period on which the Class B Investor Amount is paid in full; and (d) the balance, if any, will be treated as Shared Principal Collections and applied as described under "Description of the Certificates--Shared Principal Collections" in the accompanying prospectus. The "COLLATERAL EXPECTED FINAL DISTRIBUTION DATE" is , 200 . PRINCIPAL FUNDING ACCOUNT Pursuant to the series supplement, the servicer will establish and maintain the "PRINCIPAL FUNDING ACCOUNT" as a segregated trust account held for the benefit of the Class A Certificateholders and the Class B Certificateholders. During the accumulation period, the trustee at the direction of the servicer will transfer Available Investor Principal Collections to the principal funding account as described under "--Application of Collections--Payments of Principal" in this prospectus supplement. Funds on deposit in the principal funding account will be invested by the trustee at the direction of the servicer in eligible investments. Investment earnings, net of investment losses and expenses, on the principal funding account, referred to as the "PRINCIPAL FUNDING ACCOUNT INVESTMENT PROCEEDS" will be included in Class A Available Funds for each distribution date. RESERVE ACCOUNT Pursuant to the series supplement, the servicer will establish and maintain the "RESERVE ACCOUNT" as a segregated trust account held for the benefit of the Class A Certificateholders. The reserve account is established to assist with the distribution of interest on the Class A Certificates during the accumulation period. For each distribution date from and after the reserve account funding date, but prior to the termination of the reserve account, the trustee, acting pursuant to the servicer's instructions, will apply Excess Spread and Excess Finance Charges allocated to Series 2000- , as described above under "--Application of Collections--Excess Spread; Excess Finance Charges," to increase the amount on deposit in the reserve account, to the extent this amount is less than the Required Reserve Account Amount. The "RESERVE ACCOUNT FUNDING DATE" will be the distribution date for the monthly period which begins no later than three months prior to the monthly period in which, as of the related determination date, the accumulation period is scheduled to begin. The "REQUIRED RESERVE ACCOUNT AMOUNT" for any distribution date on or after the reserve account funding date will be (1) the product of: - % of the Class A Investor Amount as of the preceding distribution date after giving effect to all applicable changes in the Class A Investor Amount on that date; and - a fraction, the numerator of which is the number of monthly periods schedule to be included in the accumulation period as of that date, and the denominator of which is nine, provided, that if this numerator is one, the Required Reserve Account Amount will be zero; or (2) any other amount designated by the seller, provided, that if the designation is of a lesser amount, the seller shall have provided the servicer and the trustee with evidence that each S-39 41 rating agency rating the certificates or the Collateral Interest has notified the seller that such action will not result in a reduction or withdrawal of its rating of any outstanding series or class and the seller shall have delivered to the trustee a certificate of an authorized officer to the effect that, based on the facts known to the officer at that time, in the reasonable belief of the seller, the designation will not cause a Pay Out Event or an event that, after the giving of notice or the lapse of time, would cause a Pay Out Event to occur. On each distribution date, after giving effect to any deposit to be made to and any withdrawal to be made from the reserve account, the trustee will withdraw from the reserve account to the excess, if any, of the amount on deposit in the reserve account over the Required Reserve Account Amount and will pay that amount to the Collateral Interest Holder. Provided that the reserve account has not terminated as described below, all amounts on deposit in the reserve account with respect to any distribution date, after giving effect to any deposits to, or withdrawals from, the reserve account to be made on the distribution date will be invested by the trustee at the direction of the servicer in eligible investments. The interest and other investment income, net of investment expenses and losses, earned on the investments will be retained in the reserve account, to the extent the amount on deposit is less than the required Reserve Account Amount, or deposited in the collection account and treated as collections of finance charge receivables allocable to Series 2000- . On the determination date before each distribution date for the accumulation period and on the first distribution date for the rapid amortization period, a withdrawal will be made from the reserve account, and the amount of this withdrawal will be deposited in the collection account and included in Class A Available Funds in an amount equal to the lesser of: - the available reserve account amount for the distribution date; and - the excess, if any, of a portion of the Class A Monthly Interest determined in accordance with the Pooling and Servicing Agreement over the principal funding account investment proceeds for the distribution date; provided, that the amount of the withdrawal shall be reduced to the extent that funds otherwise would be available to be deposited in the reserve account on the distribution date. On each distribution date, the "AVAILABLE RESERVE ACCOUNT AMOUNT" will be the lesser of the amount on deposit in the reserve account, before giving effect to any deposit to be made to the reserve account on the distribution date, and the Required Reserve Account Amount for the distribution date. The reserve account will be terminated following the earliest of: - the termination of the trust pursuant to the Pooling and Servicing Agreement; - the date on which the Class A Investor Amount is paid in full; and - if the accumulation period has not begun, the occurrence of a Pay Out Event or, if the accumulation period has begun, the earlier of the first distribution date with respect to the rapid amortization period and the Class A Expected Final Distribution Date. Upon the termination of the reserve account, all amounts on deposit after giving effect to any withdrawal from the reserve account on that date as described above will be distributed to the Collateral Interest Holder. Any amounts withdrawn from the reserve account and distributed to the Collateral Interest Holder will not be available for distribution to the certificateholders. PAIRED SERIES The Series 2000- Certificates are subject to being paired on or after the beginning of the accumulation period or the rapid amortization period with one or more later issued series. Any later series which is paired with Series 2000- is called a "PAIRED SERIES." A paired series may be pre-funded with an initial deposit to a funding account or may have a variable principal amount. Any funding account created in connection with a paired series will be held for the benefit of the paired series and not for the benefit of S-40 42 the holders of the Series 2000- Certificates. Upon payment in full of the Series 2000- Certificates, assuming that there have been no unreimbursed charge-offs for any related paired series, the aggregate Investor Amount of the paired series will have been increased by an amount up to an aggregate amount equal to the Investor Amount. The issuance of a paired series will be subject to the conditions described under "Description of the Certificates--New Issuances" in the accompanying prospectus. There can be no assurance that the terms of any paired series might not have an impact on the calculation of the Series Percentage or the timing or amount of payments received by a certificateholder. The full extent by which the timing or amount of payments received by a holder of a Series 2000-Certificate may be affected will be dependent on a number of factors and will not be readily determinable by the change that may occur in the Series Percentage. SHARED COLLECTIONS OF PRINCIPAL RECEIVABLES To the extent that collections of principal receivables allocated to the Series 2000- are not needed to make payments to or for the benefit of the certificateholders or the Collateral Interest Holder, the collections may be applied to cover principal payments due to or for the benefit of other principal sharing series in Group One. Any application of principal collections to other series will not result in a reduction of the Invested Amount of the Series 2000- Certificates or the Collateral Interest. Similarly, collections of principal receivables allocated to other principal sharing series in Group One, to the extent these collections, are not needed to make payments to or for the benefit of the holders of the certificates and other interests of the other series, will be applied, if necessary, to cover payments of principal due to holders of the Series 2000- Certificates during the accumulation period. The collections of principal receivables allocated to other series and not needed by other series are "SHARED PRINCIPAL COLLECTIONS." There can be no assurance that Shared Principal Collections will be available to cover payments of principal or deposits due on any distribution date for the accumulation period. If no Shared Principal Collections were available to the certificates, the Class A Investor Amount might not be paid in full by the Class A Expected Final Distribution Date and the Class B Investor Amount might not be paid in full by the Class B Expected Final Distribution Date. These Shared Principal Collections may also be allocated to other series either currently outstanding or to be issued by the trust in the future. To the extent the Shared Principal Collections are allocated to other series, the pro rata share of the Shared Principal Collections allocated to Series 2000- will be reduced. Series 2000- will be included in a group of series designated as "GROUP ONE." Series 2000- will be the series outstanding and included in Group One. ALLOCATION OF INVESTOR DEFAULT AMOUNT On each determination date, the servicer will calculate the Investor Default Amount for the preceding monthly period. The term "INVESTOR DEFAULT AMOUNT" means, for any distribution date, the product of: (1) the defaulted amount for the related monthly period; and (2) the Floating Allocation Percentage for the related monthly period. For a description of the defaulted amount, see "Description of the Certificates--Defaulted Receivables; Rebates and Fraudulent Charges" in the accompanying prospectus. A portion of the Investor Default Amount will be allocated to the Class A Certificateholders on each distribution date. The amount to be allocated to the Class A Certificateholders is the "CLASS A INVESTOR DEFAULT AMOUNT" and for each distribution date is an amount equal to the product of the Class A Floating Percentage applicable during the related monthly period and the Investor Default Amount for the related monthly period. A portion of the Investor Default Amount will also be allocated to the Class B Certificateholders. The amount to be allocated to the Class B Certificateholders is the "CLASS B INVESTOR DEFAULT AMOUNT" and for each distribution date is an amount equal to the product of the Class B Floating Percentage applicable during the related monthly period and the Investor Default Amount for that S-41 43 monthly period. A portion of the Investor Default Amount will be allocated to the Collateral Interest Holder on each distribution date. The amount to be allocated to the Collateral Interest is the "COLLATERAL DEFAULT AMOUNT" and for each distribution date is an amount equal to the product of the Collateral Floating Percentage applicable during the related monthly period and the Investor Default Amount for the related monthly period. An amount equal to the Class A Investor Default Amount for each monthly period will be paid from Class A Available Funds, Excess Spread and Excess Finance Charges allocated to Series 2000- and Reallocated Principal Collections and applied as described above under "--application of collections--payment of interest, fees and other Items," "--Application of Collections--Excess Spread; Excess Finance Charges" and "--Reallocation of Cash Flows." An amount equal to the Class B Investor Default Amount for each monthly period will be paid from Excess Spread and Excess Finance Charges allocated to Series 2000- and Reallocated Principal Collections allocable to the Collateral Invested Amount and applied as described above under "--Application of Collections--Excess Spread; Excess Finance Charges" and "--Reallocation of Cash Flows." An amount equal to the Collateral Default Amount for each monthly period will be paid from Excess Spread and Excess Finance Charges allocated to Series 2000- as described above under "--Application of Collections--Excess Spread; Excess Finance Charges." On each distribution date, if the Class A Required Amount for the distribution date exceeds the sum of Excess Spread and Excess Finance Charges allocable to Series 2000- and Reallocated Principal Collections, the Collateral Invested Amount will be reduced by the amount of that excess, but not by more than the Class A Investor Default Amount for the distribution date. In the event that this 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 will 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 the distribution date over the amount of the reduction, if any, of the Collateral Invested Amount for the distribution date. In the event that this reduction would cause the Class B Invested Amount to be a negative number, the Class B Invested Amount will be reduced to zero, and the Class A Invested Amount will be reduced by the amount by which the Class B Invested Amount would have been reduced below zero, but not by more than the excess, if any, of the Class A Investor Default Amount for the distribution date over the amount of the reductions, if any, of the Collateral Invested Amount and the Class B Invested Amount for the distribution date as described above. A reduction in the Class A Invested Amount occurring as described in the preceding sentence is a "CLASS A INVESTOR CHARGE-OFF." If a Class A Investor Charge-Off occurs this may have the effect of slowing or reducing the return of principal to the Class A Certificateholders. If the Class A Invested Amount has been reduced by Class A Investor Charge-Offs, it will subsequently be increased on any distribution date, but not by an amount in excess of the aggregate Class A Investor Charge-Offs by the amount of Excess Spread and Excess Finance Charges allocated to Series 2000- and available to reimburse Class A Investor Charge-Offs as described above under "--Application of Collections--Excess Spread; Excess Finance Charges." On each distribution date, if the Class B Required Amount for the distribution date exceeds the sum of Excess Spread and Excess Finance Charges allocable to Series 2000- and not required to pay the Class A Required Amount and Reallocated Principal Collections allocable to the Collateral Interest and not required to pay the Class A Required Amount, then the Collateral Invested Amount will be reduced by the amount of that excess. If this 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 will 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 the distribution date over the amount of such reduction, if any, of the Collateral Invested Amount. A S-42 44 reduction in the Class B Invested Amount occurring as described in the preceding sentence is a "CLASS B INVESTOR CHARGE-OFF." If a Class B Investor Charge-Off occurs this may have the effect of slowing or reducing the return of principal to the Class B Certificateholders. If the Class B Invested Amount has been reduced by the Class B Investor Charge-Offs, it will thereafter be increased on any distribution date, but not by an amount in excess of the aggregate Class B Investor Charge-Offs, by the amount of Excess Spread and Excess Finance Charges allocated to Series 2000- and available to reimburse Class B Investor Charge-Offs as described above under "--Application of Collections--Excess Spread; Excess Finance Charges." OPTIONAL REPURCHASE On any date occurring on or after the date that the Investor Amount is reduced to 5% or less of the Initial Invested Amount, the seller will have the option, to be exercised in its sole discretion, to repurchase the certificates. The purchase price of the certificates and the Collateral Interest will be equal to the Invested Amount on the distribution date on which the purchase occurs, if the purchase is on a distribution date and, if not, the invested amount for the distribution date following the repurchase. Plus, in each case, accrued and unpaid interest on the certificates plus accrued and unpaid interest on the Collateral Interest. Following a repurchase, the certificateholders will have no further rights to the receivables; provided, however, that the repurchase in no way impacts the certificateholders' rights under the federal securities law. Any optional repurchase may result in an early repayment of your investment without any prepayment penalty and there can be no assurance that you will be able to invest the early repayment amount at a similar rate of return. PAY OUT EVENTS The revolving period for Series 2000- will continue through the close of business on , 200 , or a later date resulting from the postponement of the accumulation period, unless a Pay Out Event occurs prior to that date. A "PAY OUT EVENT" for Series 2000- refers to any of the following events, which are applicable only to Series 2000- although other series may have similar or identical Pay Out Events: (a) failure of the seller: - to make any payment or deposit on the date required under the Pooling and Servicing Agreement on or before the date occurring five business days after the date the payment or deposit is required to be made; or - duly to observe or perform in any material respect any other covenants or agreements of the seller in the Pooling and Servicing Agreement, which failure has a material adverse effect on the Series 2000- Holders which determination will be made without reference to whether any funds are available pursuant to any credit enhancement and provided that the failure continues unremedied for 60 days after written notice has been given to the seller by the trustee, or to the seller and the trustee by Series 2000- Holders aggregating not less than 50% of the outstanding principal balance of the Series 2000- Interests; (b) any representation or warranty made by the seller in the Pooling and Servicing Agreement or any information required to be given by the servicer on behalf of the seller to identify the accounts proves to have been incorrect in any material respect when made or delivered and continues to be incorrect in any material respect for 60 days after written notice has been given to the seller by the trustee, or to the seller and the trustee by holders of the certificates aggregating not less than 50% of the outstanding principal balance of the Series 2000- Certificates and as a result the interests of the certificateholders are materially and adversely affected, which determination shall be made without reference to whether any funds are available pursuant to any credit enhancement; provided, however, that S-43 45 a Pay Out Event shall not be deemed to have occurred under this subparagraph (b) if the seller has accepted reassignment of the related receivable or all such receivables, if applicable, during the 60 day period after notice, or a longer period if specified by the trustee, in accordance with the provisions of the Pooling and Servicing Agreement; (c) with respect to the end of any monthly period: - for which the Seller Amount is less than the Required Seller Amount, the failure of the seller to convey receivables in additional accounts to the trust on or prior to the tenth business day following the related determination date so that the Seller Amount is at least equal to the Required Seller Amount; or - for which the aggregate principal receivables in the trust are less than the Required Principal Balance, the failure of the seller to convey receivables in additional accounts to the trust on or prior to the tenth business day following the related determination date so that the aggregate principal receivables in the trust are at least equal to the Required Principal Balance; (d) the Net Portfolio Yield averaged over three consecutive monthly periods is less than the Base Rate averaged over the same period; (e) any servicer default occurs which would have a material adverse effect on the certificateholders, which determination shall be made without reference to whether any funds are available pursuant to any credit enhancement; or (f) the Class A Investor Amount is not paid in full on the Class A Expected Final Distribution Date or the Class B Investor Amount is not paid in full on the Class B Expected Final Distribution Date or the Collateral Invested Amount shall not be paid in full on the Collateral Expected Final Distribution Date. The term "NET PORTFOLIO YIELD" for any month, means the annualized percentage equivalent of a fraction: (a) the numerator of which is the sum of: (1) the amount of collections of finance charge receivables during the month allocable to the Series 2000- Certificates and to the Collateral Interest, including any other amounts that are to be treated as collections of finance charge receivables under the Pooling and Servicing Agreement, after subtracting therefrom the Investor Default Amount for the related month; plus (2) the amount of any net earnings on the principal funding account for the related distribution date; plus (3) the amount of funds, if any, to be withdrawn from the reserve account and included in Class A Available Funds for the related distribution date; and (b) and the denominator of which is the Investor Amount as of the last day of the prior calendar month. For any month, the "BASE RATE" will be equal to the annualized percentage equivalent of a fraction: (a) the numerator of which is equal to the sum of the following, each for the related distribution date: (1) the Class A Monthly Interest; (2) the Class B Monthly Interest; (3) the Collateral Minimum Monthly Interest; and (4) the Monthly Servicing Fee, and S-44 46 (b) the denominator of which is the Investor Amount as of the last day of the preceding month. A Pay Out Event for all series refers to any of the following events, which are applicable to Series 2000- and other series: (g) an insolvency event relating to any seller or additional seller; (h) the trust becomes an "investment company" within the meaning of the Investment Company Act of 1940, as amended; or (i) the inability of any seller or additional seller for any reason to transfer receivables to the trust in accordance with the provisions of the Pooling and Servicing Agreement. In the case of any event described in subparagraphs (a), (b) or (e), a Pay Out Event will be deemed to have occurred only if, after any applicable grace period described in these clauses, the trustee or Series 2000- Holders evidencing undivided interests aggregating more than 50% of the aggregate unpaid principal amount of the Series 2000- Interests, by written notice to the seller and the servicer, and to the trustee if given by the Series 2000- Holders, declare that a Pay Out Event has occurred with respect to Series 2000- . In the case of any event described in subparagraphs (c), (d), (f), (g), (h), or (i), a Pay Out Event will be deemed to have occurred immediately upon the occurrence of the event without any notice or other action on the part of the trustee, or the Series 2000- Holders. Upon the occurrence of a Pay Out Event, the rapid amortization period will begin. In this event, distributions of principal to the certificateholders will begin on the first distribution date following the month in which the Pay Out Event occurred. SERVICING COMPENSATION AND PAYMENT OF EXPENSES The share of the fee payable to the servicer allocable to the Series 2000- Interests for any distribution date (the "MONTHLY SERVICING FEE") will be equal to one-twelfth of the product of (a) 2% and (b) the Invested Amount as of the last day of the monthly period preceding the distribution date; provided, however, with respect to the first distribution date, the Monthly Servicing Fee will be $ . The share of the Monthly Servicing Fee allocable to the Class A Certificateholders for any distribution date, called the "CLASS A SERVICING FEE," will be one-twelfth of the product of: (1) the Class A Floating Percentage; (2) 2%; and (3) the Invested Amount as of the last day of the monthly period preceding the distribution date; provided, however, that for the first distribution date, the Class A Servicing Fee will be $ . The share of the Monthly Servicing Fee allocable to the Class B Certificateholders for any distribution date, called the "CLASS B SERVICING FEE," will be equal to one-twelfth of the product of: (1) the Class B Floating Percentage; (2) 2%; and (3) the Invested Amount as of the last day of the monthly period preceding the distribution date; provided, however, that for first distribution date, the Class B Servicing Fee will be $ . The share of the Monthly Servicing Fee allocable to the Collateral Interest Holder for any distribution date, called the "Collateral Servicing Fee," will be equal to one-twelfth of the product of: (1) the Collateral Floating Percentage; (2) 2%; and S-45 47 (3) the Invested Amount as of the last day of the monthly period preceding the distribution date; provided, however, that for the first distribution date, the Collateral Servicing Fee will be $ . The Class A Servicing Fee, the Class B Servicing Fee and the Collateral Servicing Fee shall be payable to the servicer solely to the extent amounts are available for distribution as described under "--Application Collections--Payment of Interest, Fees and Other Items" and "Excess Spread; Excess Finance Charges" in this prospectus supplement. FEDERAL INCOME TAX CONSEQUENCES Based on the application of existing law to the facts as set forth in the Pooling and Servicing Agreement and other relevant documents, special tax counsel to the bank, Orrick, Herrington & Sutcliffe LLP, is of the opinion that the certificates will properly be treated as indebtedness for federal income tax purposes. See "Federal Income Tax Consequences" in the accompanying prospectus. ERISA CONSIDERATIONS GENERAL Subject to the considerations described below and in the accompanying prospectus, the Class A Certificates may be purchased by, on behalf of, or with "plan assets" of any employee benefit or other plan that is subject to the Employee Retirement Income Security Act of 1974, as amended or Section 4975 of the Internal Revenue Code of 1986, as amended. Any plan fiduciary that proposes to cause a plan to acquire any of the certificates should consult with its counsel with respect to the potential consequences under ERISA and the Internal Revenue Code of the plan's acquisition and ownership of the certificates. See "ERISA Considerations" in the accompanying prospectus. Section 406 of ERISA and Section 4975 of the Internal Revenue Code prohibit plans from engaging in certain transactions involving "plan assets" with persons that are parties in interest with respect to the plan. A violation of these "prohibited transaction" rules may generate excise tax and other liabilities under ERISA and Section 4975 of the Internal Revenue Code for these persons, unless a statutory, regulatory or administrative exemption is available. Plans that are governmental plans, as defined in Section 3(32) of ERISA, and some church plans, as defined in Section 3(33) of ERISA, are not subject to ERISA requirements. CLASS A CERTIFICATES The U.S. Department of Labor has issued an individual exemption, Prohibited Transaction Exemption 99-39 (Exemption Application No. D-10643), 64 Fed. Reg. 53,736 (October 4, 1999), to the seller relating to (1) the initial purchase, the holding and the subsequent resale by plans of senior certificates representing an undivided interest in a credit card trust with respect to which the seller is the sponsor; and (2) the servicing, operation and management of the trust, provided that the general conditions and certain other conditions set forth in this exemption are satisfied. This exemption will apply to the acquisition, holding and resale of the Class A Certificates by, on behalf of, or with "plan assets" of a plan, provided that the conditions specified in the exemption, some of which are described below, are met. Among the conditions which must be satisfied for this exemption to apply are the following: (1) The acquisition of the Class A Certificates by a plan is on terms, including the price for the Class A Certificates, that are at least as favorable to the investing plan as they would be in an arm's-length transaction with an unrelated party; S-46 48 (2) The rights and interests evidenced by the Class A Certificates acquired by the plan are not subordinated to the rights and interests evidenced by other certificates of the trust; (3) The Class A Certificates acquired by the plan have received a rating at the time of the acquisition in one of the two highest generic rating categories from a rating agency, provided that, notwithstanding such rating, credit support is provided to the Class A Certificates through a senior- subordinated structure or other form of third-party credit support which, at a minimum, represents 5% of the outstanding principal balance of the Class A Certificates at the time of the acquisition; (4) The trustee is not an affiliate of a restricted group including the underwriters, the seller, the servicer, any obligor whose receivables constitute more than 0.5% of the fair market value of the aggregate undivided interest in the trust allocated to Series 2000- , or any of their respective affiliates; (5) The sum of all payments made to and retained by the underwriters in connection with the distribution of the Class A Certificates represents not more than reasonable compensation for underwriting the Class A Certificates; the consideration received by the seller as a consequence of the assignment of receivables to the trust, to the extent allocable to the Class A Certificates, represents not more than the fair market value of the receivables; and the sum of all payments made to and retained by the servicer, to the extent allocable to the Class A Certificates, represents not more than reasonable compensation for the servicer's services under the agreement and reimbursement of the servicer's reasonable expenses in connection therewith; (6) The plan investing in the Class A Certificates is an "accredited investor" as defined in Rule 501(a)(1) of Regulation D of the Securities and Exchange Commission under the Securities Act of 1933, as amended; (7) The trustee is a substantial financial institution or trust company experienced in trust activities, is familiar with its duties, responsibilities and liabilities as a fiduciary under ERISA and, as the legal owner of, or holder of a perfected security interest in, the receivables, enforces all the rights created in favor of the certificateholders, including plans; (8) Prior to the issuance of any new series, confirmation is received from the rating agencies that the issuance will not result in the reduction or withdrawal of the then current rating of the Class A Certificates held by any plan pursuant to the Fleet exemption; (9) To protect against fraud, chargebacks or other dilution of the receivables, the Pooling and Servicing Agreement and the rating agencies require the seller to maintain a sellers' interest of not less than 2% of the principal balance of the receivables contained in the trust; (10) Each receivable is an eligible receivable, based on criteria of the rating agencies and as specified in the Pooling and Servicing Agreement, and the Pooling and Servicing Agreement requires that any change in the terms of the cardholder agreements must be made applicable to the comparable segment of accounts owned or serviced by the seller which are part of the same program or have the same or substantially similar characteristics; (11) The Pooling and Servicing Agreement limits the number of newly originated accounts to be designated to the trust, unless the rating agencies otherwise consent in writing, to the following: (a) with respect to any three-month period commencing in January, April, July and October of each calendar year, 15% of the number of existing accounts designated to the trust as of the first day of the calendar year during which the monthly period commenced; and S-47 49 (b) with respect to any calendar year, 20% of the number of existing accounts designated to the trust as of the first day of the calendar year; (12) The Pooling and Servicing Agreement requires the seller to deliver an opinion of counsel confirming the validity and perfection of the transfer of receivables in newly originated accounts to the trust for each interim addition; and (13) The Pooling and Servicing Agreement requires the seller and the trustee to receive confirmation from each rating agency that the rating agency will not reduce or withdraw its then current rating of the Class A Certificates as a result of: (a) an addition of accounts that is required to be made because either the Seller Amount is less than the Required Seller Amount or the principal receivables are less than the Required Principal Balance, and the addition exceeds the limits set forth in paragraph (11) above; or (b) a restricted addition of accounts made at the discretion of the seller as described in the accompanying prospectus under the caption "Description of the Certificates--Addition of Accounts--Conditions to Required and Restricted Additions". The trust also must meet the following requirements: (1) The corpus of the trust must consist only of receivables of the type which have been included in other investment pools; (2) Certificates evidencing interests in other investment pools have been rated in one of the two highest generic rating categories by at least one of the rating agencies for at least one year prior to the plan's acquisition of the Class A Certificates; and (3) Certificates evidencing an interest in such other investment pools have been purchased by investors other than plans for at least one year prior to any plan's acquisition of the Class A Certificates. Moreover, the Prohibition Transaction Exemption provides relief from certain self-dealing/conflict of interest prohibited transactions that may occur when a plan fiduciary causes a plan to acquire the Class A Certificates if the fiduciary or its affiliate is an obligor on the receivables held in the trust, provided that, among other requirements: (1) in the case of an acquisition in connection with the initial issuance of the Class A Certificates, at least 50% of each class of certificates in which plans have invested is acquired by persons independent of the restricted group and at least 50% of the aggregate interest in the trust is acquired by persons independent of the restricted group; (2) the fiduciary, or its affiliate, is an obligor with respect to 0.5% or less of the fair market value of the obligations contained in the trust; (3) the plan's investment in the Class A Certificates does not exceed 25% of all of the Class A Certificates outstanding after the acquisition; and (4) no more than 25% of the asset of the plan are invested in securities representing an interest in one or more trusts containing assets sold or serviced by the same entity. The seller believes that the Fleet exemption will apply to the acquisition and holding of the Class A Certificates by plans and that all conditions of the Fleet exemption, other than those within the control of the investors, will be met. S-48 50 CLASS B CERTIFICATES The U.S. Department of Labor has designated the Fleet exemption an "underwriter exemption." As a result, an insurance company investing solely assets of its general account may be able to acquire and hold the Class B Certificates, provided that: (1) Class A Certificates are eligible for relief under the Fleet exemption; and (2) the acquisition and holding satisfies the conditions applicable under Sections I and III of U.S. Department of Labor Prohibition Exemption 95-60. Accordingly, the Class B Certificates may not be acquired or held by, on behalf of, or with "plan assets" of any plan, other than an insurance company investing assets of its general account. By its acceptance of a Class B certificate, each Class B certificateholder will be deemed to have represented and warranted that either: (1) it is not and will not be a plan; or (2) it is an insurance company, it acquired and will hold the Class B Certificates solely with assets of its general account, and such acquisition and holding satisfies the conditions applicable under Sections I and III of PTCE 95-60. See "--Class A Certificates" above and "ERISA Considerations" in the accompanying prospectus. CONSULTATION WITH COUNSEL In light of the foregoing, fiduciaries or other persons contemplating purchasing the certificates on behalf of or with "plan assets" of any plan should consult their own counsel regarding whether the trust assets represented by the certificates would be considered "plan assets," the consequences that would apply if the trust's assets were considered "plan assets," and the availability of exemptive relief from the prohibited transaction rules, in the case of the Class A Certificates, under the Fleet exemption or, in the case of the Class B Certificates and only with respect to an insurance company general account investor, the Fleet exemption and Sections I and III of PTCE 95-60. Finally, plan fiduciaries and other plan investors should consider the fiduciary standards under ERISA or other applicable law in the context of the plan's particular circumstances before authorizing an investment of a portion of the plan's assets in the certificates. Accordingly, among other factors, plan fiduciaries and other plan investors should consider whether the investment: (1) satisfies the diversification requirement of ERISA or other applicable law; (2) is in accordance with the plan's governing instruments; and (3) is prudent in light of the "Risk Factors" and other factors discussed in the accompanying prospectus. S-49 51 UNDERWRITING Subject to the terms and conditions set forth in the underwriting agreement relating to the Class A Certificates and the Class B Certificates, the bank has agreed to sell to the underwriters named below and each of the "CLASS A UNDERWRITERS" has agreed to purchase from the bank, the principal amount of Class A Certificates set forth opposite its name below:
PRINCIPAL AMOUNT OF CLASS A CLASS A UNDERWRITERS CERTIFICATES - -------------------- ------------ A Co. ...................................................... $ B Co. ...................................................... $ C Co. ...................................................... $ Total....................................................... $ ======
The seller has been advised by the Class A Underwriters that the Class A Underwriters propose initially to offer the Class A Certificates to the public at the price set forth on the cover page of this prospectus supplement and to certain dealers at such price less a concession not in excess of % of the principal amount of the Class A Certificates. The Class A Underwriters may allow and the dealers may reallow a concession not in excess of % of the principal amount of the Class A Certificates to certain other dealers. After the initial public offering, the public offering price and the concessions may be changed. Subject to the terms and conditions set forth in the underwriting agreement, the bank has agreed to sell to the "CLASS B UNDERWRITERS" named below and each of the Class B Underwriters has agreed to purchase from the bank, the principal amount of Class B Certificates set forth opposite its name below:
PRINCIPAL AMOUNT OF CLASS B CLASS B UNDERWRITERS CERTIFICATES - -------------------- ------------ A Co........................................................ $ B Co........................................................ $ Total....................................................... $ ======
The seller has been advised by the Class B Underwriters that the Class B Underwriters propose initially to offer the Class B Certificates to the public at the price set forth on the cover page of this prospectus supplement and to certain dealers at this price less a concession not in excess of % of the principal amount of the Class B Certificates. The Class B Underwriters may allow and the dealers may reallow a concession not in excess of % of the principal amount of the Class B Certificates to certain other dealers. After the initial public offering, the public offering price and such concessions may be changed. The underwriters will be compensated as set forth in the following table:
UNDERWRITERS' AMOUNT DISCOUNTS AND PER $1,000 COMMISSIONS OF PRINCIPAL TOTAL AMOUNT ------------- ------------ ------------ Class A Certificates.......................... % $ $ Class B Certificates.......................... % $ $ $ ======
Additional offering expenses are estimated to be $ . The underwriters have agreed to reimburse the seller for certain expenses of the issuance and distribution of the certificates. S-50 52 The seller has agreed that it will indemnify the underwriters against certain liabilities, including liabilities under the Securities Exchange Act of 1933, or contribute to payments the underwriters may be required to make. Each underwriter has represented and agreed that: (a) it has complied and will comply with all applicable provisions of the Financial Services Act of 1986 and the Public Offers of Securities Regulations 1995 with respect to anything done by it in relation to the certificates in, from or otherwise involving the United Kingdom; (b) it has only issued or passed on and will only issue or pass on in the United Kingdom any document received by it in connection with the issue of the certificates to a person who is of a kind described in Article 11(3) of the Financial Services Act of 1986 (Investment Advertisements) (Exemptions) Order 1996 or is a person to whom such document may otherwise lawfully be issued or passed on; (c) if it is an authorized person under Chapter III of part I of the Financial Services Act 1986, it has only promoted and will only promote (as that term is defined in Regulation 1.02(2) of the Financial Services (Promotion of Unregulated Schemes) Regulations 1991) to any person in the United Kingdom the scheme described in this prospectus supplement and the prospectus if that person is of a kind described either in Section 76(2) of the Financial Services Act 1986 or in Regulation 1.04 of the Financial Services (Promotion of Unregulated Schemes) Regulations 1991; and (d) it is a person of a kind described in Article 11(3) of the Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order 1996. The underwriters may engage in over-allotment transactions, stabilizing transactions, syndicate covering transactions and penalty bids with respect to the certificates in accordance with Regulation M under the Securities Exchange Act of 1934. Over-allotment transactions involve syndicate sales in excess of the offering size, which creates a syndicate short position. Stabilizing transactions permit bids to purchase the certificates so long as the stabilizing bids do not exceed a specified maximum. Syndicate covering transactions involve purchases of the certificates in the open market after the distribution has been completed in order to cover syndicate short positions. Penalty bids permit the underwriters to reclaim a selling concession from a syndicate member when the certificates originally sold by such syndicate member are purchased in a syndicate covering transaction. This over-allotment transactions, stabilizing transactions, syndicate covering transactions and penalty bids may cause the price of the certificates to be higher than they would otherwise be in the absence of the transactions. Neither the bank nor the underwriters represents that the underwriters will engage in any such transactions or that these transactions, once commenced, will not be discontinued without notice at any time. LEGAL MATTERS Certain legal matters relating to the issuance of the certificates will be passed upon for the seller by Linda Morris, Esq., Vice President, Secretary and General Counsel, Fleet Bank (RI), National Association, and by Orrick, Herrington & Sutcliffe LLP, Washington, D.C., special counsel to the seller. In addition certain legal matters, including matters related to Rhode Island law, will be passed upon for the seller by Edwards & Angell, Boston, Massachusetts. Certain legal matters relating to the federal tax consequences of such issuance will be passed upon for the seller by Orrick, Herrington & Sutcliffe LLP, Washington, D.C. Certain matters relating to the issuance of the certificates will be passed upon for the underwriters by Mayer, Brown & Platt, Chicago, Illinois. S-51 53 INDEX OF PRINCIPAL TERMS A accumulation period............... S-17 Available Investor Principal Collections..................... S-26 Available Reserve Account Amount.......................... S-40 B bank.............................. S-11 Base Rate......................... S-44 business day...................... S-23 C Certificate Owner................. S-22 Class A Additional Interest....... S-36 Class A Available Funds........... S-24 Class A Certificate Rate.......... S-23 Class A Certificateholders........ S-11 Class A Certificates.............. S-11 Class A Expected Final Distribution Date............... S-17, S-25 Class A Floating Percentage....... S-29 Class A Initial Invested Amount... S-30 Class A Invested Amount........... S-30 Class A Investor Amount........... S-32 Class A Investor Charge-Off....... S-42 Class A Investor Default Amount... S-41 Class A Monthly Interest.......... S-24 Class A Monthly Principal......... S-26 Class A Principal Percentage...... S-30 Class A Required Amount........... S-32 Class A Servicing Fee............. S-45 Class A Underwriters.............. S-50 Class B Additional Interest....... S-36 Class B Available Funds........... S-24 Class B Certificate Rate.......... S-23 Class B Certificateholders........ S-11 Class B Certificates.............. S-11 Class B Expected Final Distribution Date............... S-17, S-26 Class B Floating Percentage....... S-29 Class B Initial Invested Amount... S-31 Class B Invested Amount........... S-31 Class B Investor Amount........... S-32 Class B Investor Charge-Off....... S-43 Class B Investor Default Amount... S-41 Class B Monthly Interest.......... S-25 Class B Monthly Principal......... S-26 Class B Principal Percentage...... S-30 Class B Required Amount........... S-33 Class B Servicing Fee............. S-45 Class B Underwriters.............. S-50 Collateral Additional Interest.... S-37 Collateral Available Funds........ S-25 Collateral Default Amount......... S-31, S-42 Collateral Expected Final Distribution Date............... S-39 Collateral Floating Percentage.... S-29 Collateral Initial Invested Amount.......................... S-31 Collateral Interest............... S-11 Collateral Interest Holder........ S-11 Collateral Invested Amount........ S-31 Collateral Minimum Interest Rate............................ S-25 Collateral Minimum Monthly Interest........................ S-25 Collateral Monthly Principal...... S-27 Collateral Principal Percentage... S-30 Controlled Accumulation Amount.... S-27 Controlled Deposit Amount......... S-27 D Deficit Controlled Accumulation Amount.......................... S-27 definitive certificate............ S-22 Designated Maturity............... S-23 distribution dates................ S-22 E Excess Finance Charges............ S-25 Excess Spread..................... S-37 F Fleet............................. S-11 Fleet Credit Card Portfolio....... S-12 Floating Allocation Percentage.... S-28 G Group One......................... S-41 I Initial Invested Amount........... S-21, S-31 interest period................... S-23 Invested Amount................... S-31 Investor Amount................... S-32 Investor Default Amount........... S-41 L LIBOR............................. S-23 LIBOR determination date.......... S-23 M Master Pooling and Servicing Agreement....................... S-11 monthly period.................... S-23 Monthly Servicing Fee............. S-45
S-52 54 N Net Portfolio Yield....................... S-44 P paired series............................. S-40 Pay Out Event............................. S-43 Percentage Allocation..................... S-34 Pooling and Servicing Agreement........... S-11 Principal Allocation Percentage........... S-29 principal funding account................. S-39 principal funding account investment proceeds................................ S-39 R rapid amortization period................. S-18 Reallocated Principal Collections......... S-32 record date............................... S-23 Reference Banks........................... S-23 Required Reserve Account Amount........... S-39 reserve account........................... S-39 reserve account funding date.............. S-39 S Seller Amount............................. S-22 sellers' interest......................... S-21 Series 2000 - --- ........................ S-11 Series 2000 - --- Certificates............ S-11 Series 2000 - --- Holders................. S-11 Series 2000 - --- Interests............... S-11 Series 2000 - --- Termination Date........ S-22 Series Investor Amount.................... S-32 Series Percentage......................... S-21 Shared Principal Collections.............. S-41 T Telerate Page 3750........................ S-23 trust..................................... S-11
S-53 55 ANNEX I OTHER SERIES ISSUED The certificates will be the series to be issued by the trust. The table below sets forth the principal characteristics of the other series heretofore issued by the trust and currently outstanding. These series are the Series 1995-A Certificates, the Series 1995-C Certificates, the Series 1995-D Certificates, the Series 1995-F Certificates, the Series 1996-A Certificates, the Series 1996-B Certificates, the Series 1996-C Certificates, the Series 1996-D Certificates, the Series 1996-E Certificates, the Series 1998-A Certificates, the Series 1999-A Certificates, the Series 1999-B Certificates, the Series 1999-C Certificates, the Series 1999-D Certificates and the Series 2000-A Certificates. Solely for purposes of this Annex I, "LIBOR" shall mean London interbank offered quotations for United States dollar deposits determined as set forth in the related series supplements. SERIES 1995-A Initial Invested Amount.............................. $600,000,000 Initial Pre-Funded Amount............................ $100,000,000 Invested Amount as of December 31, 1999.............. $700,000,000 Class A Certificate Rate............................. One Month LIBOR plus .180% per annum Class B Certificate Rate............................. One Month LIBOR plus .375% per annum Collateral Rate...................................... No higher than One Month LIBOR plus 1.00% per annum Initial Enhancement Amount........................... $73,500,000 Series Servicing Fee Rate............................ 2% per annum Stated Series 1995-A Termination Date................ January 1, 2003 Series Issuance Date................................. January 18, 1995 SERIES 1995-C Initial Invested Amount.............................. $375,000,000 Initial Pre-Funded Amount............................ $200,000,000 Investor Amount as of December 31, 1999.............. $575,000,000 Class A Certificate Rate............................. Three Month LIBOR plus .20% per annum Class B Certificate Rate............................. Three Month LIBOR plus .34% per annum Collateral Rate...................................... No higher than One Month LIBOR plus 1.00% per annum Initial Enhancement Amount........................... $60,375,000 Series Servicing Fee Rate............................ 2% per annum
I-1 56 Stated Series 1995-C Termination Date................. January 1, 2005 Series Issuance Date.................................. April 27, 1995 SERIES 1995-D Initial Invested Amount............................... $450,000,000 Initial Pre-Funded Amount............................. $150,000,000 Investor Amount as of December 31, 1999............... $600,000,000 Class A Certificate Rate.............................. One Month LIBOR plus .19% per annum Class B Certificate Rate.............................. One Month LIBOR plus .32% per annum Initial Enhancement Amount............................ $63,000,000 Series Servicing Fee Rate............................. 2% per annum Stated Series 1995-D Termination Date................. February 1, 2004 Series Issuance Date.................................. July 25, 1995 SERIES 1995-F Initial Invested Amount............................... $750,000,000 Initial Pre-Funded Amount............................. $100,000,000 Investor Amount as of December 31, 1999............... $850,000,000 Class A-1 Certificate Rate............................ 6.05% per annum Class A-2 Certificate Rate............................ One Month LIBOR plus .19% per annum Class B Certificate Rate.............................. One Month LIBOR plus .30% per annum Initial Enhancement Amount............................ $65,875,000 Series Servicing Fee Rate............................. 2% per annum Series 1995-F Termination Date........................ August 1, 2003 Series Issuance Date.................................. November 21, 1995 SERIES 1996-A Initial Invested Amount............................... $400,000,000 Initial Pre-Funded Amount............................. $100,000,000 Investor Amount as of December 31, 1999............... $500,000,000 Class A-1 Certificate Rate............................ 6.0% per annum Class A-2 Certificate Rate............................ One Month LIBOR plus .23% per annum Class B Certificate Rate.............................. One Month LIBOR plus .35% per annum Collateral Rate....................................... No higher than One Month LIBOR plus 1.00% per annum Initial Enhancement Amount............................ $43,750,000 Series Servicing Fee Rate............................. 2% per annum Series 1996-A Termination Date........................ November 2005 Distribution Date Series Issuance Date.................................. January 18, 1996 SERIES 1996-B Initial Invested Amount............................... $750,000,000 Investor Amount as of December 31, 1999............... $750,000,000 Class A Certificate Rate.............................. Three Month LIBOR plus .230% per annum Class B Certificate Rate.............................. Three Month LIBOR plus .375% per annum Collateral Rate....................................... No higher than One Month LIBOR plus 1.00% per annum Initial Enhancement Amount............................ $75,000,000 Series Servicing Fee Rate............................. 2% per annum Series 1996-B Termination Date........................ January 2007 Distribution Date Series Issuance Date.................................. March 26, 1996 SERIES 1996-C Initial Invested Amount............................... $700,000,000 Investor Amount as of December 31, 1999............... $700,000,000
I-2 57
Class A Certificate Rate............................. Three Month LIBOR plus .120% per annum Class B Certificate Rate............................. Three Month LIBOR plus .250% per annum Collateral Rate...................................... No higher than Three Month LIBOR plus 1.00% per annum Initial Enhancement Amount........................... $70,000,000 Series Servicing Fee Rate............................ 2% per annum Series 1996-C Termination Date....................... November 2003 Distribution Date Series Issuance Date................................. May 13, 1996 SERIES 1996-D Initial Invested Amount.............................. $575,000,000 Initial Pre-Funded Amount............................ $125,000,000 Investor Amount as of December 31, 1999.............. $700,000,000 Class A Certificate Rate............................. One Month LIBOR plus .15% per annum Class B Certificate Rate............................. One Month LIBOR plus .30% per annum Collateral Rate...................................... No higher than One Month LIBOR plus 1.00% per annum Initial Enhancement Amount........................... $70,000,000 Series Servicing Fee Rate............................ 2% per annum Series 1996-D Termination Date....................... June 2005 Distribution Date Series Issuance Date................................. June 18, 1996 SERIES 1996-E Initial Invested Amount.............................. $450,000,000 Initial Pre-Funded Amount............................ $50,000,000 Investor Amount as of December 31, 1999.............. $500,000,000 Class A Certificate Rate............................. One Month LIBOR plus .10% per annum Class B Certificate Rate............................. One Month LIBOR plus .33% per annum Collateral Rate...................................... No higher than One Month LIBOR plus 1.00% per annum Initial Enhancement Amount........................... $50,000,000 Series Servicing Fee rate............................ 2% per annum Series 1996-E Termination Date....................... May 2004 Distribution Date Series Issuance Date................................. November 1, 1996 SERIES 1998-A Initial Invested Amount.............................. $862,500,000 Initial Pre-Funded Amount............................ $287,500,000 Investor Amount as of December 31, 1999.............. $1,150,000,000 Class A Certificate Rate............................. One Month LIBOR plus .04% per annum Class B Certificate Rate............................. One Month LIBOR plus .24% per annum Collateral Rate...................................... No higher than One Month LIBOR plus 1.00% per annum Initial Enhancement Amount........................... $120,750,000 Series Servicing Fee Rate............................ 2% per annum Series 1998-A Termination Date....................... July 2003 Distribution Date Series Issuance Date................................. February 6, 1998 SERIES 1999-A Initial Invested Amount.............................. $600,000,000 Investor Amount as of December 31, 1999.............. $600,000,000 Class A Certificate Rate............................. One Month LIBOR plus .11% per annum Class B Certificate Rate............................. One Month LIBOR plus .33% per annum Class C Interest..................................... No higher than One Month LIBOR plus 2.00% per annum Initial Enhancement Amount........................... $66,000,000
I-3 58 Series Servicing Fee Rate............................. 2% per annum Series 1999-A Termination Date........................ September 2004 Distribution Date Series Issuance Date.................................. March 23, 1999 SERIES 1999-B Initial Invested Amount............................... $500,000,000 Investor Amount as of December 31, 1999............... $500,000,000 Class A Certificate Rate.............................. One Month LIBOR plus .20% per annum Class B Certificate Rate.............................. One Month LIBOR plus .39% per annum Collateral Rate....................................... No higher than One Month LIBOR plus 2.00% per annum Initial Enhancement Amount............................ $55,000,000 Series Servicing Fee Rate............................. 2% per annum Series 1999-B Termination Date........................ January 2007 Distribution Date Series Issuance Date.................................. July 22, 1999 SERIES 1999-C Initial Invested Amount............................... $300,000,000 Investor Amount as of December 31, 1999............... $300,000,000 Class A Certificate Rate.............................. 6.90% per annum Class B Certificate Rate.............................. 7.20% per annum Collateral Minimum Interest Rate...................... No higher than One Month LIBOR plus 2.00% per annum Initial Enhancement Amount............................ $27,000,000 Series Servicing Fee Rate............................. 2% per annum Series 1999-C Termination Date........................ April 2007 Distribution Date Series Issuance Date.................................. November 3, 1999 SERIES 1999-D Initial Invested Amount............................... $600,000,000 Investor Amount as of December 31, 1999............... $600,000,000 Class A Certificate Rate.............................. One Month LIBOR plus 0.22% per annum Class B Certificate Rate.............................. One Month LIBOR plus 0.50% per annum Collateral Minimum Interest Rate...................... Not to exceed 9.5% per annum Initial Enhancement Amount............................ $66,000,000 Series Servicing Fee Rate............................. 2% per annum Series 1999-D Termination Date........................ April 2007 Distribution Date Series Issuance Date.................................. November 3, 1999 SERIES 2000-A Initial Invested Amount............................... $750,000,000 Class A Certificate Rate.............................. One Month LIBOR plus 0.13% per annum Class B Certificate Rate.............................. One Month LIBOR plus 0.33% per annum Collateral Minimum Interest Rate...................... Not to exceed 9.5% per annum Initial Enhancement Amount............................ $82,500,000 Series Servicing Fee Rate............................. 2% per annum Series 2000-A Termination Date........................ July 2005 Distribution Date Series Issuance Date.................................. February 2, 2000
I-4 59 ANNEX II RECEIVABLES IN ADDITIONAL ACCOUNTS CONVEYED TO THE TRUST
NUMBER OF RECEIVABLES ASSIGNMENT DATE RECEIVABLES ADDITIONAL IN ADDITIONAL NUMBER TRANSFERRED TO TRUST RELEVANT CUT-OFF DATE ACCOUNTS(1) ACCOUNTS(1) - ---------- -------------------- --------------------- ----------- -------------- 1 May 16, 1994 March 31, 1994 276,371 $ 367,091,261 2 July 1, 1994 May 31, 1994 157,629 $ 202,859,562 3 August 17, 1994 July 31, 1994 226,342 $ 351,961,171 4 September 23, 1994 August 31, 1994 192,815 $ 299,924,106 5 November 18, 1994 October 31, 1994 332,866 $ 406,625,727 6 January 6, 1995 November 30, 1994 217,320 $ 316,458,944 7 March 15, 1995 February 28, 1995 291,057 $ 348,693,399 8 April 18, 1995 March 31, 1995 143,714 $ 168,739,171 9 May 23, 1995 April 30, 1995 98,330 $ 137,485,579 10 July 18, 1995 June 30, 1995 322,271 $ 432,984,240 11 August 15, 1995 July 31, 1995 126,338 $ 188,302,827 12 August 31, 1995 August 11, 1995 67,968 $ 94,548,321 13 November 21, 1995 October 25, 1995 285,122 $ 491,863,655 14 December 15, 1995 November 26, 1995 265,376 $ 369,389,253 15 January 18, 1996 December 26, 1995 182,985 $ 330,263,251 16 February 19, 1996 January 31, 1996 269,467 $ 560,543,656 17 March 26, 1996 February 29, 1996 150,460 $ 330,531,723 18 May 1, 1996 March 31, 1996 68,056 $ 251,797,517 19 May 13, 1996 March 31, 1996 219,150 $ 499,241,938 20 June 18, 1996 April 30, 1996 244,770 $ 636,632,670 21 June 30, 1996 May 31, 1996 73,771 $ 200,155,226 22 September 1, 1996 July 31, 1996 217,130 $ 640,152,919 23 November 1, 1996 September 30, 1996 151,051 $ 500,113,079 24 November 1, 1996 September 30, 1996 30,631 $ 100,564,456 25 November 15, 1996 October 31, 1996 100,603 $ 250,370,356 26 January 17, 1997 December 31, 1996 118,232 $ 368,278,729 27 February 14, 1997 January 31, 1997 111,777 $ 307,635,708 28 March 14, 1997 February 28, 1997 169,598 $ 400,826,266 29 April 18, 1997 March 31, 1997 204,546 $ 450,500,767 30 May 14, 1997 April 30, 1997 155,299 $ 450,053,037 31 June 13, 1997 May 31, 1997 148,940 $ 241,091,790 32 June 29, 1997 May 31, 1997 5,757 $ 10,065,454 33 September 12, 1997 August 31, 1997 250,570 $ 499,607,860 34 September 30, 1997 August 31, 1997 218,401 $ 301,830,170 35 November 14, 1997 October 31, 1997 167,351 $ 322,443,973 36 December 12, 1997 November 30, 1997 228,234 $ 203,845,007 37 January 30, 1998 December 31, 1997 492,821 $ 729,961,299 38 February 13, 1998 January 31, 1998 246,990 $ 363,909,199 39 April 14, 1998 March 31, 1998 227,285 $ 907,447,235 40 May 14, 1998 April 30, 1998 249,490 $ 602,772,032 41 July 1, 1998 May 31, 1998 284,855 $ 582,539,789 42 September 1, 1998 July 31, 1998 209,559 $ 500,442,550
II-1 60
NUMBER OF RECEIVABLES ASSIGNMENT DATE RECEIVABLES ADDITIONAL IN ADDITIONAL NUMBER TRANSFERRED TO TRUST RELEVANT CUT-OFF DATE ACCOUNTS(1) ACCOUNTS(1) - ---------- -------------------- --------------------- ----------- -------------- 43 October 1, 1998 August 31, 1998 126,098 $ 364,789,653 44 November 13, 1998 October 31, 1998 276,577 $ 648,197,959 45 December 14, 1998 November 30, 1998 65,326 $ 166,800,025 46 December 31, 1998 November 30, 1998 79,855 $ 210,815,757 47 January 28, 1999 December 31, 1998 77,427 $ 197,913,305 48 January 31, 1999 December 31, 1998 312,662 $ 704,718,352 49 February 16, 1999 January 31, 1999 189,409 $ 393,818,299 50 March 10, 1999 January 31, 1999 145,162 $ 248,815,264 51 March 24, 1999 February 28, 1999 152,894 $ 206,886,377 52 April 14, 1999 March 31, 1999 56,776 $ 105,666,192 53 April 16, 1999 March 31, 1999 124,643 $ 304,064,904 54 May 14, 1999 April 30, 1999 95,437 $ 123,248,542 55 June 1, 1999 April 30, 1999 400,682 $ 925,598,651 56 July 19, 1999 May 31, 1999 89,208 $ 118,401,838 57 July 23, 1999 June 30, 1999 182,395 $ 332,801,715 58 September 21, 1999 August 31, 1999 399,265 $ 920,892,601 59 October 15, 1999 September 30, 1999 147,493 $ 300,519,356 60 January 17, 2000 December 31, 1999 495,186 $1,345,216,825
- ------------ (1) The amounts shown are as of the Relevant Cut-Off Date. II-2 61 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- FLEET CREDIT CARD MASTER TRUST II ISSUER [FLEET LOGO] FLEET BANK (RI), NATIONAL ASSOCIATION SELLER AND SERVICER SERIES 2000- $ CLASS A ASSET-BACKED CERTIFICATES $ CLASS B ASSET-BACKED CERTIFICATES ------------------------ PROSPECTUS SUPPLEMENT ------------------------ Underwriters of the Class A certificates A CO. B CO. C CO. Underwriters of the Class B certificates A CO. B CO. YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH DIFFERENT INFORMATION. We are not offering the Series 2000- certificates in any state where the offer is not permitted. The delivery of this prospectus supplement and the accompanying prospectus at any time does not imply that the information in this prospectus supplement and the accompanying prospectus is correct as of any date after the dates on their covers. We note that if any material change occurs while this prospectus supplement and the accompanying prospectus are required by law to be delivered, we will update the relevant information in this prospectus supplement and the accompanying prospectus to incorporate the material change. Until , 200 , all dealers that effect transactions in the Class A certificates or the Class B certificates, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers' obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 62 THE INFORMATION IN THIS PROSPECTUS AND THE ACCOMPANYING PROSPECTUS SUPPLEMENT IS NOT COMPLETE AND MAY BE CHANGED. WE MAY NOT SELL THESE CERTIFICATES UNTIL WE DELIVER A FINAL PROSPECTUS AND ACCOMPANYING PROSPECTUS SUPPLEMENT. THIS PROSPECTUS AND THE ACCOMPANYING PROSPECTUS SUPPLEMENT ARE NOT AN OFFER TO SELL NOR ARE THEY SEEKING AN OFFER TO BUY THESE CERTIFICATES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED. SUBJECT TO COMPLETION DATED FEBRUARY 4, 2000 Prospectus [FLEET LOGO] FLEET CREDIT CARD MASTER TRUST II ISSUER FLEET BANK (RI), NATIONAL ASSOCIATION SELLER AND SERVICER ASSET-BACKED CERTIFICATES THE TRUST-- - - may periodically issue asset-backed certificates in one or more series with one or more classes; and - - will own-- - receivables in a portfolio of revolving credit card accounts; - payments due on those receivables; and - other property described in this prospectus and in the accompanying prospectus supplement. THE CERTIFICATES-- - - will represent interests in the trust and will be paid only from the trust assets; - - offered with this prospectus will be rated in one of the four highest rating categories by at least one nationally recognized rating organization; - - may have one or more forms of enhancement; and - - will be issued as part of a designated series which may include one or more classes of certificates and enhancement. THE CERTIFICATEHOLDERS-- - - will receive interest and principal payments from a varying percentage of credit card account collections. CONSIDER CAREFULLY THE RISK FACTORS BEGINNING ON PAGE 8 IN THIS PROSPECTUS. A certificate is not a deposit and neither the certificates nor the underlying accounts or receivables are insured or guaranteed by the Federal Deposit Insurance Corporation or any other governmental agency. The certificates will represent interests in the trust only and will not represent interests in or obligations of Fleet Bank (RI), National Association or any of its affiliates. This prospectus may be used to offer and sell certificates of a series only if accompanied by the prospectus supplement for that series. NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED THESE CERTIFICATES OR DETERMINED THAT THIS PROSPECTUS OR THE PROSPECTUS SUPPLEMENT IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. , 2000 63 IMPORTANT NOTICE ABOUT INFORMATION PRESENTED IN THIS PROSPECTUS AND THE ACCOMPANYING PROSPECTUS SUPPLEMENT We provide information to you about the certificates in two separate documents that progressively provide more detail: (a) this prospectus, which provides general information, some of which may not apply to a particular series of certificates, including your series, and (b) the accompanying prospectus supplement, which will describe the specific terms of your series of certificates, including: - the terms, including interest rates, for each class; - the timing of interest and principal payments; - information about the receivables; - information about credit enhancement, if any, for each class; and - the method for selling the certificates. IF THE DESCRIPTION OF THE TERMS OF A PARTICULAR SERIES OF CERTIFICATES VARIES BETWEEN THE DESCRIPTION CONTAINED IN THIS PROSPECTUS AND THE DESCRIPTION IN THE ACCOMPANYING PROSPECTUS SUPPLEMENT, YOU SHOULD RELY ON THE INFORMATION IN THE ACCOMPANYING PROSPECTUS SUPPLEMENT. We include cross references in this prospectus and the accompanying prospectus supplement to captions in these materials where you can find further related discussions. The following table of contents and the table of contents included in the accompanying prospectus supplement provide the pages on which these captions are located. You can find a listing of the pages where terms used in this prospectus are defined under the caption "Index of Principal Terms," on page 71 in this prospectus. 2 64 TABLE OF CONTENTS
PAGE ---- Prospectus Summary...................... 5 The Trust............................. 5 Trust Assets.......................... 5 Servicer.............................. 5 Allocation of Trust Assets............ 6 Interest Payments On The Certificates....................... 6 Principal Payments On The Certificates....................... 6 Revolving Period................... 6 Accumulation and Amortization Periods.......................... 6 Effect of Pay Out Event............ 6 Shared Excess Finance Charge Collections........................ 7 Shared Principal Collections.......... 7 Credit Enhancement.................... 7 Certificate Ratings................... 7 Risk Factors............................ 8 Competition in the Credit Card Industry Could Lead to Early Payment of Your Certificates....... 8 A Change in the Terms of the Receivables May Adversely Affect the Amount or Timing of Collections and May Cause an Early Payment of Your Certificates or a Downgrade... 8 If the Transfer of Receivables Were Held to Be Merely a Grant of a Security Interest, Other Interests May Have Priority Over Your Certificates....................... 8 If a Conservator or Receiver Is Appointed for the Bank, Assets Could Be Sold At a Loss, Payment May Be Accelerated, Delayed or Reduced and Protections Provided to Certificateholders May Be Overridden......................... 9 Consumer Protection Laws May Restrict the Bank's Ability to Collect Receivables and Maintain Yield on the Portfolio and May Lead to an Early Pay Out or Inability to Pay Certificates in Full............... 10 Principal May Be Paid Earlier Than Expected Creating a Reinvestment Risk to Certificateholders or Later Than Expected Resulting in a Failure to Receive Payment When Expected........................... 11 Social, Economic and Geographic Factors Affect Credit Card Payments and Are Unpredictable and May Cause a Delay or Default in Payment...... 12 Credit Ratings Assigned to Your Certificates are Limited in Nature............................. 12 Credit Quality of Trust Assets May Be Eroded By the Addition of New Assets............................. 12
PAGE ---- Credit Card Rates May Decline or Certificate Rates May Increase Without a Corresponding Change in Amounts Needed to Pay Certificates....................... 13 Issuance of Additional Series by the Trust May Adversely Affect Your Payments or Rights................. 13 If Optional Repurchase Occurs, It May Result in an Early Return of Principal and a Reinvestment Risk............................... 14 If Credit Card Account Holders Are Concentrated in One State or Geographic Location, Laws, Economic Downturn or Natural Disasters in that Area May Adversely Affect Collections of Receivables......... 14 If the Bank Elects to Treat a Portion of Principal Receivables as Finance Charge Receivables, Principal Payments Could Be Delayed.......... 14 Amounts In Prefunding Account Not Invested in Receivables May Result in Early Return of Principal and Reinvestment Risk.................. 14 You Will Not Be Recognized as the Owner of Certificates on the Records of the Trustee and Will Not Be Able to Exercise Rights Directly as a Certificateholder............. 15 Trust Assets May Be Allocated to One or More Specific Series or Groups and Not Be Available to Your Series............................. 15 Formation of the Trust.................. 16 Transfer and Assignment................. 17 The Transfer.......................... 17 Amendment to Pooling and Servicing Agreement.......................... 17 Assignment and Assumption Agreement... 18 Rights Agreement...................... 18 The Bank's Credit Card Activities....... 18 General............................... 18 Supplemental Information.............. 19 Acquisition and Use of Credit Cards... 19 Billing and Payments.................. 20 Description of First Data Resources, Inc................................ 21 Delinquencies......................... 21 Interchange........................... 22 Use of Proceeds......................... 22 The Bank and FleetBoston Financial Corporation........................... 22
3 65 TABLE OF CONTENTS (CONTINUED)
PAGE ---- Transfer of Receivables............... 23 Matters Relating to Conservatorship and Receivership................... 24 Consumer Protection Laws.............. 25 Description of the Certificates......... 26 General............................... 26 Book-Entry Registration............... 28 Definitive Certificates............... 31 The Bank Certificate; Additional Sellers............................ 32 Interest Payments..................... 33 Principal Payments.................... 33 Shared Principal Collections.......... 34 Sharing of Excess Finance Charge Collections........................ 34 Companion Series...................... 35 New Issuances......................... 35 Transfer and Assignment of Receivables........................ 37 Liquidation of Receivables............ 37 Representations, Warranties and Covenants.......................... 38 Addition of Accounts.................. 43 Acquisition of Participation Interest........................... 45 Automatic Account Additions........... 45 Removal of Accounts................... 46 Servicing Procedures.................. 47 Discount Option....................... 47 Trust Accounts........................ 48 Series Percentage and Seller Percentage......................... 49 Application of Collections............ 49 Operation of Excess Funding Account... 49 Defaulted Receivables; Rebates and Fraudulent Charges................. 50 Final Payment of Principal and Interest; Termination.............. 51 Trust Pay Out Events.................. 51 Servicing Compensation and Payment of Expenses........................... 52 Matters Regarding the Servicer........ 53 Indemnification....................... 53 Servicer Default...................... 54
PAGE ---- Report to Certificateholders.......... 56 Evidence as to Compliance............. 56 Amendments............................ 57 Defeasance............................ 58 List of Certificateholders............ 58 The Trustee........................... 58 Enhancement............................. 59 General............................... 59 Subordination......................... 59 Letter of Credit...................... 60 Cash Collateral Guaranty or Account... 60 Collateral Interest................... 60 Swap Agreements....................... 60 Surety Bond or Insurance Policy....... 60 Spread Account........................ 61 Certificate Rating...................... 61 Federal Income Tax Consequences......... 61 General............................... 61 Treatment of the Certificate as Debt............................... 62 Treatment of the Trust................ 63 Taxation of Interest Income of U.S. Certificate Owners................. 64 Sale or Exchange of Certificates...... 65 Non-U.S. Certificate Owners........... 65 Information Reporting and Backup Withholding........................ 66 State and Local Taxation.............. 67 ERISA Considerations.................... 67 Plan of Distribution.................... 69 Underwriting............................ 69 Legal Matters........................... 70 Reports to Certificateholders........... 70 Where You Can Find More Information..... 70 Global Clearance, Settlement and Tax Documentation Procedures.............. A-1
4 66 PROSPECTUS SUMMARY This summary highlights selected information from this document and does not contain all of the information that you need to consider in making your investment decision. To understand all of the terms of an offering of the certificates, read carefully this entire document and the accompanying prospectus supplement. This summary provides an overview of the trust assets including, in particular, the receivables and how these receivables will be allocated and other information to aid your understanding and is qualified by the full description of such information in this prospectus and the accompanying prospectus supplement. THE TRUST Fleet Credit Card Master Trust II was formed in 1993 pursuant to a pooling and servicing agreement. The pooling and servicing agreement is between Fleet Bank (RI), National Association, as seller and servicer, and Bankers Trust Company, as trustee. - - The trust is a master trust in which multiple series of certificates may be issued. Each series is issued pursuant to a supplement to the pooling and servicing agreement. The terms of a series are described in the series supplement. - - Some classes or series may not be offered by this prospectus; for example, they may be offered in a private placement. See "Formation of the Trust" and "Transfer and Assignment" in this prospectus. TRUST ASSETS The bank and its predecessors have transferred to the trust the receivables in designated MasterCard(R) and VISA(R)(1) revolving credit card accounts. All new receivables generated in those accounts will be transferred automatically to the trust. The receivables transferred to the trust are the primary trust assets. The bank will periodically designate additional accounts to the trust. Receivables in these additional accounts will be transferred to the trust and receivables generated in the new accounts will be transferred automatically to the trust. The total amount of receivables in the trust will fluctuate daily as new receivables are generated and payments are received on accounts. Additional assets may be transferred to the trust. See "The Bank's Credit Card Activities" and "Description of the Certificates--Addition of Accounts" in this prospectus. Additional trust assets may include: - - monies and investments in the trust's bank accounts; - - revolving credit card accounts affiliated with programs other than MasterCard and VISA or credit card accounts in programs created for a specific company; - - participations in other pools of revolving credit card receivables or consumer loan receivables, secured and unsecured arising as a result of advances made on bank cards, private label cards, corporate cards and unsecured revolving lines of credit; and - - instruments and rights providing credit enhancement to a series or class. SERVICER The bank services the receivables under the terms of the pooling and servicing agreement. In limited cases, the bank may resign or be removed and either the trustee or a third party may be appointed as the new servicer. The servicer receives a servicing fee from the trust. Each series is obligated to pay a portion of the servicing fee. See "Description of the Certificates--Servicing Compensation and Payment of Expenses" and "--Matters Regarding the Servicer" in this prospectus. - --------------- (1) MasterCard(R) and VISA(R) are federally registered servicemarks of MasterCard International Inc. and VISA U.S.A., Inc., respectively. 5 67 ALLOCATION OF TRUST ASSETS The trust assets are allocated among the series of certificates outstanding and the interest of the bank represented by the seller certificates. The seller certificates represent the remaining interest in the assets of the trust not represented by the certificates and other interests issued by the trust to investors. Certificateholders are only entitled to amounts allocated to their series and only to the extent of interest and principal payments due on their certificates. See "Description of the Certificates--Series Percentage and Seller Percentage" in this prospectus. INTEREST PAYMENTS ON THE CERTIFICATES Each certificate of a series will represent the right to receive payments of interest as described in the prospectus supplement for that series. If a series of certificates consists of more than one class, each class may differ in, among other things, priority of payments, payment dates, interest rates, method for computing interest and rights to credit enhancement. Each class of certificates may have fixed, floating or any other type of interest rate. Generally, interest will be paid monthly, quarterly or on other scheduled dates over the life of the certificates. See "Description of the Certificates--Interest Payments" and "Enhancement" in this prospectus. PRINCIPAL PAYMENTS ON THE CERTIFICATES Each certificate of a series will represent the right to receive payments of principal as described in the prospectus supplement prepared for that series. If a series of certificates consists of more than one class, each class may differ in, among other things, the amounts allocated for principal payments, priority of payments, payment dates, maturity, and rights to series enhancement. REVOLVING PERIOD Each series of certificates will begin with a period during which the trust will not pay or accumulate principal for payment to the certificateholders. The period when no principal is paid or accumulated is known as the revolving period. The trust, during the revolving period, will usually pay available principal to the bank as holder of the sellers' interest, but may pay amounts due to holders of certificates of other series. ACCUMULATION AND AMORTIZATION PERIODS Following the revolving period, each class of certificates will have one or a combination of the following periods in which: - - principal is accumulated in specified amounts per month and paid on a scheduled date; - - principal is paid in fixed amounts at scheduled intervals; - - principal is paid in varying amounts at scheduled intervals; - - principal is paid, at the option of the bank, in amounts and on dates designated by the bank; - - principal is accumulated in varying amounts each month based on the amount of principal receivables collected following a series pay out event; or - - principal is paid in varying amounts each month based on the amount of principal receivables collected following a series pay out event or a trust pay out event. The time at which principal payments or principal accumulation will begin and the period over which principal payments or principal accumulation will occur will vary from one series to another and within a series from one class to another. The principal payment provisions for each series and class will be included in the prospectus supplement prepared for the related series. EFFECT OF PAY OUT EVENT If any pay out event occurs, then for each affected series, the revolving period will end and either a rapid amortization period or a rapid accumulation period will begin. Within a series, the rapid amortization period may apply to one or more classes of the series and a rapid accumulation period may apply to another class or classes of the series. In a rapid amortization period, the trust will pay all available principal to the certificateholders of that series or class on each distribution date. In a rapid accumulation period, the trust will place all available principal for that series or class into an account to be held until the expected final distribution date for that series or 6 68 class. Principal accumulated during a rapid accumulation period will, in most cases, be paid to the certificateholders of the series or class for which it was accumulated on the expected final distribution date. For both a rapid amortization period and a rapid accumulation period, if the series has more than one class, then each class may have a different priority for payment or accumulation. A pay out event may affect one or more series. See "Description of Certificates--Trust Pay Out Events" in this prospectus for a discussion of the events that might lead to a rapid amortization period. SHARED EXCESS FINANCE CHARGE COLLECTIONS Any series may be included in a group of series. If specified in the related prospectus supplement, amounts designated as excess spread for a series and not needed for that series, will be excess finance collections which may be applied to cover shortfalls of other series in the same group. See "Description of the Certificates--Sharing of Excess Finance Charge Collections" "--Applications of Collections" and "--Defaulted Receivables; Rebates and Fraudulent Charges" in this prospectus. SHARED PRINCIPAL COLLECTIONS If specified in the accompanying prospectus supplement, collections of principal receivables allocated to a series and not needed for that series, may be applied to cover principal needs for other series in the same group. See "Description of the Certificates--Shared Principal Collections" in this prospectus. CREDIT ENHANCEMENT Each class of a series may be entitled to credit enhancement. Credit enhancement for the certificates of any class may take the form of one or more of the following: - - subordination - - collateral interest - - insurance policy - - cash collateral guaranty or account - - letter of credit - - surety bond - - spread account - - reserve account - - swap arrangements The type, characteristics and amount of any credit enhancement will be: - - based on several factors, including the characteristics of the receivables and accounts at the time a series of certificates is issued and the structure of the series; and - - established based on the requirements of the rating agencies. See "Enhancement" in this prospectus. CERTIFICATE RATINGS Any certificate offered by this prospectus and an accompanying prospectus supplement will be rated in one of the four highest rating categories by at least one nationally recognized rating organization. A rating is not a recommendation to buy, sell or hold securities and may be revised or withdrawn at any time by the assigning agency. Each rating should be evaluated independently of any other rating. See "Risk Factors--Credit Ratings Assigned to Your Certificates Are Limited in Nature" in this prospectus. 7 69 RISK FACTORS You should consider the following factors before you decide whether or not to purchase the certificates. COMPETITION IN THE CREDIT CARD INDUSTRY COULD LEAD TO EARLY PAYMENT OF YOUR CERTIFICATES The bank credit card industry is highly competitive. As the bank's competitors strive to expand their market share, the bank's use of effective advertising, target marketing and pricing strategies becomes extremely important. The bank has remained competitive by offering low rate balance transfer options, lower fixed annual percentage rate cards, no-annual-fee cards, and other cards that offer savings or other rewards to the borrower. In light of recent mergers and consolidations of banking and financial services companies, there are fewer card issuers with greater economies of scale and brand recognition. Also, the use of debit cards associated with the VISA or MasterCard logo competes with traditional credit card usage. The increase in competition and the use of lower annual percentage rate offers may lead to a reduction in yield on the bank's portfolio. The lower rates also may reduce the amount of finance charge collections available to pay interest on the certificates. Increased competition resulting from consolidations and mergers may also impact the bank's ability to originate new accounts and generate new receivables. If the origination of new accounts or the generation of new receivables decreases significantly, the bank may not be able to designate additional accounts to the trust when required and a pay out event and early amortization may occur. If your series provides for rapid amortization upon the occurrence of a series pay out event, these events may cause your principal to be paid back earlier than expected. A CHANGE IN THE TERMS OF THE RECEIVABLES MAY ADVERSELY AFFECT THE AMOUNT OR TIMING OF COLLECTIONS AND MAY CAUSE AN EARLY PAYMENT OF YOUR CERTIFICATES OR A DOWNGRADE As owner of the accounts, the bank retains the right to change various account terms including finance charges, other fees and the required monthly minimum payment. The changes may be voluntary on the part of the bank or may be forced by law or market conditions. Changes in interest and fees could decrease the effective yield on the accounts. If your series provides for rapid amortization upon the occurrence of a series pay out event, this could result in an early amortization of your certificates. Changes could also cause a reduction in the credit ratings on your certificates. See "Description of the Certificates--Representations, Warranties and Covenants" in this prospectus. IF THE TRANSFER OF RECEIVABLES WERE HELD TO BE MERELY A GRANT OF A SECURITY INTEREST, OTHER INTERESTS MAY HAVE PRIORITY OVER YOUR CERTIFICATES The bank has represented in the pooling and servicing agreement that the transfer of the receivables to the trust is either a sale or the grant of a security interest in the receivables. In order to protect the purchasers of the certificates, the bank has taken and will take the necessary actions to ensure that, if the transfer is determined by a court to be a grant of a security interest and not a sale of the receivables to the trust, the trust will have a "first-priority perfected security interest" in the receivables. Regardless of these actions to 8 70 ensure the trust a first-priority perfected security interest, your interests could be impaired: - by a tax, governmental or other nonconsensual lien on the bank's property arising before receivables come into existence which may have priority over the trust's interests in the receivables; - if the FDIC were appointed as conservator or receiver for the bank, the FDIC's administrative expenses may be paid before the certificateholders are paid; or - if insolvency or similar proceedings were commenced by or against the bank or, in certain circumstances, if certain time periods were to pass, then the trust may not have a first-priority perfected security interest in amounts held by the bank and not deposited into the collection account; this may result in a loss to the certificateholders. See "Material Legal Aspects of the Receivables--Transfer of Receivables" in this prospectus. IF A CONSERVATOR OR RECEIVER IS APPOINTED FOR THE BANK, ASSETS COULD BE SOLD AT A LOSS, PAYMENT MAY BE ACCELERATED, DELAYED OR REDUCED AND PROTECTIONS PROVIDED TO CERTIFICATEHOLDERS MAY BE OVERRIDDEN The Federal Deposit Insurance Act, as amended by the Financial Institutions Reform, Recovery and Enforcement Act of 1989, provides that a security interest granted by the bank in the receivables would be respected to the extent that: - the pooling and servicing agreement complies with the regulatory requirements of the FDIA; - the security interest granted under the pooling and servicing agreement is perfected before the FDIC is appointed as conservator or receiver for the bank; and - the security interest is not taken in contemplation of the bank's insolvency or with the intent to hinder, delay or defraud the bank or its creditors. Opinions and policy statements issued by the FDIC suggest that, because of the manner in which these transactions are structured, the FDIC would respect the security interest granted by the bank in the receivables. If the FDIC were to assert a contrary position, however, payments of principal and interest on the certificates could be delayed and possibly reduced. Furthermore, the FDIC could: - require the trustee to go through the administrative claims procedure established by the FDIC in order to obtain payments on the certificates; - request a stay of any actions by the trustee to enforce the pooling and servicing agreement or the certificates against the bank; and - repudiate the pooling and servicing agreement and limit the claims of the holders of the certificates to their "actual direct compensatory damages." If the FDIC were to take any of these actions, the amount payable to you could be lower than the outstanding principal and accrued interest on the certificates, thus resulting in losses to you. 9 71 The appointment of a conservator or receiver for the bank could cause an early amortization of principal on all outstanding series. Under the terms of the pooling and servicing agreement, new principal receivables would not be transferred to the trust. The trustee would sell the receivables unless a sufficient amount of the holders of certificates, and anyone else authorized to vote on those matters, gave the trustee other instructions. The trust would then terminate earlier than was planned and you could have a loss if the sale of the receivables produced insufficient amounts to pay you in full. However, the conservator or receiver for the bank may have the power: - regardless of the terms of the pooling and servicing agreement, (a) to delay any such procedure, (b) to prevent the early amortization, (c) to prevent the early sale of the receivables and termination of the trust or (d) to require new principal receivables to continue being transferred to the trust; or - regardless of the instructions of those authorized to direct the trustee's actions under the pooling and servicing agreement, (a) to require the early sale of the receivables, (b) to require termination of the trust and retirement of the certificates or (c) to prohibit the continued transfer of principal receivables to the trust. In addition, if a conservator or receiver were appointed for the servicer, the conservator or receiver may have the power to prevent either the trustee or the certificateholders from appointing a new servicer. See "Material Legal Aspects of the Receivables--Matters Relating to Conservatorship and Receivership." CONSUMER PROTECTION LAWS MAY RESTRICT THE BANK'S ABILITY TO COLLECT RECEIVABLES AND MAINTAIN YIELD ON THE PORTFOLIO AND MAY LEAD TO AN EARLY PAY OUT OR INABILITY TO PAY CERTIFICATES IN FULL Federal and state consumer protection laws regulate the creation and enforcement of consumer loans, including credit card accounts and receivables. New legislation and regulatory changes affecting consumer loans and, in many cases, specifically aimed at the credit card industry, are always under consideration both at the federal and state levels. If implemented, some of the legislative changes under consideration would: - limit the bank's ability to increase finance charges; - restrict or cap interest rates on credit card accounts; - limit the bank's ability to impose or increase fees; and - require increased disclosure and reporting to cardholders and applicants for credit cards. - It is not clear whether any of these proposals will become law or, if they are enacted, what final form they will take. However, you should be aware that legislative and regulatory changes can be expected from time to time. These changes may make it more difficult for the servicer to collect the receivables or may restrict the finance charges and fees that the bank can charge. 10 72 If, as a result of legislative or regulatory changes, the bank were required to reduce its finance charges and fees, or, if the bank were not permitted to increase finance charges and fees when needed, this could cause a pay out event to occur. The bank makes representations and warranties relating to compliance with the requirements of law. The bank also makes representations and warranties in the pooling and servicing agreement relating to the validity and enforceability of the accounts and the receivables and agrees to indemnify the trust for, among other things, any liability arising from the violation of laws. However, the trustee will not make any examination of the receivables or the records relating to the receivables for the purpose of establishing the presence or absence of defects, compliance with the representations and warranties, or for any other purpose. If a representation or warranty is breached, the only remedy is that the seller or the servicer must accept the transfer and reassignment of receivables affected by the violation. See "Description of the Certificates--Representation, Warranties and Covenants" and "Material Legal Aspects of the Receivables--Consumer Protection Laws" in this prospectus. PRINCIPAL MAY BE PAID EARLIER THAN EXPECTED CREATING A REINVESTMENT RISK TO CERTIFICATEHOLDERS OR LATER THAN EXPECTED RESULTING IN A FAILURE TO RECEIVE PAYMENT WHEN EXPECTED The receivables in the trust may be paid at any time and there is no assurance that new receivables will be generated or will be generated at levels needed to maintain the trust. To prevent the occurrence of a pay out event, new receivables must be generated and added to the trust. The trust is required to maintain a certain minimum amount of receivables. The generation of new receivables is affected in part, by the bank's ability to compete in the current industry environment and by customers' changing borrowing and payment patterns. If there is a decline in the generation of new receivables you may be repaid your principal prior to the expected date. One development which affects the level of finance charge collections is the increased convenience use of credit cards. Convenience use means that the customers pay their account balances in full on or prior to the due date. The customer, therefore, avoids all finance charges on his account. This decreases the effective yield on the accounts and could cause the occurrence of a pay out event. Convenience use is more common among cardholders who are not assessed an annual fee than among those who pay these fees. A substantial majority of the cardholders on the accounts designated to the trust are not charged an annual cardholder fee. The pooling and servicing agreement requires that the balance of principal receivables in the trust not fall below a specified level. If the level of principal receivables does fall below the required level, a pay out event will occur. To maintain the level of principal receivables in the trust, the bank periodically adds receivables through the designation of additional accounts for inclusion in the trust. If the bank is not able to add additional accounts when required, a pay out event will occur. 11 73 See "Description of the Certificates--Trust Pay Out Events" in this prospectus and "Description of the Certificates--Pay Out Events" in the accompanying prospectus supplement. Changes in finance charges also will affect payment patterns on the receivables and thus may result in a decline in yield. During the amortization periods, this may adversely affect the repayment of principal. See "Receivable Yield Considerations" in the accompanying prospectus supplement. SOCIAL, ECONOMIC AND GEOGRAPHIC FACTORS AFFECT CREDIT CARD PAYMENTS AND ARE UNPREDICTABLE AND MAY CAUSE A DELAY OR DEFAULT IN PAYMENT Changes in credit card use, payment patterns and the rate of defaults by cardholders may result from a variety of social, economic and geographic factors. Social factors include changes in consumer confidence levels and attitude toward incurring debt, the public's perception of the use of credit cards and changing attitudes regarding the stigma of personal bankruptcy. Economic factors include the rate of inflation, the unemployment rates and relative interest rates offered for various types of loans. Moreover, adverse changes in economic conditions in states where cardholders are located could have a direct impact on the timing and amount of payments on the certificates of any series. See "The Bank's Credit Card Activities" in this prospectus and the accompanying prospectus supplement. CREDIT RATINGS ASSIGNED TO YOUR CERTIFICATES ARE LIMITED IN NATURE Each credit rating assigned to your certificates reflects the rating agency's assessment only of the likelihood that interest and principal will be paid when required under the pooling and servicing agreement, not when expected. These ratings are based on the rating agencies' determination of the value of receivables in the trust and the availability of any credit enhancement. The ratings do not address the following: - the likelihood that the principal or interest on your certificate will be prepaid, paid on a scheduled date or paid on any particular date before the termination date of your series; - the possibility that your certificates will be paid early or the possibility of the imposition of United States withholding tax for non-U.S. Certificateholders; - the marketability of the certificates, or any market price; or - that an investment in the certificates is a suitable investment for you. A rating is not a recommendation to purchase, hold or sell certificates of a series or class of a series. CREDIT QUALITY OF TRUST ASSETS MAY BE ERODED BY THE ADDITION OF NEW ASSETS The bank expects that it will periodically add additional accounts to the trust and may at times be obligated to add additional accounts. Additional accounts may include accounts which were originated using criteria that are different than those applicable to the accounts currently designated to the trust. There are many reasons which could cause these differences, including the fact that the additional accounts were originated at a different date or were 12 74 acquired from an institution which used different underwriting standards or procedures. Consequently, there is no assurance that future additional accounts will have the same credit quality as those currently designated to the trust. In addition, the pooling and servicing agreement allows the bank to add participation interests in other assets to the trust. The addition of these participation interests and of additional accounts will be subject to the satisfaction of conditions described in this prospectus under "Description of the Certificates--Addition of Accounts" and "--Automatic Account Additions." CREDIT CARD RATES MAY DECLINE OR CERTIFICATE RATES MAY INCREASE WITHOUT A CORRESPONDING CHANGE IN AMOUNTS NEEDED TO PAY CERTIFICATES The majority of accounts have finance charges set at a rate above the London interbank offered rate or the prime rate. Certificates may bear interest at a fixed-rate or at a floating-rate based on another specified index. Thus, if the London interbank offered rate or other specified rate declines, finance charge collections will decline; however, there may not be a corresponding decrease in the interest rates on the certificates. The effect of lower finance charges without a corresponding reduction in the rates on the certificates could cause a pay out event to occur which may cause your certificates to be paid early. On the other hand, a portion of the accounts have finance charges set at a fixed rate. If the rates on the certificates increase there will be no corresponding increase in the finance charges on the fixed-rate accounts. If a significant portion of the accounts have fixed-rate finance charges in the future, an increase in interest rates on the certificates could cause a pay out event to occur which may cause your certificates to be paid early. ISSUANCE OF ADDITIONAL SERIES BY THE TRUST MAY ADVERSELY AFFECT YOUR PAYMENTS OR RIGHTS The trust is a master trust and has issued other series of certificates and is expected to issue additional series from time to time. All certificates are payable from the receivables in the trust. The trust may issue additional series with terms that are different from your series without the prior review or consent of any certificateholders. It is a condition to the issuance of each new series that each rating agency that has rated an outstanding series, confirms in writing that the issuance of the new series will not result in a reduction or withdrawal of its rating. However, the terms of a new series could affect the timing and amounts of payments on any other outstanding series, including your series. The owners of the certificates of any new series will have voting rights which will reduce the percentage interest represented by your series. The affected voting rights may relate to the ability to approve waivers and give consents. The actions which may be affected include directing the appointment of a successor servicer following a servicer default, amending the pooling and servicing agreement and directing a reassignment of the entire portfolio of accounts. See "Description of the Certificates--New Issuances" in this prospectus. 13 75 IF OPTIONAL REPURCHASE OCCURS, IT MAY RESULT IN AN EARLY RETURN OF PRINCIPAL AND A REINVESTMENT RISK When the amount of certificates of a series is reduced to a stated percentage of that series' original amount, the bank may repurchase the remaining certificates of the series. It is possible, if so provided in the applicable series supplement, that the repurchase option could be exercised when 10% or more of the principal amount of the series remains outstanding. A repurchase may result in an early return of your investment. It is not expected that any premium will be paid in the event of the exercise of the repurchase option and there can be no assurance that you will be able to invest any early repayment amount at a similar rate of return. IF CREDIT CARD ACCOUNT HOLDERS ARE CONCENTRATED IN ONE STATE OR GEOGRAPHIC LOCATION, LAWS, ECONOMIC DOWNTURN OR NATURAL DISASTERS IN THAT AREA MAY ADVERSELY AFFECT COLLECTIONS OF RECEIVABLES If the trust contains a high concentration of receivables relating to cardholders located within a single state or region of the United States, events in that state or region may have a magnified effect on the trust due to the concentration. The prospectus supplement of a series will contain a then-current detailed geographic breakdown of the number of accounts and the amount of receivables relating to cardholders with addresses in each applicable state. See "The Receivables--Geographic Distribution of Accounts and Receivables" in the accompanying prospectus supplement. The bank has no way of predicting how a future geographic event or a change in the geographic distribution of the receivables may affect the certificates. IF THE BANK ELECTS TO TREAT A PORTION OF PRINCIPAL RECEIVABLES AS FINANCE CHARGE RECEIVABLES, PRINCIPAL PAYMENTS COULD BE DELAYED The documents relating to the certificates permit the bank to cause a percentage of principal receivables to be discounted as principal receivables and treated as finance charge receivables. The bank may elect to use the discount and may decide, without notice to or the consent of any holders of certificates, to reduce the discount or discontinue the use of the discount. Any election by the bank to discount the principal receivables will result in an increase in the amount of finance charge receivables and a reduction in the amount of principal receivables and the collection of principal receivables from that which would otherwise occur. This may result in delayed principal payments on the certificates. Use of the discount will also reduce the sellers' interest in the trust, thereby making pay out events based in part on the amount of collections of finance charge receivables less likely to occur and increasing the likelihood that the bank will have to designate more accounts to the trust or that a pay out event will occur based on the sellers' interest or the amount of principal receivables in the trust. Any subsequent reduction or withdrawal of the percent used in discounting the principal receivables would have the opposite effect. AMOUNTS IN PREFUNDING ACCOUNT NOT INVESTED IN RECEIVABLES MAY RESULT IN EARLY RETURN OF PRINCIPAL AND REINVESTMENT RISK The bank may, in connection with any series, create a prefunding account and deposit a portion of the proceeds of the series into the account. Moneys in the account will be invested in additional principal receivables. However, any money in the prefunding account not used by a specific date must be paid to the holders of the certificates of that series. This will result in an early return of principal. The bank does not expect to pay a prepayment penalty or premium in that event. If you receive an early payment you may 14 76 not be able to reinvest at a rate equivalent to the rate on the certificates which were paid early. YOU WILL NOT BE RECOGNIZED AS THE OWNER OF CERTIFICATES ON THE RECORDS OF THE TRUSTEE AND WILL NOT BE ABLE TO EXERCISE RIGHTS DIRECTLY AS A CERTIFICATEHOLDER If so stated in the accompanying prospectus supplement, the certificates of that series initially will be represented by one or more certificates registered in the name of Cede, the nominee for DTC, and will not be registered in the names of the certificate owners or their nominees. Unless definitive certificates are issued for a series, certificate owners of that series will not be recognized by the trustee as certificateholders, as that term is used in the governing documents. As a result you will only be able to exercise the rights of certificateholders indirectly through DTC, Cedelbank or Euroclear and their participating organizations. See "Description of Certificates--Book-Entry Registration" and "--Definitive Certificates" in this prospectus. TRUST ASSETS MAY BE ALLOCATED TO ONE OR MORE SPECIFIC SERIES OR GROUPS AND NOT BE AVAILABLE TO YOUR SERIES A series supplement or an amendment to the pooling and servicing agreement may provide that portions of the receivables or participation interests in the trust be allocated to one or more series or groups. If such an allocation were to occur, and if the allocation was not to your series or a group in which your series is included, your series would not be able to benefit from such receivables or participation interests. Such an allocation is dependent upon: - satisfying the rating agency condition, and - delivering an officer's certificate to the trustee by the servicer that states that the servicer reasonably believes that the allocation will not have an adverse effect. 15 77 FORMATION OF THE TRUST Fleet Credit Card Master Trust II was formed, in accordance with the laws of the State of New York, pursuant to a Pooling and Servicing Agreement dated as of December 1, 1993. The Pooling and Servicing Agreement was amended and restated on May 23, 1994, and the amended and restated agreement was amended by amendments dated July 1, 1994, October 6, 1995, February 20, 1998, and May 14, 1999. The Pooling and Servicing Agreement is between Fleet Bank (RI), National Association (the "BANK"), as seller and servicer, and Bankers Trust Company, as trustee. The Pooling and Servicing Agreement, as originally executed, was between Colonial National Bank USA and the trustee. Colonial National Bank USA subsequently changed its name to Advanta National Bank USA and following a merger into it by Advanta National Bank, Advanta National Bank USA changed its name to Advanta National Bank. Advanta National Bank was replaced, as described in this prospectus, as seller and servicer on February 20, 1998 by Fleet Bank (RI), National Association. The trust, from time to time, issues series of asset-backed securities. Each series is issued pursuant to the terms of a series supplement to the Pooling and Servicing Agreement. The Pooling and Servicing Agreement and any series supplement are sometimes collectively referred to as the "POOLING AND SERVICING AGREEMENT." All of the asset-backed securities which have been issued and which will be issued under the Pooling and Servicing Agreement represent undivided interests in the assets of the Fleet Credit Card Master Trust II. The assets of the trust consist primarily of receivables in consumer revolving credit card accounts designated to the trust. The "RECEIVABLES" represent the amounts outstanding on the accounts and owed by the credit card holders. When the trust was created in 1993, the original seller designated the initial accounts to the trust and transferred to the trust the receivables in those initial accounts, including future receivables arising in those accounts after the designation. Since the initial designation, the seller or sellers under the Pooling and Servicing Agreement have, from time to time, designated additional accounts and transferred to the trust the receivables in the additional accounts and the receivables arising in the accounts after the designation. The receivables include principal receivables and finance charge receivables. The "PRINCIPAL RECEIVABLES" are the amounts charged by cardholders for merchandise, services and cash advances. The "FINANCE CHARGE RECEIVABLES" are the periodic finance charges, annual membership fees and annual service charges, late fees, overlimit fees, cash advances fees, all other fees and charges for an account. Finance charge receivables also include other amounts which the seller designates to be included as finance charge receivables and also include amounts recovered as a result of efforts to collect amounts which were owed as principal receivables and which were charged-off as defaulted receivables. The trust assets consist of and will consist of: - the receivables in those accounts designated to the trust; - all monies due or to become due on the receivables and all amounts received as collections of the receivables and all proceeds of the receivables; - "RECOVERIES," meaning the net amounts subsequently recovered with respect to principal receivables after the principal receivables have been charged-off; - the right to receive a portion of the "INTERCHANGE," meaning specified fees received by the bank as a creditor participating in the VISA and MasterCard International associations as partial compensation for taking credit risk, absorbing fraud losses and funding receivables for a limited period prior to initial billing, attributed to charges for merchandise and services in the accounts; the amount of the interchange included in the trust assets for a series will be designated in the respective series supplement; - proceeds of credit insurance policies relating to the receivables; 16 78 - all monies and other property constituting eligible investments in bank accounts of the trust; and - the benefits of any series enhancements issued for any series; the series enhancement will, however, only be available to certificateholders of the series for which it is provided. The trust assets may also include participations, including 100% participations, representing undivided interests in a pool of assets consisting of revolving credit card receivables or consumer loan receivables, secured or unsecured, arising as a result of advances made on bank cards, private label cards, corporate cards and unsecured revolving lines of credit. The investor certificates and interests in the trust which are treated as investor certificates, including the certificates offered by this prospectus and the accompanying prospectus supplement, represent undivided interests in the trust. Certificates of a series represent the right to receive, to the extent necessary to make the required payments on the certificates, the following: - a portion of collections allocable to the certificateholders of that series; - funds on deposit in the collection account and in the excess funding account allocable to certificateholders of that series; - funds on deposit in any deposit, trust, escrow or similar account maintained for the benefit of that series or any class of that series; and - funds available pursuant to any enhancement for that series. The rights and interests of the certificateholders listed above for all series are collectively the "CERTIFICATEHOLDERS' INTEREST." "CERTIFICATEHOLDERS" are the registered owners of the certificates or the bearer of any certificates in bearer form. See "Description of the Certificates" in this prospectus. The trust has not and will not engage in any activity other than acquiring and holding the receivables, issuing and making payments on certificates and certain uncertificated interests with respect to each series issued by the trust, the Bank Certificate and Supplemental Certificates, obtaining series enhancement applicable to any series and other related activities. As a consequence, the trust is not expected to have any need for, or sources of, capital resources other than the assets of the trust. TRANSFER AND ASSIGNMENT THE TRANSFER The trust was created in 1993 and from this formation until February 20, 1998 was known as ADVANTA Credit Card Master Trust II and Advanta National Bank was seller and servicer under the Pooling and Servicing Agreement. On February 20, 1998, Fleet Financial Group Inc. and some of its subsidiaries and Advanta Corp. and some of its subsidiaries including Advanta National Bank, transferred to Fleet Bank (RI), National Association, certain assets and liabilities relating to their respective credit card businesses including their credit card accounts and the assets and liabilities of Advanta National Bank relating to the trust. AMENDMENT TO POOLING AND SERVICING AGREEMENT Immediately prior to the transfer described in the preceding paragraph, the Pooling and Servicing Agreement was amended to provide, among other things, that: - Advanta National Bank could assign and delegate to the bank all of Advanta National Bank's rights and obligations as seller and servicer under the Pooling and Servicing Agreement and each series supplement; and - the name of the trust would be changed to Fleet Credit Card Master Trust II. 17 79 ASSIGNMENT AND ASSUMPTION AGREEMENT Under the terms of an assignment and assumption agreement also dated February 20, 1998, the bank accepted and assumed all of Advanta National Bank's liabilities under the Pooling and Servicing Agreement and the series supplements. The bank also assumed and agreed to perform each and every covenant and obligation of the seller and of the servicer contained in the Pooling and Servicing Agreement and the series supplements. Pursuant to the assignment and assumption agreement, the bank certificate was assigned and transferred to the bank, Advanta National Bank was released as seller and servicer and has no further obligations or liabilities under the Pooling and Servicing Agreement or the series supplements and the bank became the sole seller and servicer. In addition, under the assignment and assumption agreement, ownership of the accounts in the trust was transferred to the bank, and the bank transferred to the trustee on behalf of the trust, for the benefit of the certificateholders, all of the bank's right, title and interest in and to the receivables in those accounts. The bank has also granted to the trustee on behalf of the trust for the benefit of the certificateholders, a first priority perfected security interest in all of the bank's right, title and interest in and to the receivables in the accounts designated to the trust. RIGHTS AGREEMENT In connection with the transfer, the bank and Fleet Credit Card, LLC entered into a rights agreement dated as of February 20, 1998. Under the rights agreement, the bank assigned and transferred to Fleet Credit Card, LLC all economic rights and interests in the assets of the bank acquired as a result of the transfer. Also under the rights agreement, the bank transferred to Fleet Credit Card, LLC an economic interest in all liabilities assumed by the bank as a result of the transfer. The rights agreement states that the economic interests thereby transferred is the transfer of contractual rights between the bank and Fleet Credit Card, LLC to receive payments or to pay obligations and not an ownership interest in or a lien on any of the assets of the trust. The rights agreement states that the transfer of economic interest is subject to any and all rights, liens and security interests granted to the trustee pursuant to the Pooling and Servicing Agreement. Subsequent to the transfer, Fleet Credit Card, LLC converted into a limited partnership which is known as the Fleet Credit Card Services, L.P. A subsidiary of the bank is the general partner of Fleet Credit Card Services, L.P. THE BANK'S CREDIT CARD ACTIVITIES GENERAL The bank currently is the seller and the servicer under the Pooling and Servicing Agreement. The bank was the survivor of a merger on November 14, 1997 between the bank and Fleet Bank (Delaware), National Association. The bank's credit card portfolio at that time consisted of credit card accounts originated or acquired by the bank or its predecessor. As discussed in this prospectus under "Transfer and Assignment," on February 20, 1998, Advanta National Bank transferred to the bank the ownership interest in substantially all of the accounts in the Advanta consumer credit card portfolio. This Advanta consumer credit card portfolio and the accounts owned by the bank prior to the February 20, 1998 transfer, in addition to originations or acquisitions made since the transfer, constitute the "FLEET CREDIT CARD PORTFOLIO." The accounts in the Fleet Credit Card Portfolio include premium and standard accounts. Both premium and standard accounts undergo the same credit analysis, but premium accounts have higher initial credit limits because of the higher incomes and better credit quality of the cardholders. In addition, premium accounts generally offer a wider variety of services to the cardholders and those that charge 18 80 annual cardholder fees generally have higher annual cardholder fees than standard accounts that have annual cardholder fees. Servicing of the Fleet Credit Card Portfolio is performed primarily by the bank through its subsidiary Fleet Credit Card Services, L.P. However, certain data processing and administrative functions associated with the servicing of the Fleet Credit Card Portfolio are currently performed on behalf of the bank by First Data Resources, Inc. See "--Description of First Data Resources, Inc." in this prospectus. SUPPLEMENTAL INFORMATION Information relating to the credit card activities of the bank is described in this prospectus. In addition, the accompanying prospectus supplement may update or supplement this information. To the extent the trust assets include any participation interests or receivables other than those of the type described in this prospectus, the accompanying prospectus supplement will describe the nature and characteristics of these participation interests or receivables. ACQUISITION AND USE OF CREDIT CARDS Growth Strategy and Origination. The bank acquires credit card accounts through several programs. The programs include balance transfer programs, partnership programs, value added programs and the acquisition of credit card portfolios from other financial institutions. These programs, excluding portfolio acquisitions, target desirable consumers based on pre-established criteria and use national direct mail, telemarketing and the internet as channels to market the bank's products. The bank carefully targets consumers through various data-mining methods and targeting models in its direct mail and telemarketing solicitations. The bank aligns the product offering with the target customer segment along with the number and sequence of offers in order to maximize market penetration, response rates and usage. The bank's products include standard and premium credit cards with either the VISA or MasterCard affiliation. Management of the bank believes that these account origination programs and varied products help to create and maintain a balanced portfolio and provide a process to sustain growth for the bank. Substantially all new accounts are generated through direct mail and telemarketing solicitation of potential cardholders. Solicitations are either prequalified or non-prequalified. All of the credit cards originated are unsecured. For prequalified solicitations, the bank engages a third-party service to identify those individuals who meet the bank's credit and demographic criteria. Once a list of these individuals is obtained, the bank delivers the list to third party vendors who prepare the solicitation materials. If an individual responds to a prequalified solicitation, the bank obtains a second credit bureau report and offers a credit card to the applicant only if that second report confirms the applicant's eligibility. For responses to non-prequalified solicitations, credit bureau reports are obtained for all applicants. Underwriting Procedures. The bank uses internally developed credit scoring models as well as proprietary scoring models developed by the Fair, Isaacs Companies, an independent firm experienced in developing credit scoring models, in evaluating the credit risk of each applicant. Credit scoring models are developed by statistically evaluating common characteristics and their correlation with credit risk. Application of a credit scoring system is intended to provide a general indication, based on the information available, of an applicant's willingness and ability to repay his or her obligations, and an estimate of the credit risk associated with the applicant. The bank uses proprietary scoring models as a supplement to the credit scoring models. Most applications are scored on the basis of information received from an independent credit reporting agency. In some cases, in accordance with criteria established by bank management, employment and earnings are verified by telephone. Credit limits are determined from various credit and profitability models. 19 81 For prequalified solicitations, the bank generally purchases the names of potential cardholders who meet established credit criteria from credit bureaus. These lists are matched against internal and external sources and edited to ensure optimal quality and accuracy. The bank then mails prequalified solicitation packages requiring only the signature and brief amount of information from the potential cardholder. Notwithstanding the prequalifications, some applications are rejected upon receipt of information from the applicant and the results of the applicant's credit scores. For non-prequalified solicitations, the bank purchases the names of potential cardholders from a variety of sources and then edits the list using internal and external sources to ensure quality and accuracy. The potential cardholders on the final list are mailed solicitation packages which include full applications. Respondents to these solicitations are approved or declined based on criteria which are substantially similar to the criteria used to approve or decline respondents to prequalified solicitations. Potential cardholders must meet minimum credit standards established by the bank to receive a specific credit limit. Cardholders not meeting the minimum standards for the initial product offering are offered a reduced credit limit for which they qualify. The bank generally offers an initial credit line of $3,500 for standard cards and $7,500 for premium cards although higher and lower limits are also offered for these cards. Generally, platinum card accounts have credit lines which are not significantly different than the credit lines offered on other premium accounts with similar credit quality. Since 1997, substantially higher credit lines have been offered for platinum card accounts. Cardholders may request to have their credit line increased upon completion of a full application. After a review of the full application and credit bureau report, the bank decides whether to extend additional credit. Also, the bank may initiate credit line increases for cardholders meeting minimum standards for usage and payment history established by the bank. Credit line increases are granted to accountholders who have demonstrated good credit behavior and appropriate usage patterns. Accounts are opened with an initial term of one to two years. At the anniversary date, accounts which meet certain criteria for usage and payment history are reissued for one- to three-year terms. Terms and Uses of Credit Cards. Each cardholder is subject to an agreement governing the terms and conditions of the related MasterCard or VISA account. Under the agreements with MasterCard and VISA, the bank reserves the right, upon advance notice to the cardholder, to change or terminate any terms, conditions, services or features of its MasterCard and VISA accounts at any time. Changes may include increasing or decreasing finance charges, other fees and charges and minimum payment terms. The agreement with each cardholder provides that the bank may apply changes, when applicable, to current outstanding balances as well as to future transactions. See "Risk Factors--Consumer Protection Laws May Restrict the Bank's Ability to Collect Receivables and Maintain Yield on the Portfolio and May Lead to an Early Pay Out or Inability to Pay Certificates in Full" and "Material Legal Aspects of the Receivables--Consumer Protection Laws" in this prospectus. A cardholder may use the credit card for purchases, balance transfers and cash advances. Cardholders make purchases when using the credit card to buy goods or services. Balance transfers result when cardholders request to move balances from other credit cards or loans to the credit card account held with the bank. A cash advance is made when a credit card is used to obtain cash from a financial institution or an automated teller machine or when the cardholder uses special drafts issued by the bank to draw against the cardholder's credit line. The bank generally limits the amount of credit available for cash advances on new accounts to 30% to 50% of the total credit line. BILLING AND PAYMENTS The bank, using First Data Resources, Inc., as its service bureau, generates and mails to cardholders monthly statements summarizing account activity. For the majority of accounts, cardholders receive a 25-day grace period on purchases. Currently, a majority of the cardholders are required to make a monthly payment equal to 2% of their total balance. 20 82 All fees, charges and credit insurance premiums assessed by the bank are automatically charged to an account and are included in the account balance at the end of each billing cycle. The accrued and unpaid periodic finance charges assessed by the bank are calculated by multiplying the average daily balances of purchases and cash advances in an account by the applicable daily periodic rate, then multiplying the resulting product by the number of days in the billing cycle. Most accounts are also subject to daily compounding of interest. Finance charges are not assessed in most circumstances on purchases if all balances shown in the billing statement are paid by the due date. Under certain conditions related to customer performance, the bank may immediately convert the annual percentage rate applicable to existing and future balances to a higher rate. The bank primarily offers cards to customers without an annual fee. The bank assesses miscellaneous transaction fees, including cash advance and draft fees, late and overlimit charges, and returned check, returned draft, and draft stop payment charges. Prior to June 1997, miscellaneous fees did not constitute a material portion of finance charge receivables. However, since June 1997, these fees have represented a greater portion of finance charge receivables. DESCRIPTION OF FIRST DATA RESOURCES, INC. Certain data processing and administrative functions associated with the servicing of the Fleet Credit Card Portfolio are currently being performed on behalf of the bank by First Data Resources, Inc. First Data Resources, Inc. was established in 1969 as the data processing unit of Mid-America Bankcard Association. In 1980, American Express acquired First Data Resources, Inc. and in 1992, First Data Resources, Inc. became an independent company as a subsidiary of First Data Corp. According to First Data Resources, Inc., it is a leading global provider of comprehensive transaction processing products and services to credit, debit, commercial, private label and oil card issuers. First Data Resources, Inc.'s home office in the United States is located in Omaha, Nebraska. DELINQUENCIES The discussion set forth under this caption "--Delinquencies" relates to the policies currently in effect for accounts designated to the trust. The bank may, from time to time, further revise its policies relating to the accounts including its policies concerning delinquencies. Currently, for accounts designated to the trust, each account is billed monthly on or about the same day of the month. An account is "contractually delinquent" if the minimum payment indicated on the cardholder's statement is not received by the due date. For purposes of determining the delinquency of an account, the period from one monthly billing statement to the next is considered a period of 30 days, regardless of the actual number of days elapsed. Efforts to collect contractually delinquent credit card receivables currently are made by the bank's service center personnel or the bank's designees. Collections activities include statement messages, formal collection letters and telephone calls. The intensity at which collection activity is pursued depends on the risk the account presents to the bank, which is determined by behavioral scoring and adaptive control techniques. In the event that initial telephone contact fails to resolve the delinquency, the bank continues to contact the cardholder by telephone and by mail. Although these arrangements are made infrequently, the bank may also enter into arrangements with cardholders to extend or otherwise change payment schedules. Delinquency levels are monitored by management of both the collections and credit policy departments of the bank and information is reported daily to senior management. The following chart summarizes the bank's charge-off policy for delinquent accounts:
PERIOD IN EFFECT CHARGE-OFF POLICY - ---------------- ----------------- October 1, 1998 to Present.................................. 180 days delinquent Prior to October 1, 1998.................................... 186 days delinquent
21 83 When accounts are charged-off as delinquent, the charged-off accounts which are non-bankrupt accounts are generally sold to outside third parties. Accounts are also charged-off due to death of the accountholder or fraud in the account. Accounts which are charged-off due to death of the accountholder are charged-off within 30 days of notice of the death. Accounts which are charged-off due to fraud are charged-off within a 90-day investigative period following notice of fraudulent activity in the account. The following chart summarizes the bank's charge-off policy for accounts of bankrupt cardholders:
PERIOD IN EFFECT CHARGE-OFF POLICY - ---------------- ----------------- October 1, 1998 to Present.................................. 60 days after notice From August 1996 to October 1, 1998......................... 90 days after notice
The credit evaluation, servicing and charge-off policies and collection practices of the bank may change from time to time in accordance with the bank's business judgment and applicable laws and regulations. Information concerning the delinquency and loss experience of the Fleet Credit Card Portfolio is contained in the accompanying prospectus supplement. This information shows delinquencies grouped by the number of days the receivables are delinquent and the percentage of the portfolio which is delinquent. The loss experience information shows the receivables outstanding, the charge-offs in dollars and as a percentage of the receivables outstanding. In addition, the accompanying prospectus supplement will include information on the composition of the trust portfolio by period of delinquency. INTERCHANGE Creditors, including the bank, participating in the VISA and MasterCard International associations receive fees, called "INTERCHANGE," as partial compensation for taking credit risk, absorbing fraud losses and funding receivables for a limited period prior to initial billing. Under the VISA and MasterCard International systems, a portion of the interchange attributed to cardholder charges for merchandise and services is passed from banks which clear the transactions for merchants to credit card-issuing banks. Interchange approximates 1.4% of the transaction amount. VISA and MasterCard International may from time to time change the amount of interchange reimbursed to banks issuing their credit cards. Collections of finance charge receivables will be deemed to include interchange attributed to the cardholder charges for merchandise and services in the accounts, as calculated pursuant to the related series supplement for any series. USE OF PROCEEDS The net proceeds from the sale of each series offered by this prospectus and the related prospectus supplement will be paid to the seller. The seller will use these proceeds for general corporate purposes which will include issuing more credit card loans. THE BANK AND FLEET BOSTON CORPORATION The bank is the surviving bank of a merger consummated on November 14, 1997, between the bank and Fleet Bank (Delaware), National Association. The bank is a limited purpose credit card bank chartered under the laws of the United States. The bank is a wholly-owned subsidiary of Fleet National Bank. Fleet National Bank is a wholly-owned subsidiary of Fleet Boston Corporation, doing business ad FleetBoston Financial Corporation ("FLEET"). Fleet is the bank holding company which came into existence on October 1, 1999 as a result of the merger of Fleet Financial Group, Inc. and BankBoston Corporation. Prior to the merger of Fleet Financial Group, Inc. and the BankBoston Corporation, the bank was an indirect wholly-owned subsidiary of Fleet Financial Group, Inc. 22 84 The bank is subject to the supervision and regulation of the Office of the Comptroller of the Currency. The bank's deposits are insured by FDIC and the bank is a member of the Federal Reserve Bank of Boston. Fleet is a $190.7 billion diversified financial services company. The company's lines of business include commercial and consumer banking, institutional and investment banking, cash management, trade services, export finance, mortgage banking, commercial finance, asset-based lending, commercial real estate lending, equipment leasing, government banking, investment management services, private equity investments, credit cards, discount brokerage services, student loan processing, and full-service banking in Latin America. Through 5,750 outlets, Fleet serves approximately 20 million customers. Fleet is headquartered in Boston and listed on the New York Stock Exchange (NYSE: FBF). The principal executive office of the bank is located at 111 Westminster Street, Providence, Rhode Island 02093. MATERIAL LEGAL ASPECTS OF THE RECEIVABLES TRANSFER OF RECEIVABLES The seller represents and warrants in the Pooling and Servicing Agreement that its transfer of the receivables to the trust is either a sale to the trust of all right, title and interest of the seller in and to the receivables or the grant to the trust of a first-priority, perfected security interest in the bank's rights in receivables. In either case, the seller represents and warrants that the transfer and the grant will be free and clear of liens arising from or through the seller except for: - certain potential tax, governmental and other nonconsensual liens; - the interests of the holders of the Bank Certificate and any Supplemental Certificates; and - the seller's right to receive interest and investment earnings, net of losses and investment expenses, in respect of the collection account or any series account. See "Description of the Certificates--Representations, Warranties and Covenants" for a discussion of the trust's rights arising from a breach of these warranties. The seller represents and warrants that the receivables are "accounts" or "general intangibles" for purposes of the Uniform Commercial Code. Both the sale of accounts and the transfer of accounts as security for an obligation are subject to the provisions of Article 9 of the UCC. In addition, a transfer of general intangibles as security for an obligation is subject to the provisions of Article 9 of the UCC. Therefore, the bank will file appropriate UCC financing statements to perfect the trust's security interest in the receivables. Article 9 of the UCC, however, does not apply to the sale of general intangibles. As a consequence, some other action under applicable state law may be required in order to perfect this type of sale against the interests of third parties. There are limited circumstances in which a prior or subsequent transferee of receivables coming into existence after the date a series is issued could have an interest in the receivables with priority over the trust's interest. Under the Pooling and Servicing Agreement, however, the seller represents and warrants that the receivables were transferred to the trust free and clear of the lien of any third party, except for certain tax, governmental and other nonconsensual liens. In addition, the seller covenants that, except as permitted by the Pooling and Servicing Agreement, it will not sell, pledge, assign, transfer or grant any lien on any receivable, or any related interest, other than to the trust. Nevertheless, a tax, governmental or other nonconsensual lien on property of the seller arising prior to the time a receivable comes into existence may have priority over the interest of the trust in this receivable. Furthermore, if the FDIC were appointed as receiver or conservator of the seller, certain administrative expenses of the receiver or conservator may have priority over the interest of the trust in the receivables arising from the accounts owned by the seller. 23 85 In addition, while the bank is the servicer and subject to certain conditions, cash collections held by the bank may be commingled and used for the benefit of the bank prior to the date on which these collections must be deposited in the collection account. If insolvency or similar proceedings were commenced by or against the bank or, in certain circumstances, if certain time period were to pass, the trust may not have a first-priority perfected security interest in these collections. In this event, the amount payable to you could be lower than the outstanding principal and accrued interest on the certificates, thus resulting in losses to you. MATTERS RELATING TO CONSERVATORSHIP AND RECEIVERSHIP The bank is chartered as a national banking association and is regulated and supervised by the Office of the Comptroller of the Currency, which is authorized to appoint the FDIC as conservator or receiver for the bank if certain events occur relating to the bank's financial condition or the propriety of its actions. In addition, the FDIC could appoint itself as conservator or receiver for the bank. The Federal Deposit Insurance Act, as amended by the Financial Institutions Reform, Recovery and Enforcement Act of 1989 ("FDIA") provides that the security interest should be respected to the extent that: - the Pooling and Servicing Agreement complies with the regulatory requirements of the FDIA; - the security interest granted under the Pooling and Servicing Agreement is perfected before the FDIC is appointed as conservator or receiver for the bank; and - the security interest was not taken in contemplation of the bank's insolvency or with the intent to hinder, delay or defraud the bank or its creditors, In addition, opinions and policy statements issued by the FDIC suggest that, because of the manner in which these transactions are structured, the FDIC would respect the security interest granted by the bank in the receivables. Nevertheless, delays or reductions in payments on outstanding series of certificates could occur if the FDIC were: - to assert a contrary position; - to require the trustee to go through the administrative claims procedure established by the FDIC in order to obtain payments on the certificates; or - to request a stay of any actions by the trustee to enforce the Pooling and Servicing Agreement or the certificates against the bank. In addition, the FDIC as conservator or receiver for the bank could repudiate the Pooling and Servicing Agreement. The FDIA would limit the damages for this form of repudiation to the trust's "actual direct compensatory damages" determined as of the date that the FDIC is appointed as conservator or receiver for the bank. The FDIC, moreover, could delay its decision whether to repudiate the Pooling and Servicing Agreement for a reasonable period following its appointment as conservator or receiver for the bank. Therefore, if the FDIC as conservator or receiver for the bank were to repudiate the Pooling and Servicing Agreement, the amount payable to you could be lower than the outstanding principal and accrued interest on the certificates, thus resulting in losses to you. The Pooling and Servicing Agreement provides that, upon the commencement of an insolvency event with respect to the seller, a trust Pay Out Event will occur, an early amortization will begin and no new principal receivables will be transferred to the trust. Also, as a result of the insolvency event involving the seller, unless the trustee receives other instructions from the certificateholders and other parties described in the Pooling and Servicing Agreement, the trustee will be required to liquidate the receivables. See "Description of the Certificates--Liquidation of Receivables." However, the FDIC, as conservator or 24 86 receiver for the bank, may have the power, notwithstanding the terms of the Pooling and Servicing Agreement, the decisions of the trustee or the instructions of the certificateholders to: - delay the procedure for the liquidation of the receivables; - prevent the commencement of an early amortization; - prevent or limit the early liquidation of the receivables and the termination of the trust; or - require the continued transfer of new principal receivables to the trust. On the other hand, regardless of the terms of the Pooling and Servicing Agreement and any instructions of those authorized to direct the trustee's action, the FDIC as conservator or receiver for the bank may have the power to: - require the early liquidation of the receivables, - require the early termination of the trust and the retirement of the certificates, or - prohibit or limit the continued transfer of new principal receivables to the trust. In addition, the FDIC as conservator or receiver for the bank may have the power to prevent either the trustee or the certificateholders from appointing a successor servicer under the Pooling and Servicing Agreement. CONSUMER PROTECTION LAWS The relationship of the cardholder and credit card issuer is extensively regulated by Federal and state consumer protection laws. With respect to credit cards issued by the bank, the most significant of these laws include the Federal Truth-in-Lending Act, Equal Credit Opportunity Act, Fair Credit Reporting Act, Fair Debt Collection Practice Act, Electronic Funds Transfer Act and National Bank Act, as well as any relevant Rhode Island laws and comparable statutes in the states in which cardholders reside. These statutes impose disclosure requirements when a credit card account is advertised, when it is opened, at the end of monthly billing cycles, upon account renewal for accounts on which annual fees are assessed and at year end. The statutes also limit cardholder liability for unauthorized use, prohibit specified discriminatory practices in extending credit and impose limitations on the type of account-related charges that may be assessed. Federal legislation requires credit card issuers to disclose to consumers the interest rates, annual cardholder fees, grace periods and balance calculation methods associated with their credit card accounts. Cardholders are entitled under current law to have payments and credits applied to the credit card account promptly, to receive prescribed notices and to have billing errors resolved promptly. The trust may be liable for certain violations of consumer protection laws that apply to the receivables, either as assignee of the seller with respect to obligations arising before transfer of the receivables to the trust or as a party directly responsible for obligations arising after the transfer. In addition, a cardholder may be entitled to assert these violations by way of set-off against his obligation to pay the amount of receivables owing. The seller covenants in the Pooling and Servicing Agreement to accept the transfer of all receivables in an account, under certain circumstances, if any receivable in the account has not been created in compliance with the requirements of the consumer protection laws. The seller has also agreed in the Pooling and Servicing Agreement to indemnify the trust for, among other things, any liability arising from these violations. See "Description of the Certificates--Representations, Warranties and Covenants" in this prospectus. Application of federal and state bankruptcy and debtor relief laws would adversely affect the interests of the certificateholders if these laws result in any receivables being charged-off as uncollectible. See "Description of the Certificates--Defaulted Receivables; Rebates and Fraudulent Charges" and "Risk Factors--Consumer Protection Laws May Restrict the Bank's Ability to Collect Receivables and Maintain Yield on the Portfolio and May Lead to an Early Pay Out or Inability to Pay Certificates in Full" in this prospectus. 25 87 DESCRIPTION OF THE CERTIFICATES The certificates will be issued in series pursuant to the Pooling and Servicing Agreement and series supplements to the Pooling and Servicing Agreement. Under the Pooling and Servicing Agreement, the seller may execute further series supplements among the seller, the servicer and the trustee in order to issue additional series. See "--New Issuances" in this prospectus. The trustee will provide a copy of the Pooling and Servicing Agreement, without exhibits or schedules, including any series supplement for a series, to certificateholders of that series without charge upon written request. A copy of the form of Pooling and Servicing Agreement has been filed with the Securities and Exchange Commission as an exhibit to the registration statement of which this prospectus is a part. The following summaries describe provisions common to all series of certificates. Information specific to a series will be contained in the related prospectus supplement. GENERAL There is no limit to the amount of certificates that can be issued under the Pooling and Servicing Agreement. The aggregate principal amount of each series of certificates issued by the trust will be described by the series supplement for that series. Each series of certificates may consist of one or more classes, one or more of which may be floating or fixed rate certificates or other type of certificates as specified in the related prospectus supplement. A series may include a class or classes which are subordinated in right of payment of principal and/or interest to another class or other classes in the same series or in any other series. Each series will be issued in the minimum denominations for each class specified in the related prospectus supplement. For each series, the investor certificates issued by the trust represent the right to receive, to the extent necessary to make payments on the certificates of that series: - the portion of the collections allocable to that series; - funds and other property constituting eligible investments in the collection account and the excess funding account allocable to that series; - funds and other property constituting eligible investments in any deposit, trust, escrow or similar account maintained for the benefit of that series; and - funds available pursuant to any related series enhancement. The collections of receivables will be allocated to each series on the basis of the percentages described in the related prospectus supplement. The trust assets will be allocated among: - the certificateholders' interest of each series, including providers of series enhancement holding uncertificated subordinated interests; and - the interest of the holders of the Seller Certificates which include the Bank Certificate and any Supplemental Certificate, and collectively represent the sellers' interest. The sellers' interest represents the right to the assets of the trust not allocated to the certificateholders' interest. The term "SELLER AMOUNT" refers to an amount equal to: - the aggregate amount of principal receivables in the trust at the time of determination; plus - the principal amount on deposit in the excess funding account at the same time, minus - the sum of the amount of principal receivables and the amount on deposit in the excess funding account allocated to each outstanding series. 26 88 The Seller Amount will fluctuate as the amount of principal receivables in the trust changes from time to time. The term "INVESTOR AMOUNT" for a series, as described in that series supplement and the related prospectus supplement, generally refers to the principal amount of the certificateholders' interest in the assets of the trust. The term "INVESTED AMOUNT" for a series, as described in that series supplement and the related prospectus supplement, generally refers to the investor amount less, to the extent provided in the series supplement, amounts held in a principal funding account, prefunding account or other account specified in the series supplement. Each series will commence with a period of time called a "REVOLVING PERIOD" which begins on the date that series is issued and continues to the day immediately preceding the commencement of an amortization period for that series. During the revolving period, no principal will be paid on the certificates of that series and no amounts will be accumulated to pay principal on that series. The revolving period for a series shall end, and an amortization period shall begin, either as scheduled or upon the occurrence of a "PAY OUT EVENT," meaning a trust Pay Out Event or a series Pay Out Event for that series. The term "AMORTIZATION PERIOD" refers to the period during which collections of principal receivables are to be used to pay principal on the certificates of any series or are to be accumulated in an account to be used at a future date to pay principal on the certificates of that series. An amortization period includes an accumulation period as well as any controlled amortization period, principal amortization period, rapid amortization period, optional amortization period, limited amortization period or, for a series, any other amortization period provided in the related series supplement. An "ACCUMULATION PERIOD" is a period during which collections of principal receivables are deposited into an account to be used at a future date to make payments on the certificates. A "RAPID AMORTIZATION PERIOD" begins upon the occurrence of a Pay Out Event and means the resulting period during which available collections of principal receivables are used, on a monthly basis, to pay principal on the certificates of those series affected by the Pay Out Event. A rapid amortization period continues until the earlier of the payment in full of the certificates of the series affected by the Pay Out Event or the occurrence of the series termination date. A "RAPID ACCUMULATION PERIOD" means a period during which available collections of principal receivables are, on a monthly basis, placed in a principal funding account and accumulated to be used to pay the certificates of the affected class or series on their expected final distribution date. A rapid accumulation period is not a feature of all series. For those series in which a rapid accumulation period may occur, it may occur for one or more classes only for all classes of the series. If a series or a class is subject to the occurrence of a rapid accumulation period, that feature of the series will be described in the applicable prospectus supplement. A rapid accumulation period occurs in lieu of a rapid amortization period and begins upon the occurrence of a series Pay Out Event. During the rapid accumulation period, the funds in the principal funding account may be invested in permitted investments, subject to a guaranteed rate agreement or placed in some other arrangement that assures a minimum return on the investment of the funds. Investment earnings on the funds in the principal funding account may be used to pay the interest on the related series certificates. On the expected final distribution date of the affected class or series, distributions of principal from the principal funding account will be made to the certificateholders in the manner described in the related prospectus supplement. In order to enhance the likelihood of payment in full of principal at the end of the rapid accumulation period for a series, the series may be subject to a principal guaranty or some other similar arrangement. A "SCHEDULED AMORTIZATION DATE" means, for any series, the date on which principal payments on the certificates are scheduled to begin or the date on which deposits are scheduled to begin to be made into an account to be accumulated and used to pay principal on the certificates in the future. During the revolving period for any series, the invested amount for that series will generally remain constant except in certain limited circumstances or unless otherwise specified in the related prospectus supplement. See "--Defaulted Receivables; Rebates and Fraudulent Charges" in this prospectus. The 27 89 amount of principal receivables, however, will vary each day as new principal receivables are created and others are paid. The Seller Amount will fluctuate daily to reflect the changes in the amount of the principal receivables. When a series is amortizing, the invested amount for the series will generally decline for each monthly period as principal receivables allocated to the series are collected and distributed to the certificateholders or deposited in a series account for the benefit of the series or a class of the series for payment to the applicable certificateholders when due. As a result, the Seller Amount will generally increase each month to reflect the reductions in the invested amount of a series and will also change to reflect the variations in the amount of principal receivables. Interest on the certificates for each interest period for a series will be distributed as set forth in the related prospectus supplement. Interest payments of a series will generally be funded from the portion of finance charge receivables collected during the related monthly period allocable to a series and, if necessary and if specified in the related prospectus supplement, from any series enhancement available for that series. The terms "INTEREST PERIOD" and "MONTHLY PERIOD" for a series have the meanings specified in the related prospectus supplement. See "--Interest Payments" in this prospectus. If referred to in the related prospectus supplement, certificates of that series initially will be represented by certificates registered in the name of the nominee of The Depository Trust Company, or any other depository or any successor depository selected by the seller. The Depository Trust Company or any other depository selected for a series by the seller is a "DEPOSITORY." If referred to in the related prospectus supplement, beneficial interests in the certificates of that series will be available for purchase in minimum denominations of $1,000 and integral multiples of $1,000 in excess thereof in book-entry form only. The seller has been informed by DTC that DTC's nominee will be Cede & Co. Accordingly, Cede is expected to be the holder of record of each series of certificates and will therefore, be the only certificateholder for purposes of the Pooling and Servicing Agreement. Those entities, including most or all investors in the certificates, will acquire only a beneficial interest in the certificates and will not be the registered holders of the certificates. A beneficial owner is called a "CERTIFICATE OWNER." You, as a beneficial owner, will not be entitled to receive a certificate representing your interest in the certificates. Unless and until, under the limited circumstances described in this prospectus, certificates in fully registered, certificated form are issued: - all references in this prospectus to actions by certificateholders shall refer to actions taken by DTC upon instructions from its participants; and - the trustee will not consider a Certificate Owner to be a certificateholder, as defined in the Pooling and Servicing Agreement, and all references in this prospectus to distributions, notices, reports and statements to certificateholders shall refer to distributions, notices, reports and statements to DTC or Cede, as the registered holder of the certificates, as the case may be, for distribution to Certificate Owners in accordance with DTC procedure. See "--Book-Entry Registration" and "--Definitive Certificates" in this prospectus. Distributions will be made to DTC in immediately available funds. If so specified in the related prospectus supplement application will be made to list the certificates of the related series, or all or a portion of any class thereof, on the Luxembourg Stock Exchange or any other specified exchange. BOOK-ENTRY REGISTRATION If specified in the related prospectus supplement, certificateholders of a series may hold their certificates through DTC, in the United States, or Cedelbank or Euroclear, in Europe, if they are participants of these systems. 28 90 Cede, as nominee for DTC, will hold the global certificates. Cedelbank and Euroclear will hold omnibus positions on behalf of the Cedelbank customers and the Euroclear participants, respectively, through customers' securities accounts in Cedelbank's and Euroclear's names on the books of their respective depositaries, collectively, the "DEPOSITARIES," which in turn will hold these positions in customers' securities accounts in the depositaries' names on the books of DTC. DTC is a limited-purpose trust company organized under the laws of the State of New York, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934, as amended. DTC was created to hold securities for its participating organizations and facilitate the clearance and settlement of securities transactions between participants through electronic book-entry changes in accounts of its participants, thereby eliminating the need for physical movement of certificates. Participants include securities brokers and dealers, who may include the underwriters of any series of certificates, banks, trust companies and clearing corporations and may include certain other organizations. Indirect access to the DTC system also is available to others such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with participants either directly or indirectly. Transfers between DTC participants will occur in accordance with DTC rules. Transfers between Cedelbank customers and Euroclear participants will occur in the ordinary way in accordance with their applicable rules and operating procedures. Cross-market transfers between persons holding directly or indirectly through DTC, other than Cedelbank customers and Euroclear participants, on the one hand, and directly or indirectly through Cedelbank customers or Euroclear participants, on the other, will be effected in DTC in accordance with DTC rules on behalf of the relevant European international clearing system by its depositary. However, these cross-market transactions will require delivery of instructions to the relevant European international clearing system by the counterparty in the system in accordance with its rules and procedures and within its established European time deadline. The relevant European international clearing system will, if the transaction meets its settlement requirements, deliver instructions to its depositary to take action to effect final settlement on its behalf by delivering or receiving securities in DTC, and making or receiving payment in accordance with normal procedures for same-day funds settlement applicable to DTC. Cedelbank customers and Euroclear participants may not deliver instructions directly to the depositaries. Because of time-zone differences, credits of securities in Cedelbank or Euroclear as a result of a transaction with a DTC participant will be made during the subsequent securities settlement processing, dated the business day following the DTC settlement date, and these credits or any transactions in the securities settled during this processing will be reported to the relevant Cedelbank customer or Euroclear participant on that business day. Cash received in Cedelbank or Euroclear as a result of sales of securities by or through a Cedelbank customer or a Euroclear participant to a DTC participant will be received with value on the DTC settlement date but will be available in the relevant Cedelbank or Euroclear cash account only as of the business day following settlement in DTC. Certificate Owners that are not participants or indirect participants but desire to purchase, sell or otherwise transfer ownership of, or other interests in, certificates may do so only through participants and indirect participants. In addition, Certificate Owners of a series will receive all distributions of principal of and interest on the certificates from the paying agent through the participants who in turn will receive them from DTC. Under a book-entry system, Certificate Owners of a series may experience some delay in their receipt of payments, since these payments will be forwarded by the trustee to Cede, as nominee for DTC. DTC will forward these payments to its participants, who, afterwards, will forward the payments to indirect participants or Certificate Owners of the related series. It is anticipated that the only certificateholder of any series will be Cede, as nominee of DTC. Certificate Owners of a series will not be recognized by the trustee as certificateholders of that series for purposes of the Pooling and Servicing Agreement. Certificate Owners of a series will only be permitted to 29 91 exercise the rights of certificateholders indirectly through DTC and its participants, who in turn will exercise the rights of certificateholders through DTC. Under the rules, regulations and procedures creating and affecting DTC and its operations, DTC is required to make book-entry transfers among participants on whose behalf it acts with respect to the certificates of a series and is required to receive and transmit distributions of principal of and interest on the certificates of the series. Participants and indirect participants with which Certificate Owners of a series have accounts similarly are required to make book-entry transfers and receive and transmit these payments on behalf of their respective Certificate Owners. Accordingly, although Certificate Owners will not possess certificates, Certificate Owners will receive payments and will be able to transfer their interests. Because DTC may only act on behalf of participants, who in turn act on behalf of indirect participants and certain banks, the ability of a Certificate Owner to pledge certificates to persons or entities that do not participate in the DTC system, or otherwise take actions in respect of the certificates, may be limited due to the lack of a physical certificate for the certificates. DTC has advised the servicer that it will take any action permitted to be taken by a certificateholder of a series under the Pooling and Servicing Agreement only at the direction of one or more participants to whose account with DTC the certificates are credited. Additionally, DTC has advised the servicer that DTC will take these actions with respect to specified percentages of the applicable investor amount only at the direction of and on behalf of participants whose holdings include undivided interests that constitute these specified percentages. DTC may take conflicting actions with respect to other undivided interests to the extent that these actions are taken on behalf of participants whose holdings include these undivided interests. Cedelbank, societe anonyme is incorporated under the laws of Luxembourg as a professional depository. Cedelbank holds securities for its participating organizations and facilitates the clearance and settlement of securities transactions between Cedelbank customers through electronic book-entry changes in accounts of Cedelbank customers, thereby eliminating the need for physical movement of certificates. Transactions may be settled in Cedelbank in any of 34 currencies, including United States dollars. Cedelbank provides to its Cedelbank customers, among other things, services for safekeeping, administration, clearance and settlement of internationally traded securities and securities lending and borrowing. Cedelbank interfaces with domestic markets in several countries. As a registered bank in Luxembourg, Cedelbank is subject to regulation by the Luxembourg Commission for the Supervision of the Financial Sector. Cedelbank customers are world-wide financial institutions, including underwriters, securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations and may include the underwriters of any series of certificates. Indirect access to Cedelbank is also available to other institutions, such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a Cedelbank customer, either directly or indirectly. The Euroclear System was created in 1968 to hold securities for participants of the Euroclear System and to clear and settle transactions between Euroclear participants through simultaneous electronic book-entry delivery against payment, thereby eliminating the need for physical movement of certificates and any risk from lack of simultaneous transfers of securities and cash. Transactions may now be settled in any of 34 currencies, including United States dollars. The Euroclear System includes various other services, including securities lending and borrowing and interfaces with domestic markets in more than 25 countries generally similar to the arrangements for cross-market transfers with DTC described above. The Euroclear System is operated by Morgan Guaranty Trust Company of New York, Brussels, Belgium office, as the Euroclear operator, under contract with Euroclear Clearance System, Societe Cooperative., a Belgian cooperative corporation. All operations are conducted by the Euroclear operator, and all Euroclear securities clearance accounts and Euroclear cash accounts are accounts with the Euroclear operator, not the cooperative. The cooperative establishes policy for the Euroclear System. Euroclear participants include banks, including central banks, securities brokers and dealers and other professional financial intermediaries and may include the underwriters of any series of certificates. Indirect 30 92 access to the Euroclear System is also available to other firms that maintain a custodial relationship with a Euroclear participant, either directly or indirectly. The Euroclear operator is the Belgian branch of a New York banking corporation which is a member bank of the Federal Reserve System. As a result, it is regulated and examined by the Board of Governors of the Federal Reserve System and the New York State Banking Department, as well as the Belgian Banking Commission. Securities clearance accounts and cash accounts with the Euroclear operator are governed by the Terms and Conditions Governing Use of Euroclear and the related Operating Procedures of the Euroclear System. These terms and conditions govern transfers of securities and cash within the Euroclear System, withdrawal of securities and cash from the Euroclear System, and receipts of payments with respect to securities in the Euroclear System. All securities in the Euroclear System are held on a fungible basis without attribution of specific certificates to specific securities clearance accounts. The Euroclear operator acts under the terms and conditions only on behalf of Euroclear participants and has no record of or relationship with persons holding through Euroclear participants. Distributions with respect to certificates held through Cedelbank or Euroclear will be credited to the cash accounts of Cedelbank customers or Euroclear participants in accordance with the relevant system's rules and procedures, to the extent received by its depositary. These distributions will be subject to tax reporting in accordance with relevant United States tax laws and regulations. See "Federal Income Tax Consequences" in this prospectus. Cedelbank or the Euroclear operator, as the case may be, will take any other action permitted to be taken by a certificateholder under the Pooling and Servicing Agreement on behalf of a Cedelbank customer or Euroclear participant only in accordance with its relevant rules and procedures and subject to its depositary's ability to effect such actions on its behalf through DTC. Although DTC, Cedelbank and Euroclear have agreed to the foregoing procedures in order to facilitate transfers of certificates among participants of DTC, Cedelbank and Euroclear, they are under no obligation to perform or continue to perform those procedures and may discontinue the procedures at any time. See Annex I for additional information concerning global clearance, settlement and tax documentation procedures. Annex I is hereby incorporated into this prospectus by reference. In the event that any of DTC, Cedelbank or Euroclear should discontinue its services, the seller would seek an alternative depository, if available, or cause the issuance of definitive certificates to Certificate Owners or their nominees in the manner described under "--Definitive Certificates" in this prospectus. DEFINITIVE CERTIFICATES We refer to certificates issued in fully registered, certificated form as "DEFINITIVE CERTIFICATES." Definitive certificates will be issued to you as a Certificate Owner or your nominee rather than to DTC or its nominee, only if: (1) the seller advises the trustee in writing that DTC is no longer willing or able properly to discharge its responsibilities as depository for the certificates of your series or your class, and the trustee or the seller is unable to locate a qualified successor; (2) the seller, at its option, advises the trustee that it elects to terminate the book-entry system with respect to your series or class through DTC; or (3) after the occurrence of a Servicer Default, Certificate Owners of your series or class evidencing more than 50% of the aggregate unpaid principal amount of your series or class advise the trustee and DTC through participants in writing that the continuation of a book-entry system through DTC, or its successor, is no longer in the best interest of the Certificate Owners of the certificates. 31 93 Upon the occurrence of any of the events described in clauses (1), (2) or (3) above, DTC is required to notify all participants of the availability through DTC of definitive certificates of the affected series. Upon surrender by DTC of the definitive certificates and instructions for re-registration, the seller will execute and the trustee will authenticate and deliver the definitive certificates to the Certificate Owners. Subsequently, the trustee will recognize the holders of the definitive certificates as holders under the Pooling and Servicing Agreement. If definitive certificates have been issued to you and you are recognized by the trustee as a register certificateholder, then distributions of principal and interest on the definitive certificates will be made by the paying agent directly to you in accordance with the procedures described in this prospectus and in the Pooling and Servicing Agreement. Interest payments and any principal payments on each distribution date will be made to holders in whose names the definitive certificates were registered at the close of business on the related record date. If you hold a definitive certificate, distributions will be made by check mailed to your address as it appears on the register maintained by the trustee. However, the final payment on any definitive certificate, will be made only upon presentation and surrender of the certificate at the office or agency specified in the notice of final distribution to respective certificateholders. The trustee will provide this notice to registered certificateholders of the series not later than the fifth day of the month of the related final distribution. Definitive certificates will be transferable and exchangeable at the offices of the transfer agent and registrar for the related series. No service charge will be imposed for any registration of transfer or exchange, but the transfer agent and registrar of the series may require payment of a sum sufficient to cover any tax or other governmental charge imposed in connection therewith. THE BANK CERTIFICATE; ADDITIONAL SELLERS The sellers' interest in the trust is, as of the date of this prospectus, held by the bank, as the seller, and is represented by a single certificate known as the "BANK CERTIFICATE." The Pooling and Servicing Agreement provides that the seller may surrender the Bank Certificate to the trustee in exchange for a newly issued Bank Certificate and one or more additional certificates. Each certificate, other than the Bank Certificate, representing a portion of the sellers' interest is called a "SUPPLEMENTAL CERTIFICATE." The seller may transfer or assign a Supplemental Certificate to a person designated by the seller by the execution and delivery of a supplement to the Pooling and Servicing Agreement. A supplement to the Pooling and Servicing Agreement entered into for this purpose must meet the amendment requirements of the Pooling and Servicing Agreement; see "--Amendments" in this prospectus. In addition, the issuance of a Supplemental Certificate, requires that: (1) the seller shall have given written notice to each rating agency of the exchange; (2) the Seller Amount, excluding the interest represented by any Supplemental Certificate, shall not be less than 2% of the total amount of principal receivables in the trust as of the date of, and after giving effect to, the exchange; and (3) if any series of certificates are outstanding that were characterized as debt at the time of their issuance, the seller shall deliver to the trustee and each rating agency a tax opinion addressing matters specified in the Pooling and Servicing Agreement. Any subsequent transfer or exchange of a Supplemental Certificate is subject to the condition set forth in clause (2) above. The Bank Certificate, or any interest in the Bank Certificate, may be transferred to an entity that is a member of the "affiliated group" of which Fleet is the "common parent," as these terms are defined in Section 1504(a) of the Internal Revenue Code of 1986; provided, that: - if any series of certificates are outstanding that were characterize as debt at their time of issuance, the seller shall have delivered to the trustee and each rating agency a tax opinion to the effect that 32 94 the transfer will not adversely affect the tax characterization of any certificates which were characterized as debt; and - any transferee will be deemed to be a "seller" for purposes of the provisions of the Pooling and Servicing Agreement regarding the seller indemnification and liquidation of the receivables upon the occurrence of an insolvency event. See "--Liquidation of Receivables" and "--Indemnification" in this prospectus. The bank may designate affiliates of the bank to be included as a seller, called "ADDITIONAL SELLERS," under the Pooling and Servicing Agreement by means of an amendment to the Pooling and Servicing Agreement. An amendment made to name an additional seller will not require the consent of any certificateholder. See "--Amendments" in this prospectus. In connection with the designation of an additional seller, the seller shall surrender the Bank Certificate to the trustee in exchange for a newly issued Bank Certificate modified to reflect the additional seller's interest in the sellers' interest; provided, however, that: - the conditions set forth above with respect to the issuance of a Supplemental Certificate or the transfer of the Bank Certificate, as applicable, shall have been satisfied prior to the designation and exchange; and - any applicable conditions described in "--Addition of Accounts" in this prospectus shall have been satisfied with respect to the transfer of receivables or participation interests by any additional seller to the trust. Following the inclusion of an additional seller, the additional seller will be treated in the same manner as the seller and will have the same obligations and rights as the seller. INTEREST PAYMENTS Each class of a series will accrue interest at the rate per annum specified in, or in the manner described in, the related prospectus supplement. Interest on all certificates will be due and payable on the distribution dates. The "DISTRIBUTION DATE" for a series will be the fifteenth day of each month or, if the fifteenth is not a business day, the next business day, or another date specified in the series supplement for the series. If so specified in the related prospectus supplement, interest for a class of a series will be calculated based on the outstanding principal amount of the class at the end of the rate determination period preceding the applicable distribution date. To the extent provided in the related prospectus supplement, a series may include one or more classes of floating rate certificates. The interest rate on floating rate certificates will be a variable or adjustable rate. It is the bank's present intention, subject to changing market conditions, that the floating interest rate formula or index be based on an established financial index in the national or international financial markets. The distribution dates for floating rate certificates will be set forth in the related prospectus supplement and need not be the same as the distribution dates for the other certificates of the related series, but may be either more or less frequent. For each class of floating rate certificates, the related prospectus supplement will describe: - the initial floating rate certificate interest rate, or the method of determining it; - the dates or the method of determining the dates on which the floating rate certificate interest rate is adjusted; and - the formula, index or other method by which the interest rate is determined. PRINCIPAL PAYMENTS The revolving period for a series of certificates begins on the date of issuance of the series, and ends on the day before an amortization period begins for that series. On each distribution date for the revolving period, collections of principal receivables allocable to the certificateholders' interest of a series will, 33 95 subject to permitted uses provided in the series supplement, be paid to the holders of the Seller Certificates or to amortizing or accumulating series or deposited in the excess funding account. See "Description of the Certificates--Principal Payments" in the accompany prospectus supplement. After an amortization period, which term includes any applicable accumulation period, begins for any class of a series, collections of principal receivables allocable to the class will no longer be paid to the holders of the Seller Certificates, to other amortizing or accumulating series or deposited in the excess funding account. When an amortization period begins for a class, collections of principal receivables allocable to the class will generally either be deposited in the collection account or a series account to be distributed to certificateholders on a date or dates specified in the related prospectus supplement or paid to the certificateholders on the distribution dates specified in the related prospectus supplement. To the extent that collections of principal receivables are available, subject to any controlled distribution amount or controlled deposit amount or other limitation set forth in the related prospectus supplement, payments of principal will be paid to certificateholders of a class until the investor amount of the related class has been paid in full or accumulated in an account until the full amount of the investor amount is on deposit in that account. However, if one or more classes is subordinated in right of payment of principal to another class or classes, payment to or accumulation of accounts for payment to certificateholders of the subordinated class or classes will occur only after the investor amount of the senior class or classes has been paid in part or in full or has been accumulated. The extent of subordination of a class of subordinated certificates may be limited as described in the related prospectus supplement. Funds on deposit in the collection account, series account including any principal funding account or other accumulation account, may be subject to a guaranteed rate agreement or guaranteed investment contract or other mechanism specified in the related prospectus supplement intended to assure a minimum rate of return on the investment of these funds. In order to enhance the likelihood of the payment in full of the principal amount of a class of certificates at the end of an accumulation period, the related class of certificates may be subject to a maturity guaranty or other similar mechanism specified in the applicable prospectus supplement. SHARED PRINCIPAL COLLECTIONS Each series may include provisions which allow collections of principal receivables allocated to that series but not needed for that series to be shared with other series. Each series may also contain provisions for determining if a principal shortfall exist for that series. On each distribution date the shared principal collections from all series will be combined and used to cover principal shortfalls or otherwise distributed as described in the following provisions. On each distribution date: - the servicer will allocate shared principal collections among the series entitled to shared principal collections, pro rata, in proportion to the principal shortfalls, if any, of each series; and - the servicer will withdraw from the collection account and pay to the holders of the Seller Certificates the amount of the shared principal collections not used to cover principal shortfalls; provided however, that if on any distribution date the Seller Amount is less than or equal to the Required Seller Amount, the servicer will not distribute any shared principal collections to the holders of the Seller Certificates, but will deposit these funds in the excess funding account. SHARING OF EXCESS FINANCE CHARGE COLLECTIONS Collections of finance charge receivables allocable to any series in a group in excess of the amounts necessary to make required payments on that series may, if specified in the related series supplement, be applied to cover shortfalls in amounts payable from collections of finance charge receivables allocable to any other series in the group. 34 96 COMPANION SERIES If specified in the prospectus supplement relating to a series, one series of certificates may be paired with one or more other series or a portion of one or more other series previously issued by the trust, so that a reduction in the invested amount of one series results in an increase in the invested amount of the other series. In general, a series may be issued as a paired series or companion series to an existing prior series to enable the trust to fund the amount by which the prior series has amortized and will amortize in the future. If a Pay Out Event occurs which affects the prior series or the new series issued as the companion series when the prior series is in an amortization period, the series percentage for the allocation of collections of principal receivables for the prior series may be reset to a lower percentage and the amortization period for the prior series may be lengthened. The full extent by which the amortization period for the prior series may be lengthened will be dependent on a variety of factors and will not be readily determinable by the extent by which the series percentage has been changed. See "Risk Factors--Principal May Be Paid Earlier Than Expected Creating a Reinvestment Risk to Certificateholders or Later Than Expected Resulting in a Failure to Receive Payment When Expected" in this prospectus and "Maturity Assumptions" in the accompanying prospectus supplement for a discussion of these factors. NEW ISSUANCES The Pooling and Servicing Agreement authorizes three types of certificates: - one or more series of investor certificates and interests which are treated as investor certificates which are transferable and have the characteristics described below; - a Bank Certificate, evidencing the bank's interest as seller, which will initially be held by the bank and which is transferable in certain circumstances to members of the affiliated group of which Fleet is the common parent; and - Supplemental Certificates delivered in exchange for a portion of the Bank Certificate under circumstances described in the Pooling and Servicing Agreement. The Bank Certificate and the Supplemental Certificates, if any, are, collectively, the "SELLER CERTIFICATES." The Bank Certificate and the Supplemental Certificates represent the ownership interest in the remainder of the trust assets not allocated pursuant to the Pooling and Servicing Agreement to the certificateholders' interest. This remaining interest is the "SELLERS' INTEREST." For each new series, the series supplement for that series will specify: - the name or designation of the series; - the initial investor amount and series investor amount, or method for calculating these amounts; - the certificate rate, or method for its determination; - the payment date or dates and the date or dates from which interest shall accrue; - the method for allocating collections to certificateholders of the series; - the designation of any series accounts to be used by the series and the terms governing the operation of any of these series accounts; - the method of calculating the servicing fee; - the terms of any form of series enhancement; - the terms on which the certificates of the series may be exchanged for certificates of another series, repurchased by the seller or remarketed to other investors; 35 97 - the stated series termination date of the series; - the number of classes of the series and, if the series consists of more than one class, the rights and priorities of each class; - the extent to which the certificates of the series will be issuable in temporary or permanent global form and the depositary for any global certificate or certificates, the terms and conditions, if any, upon which the global certificate may be exchanged, in whole or in part, for definitive certificates, and the manner in which any interest payable on a temporary or global certificate will be paid; - whether the certificates may be issued as bearer certificates and any limitations imposed on them; - the priority of the series with respect to any other series; - the group, if any, to which the series belongs; - whether or not the series is a principal sharing series; and - any other terms of the series. Neither the seller, the servicer, the trustee nor the trust is required or intends to obtain the consent of any certificateholder of any outstanding series to issue any additional series. The seller may offer any series under a prospectus or other disclosure document in transactions either registered under the Securities Act of 1933, as amended, or exempt from registration thereunder, directly, through one or more underwriters or placement agents, in fixed-price offerings or in negotiated transactions or otherwise. A series may be issued in fully registered or book-entry form in minimum denominations determined by the seller. The Pooling and Servicing Agreement permits each new series to have a period during which amortization or accumulation of the principal amount is intended to occur but which may have a different length and begin on a different date than periods for any other series. Further, one or more series may be in an amortization period while other series are not. Thus, certain series may not be amortizing or accumulating, while other series are amortizing or accumulating. Moreover, one or more series, or classes of a series, may have the benefits of series enhancement different from the forms of series enhancement available to another class or classes of any other series. Under the Pooling and Servicing Agreement, the trustee will hold any form of series enhancement only on behalf of the certificateholders of the series, or class, to which it relates. Collections allocated to finance charge receivables not used to pay interest on the certificates of a series will be allocated as provided in the related series supplement. There is no limit to the number of new issuances that the seller may perform under the Pooling and Servicing Agreement. The trust will terminate only as provided in the Pooling and Servicing Agreement. The following are conditions to the issuance of a new series: (1) on or before the fifth day immediately preceding the relevant closing date, the seller shall give the trustee and the servicer notice of a new issuance and its date; and on or before the tenth day immediately preceding the relevant closing date, the seller shall give each rating agency notice of a new issuance and its date; and (2) the seller shall deliver to the trustee: - a related series supplement specifying the principal terms of the new series; - any agreement relating to series enhancement for the series; - written confirmation from each rating agency rating any outstanding series that the new issuance will not result in that rating agency reducing or withdrawing its rating of any outstanding series or class of certificates; 36 98 - an officer's certificate from the seller stating that the seller reasonably believes that a new issuance will not cause a Pay Out Event to occur for any series; and - if any series of certificates are outstanding that were characterized as debt at the time of their issuance, an opinion of counsel to the effect that for federal tax purposes, the new issuance will not adversely affect that characterization and that the trust will not be deemed to be an association or publicly traded partnership taxable as a corporation and that the new issuance will not cause an event in which gain or loss would be recognized by any certificateholders of the trust. TRANSFER AND ASSIGNMENT OF RECEIVABLES The seller has transferred and assigned to the trust all of its right, title and interest in and to specifically identified receivables existing in the accounts owned by the seller on the day of the relevant transfer and assignment and in and to all receivables created in future accounts and all future proceeds. In connection with a transfer of the receivables to the trust, the seller annotates and indicates in its computer files that the receivables have been conveyed to the trust for the benefit of the certificateholders. In addition, the seller provides to the trustee a computer file or a microfiche list containing a true and complete list of all accounts owned by the seller, the receivables of which have been assigned to the trust. The list specifies for each account, its account number, the aggregate amount outstanding and the aggregate amount of principal receivables outstanding as of the cut-off date selected by the seller. The seller will not deliver to the trustee any other records or agreements relating to the accounts or the receivables. The records and agreements maintained by the seller or servicer relating to the accounts designated to the trust and the receivables in the trust will not be segregated by the seller or the servicer from other documents and agreements relating to other credit card accounts and receivables and will not be stamped or marked to reflect the transfer of the receivables to the trust. The seller has filed and will file UCC financing statements meeting the requirements of applicable state law with respect to the receivables. See "Material Legal Aspects of the Receivables" in this prospectus. LIQUIDATION OF RECEIVABLES If an insolvency event occurs which involves the seller, the Pooling and Servicing Agreement requires that the seller will immediately cease to transfer principal receivables to the trust and promptly notify the trustee. Notwithstanding any cessation of the transfer of additional principal receivables to the trust, principal receivables transferred to the trust prior to the occurrence of the insolvency event, collections of the principal receivables transferred prior to the insolvency event and collections of finance charge receivables whenever created, accrued in respect of the principal receivables in the trust, shall continue to be a part of the trust. Within 15 days after receipt of the notice by the trustee of the occurrence of the insolvency event, the trustee shall: - publish a notice in an authorized newspaper that an insolvency event has occurred and that the trustee intends to liquidate the receivables; and - give notice to the certificateholders and request instructions from the certificateholders. The trustee shall promptly liquidate the receivables in a commercially reasonable manner and on commercially reasonable terms, unless the trustee has received instructions within 90 days from the date notice is first published: - from certificateholders evidencing more than 50% of the investor amount of each series or, for any series with two or more classes, of each class, to the effect that the certificateholders disapprove of the liquidation of the receivables and wish to continue having principal receivables transferred to the trust; and 37 99 - if at that time there is more than one seller, from any seller which is not the subject of the insolvency event, and from any holder of a Supplemental Certificate and any other parties specified in the series supplements, also disapproving the liquidation. The trustee may obtain a prior determination from any applicable conservator, receiver or liquidator that the terms and manner of any proposed liquidation are commercially reasonable. If a conservator or receiver is appointed for the seller and no Pay Out Event other than the conservatorship or receivership or insolvency of the seller exists, the conservator or receiver may have the power to prevent the early liquidation of the receivables. The proceeds from the liquidation of the receivables shall be immediately deposited in the collection account. The trustee shall determine conclusively the amount of the proceeds which are deemed to be finance charge receivables and which are deemed to be principal receivables. The proceeds shall be allocated and distributed to certificateholders in accordance with the terms of each series supplement, and the trust shall then terminate immediately. REPRESENTATIONS, WARRANTIES AND COVENANTS The seller makes representations and warranties as of each date on which certificates are issued and, with respect to receivables in additional accounts, as of the related addition date, to the effect, among other things, that: (1) the Pooling and Servicing Agreement, each series supplement and, in the case of additional accounts, the related assignment document, constitute legal, valid and binding obligations of the seller enforceable against the seller in accordance with their terms, subject to bankruptcy, insolvency, reorganization, moratorium and similar laws of general applicability relating to or affecting the enforcement of creditors' rights in general and the rights of creditors of national banks under United States law and except as this enforceability may be limited by general principles of equity, whether considered in a suit at law or in equity; (2) the schedule of accounts referred to in the Pooling and Servicing Agreement is an accurate and complete listing in all material respects of the accounts owned by the seller and designated to the trust as of the related cut-off date and the information contained in the schedule concerning the identity of these accounts and the receivables existing in the accounts is true and correct in all material respects as of the related cut-off date; (3) each receivable conveyed to the trust by the seller has been conveyed to the trust free and clear of any lien other than liens permitted by the Pooling and Servicing Agreement; (4) all authorizations, consents, orders or approvals of or registrations or declarations with any governmental authority required to be obtained, effected or given by the seller in connection with the conveyance by the seller of receivables to the trust have been duly obtained, effected or given and are in full force and effect; (5) either the Pooling and Servicing Agreement or, in the case of additional accounts, the related assignment document, constitutes a valid sale, transfer and assignment to the trust of all right, title and interest of the seller in the receivables conveyed to the trust by the seller and the proceeds thereof or, if the Pooling and Servicing Agreement or the related assignment document does not constitute a sale of the property, it constitutes a grant of a "security interest," as defined in the UCC, in the property to the trust, which, in the case of receivables then existing and the proceeds of the receivables, is enforceable upon execution and delivery of the Pooling and Servicing Agreement or the related assignment document as of the applicable date and which will be enforceable with respect to receivables created in future accounts in the future and the related future proceeds and that upon the filing of financing statements required by the Pooling and Servicing Agreement, 38 100 the trust shall have a first priority perfected security or ownership interest in the property and proceeds except for: - liens permitted under the Pooling and Servicing Agreement; - the interest of the seller as holder of the Bank Certificate or any Supplemental Certificate; and - the seller's right to receive interest accruing on and investment earnings, if any, in respect of the collection account or any series account, as provided in the Pooling and Servicing Agreement or the related series supplement; (6) except as otherwise expressly provided in the Pooling and Servicing Agreement or the related series supplement, neither the seller nor any person claiming through or under the seller has any claim to or interest in the collection account, the excess funding account, any series account or any series enhancement; (7) as of the related cut-off date, each initial account or additional account is an Eligible Account; (8) as of the related cut-off date, each receivable contained in the accounts being added to the trust is an Eligible Receivable; (9) as of the date of the creation of any new receivable in an account designated to the trust, the new receivable is an Eligible Receivable; and (10) no selection procedure has been used by the seller which it reasonably believes would result in the selection of an account that would be materially adverse to the interests of certificateholders of any series. The seller shall accept reassignment of the receivable in the event: (a) any representation or warranty of the seller contained in clause (2), (3), (4), (7), (8), (9) or (10) above is not true and correct in any material respect as of the specified date with respect to any receivable transferred to the trust or an account and, as a result of the breach, any receivables in the related account become defaulted receivables, or the trust's rights in, to or under the receivables or the proceeds of the receivable are impaired or the proceeds are for any reason not available to the trust free and clear of any lien, unless the breach is cured within 60 days or a longer period not in excess of 150 days agreed to by the trustee after the earlier to occur of the discovery of the breach by the seller or receipt by the seller of notice of the breach given by the trustee; or (b) a receivable in the trust is determined to be ineligible because it is evidenced by an instrument or chattel paper. The receivables subject to reassignment will be "INELIGIBLE RECEIVABLES." The receivables will not, however, be deemed ineligible receivables and will not be reassigned to the seller if, on any day prior to the end of the 60-day or longer cure period: (1) either (A) in the case of an event described in clause (a) above the relevant representation and warranty shall be true and correct in all material respects as if made on that day or (B) in the case of an event described in clause (b) above the circumstances causing the receivable to become an ineligible receivable shall no longer exist; and (2) the seller shall have delivered to the trustee an officer's certificate describing the nature of the breach and the manner in which the relevant representation and warranty became true and correct. Ineligible receivables which are to be removed from the trust shall be automatically removed from the trust by the servicer deducting the portion of the ineligible receivables reassigned to the seller which are principal receivables from the aggregate amount of principal receivables used to calculate the Seller 39 101 Amount, the series percentages and any other percentage used to allocate within or among series. If following the exclusion of the principal receivables from the calculation of the Seller Amount, the Seller Amount would be less than the Required Seller Amount, then on the first distribution date following the monthly period in which the reassignment obligation arises, the seller shall make a deposit into the excess funding account. The amount deposited shall be an amount equal to the amount by which the Seller Amount would be reduced below the Required Seller Amount, but, not in an amount greater than the amount of the principal receivables reassigned to the seller. Upon the deposit, if any, required to be made to the excess funding account and the reassignment of ineligible receivables, the trustee shall automatically be deemed to convey to the seller or its designee, without recourse, representation or warranty, all the right, title and interest of the trust in and to the ineligible receivables, all moneys due or to become due and all amounts and proceeds received. The obligation of the seller to accept reassignment of any ineligible receivables, and to make the deposits, if any, required to be made to the excess funding account shall constitute the sole remedy respecting the event giving rise to the obligation available to certificateholders, or the trustee on behalf of the certificateholders. The obligations of the seller or any additional seller to accept reassignment of the receivables will be several and not joint with respect to the receivables transferred by the seller to the trust. The seller also makes representations and warranties to the trust to the effect, among other things, that as of each date on which certificates are issued: (1) it is a national banking association or corporation duly organized and validly existing in good standing under the laws of the jurisdiction of its organization or incorporation; (2) it is duly qualified or is exempt from the requirements to do business and is in good standing as a foreign corporation, and has obtained all necessary licenses and approvals in each jurisdiction in which failure to so qualify or to obtain such licenses and approvals would render any cardholder agreement relating to an account owned by it or any receivable transferred to the trust by it unenforceable by the seller, the servicer or the trustee or would have a material adverse effect on the certificateholders of any series; (3) the execution and delivery of the Pooling and Servicing Agreement and each series supplement by the seller and the execution and delivery to the trustee of the certificates by the bank and the consummation by the seller of the transactions provided for in the Pooling and Servicing Agreement and each series supplement have been duly authorized by the seller; (4) the execution and delivery by the seller of the Pooling and Servicing Agreement, each series supplement and the certificates, the performance by the seller of the transactions contemplated by the Pooling and Servicing Agreement and each series supplement and the fulfillment by the seller of their terms, will not conflict with, result in any breach of any of the material terms and provisions of any instrument to which the seller is a party or by which it or any of its properties are bound; (5) the execution and delivery by it of the Pooling and Servicing Agreement, each series supplement and the certificates, the performance by the seller of the transactions contemplated by the Pooling and Servicing Agreement and each series supplement and the fulfillment by the seller of their terms will not conflict with or violate any requirements of law applicable to the seller; (6) there are no proceedings or investigations, pending or, to the best knowledge of the seller, threatened against it, before any court, regulatory body, administrative agency, or other tribunal or governmental instrumentality seeking any determination or ruling that, in the reasonable judgment of the seller, would materially and adversely affect the performance by 40 102 it of its obligations with respect to any series under the Pooling and Servicing Agreement or any series supplement; (7) no insolvency event with respect to the seller has occurred and the transfer of the receivables by the seller to the trust has not been made in contemplation of the occurrence of an insolvency event; and (8) the seller is either an insured institution for the purposes of the Federal Deposit Insurance Act or is a bankruptcy-remote entity. Upon discovery by the seller, the servicer or the trustee of a breach of any of the representations and warranties by the seller described above, the party discovering the breach will give prompt written notice to the others and the seller will cooperate with the servicer and the trustee in attempting to cure the breach. An "ELIGIBLE ACCOUNT" is defined in the Pooling and Servicing Agreement to mean a revolving credit card account owned by the seller and which account is identified by the seller as of the related cut-off date as having the following characteristics: - is in existence and maintained by the seller; - is payable in United States dollars; - except as provided below, has not been identified as an account the credit card or cards with respect to which have been reported to the seller as having been lost or stolen; - the obligor of which has provided as his or her billing address an address located in the United States, or its territories or possessions or a military address; - the obligor of which has not been identified by the seller as an employee of the seller or any affiliate of the seller; - except as provided below, does not include any receivables which are defaulted receivables; and - except as provided below, does not include any receivables which have been identified by the seller or the relevant obligor as having been incurred as a result of fraudulent use of a credit card. The Pooling and Servicing Agreement provides that an Eligible Account may include receivables which have been charged-off, or may be an account with an obligor which the seller believes is bankrupt, or may include accounts containing receivables have been identified by the obligor as having been incurred as a result of fraudulent use of a credit card, or as to which any credit cards have been reported to the seller as lost or stolen, in each case as of the related cut-off date; provided, that: - the balance of all receivables included in those accounts is reflected on the books and records of the seller, and is treated for purposes of the Pooling and Servicing Agreement, as "zero"; and - charging privileges with respect to those accounts have been canceled. An "ELIGIBLE RECEIVABLE" is defined in the Pooling and Servicing Agreement to mean each receivable: - which has arisen under an Eligible Account; - which was created in compliance with all requirements of law applicable to the seller, the failure to comply with which would have a material adverse effect upon certificateholders, and under a credit card agreement which complies with all requirements of law applicable to the seller, the failure to comply with which would have a material adverse effect upon certificateholders; - with respect to which all material consents, licenses, approvals or authorizations of, or registrations or declarations with, any governmental authority required to be obtained or given by the seller in connection with the creation of such receivable or the execution, delivery and performance by the seller of its obligations, if any, under the related credit card agreement have been duly obtained or given and are in full force and effect as of the date of creation of the receivable; 41 103 - as to which, at the time of its transfer to the trust, the seller or the trust will have good and marketable title, free and clear of all liens, encumbrances, charges and security interests, except for certain tax liens permitted by the Pooling and Servicing Agreement; - which has been the subject of either: (a) a valid transfer and assignment from the seller to the trust of all of the seller's right, title and interest in the receivable; or (b) the grant of a first priority perfected security interest in the receivable and in the proceeds of the receivable; - which at and after the time of transfer to the trust is the legal, valid and binding payment obligation of the obligor thereon, legally enforceable against the obligor in accordance with its terms, except as the enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors' rights in general and except as the enforceability may be limited by general principles of equity; - which constitutes either an "account" or a "general intangible" under and as defined in Article 9 of the UCC; - which, at the time of its transfer to the trust, has not been waived or modified except as permitted in accordance with the credit card guidelines and which waiver or modification is reflected in the servicer's computer file of revolving credit card accounts; - which, at the time of its transfer to the trust, is not subject to any right of rescission, setoff, counterclaim or any other defense of the obligor, including the defense of usury, other than defenses arising out of applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors' rights in general and except as the enforceability may be limited by general principles of equity, or as to which the servicer is required by the Pooling and Servicing Agreement to make an adjustment; - as to which, at the time of its transfer to the trust, the seller has satisfied all obligations to be fulfilled by the seller at that time; and - as to which, at the time of its transfer to the trust, the seller has not taken any action which, or failed to take any action the omission of which, would, at the time of its transfer to the trust, impair the rights of the trust or the certificateholders. The trustee will not make any initial or periodic general examination of the receivables or any records relating to the receivables for the purpose of establishing the presence or absence of defects, compliance with the seller's representations and warranties or for any other purpose. The servicer, however, has agreed to deliver to the trustee on or before March 31 of each year an opinion of counsel with respect to the validity of the security interest of the trust in and to the receivables and other matters related to the trust. The seller covenants in the Pooling and Servicing Agreement that, except as otherwise required by law, or as is deemed by the seller in its sole discretion to be necessary in order for the seller to maintain its lending business on a competitive basis, based on a good faith assessment by the seller of the nature of the competition in the lending business, it will not at any time reduce the annual percentage rate at which periodic finance charges are assessed on any receivable or the other fees and charges assessed on the accounts owned by it if, as a result of the reduction, either: - the seller's reasonable expectation is that the reduction would cause a series Pay Out Event to occur; or - the reduction is not also applied to any comparable segments of consumer revolving credit card accounts owned by the seller which have characteristics the same as, or substantially similar to, the accounts designated to the trust. 42 104 The seller also covenants that it may only change the terms relating to any of the accounts owned by it and designated to the trust if in the reasonable judgment of the seller the change is also made applicable to the comparable segment of the other consumer revolving credit card accounts which have not been designated to the trust but are owned by the seller and have characteristics the same as, or substantially similar to, the accounts in the trust, subject to compliance with all requirements of law. ADDITION OF ACCOUNTS The seller may from time to time designate additional accounts to the trust. Also, if specified tests are not met, the seller will be required to designate additional accounts. In each case, the seller will convey to the trust all receivables in the additional accounts, whether these receivables are then existing or later created. The date on which additional accounts are transferred to the trust is an "ADDITION DATE." Each additional account must be an Eligible Account as of the related cut-off date. No selection procedures believed by the seller to be adverse to the interests of the certificateholders are to be used in selecting additional accounts from the available Eligible Accounts in the Fleet Credit Card Portfolio. Nevertheless, there is no assurance that additional accounts will be of the same credit quality as the accounts in the trust as of the date of this prospectus. Additional accounts may have been originated at a different time or using different credit criteria or may have been acquired from another credit card issuer that had different credit criteria. Required Additions. Generally, the seller will be required to designate additional Eligible Accounts to the trust in a sufficient amount so that, after giving effect to the addition, the Seller Amount is at least equal to the Required Seller Amount and the aggregate amount of principal receivables in the trust exceeds the Required Principal Balance, if either: (1) the Seller Amount is less than the Required Seller Amount; or (2) the aggregate amount of principal receivables in the trust is less than the Required Principal Balance. In lieu of, or in addition to, designating additional accounts, the seller may, subject to the conditions specified below and in the Pooling and Servicing Agreement, convey to the trust participations, including 100% participations, representing undivided interests in a pool of assets consisting of revolving credit card receivables or consumer secured and unsecured loan receivables arising as a result of advances made on bank cards, private label cards, corporate cards, and unsecured revolving lines of credit, and any interests in the receivables. "REQUIRED SELLER AMOUNT" means, as of any date, the product of the Required Seller Percentage and the aggregate amount of principal receivables in the trust. "REQUIRED SELLER PERCENTAGE" currently means 5%; however, the Required Seller Percentage may be reduced to as low as 2% if the seller delivers an officer's certificate stating that the reduction will not result in the occurrence of a Pay Out Event or materially adversely affect the amount or timing of distributions to be made to any series or class and the rating agencies have notified the seller that the reduction will not result in a reduction or withdrawal of any outstanding rating on a series or class of certificates. "REQUIRED PRINCIPAL BALANCE" means, as of any date, the sum of the Series Investor Amounts for all series minus the amount on deposit in the excess funding account. "SERIES INVESTOR AMOUNT" means, for any series, the amount stated in the related series supplement and, in the prospectus supplement for that series, but, generally, will be an amount equal to the numerator used in the calculation of the Series Percentage used in allocating collections of principal receivables to that series. Restricted Additions. The seller may from time to time, at its sole discretion, subject to the conditions specified below, designate additional Eligible Accounts to the trust or designate participation interests to be included as trust assets. 43 105 Conditions to Required and Restricted Additions. The following are conditions to the addition of accounts or participation interests to the trust under the required addition provisions and the restricted addition provisions: (1) on or before the tenth business day immediately preceding the addition date, the seller shall give the trustee, the servicer and each rating agency written notice of the addition; (2) the seller shall deliver to the trustee copies of UCC-1 financing statements covering the additional accounts, if necessary to perfect the trust's interest in the receivables; (3) as of each of the related cut-off date and the addition date, no insolvency event affecting the seller shall have occurred nor shall the transfer to the trust be made in contemplation of the occurrence of an insolvency event; (4) except in the case of a limited amount of required additions, the rating agencies have notified the seller that the addition will not result in a reduction or withdrawal of any outstanding rating in a series or class of certificates shall have been satisfied; (5) the seller shall deliver to the trustee an officer's certificate, dated the addition date, stating that: (a) as of the applicable related cut-off, any additional accounts are Eligible Accounts; (b) to the extent applicable, the conditions set forth in clauses (2) through (4) above have been satisfied; and (c) the seller reasonably believes that: - the addition of the receivables arising in the additional accounts to the trust or of the interests in the trust participations will not, based on the facts known to the officer at the time of the addition, then or in the future cause a Pay Out Event to occur with respect to any series; and - no procedure was used in selecting additional accounts that would be materially adverse to the interests of the certificateholders of any series as of the addition date; (6) the seller shall deliver to the trustee and each rating agency an opinion of counsel stating the validity and perfection of the transfer of the receivables created in the additional accounts to the trustee; (7) in the case of designation of additional accounts, the seller shall deliver to the trustee: (a) the computer file or microfiche list containing a true and complete list of the additional accounts; and (b) a duly executed, written assignment; and (8) unless each rating agency otherwise consents, the number of additional accounts designated as required additions during any of the three consecutive monthly periods commencing in January, April, July and October of each calendar year, shall not exceed 15% of the number of accounts designated to the trust as of the first day of the calendar year during which the monthly periods begin and the number of additional accounts designated as required additions during any calendar year shall not exceed 20% of the number of accounts designated to the trust as of the first day of the calendar year. 44 106 ACQUISITION OF PARTICIPATION INTEREST If the seller designates a participation interest to be included in the trust and these interests are issued by an entity other than the seller or any affiliate of the seller, then these interests will: (1) either: (a) have been previously registered under the Securities Act of 1933, as amended; or (b) are eligible for sale under Rule 144(k); and (2) will be acquired in bona fide secondary market transactions not from the seller or an affiliate. AUTOMATIC ACCOUNT ADDITIONS (1) The seller may from time to time, at its sole discretion, subject to and in compliance with the limitations specified in clause (2) below and the applicable conditions specified in clauses (3) through (7) below, designate additional Eligible Accounts to the trust without meeting some of the conditions applicable to other additions. These additions are "AUTOMATIC ADDITIONS." Under the automatic addition provisions, accounts to be added will be deemed to be Eligible Accounts only if the accounts are consumer revolving credit card accounts originated by the seller or any affiliate of the seller. (2) Unless each rating agency then rating any series of certificates otherwise consents, the number of accounts designated under the automatic addition provisions shall be limited as follows: - in any three consecutive monthly periods commencing in January, April, July and October of a calendar year, the number of accounts added shall not exceed 15% of the number of accounts as of the first day of the calendar year during which the monthly periods commence; and - in any calendar year, the number of accounts designated under the automatic additional provisions will not exceed 20% of the number of accounts as of the first day of the calendar year. (3) Within 30 days after the addition date for the automatic addition the seller will deliver to the trustee and each rating agency an opinion of counsel, confirming the validity and perfection of the transfer of the accounts. If the opinion of counsel is not received, the ability of the seller to designate automatic additional accounts will be suspended until each rating agency otherwise consents in writing. If the seller is unable to deliver an opinion of counsel for any automatic additional account, that inability shall be deemed to be a breach of the representations with respect to the receivables in the additional accounts, and the cure period for such breach will not exceed 30 days. (4) The seller shall deliver to the trustee copies of UCC-1 financing statements covering the additional accounts, if necessary to perfect the trust's interest in the arising receivables. (5) As of each of the related cut-off date and the addition date, no insolvency event with respect to the seller shall have occurred nor shall the transfer of the receivables arising in the additional accounts to the trust be made in contemplation of the occurrence of an insolvency event. (6) The seller shall deliver to the trustee an officer's certificate, dated the addition date, stating that: - as of the applicable related cut-off date, the automatic additional accounts are all Eligible Accounts; - to the extent applicable, the conditions described in clauses (2) through (5) above have been satisfied; and 45 107 - the seller reasonably believes that (a) the addition of the receivables arising in the automatic additional accounts will not, based on the facts known to the officer at the time of the addition, then or in the future cause a Pay Out Event to occur with respect to any series, and (b) no selection procedure was used in selecting automatic additional accounts that would be materially adverse to the interests of the certificateholders of any series as of the addition date. (7) The seller shall deliver to the trustee: - a computer file or microfiche list containing a true and complete list of the accounts being added; and - a duly executed assignment of the receivables arising in the additional accounts. REMOVAL OF ACCOUNTS During any monthly period the seller shall have the right to require the reassignment to it or its designee of all the trust's right, title and interest in, to and under the receivables then existing and in the future created, all moneys due or to become due and all amounts and proceeds received in or with respect to specified accounts or participation interests, upon satisfaction of the following conditions: (1) on or before the fifth business day immediately preceding the removal date, the seller shall give the trustee, the servicer, each rating agency then rating any series of certificates and the provider of any series enhancement written notice of the removal; (2) with respect to the accounts being removed, on or prior to the date that is ten business days after the removal date, the seller will deliver to the trustee a computer file or microfiche list containing a true and complete list of the removed accounts specifying for each account, its account number, the aggregate amount outstanding in the account and the aggregate amount of principal receivables outstanding in the account; (3) the seller shall represent and warrant as of the removal date that the list of removed accounts delivered pursuant to clause (2) above, as of the removal cut-off date, is true and complete in all material respects; (4) the rating agencies shall have notified the seller that the removal will not result in a reduction or withdrawal of any outstanding rating on a series or class of certificates; (5) the seller shall deliver to the trustee an officer's certificate to the effect that the seller reasonably believes that: - this removal will not, based on the facts known to the officer at the time of the certification, then or in the future cause a Pay Out Event to occur with respect to any series; and - no selection procedure was used in selecting the accounts or interests in the trust participations to be removed that would be materially adverse to the interests of the certificateholders of any series as of the removal date; and (6) as of the removal cut-off date, no more than 10% of the receivables in the trust are more than thirty days contractually delinquent. Upon satisfaction of the above conditions, the trustee will execute and deliver to the seller or its designee a written reassignment and will be deemed to sell, transfer, assign, set over and otherwise convey to the seller or its designee, effective as of the removal date, without recourse, representation or warranty, all the right, title and interest of the trust in and to the interests in the trust participations removed from the trust or receivables arising in the removed accounts, all moneys due and to become due and all amounts and proceeds received. 46 108 SERVICING PROCEDURES Pursuant to the Pooling and Servicing Agreement, the servicer will be responsible for servicing and administering the receivables in the trust in accordance with the servicer's customary and usual servicing procedures for servicing credit card receivables comparable to the receivables in the trust and in accordance with its credit card guidelines. DISCOUNT OPTION The Pooling and Servicing Agreement provides that the seller may designate a "DISCOUNT PERCENTAGE" at any time and from time to time. A discount percentage may be a fixed percentage or a variable percentage based on a formula. If the seller specifies a discount percentage, then that percentage of all of the principal receivables or of any specified portion of principal receivables created after the date designated by the seller will be treated as finance charge receivables, rather than principal receivables. If this option is exercised by the seller, the principal receivables will be treated as having been transferred to the trust at a discount. The seller also has the option of reducing or discontinuing the discount percentage, at any time and from time to time. The Pooling and Servicing Agreement requires the seller to provide to the servicer, the trustee and any rating agency then rating any series of certificates 30 days' prior written notice that the discount percentage is to be applied to the principal receivables. If this notice is provided, then the discount will become effective: - unless such designation, in the reasonable belief of the seller, would cause a Pay Out Event for any series to occur or would cause the occurrence of an event which, with notice or the lapse of time or both, would constitute a Pay Out Event for any series; and - if the rating agencies then rating any series of certificates notify the seller that the implementation of the discount will not result in a reduction or withdrawal of any outstanding rating on a series or class of certificates. On the date of processing of any collections, on or after the discount becomes effective, the product of the discount percentage and collections of receivables, which receivables arose on or after the effective date and which would otherwise be principal receivables, will be deemed "DISCOUNT OPTION RECEIVABLE COLLECTIONS." An amount equal to the product of the Series Percentage with respect to finance charge receivables for each series of certificates and the amount of the discount option receivables collections will be deposited by the servicer into the collection account. The amount of discount option receivable collections deposited into the collection account will be applied as finance charge receivables. An amount equal to the product of the Seller Percentage and the amount of the discount option receivable collections will be paid to the holders of the Seller Certificates. The seller may have different reasons to designate a discount percentage. For example, since the majority of the accounts have finance charges indexed to specific variable rates, the finance charges on the accounts, and the collections of finance charge receivables on the accounts, may decline as interest rates decline. The certificates of a series may have interest rates that are fixed or that are indexed to a different variable rate. If the finance charges on the accounts are significantly reduced without a corresponding reduction in the interest rate on a series of certificates, a series Pay Out Event based in part on the amount of collections of finance charge receivables and the interest rate on the certificates could occur. The seller could avoid the occurrence of a series Pay Out Event by designating a discount percentage, thereby causing an increase in the amount of collections of finance charge receivables. The seller, however, is under no obligation to designate a discount percentage at any time, and there can be no assurance that the seller would designate a discount percentage to avoid the occurrence of a Pay Out Event. 47 109 TRUST ACCOUNTS The servicer has caused to be established and maintained, in the name of the trustee, for the benefit of certificateholders of all series, an account designated as the "COLLECTION ACCOUNT," which at all times is required to be either: (a) a segregated account with an eligible institution; or (b) a segregated trust account with the corporate trust department of a depository institution organized under the laws of the United States or any one of the states thereof, including the District of Columbia or any domestic branch of a foreign bank, and acting as a trustee for funds deposited in the account, so long as any of the securities of the depository institution shall have an investment grade credit rating. An account satisfying the requirements of (a) or (b) above is an "ELIGIBLE DEPOSIT ACCOUNT." The servicer has also caused to be established and maintained, in the name of the trustee, an account designated as the "EXCESS FUNDING ACCOUNT," which also is required to be an eligible deposit account. An "ELIGIBLE INSTITUTION" is defined as: (a) a depository institution, which may be the trustee, organized under the state or federal laws of the United States, including the District of Columbia, or any domestic branch of a foreign bank, which at all times: - has either (1) a long-term unsecured debt rating of A1 or better by Moody's Investors Service Inc. or (2) a certificate of deposit rating of P-1 by Moody's; - has either (1) a long-term unsecured debt rating of AAA by Standard & Poor's Ratings Group or (2) a certificate of deposit rating of A-1+ by Standard & Poor's; and - is a member of the FDIC; or (b) any other institution that is acceptable to each rating agency then rating a series of certificates. If so qualified, the trustee or the servicer may be considered an eligible institution. Other accounts may also be created in connection with any series and for the benefit of that series. Accounts created for a specific series are "SERIES ACCOUNTS." Funds in the collection account and the excess funding account will be invested, at the direction of the servicer, in "ELIGIBLE INVESTMENTS" consisting of book-entry securities, negotiable instruments or securities represented by instruments in bearer or registered form which evidence: (a) direct obligations of, and obligations fully guaranteed as to timely payment of principal and interest by, the United States of America; (b) demand deposits, time deposits or certificates of deposit, having original maturities of no more than 365 days, of depository institutions or trust companies incorporated under the state or federal laws of the United States of America, or domestic branches of foreign banks, and subject to supervision and examination by federal or state banking or depository institution authorities; provided, that at the time of the trust's investment or contractual commitment to invest, the short-term debt rating of the depository institution or trust company shall be in the highest investment category of each rating agency then rating a series of certificates; (c) commercial paper or other short-term obligations having, at the time of the trust's investment or contractual commitment to invest, a rating from each rating agency in its highest investment category; 48 110 (d) notes or bankers' acceptances, having original maturities of no more than 365 days, issued by any depository institution or trust company described in clause (b) above; (e) investments in money market funds rated in the highest investment category by each rating agency then rating a series of certificates or otherwise approved in writing by each rating agency then rating a series of certificates; (f) time deposits, other than as referred to in the preceding clause (e) with a person the commercial paper of which has a credit rating in the highest investment category from each rating agency then rating a series of certificates; or (g) any other investments approved in writing by each rating agency then rating a series of certificates. The trustee together with any successor or any entity specified in a series supplement, acting as the "PAYING AGENT," shall have the revocable power to withdraw funds from the collection account for the purpose of making distributions to the certificateholders of any series pursuant to the related series supplement. SERIES PERCENTAGE AND SELLER PERCENTAGE Pursuant to the Pooling and Servicing Agreement, the servicer will allocate among the series, including each class of each series, and the sellers' interest the collections of finance charge receivables, the collections of principal receivables and the defaulted receivables. The servicer will make each allocation by reference to the applicable Series Percentage for each series and the Seller Percentage in each case. The "SERIES PERCENTAGE" for each series means that percentage specified in the series supplement as the percentage to be used in making allocations to that series. Generally, the Series Percentage specified in the series supplement is a floating percentage for purposes of allocating collections of finance charge receivables at all times, for purposes of allocating defaulted receivables at all times and for purposes of allocating principal receivables during the revolving period. Generally, the Series Percentage specified in the series supplement is a fixed percentage for purposes of allocating collections of principal receivables during the amortization period for that series. The "SELLER PERCENTAGE" in all cases means the excess of 100% over the sum of the Series Percentages of all series then outstanding. APPLICATION OF COLLECTIONS Except as provided below or in a series supplement, the servicer will deposit into the collection account, no later than the second business day following the date of processing, any payment collected by the servicer on the receivables; provided, however, that the servicer need not deposit into the collection account amounts allocated to the Seller Certificates and various amounts allocated to certificateholders of a series, as specified in the related series supplement. In addition, for so long as the bank remains the servicer and (1) maintains a certificate of deposit rating of A-1 or better by Standard & Poor's and P-1 by Moody's, or such other rating below A-1 or P-1, as the case may be, that is satisfactory to each rating agency then rating a series of certificates, or (2) the bank has provided to the trustee a letter of credit covering the collection risk of the servicer acceptable to each rating agency then rating a series of certificates, the servicer need not make daily deposits of collections into the collection account, but may make a single monthly deposit into the collection account in immediately available funds. OPERATION OF EXCESS FUNDING ACCOUNT On any distribution date on which the Seller Amount is less than the Required Seller Amount, the servicer will deposit any shared principal collections that would otherwise be distributed to the holders of the Seller Certificates into the excess funding account. The seller may also cause deposits to be made to the excess funding account on any business day. The servicer will determine, for each distribution date on which no series is in an amortization period, the amount by which the Seller Amount exceeds the 49 111 Required Seller Amount and will instruct the trustee to withdraw that amount from the excess funding account, to the extent of the principal amount of funds on deposit, and pay the amount to the holders of the Seller Certificates. The servicer will determine, for each distribution date on which one or more series is in an amortization period, the aggregate amount of principal shortfalls, if any, for each series and will instruct the trustee to withdraw that amount from the excess funding account, to the extent of the principal amount of funds on deposit in the account, and allocate the amount among those series with a principal shortfall as shared principal collections. So long as the bank remains the servicer and maintains a certificate of deposit rating of P-1 or better by Moody's and the seller makes deposits into the excess funding account on each business day if the Seller Amount on that date is less than the Required Seller Amount, then the servicer will, as described in the next sentence, direct the distribution of the excess amount from the excess funding account on any business day when an excess exists. If the conditions in the previous sentence are met, then the servicer will, on each business day, whether or not a distribution date, determine the amount, if any, by which the Seller Amount exceeds the Required Seller Amount and instruct the trustee to withdraw the excess amount from the excess funding account, to the extent of the principal amount of funds on deposit in the account, and pay the amount to the holders of the Seller Certificates on the next business day. Before directing a distribution on a date other than a distribution date, if any series is in an amortization period, the servicer is required to determine, on the basis of collections received prior to that business day, that no principal shortfall will exist for any principal sharing series on the next distribution date. DEFAULTED RECEIVABLES; REBATES AND FRAUDULENT CHARGES The term "DEFAULTED RECEIVABLES" means, for any monthly period, all principal receivables which are charged-off as uncollectible in the monthly period in accordance with the servicer's credit card guidelines and customary and usual servicing procedures for servicing consumer revolving credit card and other revolving credit account receivables comparable to the receivables. A principal receivable shall become a defaulted receivable on the day on which the principal receivable is recorded as charged-off on the servicer's computer master file of consumer revolving credit card accounts but, in any event, shall be deemed a defaulted receivable no later than the day the related account becomes 186 days contractually delinquent unless the obligor cures the default by making a partial payment which satisfies the criteria for curing delinquencies under the servicer's applicable credit card guidelines. The term "DEFAULTED AMOUNT" means, for any monthly period, an amount, not less than zero, equal to (a) the amount of principal receivables which became defaulted receivables in the monthly period, minus (b), unless an insolvency event involving the seller or the servicer has occurred, the amount of any defaulted receivables included in any account the receivables of which the seller or the servicer became obligated to accept reassignment or assignment in accordance with the terms of the Pooling and Servicing Agreement during such monthly period. If an insolvency event occurs with respect to the seller, the amount of the defaulted receivables which are subject to reassignment to the seller shall not be added to the sum so subtracted. If events involving insolvency occur with respect to the servicer, the amount of the defaulted receivables which are subject to reassignment or assignment to the servicer shall not be added to the sum so subtracted. The servicer may adjust downward the amount of any receivable for a number of reasons including adjustments related to rebates, refunds, unauthorized charges or billing errors to an account holder or because the receivables was created in respect of merchandise which was refused or returned by an account holder. On each day when the servicer adjusts downward any receivable without receiving collections or charging-off the amount as uncollectible, then, the amount of principal receivables used to calculate the Seller Amount, the Series Percentages and any other percentages used to allocate within or among series will be reduced by the amount of the adjustment. Similarly, the amount of principal receivables used to calculate the Seller Amount, the Series Percentages and any other percentage used to allocate within or among series will be reduced by the amount of any receivable discovered to have been 50 112 created through a fraudulent or counterfeit charge. Furthermore, in the event that the exclusion of the principal receivables from the calculation of the Seller Amount at that time would cause the Seller Amount to be less than the Required Seller Amount, the seller shall be required to pay an amount equal to the deficiency into the excess funding account, up to the amount of the reduction in principal receivables. FINAL PAYMENT OF PRINCIPAL AND INTEREST; TERMINATION Subject to any prior termination, the interest of the certificateholders of a series in the trust will terminate following the earliest of: - the day after the distribution date on which the final payment of principal and interest is made to the certificateholders of that series; - the date specified for termination in the applicable series supplement, called the "STATED SERIES TERMINATION DATE" for the series; and - the trust termination date. In the event the investor amount of any series would be greater than zero on the stated series termination date for that series or an earlier date specified in the related series supplement, the trustee will sell or cause to be sold principal receivables and the related finance charge receivables or interests, in an amount equal to 100% of the investor amount of the certificates of the series and accrued and unpaid interest thereon, but not more than the applicable Series Percentages of receivables on the stated series termination date or earlier date specified in the series supplement. The proceeds of the sale will be allocated and distributed in accordance with the applicable series supplement. The "TRUST TERMINATION DATE" will be the earliest to occur of: - the day following the payment date on which the aggregate investor amount and series enhancement investor amounts, if any, of each series is zero, provided that the seller has delivered a written notice to the trustee electing to terminate the trust; - December 31, 2044; or - if the receivables are liquidated following the occurrence of an insolvency event as described under "--Liquidation of Receivables," immediately following that liquidation. Upon termination of the trust, all right, title and interest in the receivables and other funds of the trust other than amounts in accounts maintained by the trust for the final payment of principal and interest to certificateholders, will be conveyed and transferred to the seller. TRUST PAY OUT EVENTS If a Pay Out Event occurs under the terms of a series supplement, it will be a series Pay Out Event although the same event may result in a series Pay Out Event occurring under multiple series supplements. The occurrence of a series Pay Out Event will terminate the revolving period or any amortization period then in effect for affected series and the rapid amortization period of, if applicable, a rapid accumulation period, will begin. If a Pay Out Event occurs under the base Pooling and Servicing Agreement, it will be a trust Pay Out Event and affect all series and cause the rapid amortization period to begin for all series. A trust Pay Out Event will occur with respect to all series upon the occurrence of any of the following: - an insolvency event relating to the seller or any additional seller; - the trust shall become subject to regulation by the SEC as an "investment company" within the meaning of the Investment Company Act of 1940, as amended; or 51 113 - the seller or any additional seller is unable for any reason to transfer receivables to the trust in accordance with the provisions of the Pooling and Servicing Agreement. When a rapid amortization period or a rapid accumulation period begins, distributions or deposits of principal will be made to the certificateholders or into an account for the certificateholders of the affected series in the priority provided in the related series supplement. If, because of the occurrence of a Pay Out Event, a rapid amortization period begins earlier than the scheduled amortization date or the expected final payment date of the series, certificateholders of the series will begin receiving distributions of principal earlier than they otherwise would have, which may shorten the final maturity of the certificates of the series. When a rapid accumulation period begins, the principal receivables will be deposited into a principal funding account, as described in the related prospectus supplement. Unlike in a rapid amortization period, if, because of the occurrence of a Pay Out Event, a rapid accumulation period begins earlier than the scheduled amortization date or the expected final payment date of the series, then certificateholders of the series or class affected by the rapid accumulation period will not, unless a trust Pay Out Event occurs, receive distributions of principal until the final expected distribution date of the series or class. An "INSOLVENCY EVENT" shall occur if: - the seller and/or any additional seller shall consent to the appointment of a conservator or receiver or liquidator in any insolvency, readjustment of debt, marshaling of assets and liabilities or similar proceedings relating to the seller or relating to all or substantially all of its property; - a decree or order of a court or agency or supervisory authority having jurisdiction in the premises for the appointment of a conservator or receiver or liquidator in any insolvency, readjustment of debt, marshaling of assets and liabilities or similar proceedings or for the winding-up or liquidation of the affairs of the seller, shall have been entered against the seller; or - the seller shall admit in writing its inability to pay its debts generally as they become due, file a petition to take advantage of any applicable insolvency or reorganization statute, make any assignment for the benefit of its creditors or voluntarily suspend payment of its obligations. See "Description of the Certificates--Liquidation of Receivables" in this prospectus for a description of the consequences of the occurrence of an insolvency event. SERVICING COMPENSATION AND PAYMENT OF EXPENSES The servicer's compensation for its servicing activities and reimbursement for its expenses for any monthly period will be a servicing fee payable monthly on the related distribution date in an amount equal to one-twelfth of the product of: - the weighted average of the applicable servicing fee rates for each series outstanding, based upon the applicable servicing fee rate for each series and the investor amount of the series or other amount specified in the applicable series supplement; and - the amount of principal receivables outstanding on the last day of the prior monthly period. The servicing fee will be allocated among the sellers' interest and the certificateholders' interests of all series. The share of the servicing fee allocable to the certificateholders' interest of a particular series, the "MONTHLY SERVICING FEE," will be determined in accordance with the applicable series supplement. The remainder of the servicing fee shall be paid by the certificateholders of other series and by the holders of the Seller Certificates. In no event shall the trust, the trustee or the certificateholders of any series be liable for the share of the servicing fee to be paid by the holders of the Seller Certificates. Unless otherwise provided in any series supplement, in the case of the first monthly period for a series, the monthly servicing fee shall accrue from the date of issuance of that series. 52 114 The servicer will pay from its servicing compensation certain expenses incurred in connection with servicing the receivables including, without limitation, payment of the fees and disbursements of the trustee, any paying agent and transfer agent and registrar and independent accountants and other fees which are not expressly stated in the Pooling and Servicing Agreement to be payable by the trust or the certificateholders of a series other than federal, state, local and foreign income, franchise or other taxes, if any, or any interest or penalties imposed upon the trust. MATTERS REGARDING THE SERVICER The servicer may not resign from its obligations and duties under the Pooling and Servicing Agreement, except upon determination that: - the performance of its duties under the Pooling and Servicing Agreement is no longer permissible under applicable law; and - there is no reasonable action which the servicer could take to make the performance of its duties thereunder permissible under applicable law. Any determination permitting the resignation of the servicer will be evidenced by an opinion of counsel delivered to the trustee. No resignation will become effective until the trustee or a successor servicer that is an eligible servicer shall have assumed the responsibilities and obligations of the servicer in accordance with the Pooling and Servicing Agreement. An "ELIGIBLE SERVICER" means the trustee, or an entity which is acting as servicer and: - is servicing a portfolio of revolving credit card accounts; - is legally qualified and has the capacity to service the accounts; - has demonstrated the ability to professionally and completely service a portfolio of similar accounts in accordance with high standards of skill and care; - is qualified to use the software that is then being used to service the accounts or obtains the right to use, or has its own software, which is adequate to perform its duties under the Pooling and Servicing Agreement; and - has a net worth of at least $50,000,000 as of the end of its most recent fiscal quarter. Pursuant to the Pooling and Servicing Agreement, the bank, as servicer, has the right to delegate any of its responsibilities and obligations as servicer to any entity that agrees to conduct the duties in accordance with the Pooling and Servicing Agreement and the seller's credit card guidelines; provided, that in the case of a significant delegation to an entity other than Fleet, the seller, any affiliate of the seller, or First Data Resources, Inc.: - at least 30 days' prior written notice must be given to the trustee and each rating agency then rating a series of certificates of the delegation; and - at or prior to the end of the 30 day period the servicer must determine that the rating agencies then rating a series of certificates have notified the seller that such action will not result in a reduction or withdrawal of the rating of any outstanding series or class of certificates. For information concerning entities currently involved in the bank's servicing operations see "The Bank's Credit Card Activities--General," "--Billing and Payments" and "--Description of First Data Resource, Inc." in this prospectus. INDEMNIFICATION The Pooling and Servicing Agreement provides that the seller will indemnify and hold harmless the trust and the trustee, its officers, directors, employees and agents from and against any loss, liability, expense, damage or injury suffered or sustained by reason of any acts, omissions or alleged acts or 53 115 omissions or otherwise arising out of or based upon the arrangement created by the Pooling and Servicing Agreement or any series supplement, as though the Pooling and Servicing Agreement or the series supplement created a general partnership under the Delaware Uniform Partnership Law in which the seller is the general partner; provided, however, that: - the seller will not indemnify the trustee if the acts, omissions or alleged acts or omissions constitute or are caused by fraud, negligence, or willful misconduct by the trustee; - without limiting the claims of third parties, that the seller will not indemnify the trust, the certificateholders or the Certificate Owners for any liabilities, costs or expenses of the trust with respect to any action taken by the trustee at the request of the certificateholders; - the seller will not indemnify the trust, the certificateholders or the Certificate Owners for any losses, claims or damages incurred by any of them in their capacities as investors, including, without limitation, losses incurred as a result of defaulted receivables; and - the seller will not indemnify certificateholders or the Certificate Owners for any liabilities, costs or expenses of the certificateholders or the Certificate Owners arising under any tax law relating to any federal, state, local or foreign income or franchise taxes or any other tax imposed on or measured by income, or any interest or penalties arising from a failure to comply with the tax law, required to be paid by or for the account of the certificateholders or the Certificate Owners in connection to any taxing authority. The Pooling and Servicing Agreement states that the indemnification provided by the seller will not be payable from the trust assets. The Pooling and Servicing Agreement also provides that the servicer will indemnify and hold harmless the trust and the trustee from and against any loss, liability, expense, damage or injury suffered or sustained by reason of any acts or omissions of the servicer with respect to the trust, including any judgment, award, settlement, reasonable attorneys' fees and other costs or expenses incurred in connection with the defense of any action, proceeding or claim; provided, however, that the servicer will not indemnify: - the trustee if the acts or omissions constitute or are caused by fraud, negligence, or willful misconduct by the trustee; - the trust, the certificateholders or the Certificate Owners for any liabilities, costs or expenses of the trust resulting from any action taken by the trustee at the request of the certificateholders; - the trust, the certificateholders or the Certificate Owners for any losses, claims or damages incurred by any of them in their capacities as investors, including without limitation losses incurred as a result of defaulted receivables; or - the trust, certificateholders or Certificate Owners for any liabilities, costs or expenses of the trust, the certificateholders or the Certificate Owners arising under any tax law, including without limitation, any federal, state, local or foreign income or franchise taxes or any other tax imposed on or measured by income or any related interest or penalty required to be paid by the trust, the certificateholders or the Certificate Owners to any taxing authority. The Pooling and Servicing Agreement states that the indemnification provided by the servicer will not be payable from the trust assets. SERVICER DEFAULT If a Servicer Default occurs and has not been remedied, the trustee, or certificateholders evidencing more than 50% of the aggregate investor amount of the certificates of all series, may terminate all but not less than all of the rights and obligations of the servicer, as servicer under the Pooling and Servicing Agreement, and in and to the related receivables and proceeds of the receivables. 54 116 The rights and interest of the seller under the Pooling and Servicing Agreement and in the Seller Certificates will not be affected by the termination of the servicer; provided, however, if within 60 days of receipt of a notice of termination, the trustee does not receive any bids from eligible servicers to act as a successor servicer and receives an officer's certificate of the servicer to the effect that the servicer cannot in good faith cure the Servicer Default which gave rise to the termination notice, then the trustee will offer the seller the right, at its option, to purchase the certificateholders' interest on the next succeeding distribution date. The purchase price for the certificateholders' interest will be equal to the sum of the amounts specified in the related series supplements. The seller will notify the trustee in writing prior to the record date for the distribution date of the purchase if it is exercising this option. If the seller exercises this option, the seller will: (1) if the seller's short-term deposits or long-term unsecured debt obligations are not rated at the time at least P-3 or Baa3, respectively, by Moody's, deliver to the trustee an opinion of independent outside counsel to the effect that the purchase would not be considered a fraudulent conveyance; and (2) deposit the purchase price into the collection account on the distribution date in immediately available funds. A "SERVICER DEFAULT" refers to any of the following events: (1) Any failure by the servicer to make any payment, transfer or deposit or to give instructions or notice to the trustee pursuant to the Pooling and Servicing Agreement or any series supplement on or before the date occurring five business days after the date the payment, transfer, deposit or such instruction or notice is required to be made or given. (2) Failure of the servicer duly to observe or perform in any material respect any other covenants or agreements of the servicer described in the Pooling and Servicing Agreement or any series supplement, which has a material adverse effect on the certificateholders of any series or class and the failure continues unremedied for 60 days after notice is given to the servicer by the trustee, or to the servicer and the trustee by certificateholders evidencing more than 50% of the aggregate investor amount of all series then outstanding or, if the failure does not related to all series, more than 50% of the investor amount of those series to which the failure relates. (3) The servicer delegates its duties under the Pooling and Servicing Agreement except as permitted by the Pooling and Servicing Agreement, a responsible officer of the trustee has actual knowledge of the delegation and the delegation continues unremedied for 15 days after notice is given to the servicer by the trustee, or to the servicer and the trustee by certificateholders evidencing more than 50% of the aggregate investor amount of all series. (4) Any representation, warranty or certification made by the servicer shall prove to have been incorrect when made, has a material adverse effect on the certificateholders of any series or class and continues to be incorrect in any material respect for a period of 60 days after the date on which written notice of the failure, requiring the same to be remedied, shall have been given to the servicer by the trustee, or to the servicer and the trustee by certificateholders evidencing more than 50% of the aggregate investor amount of all series then outstanding or if the representation, warranty or certification does not relate to all series, 50% of the investor amount of the affected series. (5) Certain events of bankruptcy, conservatorship, or receivership occur with respect to the servicer. Notwithstanding the foregoing, a delay in or failure of performance under clauses (1), (2), (3) or (4), will not, for certain limited periods, constitute a Servicer Default if the delay or failure (a) could not be prevented by the exercise of reasonable diligence by the servicer and (b) was caused by an act of God or the public enemy, acts of declared or undeclared war, terrorism, public disorder, rebellion or sabotage, 55 117 epidemics, landslides, lightning, fire, hurricanes, earthquakes, floods or similar causes. The preceding sentence will not relieve the servicer from using its best efforts to perform its respective obligations in a timely manner in accordance with the terms of the Pooling and Servicing Agreement and any series supplement and the servicer will provide the trustee, each rating agency, the holders of the Seller Certificates and the certificateholders of all series with an officer's certificate giving prompt notice of the failure or delay by it, together with a description of its efforts to so perform its obligations. REPORT TO CERTIFICATEHOLDERS The seller expects that on each distribution date of a series, the paying agent will forward to each certificateholder of record a statement prepared by the servicer describing, among other things: - the total amount distributed to certificateholders of each class of the series; - the amount of any distribution allocable to principal on the certificates; - the amount of the distribution allocable to interest on the certificates; - the aggregate amount of collections processed during the prior monthly period and allocated in respect of the certificates; - the amount of collections of principal receivables processed during the prior monthly period and allocated in respect of the certificates; - the amount of collections of finance charge receivables processed during the prior monthly period and allocated in respect of the certificates; - the Series Percentage for each class of certificates with respect to principal receivables and finance charge receivables, each as of the end of the last day of the prior monthly period; - the aggregate outstanding balance of accounts designated to the trust which are 30 or more days contractually delinquent, by class of delinquency, as of the end of the last day of the prior monthly period; - the defaulted amount for the prior monthly period; - the amount of the monthly servicing fee for each class for the prior monthly period; and - the amount of any series enhancement, available for each class as of the close of business on the distribution date. Each year the paying agent will furnish to each person who at any time during the preceding calendar year was a certificateholder of record of a series, a statement prepared by the servicer containing the information required to be contained in the regular monthly servicing report aggregated for the calendar year or the applicable portion of the year during which the person was a certificateholder, together with the other customary information consistent with the treatment of the certificates as debt, as the trustee or the servicer deems necessary or desirable to enable the certificateholders to prepare their tax returns. EVIDENCE AS TO COMPLIANCE The Pooling and Servicing Agreement provides that on or before November 30 of each calendar year, the servicer will cause a firm of nationally recognized independent public accountants, who may also render other services to the servicer or the seller, to furnish a report to the trustee. The report will state that the firm has applied agreed-upon procedures to documents and records relating to the servicing of the receivables and, based upon the agreed-upon procedures, no matters came to their attention that caused them to believe that the servicing, including the allocations of collections, was not conducted in compliance with the applicable terms and conditions described in the Pooling and Servicing Agreement and any series supplements except for those exceptions the firm believes to be immaterial and except for exceptions described in the statement. In addition, on or before November 30 of each calendar year, the accountants will compare the mathematical calculations of certain amounts contained in the monthly 56 118 servicer's certificates delivered during the period covered by the report with the computer reports of the servicer which were the source of the amounts and deliver a report to the trustee confirming that these amounts are in agreement except for those exceptions as they believe to be immaterial and except for other exceptions described in the report. The Pooling and Servicing Agreement provides for delivery to the trustee on or before November 30 of each calendar year of a statement signed by an authorized officer of the servicer to the effect that the servicer has, or has caused to be, fully performed its obligations in all material respects under the Pooling and Servicing Agreement and any series supplements throughout the preceding year or, if there has been a default in the performance of any of these obligations, specifying the nature and status of the default. Copies of all statements, certificates and reports furnished to the trustee may be obtained by a request in writing delivered to the trustee. AMENDMENTS The Pooling and Servicing Agreement or any series supplement may be amended from time to time without certificateholder consent if: - the seller delivers to the trustee an officer's certificate to the effect that the seller reasonably believes the amendment will not result in the occurrence of a Pay Out Event for any series and will not materially adversely affect the amount or timing of distributions to be made to any class or series; and - each rating agency then rating any series of certificates has notified the seller that the amendment will not result in a reduction or withdrawal of any rating on any series or class of certificates. Amendments which may be made without the consent of the certificateholders include, but are not limited to, amendments which provide additional series enhancement for the benefit of the certificateholders of any series or which reduce the series enhancement and amendments in connection with the addition of a participation interest to the trust or the designation of an additional seller. The Pooling and Servicing Agreement or any series supplement may also be amended if the holders of certificates evidencing not less than 66 2/3% of the aggregate investor amount of all adversely affected series consent. An amendment made with 66 2/3% consent may change or eliminate any of the provisions of the Pooling and Servicing Agreement or any series supplement or modify in any manner the rights of certificateholders. No amendment, however, may: - reduce in any manner the amount of or delay the timing of distributions to be made to certificateholders or deposits of amounts to be so distributed or the amount available under any series enhancement without the consent of each affected certificateholder; - change the definition of or the manner of calculating the interest of any certificateholder without the consent of each affected certificateholder; - reduce the percentage required to consent to any amendment without the consent of each certificateholder; or - adversely affect the rating of any series or class without the consent of certificateholders of the related series or class evidencing not less than 66 2/3% of the aggregate investor amount of the related series or class. Any amendment shall be deemed not to adversely affect any outstanding series for which the seller delivers an opinion of counsel that the amendment will not have an adverse effect on that series. Promptly following the execution of any amendment, except amendments that do not require the consent of any certificateholders, the servicer will provide written notice of the substance of the amendment to the trustee and, the trustee will furnish that written notice to each certificateholder. 57 119 DEFEASANCE Pursuant to the Pooling and Servicing Agreement, the seller may terminate its substantive obligations in respect of any series or all outstanding series by depositing with the trustee under the terms of an irrevocable trust agreement, monies and/or eligible investments which monies or investments do not come from funds of the seller on an affiliate of the seller and are sufficient to make all remaining scheduled interest and principal payments on the designated series on the dates scheduled for the payments and to pay all amounts owing to any provider of series enhancement with respect to that series. Each series for which a deposit is made will be a "DEFEASED SERIES." To provide for a defeasance of a series, the seller has the right to use collections of receivables allocated to the defeased series and otherwise available to purchase additional receivables to be applied to purchase eligible investments rather than additional receivables. Prior to its first exercise of its right to substitute monies or eligible investments for receivables, the seller shall deliver to the trustee a tax opinion with respect to the deposit and termination of obligations and shall deliver to the servicer and the trustee written notice from each rating agency then rating a series of certificates that the defeasance will not result in a reduction on withdrawal of the rating of any outstanding series or class of certificates. In addition, the seller must comply with other requirements described in the Pooling and Servicing Agreement including requirements that the seller: - deliver to the trustee an opinion of counsel that the deposit and termination of obligations will not require the trust to register as an "investment company" within the meaning of the Investment Company Act of 1940, as amended; and - deliver to the trustee and providers of series enhancement a certificate of an authorized officer stating that, based on the facts known to the officer at the time, in the reasonable opinion of the seller, the deposit and termination of obligations will not at the time of its occurrence 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 any series. If the seller discharges its substantive obligations in respect of the defeased series, any series enhancement for the affected series may no longer be available to make payments on that series. LIST OF CERTIFICATEHOLDERS Upon application of certificateholders of record representing undivided interests in the trust aggregating not less than 10% of the aggregate unpaid principal amount of any or all series, the trustee will, if it has been adequately indemnified by the certificateholders, within five business days of the request, afford the certificateholders access to the current list of registered certificateholders of the series or all series, as applicable. Access to the list will be made only during business hours and only for the purposes of communicating with other certificateholders concerning their rights under the Pooling and Servicing Agreement or any series supplement or the certificates. THE TRUSTEE Bankers Trust Company is the trustee under the Pooling and Servicing Agreement. The seller, the servicer and their respective affiliates may from time to time enter into normal banking and trustee relationships with the trustee and its affiliates. The trustee, the seller, the servicer and any of their respective affiliates may hold certificates in their own names. In addition, for purposes of meeting the legal requirements of certain local jurisdictions, the trustee shall have the power to appoint a co-trustee or separate trustees of all or any part of the trust. In the event of the appointment, all rights, powers, duties and obligations conferred or imposed upon the trustee by the Pooling and Servicing Agreement shall be conferred or imposed upon the trustee and the separate trustee or co-trustee jointly, or, in any jurisdiction in which the trustee shall be incompetent or unqualified to perform certain acts, singly upon the separate trustee or co-trustee who shall exercise and perform these rights, powers, duties and obligations solely at the direction of the trustee. 58 120 The trustee may resign at any time, in which event the servicer will be obligated to appoint a successor trustee. The servicer may also remove the trustee if the trustee ceases to be eligible to continue as trustee under the Pooling and Servicing Agreement, is legally unable to act or if the trustee becomes bankrupt or insolvent. In these circumstances, the servicer will be obligated to appoint a successor trustee. Any resignation or removal of the trustee and appointment of a successor trustee does not become effective until acceptance of the appointment by the successor trustee. ENHANCEMENT GENERAL For any series, enhancement may be provided for one or more classes. Enhancement provided for a series of certificates or a class or classes within a series is "SERIES ENHANCEMENT." Series enhancement may be in the form of the subordination of one or more classes of the certificates of the series, a letter of credit, the establishment of a cash collateral guaranty or account, a collateral interest, a surety bond, insurance, the use of cross support features, the use of a swap agreement or any combination of these. To the extent specified in the related prospectus supplement, any form of series enhancement may be structured so as to be drawn upon by more than one class. For any series, the series enhancement may not provide protection against all risks of loss and may not guarantee repayment of the entire principal balance and interest of the certificates. If losses occur which exceed the amount covered by the series enhancement or which are not covered by the series enhancement, certificateholders will bear their allocable share of deficiencies. If series enhancement is provided for a series, the related prospectus supplement will include a description of: - the amount payable under the series enhancement; - any conditions to payment under the series enhancement not otherwise described in this prospectus; - the conditions, if any, under which the amount payable under the series enhancement may be reduced and under which the series enhancement may be terminated or replaced; and - any provisions of any agreement relating to the series enhancement material to the certificateholders of the series. Additionally, the related prospectus supplement may set forth information with respect to the issuer of any third-party series enhancement, including: - a brief description of its principal business activities; - its principal place of business, place of incorporation and the jurisdiction under which it is chartered or licensed to do business; - if applicable, the identity of regulatory agencies which exercise primary jurisdiction over the conduct of its business; and - its total assets, and its stockholders' or policyholders' surplus, if applicable, as of the date specified in the prospectus supplement. SUBORDINATION If specified in the related prospectus supplement, one or more classes of a series may be subordinated to one or more other classes of a series. If specified in the related prospectus supplement, the rights of the holders of the subordinated certificates or uncertificated interests to receive distributions of principal and/or interest on any distribution date will be subordinated to the rights of the holders of the certificates which are senior to the subordinated certificates or uncertificated interests to the extent described in the 59 121 related prospectus supplement. The amount of subordination will decrease whenever amounts otherwise payable to the holders of subordinated certificates or uncertificated interests are paid to the holders of the senior certificates or interests. LETTER OF CREDIT If specified in the related prospectus supplement, a letter of credit for a series or class of certificates may be issued by the bank or financial institution specified in the related prospectus supplement. Under the letter of credit, the issuing bank will be obligated to honor drawings in an aggregate fixed dollar amount, net of unreimbursed payments thereunder, equal to the amount described in the related prospectus supplement. The amount available under the letter of credit will be reduced to the extent of the unreimbursed payments under it. CASH COLLATERAL GUARANTY OR ACCOUNT If specified in the related prospectus supplement, the certificates of any class or series may have the benefit of a guaranty, called a "CASH COLLATERAL GUARANTY," issued pursuant to a trust agreement between a cash collateral depositor, a cash collateral trustee and the seller and the servicer or be secured by the deposit of cash or permitted investments in a "CASH COLLATERAL ACCOUNT" directly. The cash collateral guaranty will generally be an obligation of the cash collateral trust and not of the cash collateral depositor, the cash collateral trustee, except to the extent of amounts on deposit in the cash collateral account, the trustee or the bank, as seller and servicer. The servicer will determine prior to each distribution date with respect to the series enhanced by the cash collateral guaranty or the cash collateral account whether a deficiency exists for the payment of interest and/or principal on the certificates so enhanced. If the servicer determines that a deficiency exists, it shall instruct the trustee to draw an amount equal to the deficiency from the cash collateral guaranty or the cash collateral account, up to the maximum amount available. COLLATERAL INTEREST If so specified in the related prospectus supplement, support for a series of certificates or one or more classes of certificates may be provided initially by an uncertificated, subordinated interest in the trust called a "COLLATERAL INTEREST" in an amount initially equal to a percentage of the certificates of the series specified in the related prospectus supplement. SWAP AGREEMENTS If specified in the related prospectus supplement, the trustee, on behalf of the trust, may enter into one or more interest rate swap agreements, guaranteed rate agreements, interest rate cap agreements, currency swap agreements or other forms of swap agreements for the benefit of a series or of a class of a series. The terms of the swap agreement will be specified in the related prospectus supplement. SURETY BOND OR INSURANCE POLICY If specified in the related prospectus supplement, insurance with respect to a series or class of certificates may be provided by one or more insurance companies. This insurance will guarantee, with respect to one or more classes of the related series, distributions of interest or principal in the manner and amount specified in the related prospectus supplement. If specified in the related prospectus supplement, a surety bond may be purchased for the benefit of the holders of any series or class of the series to assure distributions of interest or principal for the series or class of certificates in the manner and amount specified in the related prospectus supplement. 60 122 SPREAD ACCOUNT If specified in the related prospectus supplement, support for a series or one or more classes of a series may be provided upon the terms and conditions described in the related prospectus supplement by the periodic deposit of limited amounts of excess cash flow from the trust assets into an account called the "SPREAD ACCOUNT," intended to assure the subsequent distribution of interest and principal on the certificates of the class or series in the manner specified in the related prospectus supplement. CERTIFICATE RATING Any rating of the certificates by a rating agency will indicate: - that rating agency's view on the likelihood that certificateholders will receive required interest and principal payments; and - that rating agency's evaluation of the receivables and the availability of any credit enhancement for the certificates. Among the things a rating will not indicate are: - the likelihood that interest or principal payments will be paid on a scheduled date; - the likelihood that a Pay Out Event will occur; - the likelihood that a United States withholding tax will be imposed on non-U.S. certificateholders; - the marketability of the certificates; - the market price of the certificates; or - whether the certificates are an appropriate investment for any purchaser. A rating will not be a recommendation to buy, sell or hold the certificates. A rating may be lowered or withdrawn at any time by a rating agency. The seller will request a rating of the certificates offered by this prospectus and the accompanying prospectus supplement from at least one rating agency. Rating agencies other than those requested could assign a rating to the certificates and that rating could be lower than any rating assigned by a rating agency chosen by the seller. Whenever in this prospectus there are references to notices given to the rating agencies or notices, consents or letters to be obtained from the rating agencies, those references are, with respect to any series or class, the statistical rating agency or rating agencies selected by the seller to rate the certificates of that series or class. FEDERAL INCOME TAX CONSEQUENCES GENERAL The following is a discussion of the material federal income tax consequences relating to the purchase, ownership and disposition of a certificate offered by this prospectus and the related prospectus supplement. This discussion has been prepared by Orrick, Herrington & Sutcliffe LLP as special federal income tax counsel to the seller ("SPECIAL TAX COUNSEL"). Additional material federal income tax considerations, if any, relevant to a particular series will be set forth in the related prospectus supplement. Special tax counsel is of the opinion that this discussion is correct in all material respects. As more fully described below, special tax counsel is also of the opinion that the offered certificates will be characterized as debt for federal income tax purposes and the trust will not be treated as an association or publicly traded partnership taxable as a corporation for these purposes. Except as provided in 61 123 the related prospectus supplement, special tax counsel will render no other tax opinions to the seller with respect to the offered certificates or the trust. This discussion is intended as an explanatory discussion of the possible effects of the classification of the offered certificates as debt to investors generally and related tax matters affecting investors generally, but does not purport to furnish information in the level of detail or with the attention to an investor's specific tax circumstances that would be provided by an investor's tax advisor. This discussion is based on current law, which is subject to changes that could prospectively or retroactively modify or adversely affect the tax consequences summarized below. The discussion does not address all of the tax consequences relevant to a particular Certificate Owner in light of that Certificate Owner's circumstances, and some Certificate Owners may be subject to special tax rules and limitations not discussed below. Each prospective Certificate Owner is urged to consult its own tax adviser in determining the federal, state, local and foreign income and any other tax consequences of the purchase, ownership and disposition of a certificate. For purposes of this discussion, "U.S. PERSON" means a citizen or resident of the United States, a corporation or partnership organized in or under the laws of the United States, any state thereof, or any political subdivision of either (including the District of Columbia), or an estate or trust the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source. The term "U.S. CERTIFICATE OWNER" means any U.S. Person and any other person to the extent that the income attributable to its interest in a certificate is effectively connected with that person's conduct of a U.S. trade or business. TREATMENT OF THE CERTIFICATE AS DEBT The seller expresses in the Pooling and Servicing Agreement the intent that for federal, state and local income and franchise tax purposes, the certificates will be debt secured by the receivables. The seller, by entering into the Pooling and Servicing Agreement, and each investor, by the acceptance of a beneficial interest in a certificate, will agree to treat the certificates as debt for federal, state and local income and franchise tax purposes. However, the Pooling and Servicing Agreement generally refers to the transfer of receivables as a "sale," and because different criteria are used in determining the non-tax accounting treatment of the transaction, the seller will treat the Pooling and Servicing Agreement for certain non-tax accounting purposes as causing a transfer of an ownership interest in the receivables and not as creating a debt obligation. A basic premise of federal income tax law is that the economic substance of a transaction generally determines its tax consequences. The form and non-tax characterization of a transaction, while relevant factors, are not conclusive evidence of its economic substance. In appropriate circumstances, the courts have allowed taxpayers as well as the Internal Revenue Service to treat a transaction in accordance with its economic substance as determined under federal income tax law, even though the participants in the transaction have characterized it differently for non-tax purposes. The determination of whether the economic substance of a purchase of an interest in property is instead a loan secured by the transferred property has been made by the IRS and the courts on the basis of numerous factors designed to determine whether the seller has relinquished and the purchaser has obtained substantial incidents of ownership in the property. Among those factors, the primary ones examined are whether the purchaser has the opportunity to gain if the property increases in value, and has the risk of loss if the property decreases in value. Except to the extent otherwise specified in the accompanying prospectus supplement, Orrick, Herrington & Sutcliffe LLP, special tax counsel to the seller, is of the opinion that, under current law as in effect on the date of issuance of a series of certificates, although no transaction closely comparable to that contemplated by this prospectus has been the subject of any Treasury regulation, revenue ruling or judicial decision, for federal income tax purposes the certificates will not constitute an ownership interest in the receivables, but will properly be characterized as debt. Except where indicated to the contrary, the following discussion assumes that the certificates are debt for federal income tax purposes. 62 124 TREATMENT OF THE TRUST General. The Pooling and Servicing Agreement permits the issuance of certificates and certain other interests in the trust, including collateral interests, each of which may be treated for federal income tax purposes either as debt or as equity interests in the trust. If all of the certificates and other interests, except the Bank Certificate, in the trust were characterized as debt, the trust might be characterized as a security arrangement for debt collateralized by the receivables and issued directly by the seller or other holders of the Bank Certificate. Under this view, the trust would be disregarded for federal income tax purposes. Alternatively, if some of the certificates and other interests in the trust were characterized as equity, the trust might be characterized as a separate entity owning the receivables, issuing its own debt, and jointly owned by the seller or other holders of the Bank Certificate and any other holders of equity interests in the trust. However special tax counsel is of the opinion that, under the current law as in effect on the date of issuance of a series of certificates, any entity constituted by the trust will not be an association or publicly traded partnership taxable as a corporation. Possible Treatment of the Trust as a Partnership or a Publicly Traded Partnership. Although, as described above, special tax counsel is of the opinion that the certificates will properly be treated as debt for federal income tax purposes and that the trust will not be treated as an association or publicly traded partnership taxable as a corporation for federal income tax purposes, this opinion will not bind the IRS and thus, no assurance can be given that such treatment will prevail. If the IRS were to contend successfully that some or all of the Seller Certificates, the certificates or other interests in the trust including any collateral interest were equity in the trust for federal income tax purposes, all or a portion of the trust could be classified as a partnership or a publicly trade partnership taxable as a corporation for such purposes. Because special tax counsel is of the opinion that the certificates will be characterized as debt for federal income tax purposes and because any holder of an interest in a collateral interest will agree to treat that interest as debt for tax purposes, no attempt will be made to comply with any tax reporting requirements that would apply as a result of any alternative characterizations. If the trust were treated in whole or in part as a partnership in which some or all holders of interests in the publicly offered certificates were partners, that partnership could be classified as a publicly traded partnership and so could be taxable as a corporation. Further, regulations published by the Treasury Department could cause the trust to constitute a publicly traded partnership even if all holders of interests in the publicly offered certificates are treated as holding debt. The publicly traded partnership regulations generally apply to taxable years beginning after December 31, 1995, and, accordingly, could affect the classification of presently existing entities and the ongoing tax treatment of already completed transactions. Although the publicly traded partnership regulations provide for a 10-year grandfather period for a partnership actively engaged in an activity before December 4, 1995, it is not clear whether the trust would qualify for the grandfather period. If the trust were classified as a publicly traded partnership, whether by reason of the treatment of publicly offered certificates as equity or by reason of publicly traded partnership regulations, it would avoid taxation as a corporation if its income was not derived in the conduct of a "financial business;" however, whether the income of the trust would be so classified is unclear. Under the Internal Revenue Code and the publicly traded partnership regulations, a partnership will be classified as a publicly traded partnership if equity interests therein are traded on an "established securities market," or are "readily tradable" on a "secondary market" or its "substantial equivalent." The seller intends to take measures designed to reduce the risk that the trust could be classified as a publicly traded partnership by reason of interests in the trust other than the publicly traded certificates. Although the seller expects these measures will ultimately be successful, certain of the actions that may be necessary for avoiding the treatment of the interests as "readily tradable" on a "secondary market" or its "substantial equivalent" are not fully within the control of the seller. As a result, there can be no assurance that the measures the seller intends to take will in all circumstances be sufficient to prevent the trust from being classified as a publicly traded partnership under the publicly traded partnership regulations. 63 125 If the trust were treated as a partnership other than a publicly traded partnership taxable as a corporation, that partnership would not be subject to federal income tax. Rather, each item of income, gain, loss and deduction of the partnership generated through the ownership of the related receivables would be taken into account directly in computing taxable income of the seller, or the holder of the Bank Certificate, and any Certificate Owners treated as partners in accordance with their respective partnership interests therein. The amounts and timing of income reportable by any Certificate Owners treated as partners would likely differ from that reportable by the Certificate Owners had they been treated as owning debt. In addition, if the trust were treated in whole or in part as a partnership other than a publicly traded partnership, income derived from the partnership by any Certificate Owner that is a pension fund or other tax-exempt entity may be treated as unrelated business taxable income. Partnership characterization also may have adverse state and local income or franchise tax consequences for a Certificate Owner. Further, if the trust were treated in whole or in part as a partnership and the number of holders of interests in the publicly offered certificates and other interests in the trust treated as partners equaled or exceeded 100, the seller may cause the trust to elect to be an "electing large partnership." The consequence of this election to investors could include the determination of certain tax items at the partnership level and the disallowance of otherwise allowable deductions. No representation is made as to whether any this election will be made. If the arrangement created by the Pooling and Servicing Agreement were treated in whole or in part as a publicly traded partnership taxable as a corporation, that entity would be subject to federal income tax at corporate tax rates on its taxable income generated by ownership of the related receivables. That tax could result in reduced distributions to Certificate Owners. No distributions from the trust would be deductible in computing the taxable income of the corporation, except to the extent that any certificates were treated as debt of the corporation and distributions to the related Certificate Owners were treated as payments of interest thereon. In addition, distributions to Certificate Owners not treated as holding debt would be dividend income to the extent of the current and accumulated earnings and profits of the corporation and Certificate Owners may not be entitled to any dividends received deduction in respect of this income. TAXATION OF INTEREST INCOME OF U.S. CERTIFICATE OWNERS General. Stated interest on a beneficial interest in a certificate will be includible in gross income in accordance with a U.S. Certificate Owner's method of accounting. Original Issue Discount. If the certificates are issued with original issue discount, the provisions of sections 1271 through 1273 and 1275 of the Internal Revenue Code of 1986 will apply to the certificates. Under those provisions, a U.S. Certificate Owner including a cash basis holder generally would be required to accrue the original issue discount on its interest in a certificate in income for federal income tax purposes on a constant yield basis, resulting in the inclusion of original issue discount in income somewhat in advance of the receipt of cash attributable to that income. In general, a certificate will be treated as having original issue discount to the extent that its "stated redemption price" exceeds its "issue price," if such excess equals or exceeds 0.25 percent multiplied by the weighted average life of the certificate. The weighted average life of the certificate will be determined by taking into account only the number of complete years following issuance until payment is made for any partial principal payments. Under Section 1272(a)(6) of the Internal Revenue Code, special provisions apply to debt instruments on which payments may be accelerated due to prepayments of other obligations securing those debt instruments. However, no regulations have been issued interpreting those provisions, and the manner in which those provisions would apply to the certificates is unclear. Additionally, the Internal Revenue Service could take the position based on Treasury regulations that none of the interest payable on a certificate is "unconditionally payable" and hence that all of the interest should be included in the certificate's stated redemption price at maturity. If sustained, this treatment should not significantly affect 64 126 the tax liability of most Certificate Owners, but prospective U.S. Certificate Owners should consult their own tax advisers concerning the impact to them in their particular circumstances. Market Discount. A U.S. Certificate Owner who purchases an interest in a certificate at a discount that exceeds any unamortized original issue discount may be subject to the "market discount" rules of sections 1276 through 1278 of the Internal Revenue Code. These rules provide, in part, that gain on the sale or other disposition of a certificate and partial principal payments on a certificate are treated as ordinary income to the extent of accrued market discount. The market discount rules also provide for deferral of interest deductions with respect to debt incurred to purchase or carry a certificate that has market discount. Market Premium. A U.S. Certificate Owner who purchases an interest in a certificate at a premium may elect to offset the premium against interest income over the remaining term of the Certificate in accordance with the provisions of section 171 of the Internal Revenue Code. SALE OR EXCHANGE OF CERTIFICATES Upon a disposition of an interest in a certificate, a U.S. Certificate Owner generally will recognize gain or loss equal to the difference between the amount realized on the disposition and the U.S. Certificate Owner's adjusted basis in its interest in the certificate. The adjusted basis in the interest in the certificate will equal its cost, increased by any original issue discount or market discount includible in income with respect to the interest in the certificate prior to its sale and reduced by any payments of principal and original issue discount previously received with respect to the interest in the certificate and any amortized premium. Subject to the market discount rules, gain or loss will be capital gain or loss if the interest in the certificate was held as a capital asset. Capital losses generally may be used only to offset capital gains. NON-U.S. CERTIFICATE OWNERS In general, a non-U.S. Certificate Owner will not be subject to U.S. federal income tax on interest, including original issue discount, on a beneficial interest in a Certificate unless: - the non-U.S. Certificate Owner actually or constructively owns 10 percent or more of the total combined voting power of all classes of stock of the seller entitled to vote or of a profits or capital interest of the trust if characterized as a partnership; - the non-U.S. Certificate Owner is a controlled foreign corporation that is related to the seller or the trust if treated as a partnership through stock ownership; - the non-U.S. Certificate Owner is a bank described in Internal Revenue Code section 881(c)(3)(A); - this interest is contingent interest described in Internal Revenue Code section 871(h)(4); or - the non-U.S. Certificate Owner bears certain relationships to any holder of either the Seller Certificates other than the Seller or any other interest in the trust not properly characterized as debt. To qualify for the exemption from taxation, under currently applicable procedures, the last U.S. Person in the chain of payment prior to payment to a non-U.S. Certificate Owner must have received, in the year in which a payment of interest or principal occurs or in either of the two preceding years, a statement that: - is signed by the non-U.S. Certificate Owner under penalties of perjury; - certifies that the non-U.S. Certificate Owner is not a U.S. Person; and - provides the name and address of the non-U.S. Certificate Owner. The statement may be made on a Form W-8 or substantially similar substitute form, and the non-U.S. Certificate Owner must inform the withholding agent of any change in the information on the 65 127 statement within 30 days of the change. If a certificate is held through a securities clearing organization or certain other financial institutions, the organization or institution may provide a signed statement to the withholding agent. However, in that case, the signed statement must be accompanied by a Form W-8 or substitute form provided by the non-U.S. Certificate Owner to the organization or institution holding the certificate on behalf of the non-U.S. Certificate Owner. The U.S. Treasury Department is considering implementation of further certification requirements aimed at determining whether the issuer of a debt obligation is related to holders thereof. The U.S. Treasury Department recently issued final regulations which will revise some of the foregoing procedures whereby a non-U.S. Certificate Owner may establish an exemption from withholding generally beginning January 1, 2001. Non-U.S. Certificate Owners should consult their tax advisors concerning the impact to them, if any, of these procedures. Generally, any gain or income realized by a non-U.S. Certificate Owner upon retirement or disposition of an interest in a certificate will not be subject to U.S. federal income tax, provided that: - in the case of a Certificate Owner that is an individual, that Certificate Owner is not present in the United States for 183 days or more during the taxable year in which such retirement or disposition occurs; and - in the case of gain representing accrued interest, the conditions described in the preceding paragraph for exemption from withholding are satisfied. - Some exceptions to the exemption may be applicable, and an individual non-U.S. Certificate Owner should consult a tax advisor. If the certificates were treated as an interest in a partnership, the recharacterization could cause a non-U.S. Certificate Owner to be treated as engaged in a trade or business in the United States. In that event, the non-U.S. Certificate Owner would be required to file a federal income tax return and, in general, would be subject to U.S. federal income tax including the branch profits tax on its net income from the partnership. Further, certain withholding obligations apply with respect to income allocable or distributions made to a foreign partner. That withholding may be at a rate as high as 39.6 percent. If some or all of the certificates were treated as stock in a corporation, any related dividend distributions to a non-U.S. Certificate Owner generally would be subject to withholding of tax at the rate of 30 percent, unless that rate were reduced by an applicable tax treaty. INFORMATION REPORTING AND BACKUP WITHHOLDING Backup withholding of U.S. federal income tax at a rate of 31 percent may apply to payments made in respect of a certificate to a registered owner who is not an "exempt recipient" and who fails to provide required identifying information such as the registered owner's taxpayer identification number in the manner required. Generally, individuals are not exempt recipients whereas corporations and certain other entities are exempt recipients. Payments made in respect of a U.S. Certificate Owner must be reported to the Internal Revenue Service, unless the U.S. Certificate Owner is an exempt recipient or otherwise establishes an exemption. Compliance with the identification procedures described above under the caption "--Non-U.S. Certificate Owners" would establish an exemption from backup withholding for a non-U.S. Certificate Owner who is not an exempt recipient. In addition, upon the sale of a certificate to, or through, a "broker," the broker must withhold 31 percent of the entire purchase price, unless either: - the broker determines that the seller of the certificate is a corporation or other exempt recipient; or - the seller of the certificate provides identifying information in the required manner, and in the case of a non-U.S. Certificate Owner certifies that the seller is a non-U.S. Certificate Owner and other conditions are met. 66 128 This sale must also be reported by the broker to the Internal Revenue Service, unless either: - the broker determines that the seller of the certificate is an exempt recipient; or - the seller of the certificate certifies its non-U.S. status and other conditions are met. Certification of the registered owner's non-U.S. status normally would be made on Form W-8 under penalties of perjury, although in some cases it may be possible to submit other documentary evidence. As defined by Treasury regulations, the term "broker" includes all persons who stand ready to effect sales made by others in the ordinary course of a trade or business, as well as brokers and dealers registered as such under the laws of the United States or a state. These requirements generally will apply to a U.S. office of a broker, and the information reporting requirements generally will apply to a foreign office of a U.S. broker as well as to a foreign office of a foreign broker: - that is a controlled foreign corporation within the meaning of section 957(a) of the Code; or - 50 percent or more of whose gross income from all sources for the three year period ending with the close of its taxable year preceding the payment (or for such part of the period that the foreign broker has been in existence) was effectively connected with the conduct of a trade or business within the United States. Any amounts withheld under the backup withholding rules from a payment to a Certificate Owner would be allowed as a refund or a credit against the Certificate Owner's U.S. federal income tax, provided that the required information is furnished to the Internal Revenue Service. Recently issued final Treasury regulations will revise some of the foregoing information reporting and backup withholding procedures generally beginning January 1, 2001. Certificate Owners should consult their tax advisors concerning the impact to them, if any, of the revised procedures. STATE AND LOCAL TAXATION The discussion above does not address the taxation of the trust or the tax consequences of the purchase, ownership or disposition of an interest in the certificates under any state or local tax law. Each investor should consult its own tax adviser regarding state and local tax consequences. ERISA CONSIDERATIONS This section provides a brief summary of the material provisions of ERISA and the Internal Revenue Code which should be considered by potential investors if such investors contemplate acquisition of the certificates as an investment or with "plan assets" of a plan, as defined below. Additional information with respect to each series and the classes will be included in the related prospectus supplement. Section 406 of the Employee Retirement Income Security Act of 1974, as amended, and section 4975 of the Internal Revenue Code prohibit certain pension, profit sharing or other employee benefit plans, individual retirement accounts or annuities and employee annuity plans and Keogh plans--collectively, "PLANS"--from engaging in certain transactions involving "plan assets" with persons that are "parties in interest" under ERISA or "disqualified persons" under the Internal Revenue Code--collectively, "parties in interest"--with respect to the plan. A violation of these "prohibited transaction" rules may generate excise tax and other liabilities under ERISA and section 4975 of the Internal Revenue Code for these persons, unless a statutory, regulatory or administrative exemption is available. Subject to the considerations described below and except to the extent otherwise specified in the accompanying prospectus supplement, the seller anticipates that the most senior class of each series of certificates will be eligible for purchase by plan investors. A violation of the prohibited transaction rules could occur if any class of certificates were to be purchased with "plan assets" of any plan and the seller, the trustee, any underwriters of the related series or any of their affiliates were a party in interest with respect to the plan, unless a statutory, regulatory or 67 129 administrative exemption is available or an exception applies under a regulation issued by the Department of Labor. The seller, the trustee, any underwriters of a series and their affiliates are likely to be parties in interest with respect to many plans. Before purchasing certificates, a plan fiduciary or other plan investor should consider whether a prohibited transaction might arise by reason of the relationship between the plan and the seller, the trustee, any underwriters of the series or any of their affiliates and consult their counsel regarding the purchase in light of the considerations described below. The Department of Labor has issued five class exemptions that may apply to otherwise prohibited transactions arising from the purchase or holding of the certificates: Department of Labor Prohibited Transaction Class Exemptions 96-23 relating to transactions determined by "in-house asset managers", 95-60 relating to transactions involving insurance company general accounts, 91-38 relating to transactions involving bank collective investment funds, 90-1 relating to transactions involving insurance company pooled separate accounts or 84-14 relating to transactions determined by independent "qualified professional asset managers" or any other prohibited transaction exemption issued by the Department of Labor. A purchaser of certificates of any class should be aware, however, that even if the conditions specified in one or more of the above-referenced exemptions are met, the scope of the exemptive relief provided by the exemption might not cover all acts which might be construed as prohibited transactions. Under certain circumstances, the Department of Labor plan asset regulation treats the assets of an entity in which a plan holds an equity interest as "plan assets" of that plan. Because the certificates will represent beneficial interests in the trust, and despite the agreement of the seller and the certificate owners to treat each series of certificates as debt instruments, the certificates are likely to be considered equity interests in the trust for purposes of the plan asset regulation, with the result that the assets of the trust are likely to be treated as "plan assets" of the investing plans for purposes of ERISA and section 4975 of the Internal Revenue Code, unless either of the following exceptions applies. The first exception applies to a "publicly-offered security." A publicly-offered security is a security that is: (1) freely transferable; (2)part of a class of securities that is owned, immediately subsequent to the initial offering, by 100 or more investors who were independent of the issuer and of one another; and (3) either is: (a) part of a class of securities registered under section 12(b) or 12(g) of the Exchange Act; or (b) sold to the plan as part of an offering of securities to the public pursuant to an effective registration statement under the Securities Act and the class of securities of which the security is a part is registered under the Exchange Act within 120 days, or a later time as may be allowed by the SEC, after the end of the fiscal year of the issuer during which the offering of the securities to the public occurred. For purposes of the 100 independent investor criterion, except to the extent otherwise disclosed in the accompanying prospectus supplement, each class of certificates should be deemed to be a "class" of securities that would be tested separately from any other securities that may be issued by the trust. The accompanying prospectus supplement will indicate whether it is anticipated that each class of certificates will meet the foregoing criteria for treatment as "publicly-offered securities." No restrictions will be imposed on the transfer of the certificates. Unless otherwise disclosed in the accompanying prospectus supplement, the seller expects that the most senior class of each series of certificates will be held by at least 100 independent investors at the conclusion of the initial public offering although no assurance can be given, and no monitoring or other measures will be taken to ensure, that the condition is met. Unless otherwise disclosed in the accompanying prospectus supplement, the most senior class of each series of certificates will be sold as part of an offering pursuant to an effective registration statement under the Securities Act of 1933 and then will be timely registered under the Securities Act of 1934. 68 130 The second exception applies if equity participation in the entity by "benefit plan investors"--i.e., plans and other employee benefit plans not subject to ERISA, such as governmental or foreign plans, as well as entities holding assets deemed to be "plan assets"--is not "significant." Benefit plan investors' equity participation in the trust is not significant on any date on which any series of certificates is issued and outstanding if, immediately after the most recent acquisition of any equity interest in the trust, less than 25% of the value of each class of equity interests in the trust excluding interests held by the seller, the trustee or their affiliates is held by benefit plan investors. The seller can give no assurance as to whether the value of each class of equity interests in the trust held by benefit plan investors will be "significant" upon completion of the offering of any series of certificates or thereafter, and no monitoring or other measures will be taken with respect to the satisfaction of the conditions to this exception. If neither of the foregoing exceptions under the plan asset regulation is satisfied with respect to the trust and the trust were considered to hold "plan assets," transactions involving the trust and parties in interest with respect to a plan that is a Certificate Owner might be prohibited under section 406 of ERISA and/or section 4975 of the Internal Revenue Code and result in excise tax and other liabilities under ERISA and section 4975 of the Internal Revenue Code unless an exemption were available. The five Department of Labor class exemptions mentioned above may not provide relief for all transactions involving the assets of the trust even if they would otherwise apply to the purchase of a certificate by a plan. However, exemptive relief may be available under an exemption issued to the seller if and to the extent disclosed in the related prospectus supplement. In light of the foregoing, fiduciaries or other persons contemplating purchasing the certificates on behalf or with "plan assets" of any plan should consult their own counsel regarding whether the trust assets represented by the certificates would be considered "plan assets," the consequences that would apply if the trust's assets were considered "plan assets," and the availability of exemptive relief from the prohibited transaction rules or the applicability of an exception under the plan asset regulation. In addition, based on the reasoning of the United States Supreme Court decision in John Hancock Mut. Life Ins. Co. v. Harris Trust and Sav. Bank, 510 U.S. 86 (1993), under some circumstances assets in the general account of an insurance company may be deemed to be plan assets for certain purposes, with the result that a purchase of certificates with assets of an insurance company's general account may subject the insurance company to the prohibited transaction and other fiduciary responsibility rules of ERISA with respect to these assets. Insurance company general account investors should also consider the effect of the enactment of section 401(c) of ERISA and any regulations issued under section 401(c). Finally, plan fiduciaries and other plan investors should consider the fiduciary standards under ERISA or other applicable law in the context of the plan's particular circumstances before authorizing an investment of a portion of the plan's assets in the certificates. Accordingly, among other factors, plan fiduciaries and other plan investors should consider whether the investment: - satisfies the diversification requirement of ERISA or other applicable law; - is in accordance with the plan's governing instruments; and - is prudent in light of the "Risk Factors" and other factors discussed in this prospectus and in the accompanying prospectus supplement. PLAN OF DISTRIBUTION The certificates of any series offered hereby and by the related prospectus supplement may be offered by the underwriter or underwriters named in the related prospectus supplement as agent or underwriter, or through underwriting syndicates represented by the same underwriter or underwriters. UNDERWRITING The prospectus supplement relating to a series will set forth the terms of the offering of that series and each class within the series, including the name or names of the underwriters, the proceeds to and 69 131 their intended use by the seller, and either the initial public offering price, the discounts and commissions to the underwriters and any discounts or concessions allowed or reallowed to certain dealers, or the method by which the price at which the underwriters will sell the certificates of the series will be determined. The underwriters will be obligated, subject to certain conditions, to purchase all of the certificates described in the prospectus supplement relating to a series if any of the certificates are purchased. The certificates may be acquired by the underwriters for their own account and may be resold from time to time in one or more transactions, including negotiated transactions, at a fixed public offering price or at varying prices determined at the time of sale. The seller may also sell the certificates offered hereby and by means of the related prospectus supplements from time to time in negotiated transactions or otherwise, at prices determined at the time of sale. These transactions may be effected by selling certificates to or through dealers and the dealers may receive compensation in the form of underwriting discounts, concessions or commissions from the seller and any purchasers of certificates for whom they may act as agents. The place and time of delivery for the series in respect of which this prospectus is delivered will be set forth in the accompanying prospectus supplement. LEGAL MATTERS It is anticipated that certain legal matters relating to the issuance of the certificates of any series will be passed upon for the bank by counsel named in the related prospectus supplement and, with respect to the federal tax consequences of such issuance, by the bank's special tax counsel. Certain legal matters relating to the issuance of the certificates of a series will be passed upon for the underwriters by the counsel named in the related prospectus supplement. Prior to the sale of each series of certificates, the seller will cause a legality opinion to be filed with the SEC with respect to that series. REPORTS TO CERTIFICATEHOLDERS The servicer will prepare monthly and annual reports that will contain information about the trust. These reports will not constitute financial statements prepared in accordance with generally accepted accounting principles. Unless and until definitive certificates are issued to Certificate Owners, the reports will be sent to the trustee and in turn sent only to Cede & Co., which is the nominee of The Depository Trust Company and the only registered holder of the certificates. No financial reports will be sent to you. See "Description of the Certificates--Book-Entry Registration," "--Reports to Certificateholders" and "--Evidence as to Compliance" in this prospectus. WHERE YOU CAN FIND MORE INFORMATION We filed a registration statement relating to the certificates with the SEC. This prospectus is part of the registration statement, but the registration statement includes additional information. The servicer will file with the SEC all required annual, monthly and special reports and other information about the trust. You may read and copy any reports, statements or other information we file at the SEC's public reference room of the SEC in Washington, D.C. You can request copies of these documents, upon payment of a duplicating fee, by writing to the SEC. Please call the SEC at (800) SEC-0330 for further information and the operation of the public reference room. Our SEC filings are also available to the public on the SEC Internet site (http://www.sec.gov.). The SEC allows us to "incorporate by reference" information we file with it, which means that we can disclose important information to you by referring you to those documents. This information incorporated by reference is considered to be part of this prospectus. Information that we file later with the SEC will automatically update the information in this prospectus. In all cases, you should rely on the later information over different information included in this prospectus or the accompanying prospectus 70 132 supplement. We incorporate by reference any future annual, monthly and special SEC reports and proxy materials filed by or on behalf of the trust until we terminate our offering of the certificates. As a recipient of this prospectus, you may request a copy of any document we incorporate by reference, except exhibits to the documents (unless the exhibits are specifically incorporated by reference), at no cost, by writing or calling us at: Fleet Bank (RI), National Association, 200 Tournament Drive, Suite 303, Horsham, PA 19044-2303, Attn: Credit Card Securitization Department; (215) 444-6800. 71 133 INDEX OF PRINCIPAL TERMS
PAGE ---- accumulation period................. 27 addition date....................... 43 additional sellers.................. 33 amortization period................. 27 automatic additions................. 45 bank................................ 16 Bank Certificate.................... 32 cash collateral account............. 60 cash collateral guaranty............ 60 Certificate Owner................... 28 certificateholders.................. 17 certificateholders' interest........ 17 collateral interest................. 60 collection account.................. 48 defaulted amount.................... 50 defaulted receivables............... 50 defeased series..................... 58 definitive certificates............. 31 depositaries........................ 29 depository.......................... 28 discount option receivable collections....................... 47 discount percentage................. 47 distribution date................... 33 Eligible Account.................... 41 eligible deposit account............ 48 eligible institution................ 48 eligible investments................ 48 Eligible Receivable................. 41 eligible servicer................... 53 excess funding account.............. 48 FDIA................................ 24 finance charge receivables.......... 16 Fleet............................... 22 Fleet Credit Card Portfolio......... 18 ineligible receivables.............. 39 insolvency event.................... 52
PAGE ---- interchange......................... 16, 22 interest period..................... 28 invested amount..................... 27 investor amount..................... 26 monthly period...................... 28 monthly servicing fee............... 52 Pay Out Event....................... 27 paying agent........................ 49 plans............................... 67 Pooling and Servicing Agreement..... 16 principal receivables............... 16 rapid accumulation period........... 27 rapid amortization period........... 27 receivables......................... 16 recoveries.......................... 16 Required Principal Balance.......... 43 Required Seller Amount.............. 43 Required Seller Percentage.......... 43 revolving period.................... 27 scheduled amortization date......... 27 Seller Amount....................... 26 Seller Certificates................. 35 Seller Percentage................... 49 sellers' interest................... 35 series accounts..................... 48 series enhancement.................. 59 Series Investor Amount.............. 43 Series Percentage................... 49 Servicer Default.................... 55 special tax counsel................. 61 spread account...................... 61 stated series termination date...... 51 Supplemental Certificate............ 32 trust termination date.............. 51 U.S. Certificate Owner.............. 62 U.S. Person......................... 62
72 134 ANNEX I GLOBAL CLEARANCE, SETTLEMENT AND TAX DOCUMENTATION PROCEDURES Except in certain circumstances, the globally offered Fleet Credit Card Master Trust II Asset Backed Securities (the "GLOBAL SECURITIES") to be issued in Series from time to time (each, a "SERIES") will be available only in book-entry form. Investors in the Global Securities may hold such Global Securities through any of The Depository Trust Company ("DTC"), Cedelbank or Euroclear. The Global Securities will be tradeable as home market instruments in both the European and U.S. domestic markets. Initial settlement and all secondary trades will settle in same-day funds. Secondary market trading between investors holding Global Securities through Cedelbank and Euroclear will be conducted in the ordinary way in accordance with their normal rules and operating procedures and in accordance with conventional eurobond practice (i.e., seven calendar day settlement). Secondary market trading between investors holding Global Securities through DTC will be conducted according to the rules and procedures applicable to U.S. corporate debt obligations. Secondary cross-market trading between Cedelbank or Euroclear and DTC Participants holding Certificates will be effected on a delivery-against-payment basis through the respective Depositaries of Cedelbank and Euroclear (in such capacity) and as DTC Participants. Non-U.S. holders (as described below) of Global Securities will be subject to U.S. withholding taxes unless such holders meet certain requirements and deliver appropriate U.S. tax documents to the securities clearing organizations or their participants. INITIAL SETTLEMENT All Global Securities will be held in book-entry form by DTC in the name of Cede & Co. as nominee of DTC. Investors' interests in the Global Securities will be represented through financial institutions acting on their behalf as direct and indirect Participants in DTC. As a result, Cedelbank and Euroclear will hold positions on behalf of their participants through their respective Depositaries, which in turn will hold such positions in accounts as DTC Participants. Investors electing to hold their Global Securities through DTC (other than through accounts at Cedelbank or Euroclear) will follow the settlement practices applicable to U.S. corporate debt obligations. Investor securities custody accounts will be credited with their holdings against payment in same-day funds on the settlement date. Investors electing to hold their Global Securities through Cedelbank or Euroclear accounts will follow the settlement procedures applicable to conventional eurobonds in registered form. Global Securities will be credited to the securities custody accounts on the business day following the settlement date against payment for value on the settlement date. SECONDARY MARKET TRADING Because the purchaser determines the place of delivery, it is important to establish at the time of the trading of any Global Securities where both the purchaser's and seller's accounts are located to ensure that settlement can be made on the desired value date. Trading between DTC Participants. Secondary market trading between DTC Participants (other than Citibank, N.A. and Morgan Guaranty Trust Company of New York as depositories for Cedelbank and Euroclear, respectively) will be settled using the procedures applicable to U.S. corporate debt obligations in same-day funds. A-1 135 Trading between Cedelbank Customers and/or Euroclear Participants. Secondary market trading between Cedelbank Customers and/or Euroclear Participants will be settled using the procedures applicable to conventional eurobonds in same-day funds. Trading between DTC seller and Cedelbank or Euroclear purchaser. When Global Securities are to be transferred from the account of a DTC Participant (other than Citibank and Morgan as depositories for Cedelbank and Euroclear, respectively) to the account of a Cedelbank Customer or a Euroclear Participant, the purchaser must send instructions to Cedelbank prior to settlement date 12:30. Cedelbank or Euroclear, as the case may be, will instruct Citibank or Morgan, respectively, to receive the Global Securities against payment. Payment will then be made by Citibank or Morgan, as the case may be, to the DTC Participant's account against delivery of the Global Securities. After settlement has been completed, the Global Securities will be credited to the respective clearing system and by the clearing system, in accordance with its usual procedures, to the Cedelbank Customer's or Euroclear Participant's account. Credit for the Global Securities will appear the next day (European time) and cash debit will be back-valued to, and the interest on the Global Securities will accrue from, the value date (which would be the preceding day when settlement occurred in New York). If settlement is not completed on the intended value date (i.e., the trade fails), the Cedelbank or Euroclear cash debit will be valued instead as of the actual settlement date. Cedelbank Customers and Euroclear Participants will need to make available to the respective clearing systems the funds necessary to process same-day funds settlement. The most direct means of doing so is to pre-position funds for settlement, either from cash on hand or existing lines of credit, as they would for any settlement occurring within Cedelbank or Euroclear. Under this approach, they may take on credit exposure to Cedelbank or Euroclear until Global Securities are credited to their accounts one day later. As an alternative, if Cedelbank or Euroclear has extended a line of credit to them, Cedelbank Customers or Euroclear Participants can elect not to pre-position funds and allow that credit line to be drawn upon the finance settlement. Under this procedure, Cedelbank Customers or Euroclear Participants purchasing Global Securities would incur overdraft charges for one day, assuming they cleared the overdraft when the Global Securities were credited to their accounts. However, interest on the Global Securities would accrue from the value date. Therefore, in many cases the investment income on the Global Securities earned during that one-day period may substantially reduce or offset the amount of such overdraft charges, although this result will depend on each Cedelbank Customer's or Euroclear Participant's particular cost of funds. Since the settlement is taking place during New York business hours, DTC Participants can employ their usual procedures for sending Global Securities to Citibank or Morgan for the benefit of Cedelbank Customers or Euroclear Participants. The sale proceeds will be available to the DTC seller on the settlement date. Thus, to the DTC Participant a cross-market transaction will settle no differently from a trade between two DTC Participants. Trading between Cedelbank or Euroclear seller and DTC purchaser. Due to time zone differences in their favor, Cedelbank Customers and Euroclear Participants may employ their customary procedures for transactions in which Global Securities are to be transferred by the respective clearing system, through Citibank or Morgan, to another DTC Participant. The seller must send instructions to Cedelbank before settlement date 12:30. In these cases, Cedelbank or Euroclear will instruct Citibank or Morgan, as appropriate, to credit the Global Securities to the DTC Participant's account against payment. The payment will then be reflected in the account of the Cedelbank Customer or Euroclear Participant the following day, and receipt of the cash proceeds in the Cedelbank Customer's or Euroclear Participant's account would be back-valued to the value date (which would be the preceding day, when settlement occurred in New York). If the Cedelbank Customer or Euroclear Participant has a line of credit with its respective clearing system and elects to draw on such line of credit in anticipation of receipt of the sale proceeds in its account, the back-valuation may substantially reduce or offset any overdraft charges incurred over that one-day period. If settlement is not completed on the intended value date (i.e., the A-2 136 trade fails), receipt of the cash proceeds in the Cedelbank Customer's or Euroclear Participant's account would instead be valued as of the actual settlement date. CERTAIN U.S. FEDERAL INCOME TAX DOCUMENTATION REQUIREMENTS A beneficial owner of Global Securities holding securities through Cedelbank or Euroclear (or through DTC if the holder has an address outside the U.S.) will be subject to the 30% U.S. withholding tax that generally applies to payments of interest (including original issue discount) on registered debt issued by U.S. Persons, unless, under currently applicable law, (i) each clearing system, bank or other financial institution that holds customers' securities in the ordinary course of its trade or business in the chain of intermediaries between such beneficial owner and the U.S. entity required to withhold tax complies with applicable certification requirements and (ii) such beneficial owner takes one of the following steps to obtain an exemption or reduced tax rate: Exemption for non-U.S. Persons (Form W-8). Beneficial owners of Certificates that are non-U.S. Persons generally can obtain a complete exemption from the withholding tax by filing a signed Form W-8 (Certificate of Foreign Status). If the information shown on Form W-8 changes, a new Form W-8 must be filed within 30 days of such change. Exemption for non-U.S. Persons with effectively connected income (Form 4224). A non-U.S. Person, including a non-U.S. corporation or bank with a U.S. branch, for which the interest income is effectively connected with its conduct of a trade or business in the United States, can obtain an exemption from the withholding tax by filing Form 4224 (Exemption from Withholding of Tax on Income Effectively Connected with the Conduct of a Trade or Business in the United States). Exemption or reduced rate for non-U.S. Persons resident in treaty countries (Form 1001). Non-U.S. Persons that are Certificate Owners residing in a country that has a tax treaty with the United States can obtain an exemption or reduced tax rate (depending on the treaty terms) by filing Form 1001 (Ownership, Exemption or Reduced Rate Certificate). If the treaty provides only for a reduced rate, withholding tax will be imposed at that rate unless the filer alternatively files Form W-8. Form 1001 may be filed by the Certificate Owner or his agent. Exemption for U.S. Persons (Form W-9). U.S. Persons can obtain a complete exemption from the withholding tax by filing Form W-9 (Request for Taxpayer Identification Number and Certification). U.S. Federal Income Tax Reporting Procedure. The Certificate Owner of a Global Security or, in the case of a Form 1001 or a Form 4224 filer, his agent, files by submitting the appropriate form to the person through whom it holds (the clearing agency, in the case of persons holding directly on the books of the clearing agency). Form W-8 and Form 1001 are effective for three calendar years and Form 4224 is effective for one calendar year. The term "U.S. Person" means: (i) a citizen or resident of the United States; (ii) a corporation or partnership organized in or under the laws of the United States, any state thereof, or any political subdivision of either (including the District of Columbia); or (iii) an estate or trust the income of which is includible in gross income for United States tax purposes regardless of its source. This summary does not deal with all aspects of U.S. federal income tax withholding that may be relevant to foreign holders of the Global Securities. Investors are advised to consult their own tax advisors for specific tax advice concerning their holding and disposing of the Global Securities. Further, the IRS has recently finalized new regulations that will revise some aspects of the current system for withholding on amounts paid to foreign persons. Under these regulations, interest or OID paid to a nonresident alien would continue to be exempt from U.S. withholding taxes (including backup withholding) provided that the holder complies with the new procedures. A-3 137 PART II ITEM 14. Other Expenses of Issuance and Distribution. The following is an itemized list of the estimated expenses to be incurred in connection with the offering of the securities being offered hereunder other than underwriting discounts and commissions. Registration Statement Fee.................................. $1,267,200** Printing and Engraving Expenses............................. 560,000* Trustee's Fees and Expenses................................. 105,000* Legal Fees and Expenses..................................... 1,050,000* Blue Sky Fees and Expenses.................................. 20,000* Accountants' Fees and Expenses.............................. 210,000* Rating Agency Fees.......................................... 2,100,000* Miscellaneous Fees and Expenses............................. 35,000* ---------- Total....................................................... $5,347,200* ==========
- ------------ * Estimates ** Actual ITEM 15. Indemnification of Directors and Officers. The Articles of Association of Fleet Bank (RI), National Association (the "BANK") provide that each person who was or is made a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he or she is or was a director, officer or employee of the Bank or is or was serving at the request of the Bank as a director, officer, employee or agent of another corporation or of a partnership, joint venture, limited liability company, trust, or other enterprise, shall be indemnified and held harmless by the Bank to the extent authorized by the law of the state in which the Bank's ultimate parent company is incorporated, except as provided below. The Bank may, by action of its Board of Directors, grant rights to indemnification to agents of the Bank and to any of its subsidiaries with the same scope and effect as the foregoing indemnification of directors and officers. The Articles of Association provide, however, that: - no person shall be indemnified against expenses, penalties or other payments incurred in an administrative proceeding or action instituted by a federal bank regulatory agency that results in a final order assessing civil money penalties against that person, affirmative action by that person in the form of payments to the Bank or removing or prohibiting that person from service with the Bank; and - no person shall be indemnified by the Articles of Association to the extent such indemnification would violate or conflict with any applicable federal statute or any applicable final regulation or interpretation adopted by the Office of the Comptroller of the Currency or the Federal Deposit Insurance Corporation. The Articles of Association also provide that the Bank may purchase, maintain and make payment or reimbursement for reasonable premiums on, insurance to protect itself and any director, officer, employee or agent of the Bank or another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the Bank would have the power to indemnify such person against such expense, liability or loss under the law of the state in which the Bank's ultimate parent is incorporated; provided, however, that such insurance shall explicitly exclude insurance coverage for a final order of a federal bank regulatory agency assessing civil money penalties against a Bank director, officer, employee or agent. II-1 138 The Bank's ultimate parent company is incorporated in the State of Rhode Island. The laws of the State of Rhode Island provide that Rhode Island corporations may indemnify directors, officers, employees or agents against judgments, fines, reasonable costs, expenses and counsel fees paid or in connection with any proceeding or suit to which such director, officer, employee or agent or his legal representative may be a party (or for testifying when not a party) by reason of his being a director, officer, employee or agent, provided that such director, officer, employee or agent shall have acted in good faith and shall have reasonably believed: - he was acting in his official capacity, and that his conduct was in the corporation's best interest; - in all other cases that his conduct was at least not opposed to its best interests; and - in the case of any criminal proceeding, he had no reasonable cause to believe his conduct was unlawful. With respect to possible indemnification of directors, officers and controlling persons of the Bank for liabilities arising under the Securities Act of 1933 pursuant to such provisions, the Bank is aware that the Securities and Exchange Commission has publicly taken the position that the indemnification is against public policy as expressed in the Securities Act of 1933 and therefore, unenforceable. ITEM 16. Exhibits. 1.1 -- Form of Underwriting Agreement for the Certificates 4.1 -- Amended and Restated Pooling and Servicing Agreement (incorporated by reference to Exhibit 4.1 to the registrant's Registration Statement on Form S-3, Nos. 333-52583 and 333-52583-01, filed May 13, 1998) 4.2 -- Amendment No. 1 to the Amended and Restated Pooling and Servicing Agreement (incorporated by reference to Exhibit 4.2 to the registrant's Registration Statement on Form S-3, Nos. 333-52583 and 333-52583-01, filed May 13, 1998) 4.3 -- Amendment No. 2 to the Amended and Restated Pooling and Servicing Agreement (incorporated by reference to Exhibit 4.3 to the registrant's Registration Statement on Form S-3, Nos. 333-52583 and 333-52583-01, filed May 13, 1998) 4.4 -- Amendment No. 3 to the Amended and Restated Pooling and Servicing Agreement (incorporated by reference to Exhibit 4.4 to the registrant's Registration Statement on Form S-3, Nos. 333-52583 and 333-52583-01, filed May 13, 1998) 4.5 -- Amendment No. 4 to the Amended and Restated Pooling and Servicing Agreement 4.6 -- Assignment and Assumption Agreement (incorporated by reference to Exhibit 4.5 to the registrant's Registration Statement on Form S-3, Nos. 333-52583 and 333-52583-01, filed May 13, 1998) 4.7 -- Form of Series Supplement to the Amended and Restated Pooling and Servicing Agreement. 5.1 -- Opinion of Orrick, Herrington & Sutcliffe LLP with respect to legality 8.1 -- Opinion of Orrick, Herrington & Sutcliffe LLP with respect to federal tax matters 23.1 -- Consent of Orrick, Herrington & Sutcliffe LLP (included in its opinion filed as Exhibit 5.1) 23.2 -- Consents of Orrick, Herrington & Sutcliffe LLP (included in its opinion filed as Exhibit 8.1) 24.1 -- Powers of Attorney (included in Page II-4)
ITEM 17. Undertakings. The undersigned Registrant on behalf of the Fleet Credit Card Master Trust II hereby undertakes as follows: (a) (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement; (i) to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) to reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement; (iii) to include any material information with II-2 139 respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement; provided, however, that (a)(1)(i) and (a)(1)(ii) will not apply if the information required to be included in a post-effective amendment thereby is contained in periodic reports filed pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in this Registration Statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering hereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered that remain unsold at the termination of the offering. (b) That, for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (c) That insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the provisions described under Item 15 above, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of each issue. (d) That, for the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering hereof. II-3 140 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3, reasonably believes that the security rating requirement contained in Transaction Requirement B.5 of Form S-3 will be met by the time of the sale of the securities registered hereunder and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Horsham, PA on February 4, 2000. FLEET BANK (RI), NATIONAL ASSOCIATION as depositor to the trust and as servicer on behalf of the trust By: /s/ JOHN KIRBY BRAY ------------------------------------ Name: John Kirby Bray Title: Executive Vice President and Chief Financial Officer KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints John Kirby Bray and Joseph W. Saunders, and each of them, his or her true and lawful attorney-in-fact and agents, with full power of substitution and resubstitution, for and in his or her own name, place and stead, in any and all amendments (including post-effective amendments) to this Registration Statement and any or all other documents in connection therewith, and to file the same, with all exhibits thereto, with the Securities and Exchange Commission, granting unto said authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as might or could be done in person, hereby ratifying and confirming all said attorney-in-fact and agents or any of them, or their substitute or substitutes, may lawfully for or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed on February 4, 2000 by the following persons in the capacities indicated.
SIGNATURE TITLE --------- ----- /s/ JOSEPH W. SAUNDERS Chairman, President, Chief Executive Officer - ----------------------------------------------------- and Director Joseph W. Saunders /s/ JOHN KIRBY BRAY Executive Vice President and Chief Financial - ----------------------------------------------------- Officer John Kirby Bray /s/ MICHAEL J. SHEAHAN Controller - ----------------------------------------------------- Michael J. Sheahan /s/ ANNE FINUCANE Director - ----------------------------------------------------- Anne Finucane /s/ ROBERT B. HEDGES, JR. Director - ----------------------------------------------------- Robert B. Hedges, Jr. /s/ V. DUNCAN JOHNSON Director - ----------------------------------------------------- V. Duncan Johnson
II-4 141
SIGNATURE TITLE --------- ----- /s/ EUGENE M. MCQUADE Director - ----------------------------------------------------- Eugene M. McQuade /s/ BRIAN T. MOYNIHAN Director - ----------------------------------------------------- Brian T. Moynihan /s/ EVELYN F. MURPHY Director - ----------------------------------------------------- Evelyn F. Murphy /s/ H. JAY SARLES Director - ----------------------------------------------------- H. Jay Sarles
II-5 142 EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION - ------- ----------- 1.1 -- Form of Underwriting Agreement for the Certificates 4.1 -- Amended and Restated Pooling and Servicing Agreement (incorporated by reference to Exhibit 4.1 to the registrant's Registration Statement on Form S-3, Nos. 333-52583 and 333-52583-01, filed May 13, 1998) 4.2 -- Amendment No. 1 to the Amended and Restated Pooling and Servicing Agreement (incorporated by reference to Exhibit 4.2 to the registrant's Registration Statement on Form S-3, Nos. 333-52583 and 333-52583-01, filed May 13, 1998) 4.3 -- Amendment No. 2 to the Amended and Restated Pooling and Servicing Agreement (incorporated by reference to Exhibit 4.3 to the registrant's Registration Statement on Form S-3, Nos. 333-52583 and 333-52583-01, filed May 13, 1998) 4.4 -- Amendment No. 3 to the Amended and Restated Pooling and Servicing Agreement (incorporated by reference to Exhibit 4.4 to the registrant's Registration Statement on Form S-3, Nos. 333-52583 and 333-52583-01, filed May 13, 1998) 4.5 -- Amendment No. 4 to the Amended and Restated Pooling and Servicing Agreement 4.6 -- Assignment and Assumption Agreement (incorporated by reference to Exhibit 4.5 to the registrant's Registration Statement on Form S-3, Nos. 333-52583 and 333-52583-01, filed May 13, 1998) 4.7 -- Form of Series Supplement to the Amended and Restated Pooling and Servicing Agreement. 5.1 -- Opinion of Orrick, Herrington & Sutcliffe LLP with respect to legality 8.1 -- Opinion of Orrick, Herrington & Sutcliffe LLP with respect to federal tax matters 23.1 -- Consent of Orrick, Herrington & Sutcliffe LLP (included in its opinion filed as Exhibit 5.1) 23.2 -- Consents of Orrick, Herrington & Sutcliffe LLP (included in its opinion filed as Exhibit 8.1) 24.1 -- Powers of Attorney (included in Page II-4)
EX-1.1 2 FORM OF UNDERWRITING AGREEMENT FOR CERTIFICATES 1 Exhibit 1.1 OH&S DRAFT 01/11/00 ___________ __, ____ [Form of Underwriting Agreement] Fleet Credit Card Master Trust II $_____________Class A [__%] [Floating Rate] Asset Backed Certificates, Series ___-_ $_____________ Class B [__%] [Floating Rate] Asset Backed Certificate, Series ___-_ FLEET BANK (RI), NATIONAL ASSOCIATION (AS SELLER AND SERVICER) UNDERWRITING AGREEMENT Representative of the Underwriter[s] set forth herein Ladies and Gentlemen: 1. Introductory. Fleet Bank (RI), National Association, a national banking association (the "Bank") proposes to cause $___________ principal amount of Fleet Credit Card Master Trust II Class A [___%] [Floating Rate] Asset Backed Certificates, Series ____-_ (the "Class A Certificates"), $____________ aggregate principal amount of Fleet Credit Card Master Trust II Class B [___%] [Floating Rate] Asset Backed Certificates, Series ____-_ (the "Class B Certificates," and together with the Class A Certificates, the "Certificates") to be issued under an Amended and Restated Pooling and Servicing Agreement, between Bankers Trust Company, as Trustee (the "Trustee") and the Bank (as Seller and Servicer and successor to Advanta National Bank as provided in an Assignment and Assumption Agreement dated as of February 20, 1998 (the "Assumption Agreement") among Advanta National Bank, the Bank, Fleet Credit Card, LLC and the Trustee), dated as of December 1, 1993 (as amended and restated as of May 23, 1994, as amended by Amendment Number 1 to the Amended and Restated Pooling and Servicing Agreement dated as of July 1, 1994, Amendment Number 2 to the Amended and Restated Pooling and Servicing Agreement dated as of October 6, 1995, Amendment Number 3 to the Pooling and Servicing Agreement dated as of February 20, 1998 and Amendment Number 4 to the Pooling and Servicing Agreement dated as of May 14, 1999, the "Amended and Restated Pooling and Servicing Agreement"), as supplemented by the Series ____-_ Supplement with respect to the Certificates to be dated as of ___________ __, ____ (the "Series Supplement" and 2 together with the Amended and Restated Pooling and Servicing Agreement, as amended, and the Assumption Agreement, the "Pooling and Servicing Agreement"). The assets of the Trust will include, among other things, certain amounts due (the "Receivables") on a pool of VISA and MasterCard credit card accounts of the Bank (the "Accounts"), and recoveries on Defaulted Receivables. To the extent not defined herein, capitalized terms used herein have the meanings assigned in the Pooling and Servicing Agreement. The Bank hereby agrees with the underwriter[s] for the Class A Certificates listed on Schedule A hereto (the "Class A Underwriter[s]") and the underwriter[s] for the Class B Certificates listed on Schedule A hereto (the "Class B Underwriter[s]", and together with the Class A Underwriter[s], the "Underwriter[s]") as follows: 2. Representations and Warranties of the Bank. The Bank represents and warrants to, and agrees with, the Underwriter[s] that: (a) The Bank is a national banking association duly organized and validly existing in good standing under the laws of the United States, and has all requisite corporate power, authority and legal right to own its property and conduct its credit card business as such properties are presently owned and such business is presently conducted, and to execute, deliver and perform its obligations under this Agreement, the Certificates and the Pooling and Servicing Agreement. (b) The execution and delivery of this Agreement, the Certificates, the Series Supplement and the Assumption Agreement, the incurrence of the obligations herein and therein set forth and the consummation of the transactions contemplated hereunder and thereunder have been duly authorized by the Bank by all necessary action on the part of the Bank. (c) This Agreement has been duly authorized, executed and delivered by the Bank. (d) The Series Supplement will be executed and delivered by the Bank on or before the Closing Date, and when executed and delivered by the other parties thereto, will constitute a valid and binding agreement of the Bank, enforceable against the Bank in accordance with its terms, and the Amended and Restated Pooling and Servicing Agreement as previously executed and delivered by predecessors of the Bank and the Assumption Agreement as previously executed by the Bank each constitute a valid and binding agreement of the Bank, enforceable against the Bank, each in accordance with its terms, except, in each case, to the extent that (i) the enforceability thereof may be subject to insolvency, reorganization, moratorium, receivership or other similar laws now or hereafter in effect relating to creditors' or other obligees' rights generally or the rights of creditors or other obligees insured by the FDIC, (ii) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought and (iii) certain remedial provisions of the Pooling and Servicing Agreement may be 2 3 unenforceable in whole or in part under the UCC, but the inclusion of such provisions does not render the other provisions of the Pooling and Servicing Agreement invalid and, notwithstanding that such provisions may be unenforceable in whole or in part, the Trustee, on behalf of the Holders of the Certificates, will be able to enforce the remedies of a secured party under the UCC. (e) The Certificates will be issued pursuant to the terms of the Pooling and Servicing Agreement and, when executed by the Bank and authenticated by the Trustee in accordance with the Pooling and Servicing Agreement and delivered pursuant to this Agreement, will be validly issued and outstanding and entitled to the benefits of the Pooling and Servicing Agreement. The Certificates will be in all material respects in the form contemplated by the Pooling and Servicing Agreement and will conform to the description thereof contained in the Prospectus and Registration Statement, as amended or supplemented. (f) The Bank is not in violation of any Requirement of Law or in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, deed of trust, loan agreement, note, lease or other instrument to which it is a party or by which it is bound or to which any of its property is subject, which violations or defaults separately or in the aggregate would have a material adverse effect on the Bank or the Trust. (g) Neither the issuance and sale of the Certificates, nor the execution and delivery by the Bank of this Agreement or the Certificates, nor the incurrence by the Bank of the obligations herein and therein set forth, nor the consummation of the transactions contemplated hereunder or thereunder, nor the fulfillment of the terms hereof or thereof does or will (i) violate any Requirement of Law presently in effect, applicable to it or its properties or by which it or its properties are or may be bound or affected, (ii) conflict with, or result in a breach of, or constitute a default under, any indenture, contract, agreement, deed, lease, mortgage or instrument to which it is a party or by which it or its properties are bound, or (iii) result in the creation or imposition of any Lien upon any of its property or assets, except for those encumbrances created under the Pooling and Servicing Agreement. (h) All consents, approvals, authorizations, orders, filings, registrations or qualifications of or with any court or any other governmental agency, board, commission, authority, official or body required in connection with the execution and delivery by the Bank of this Agreement, the Certificates or the Pooling and Servicing Agreement, or to the consummation of the transactions contemplated hereunder and thereunder, or to the fulfillment of the terms hereof and thereof have been or will have been obtained on or before the Closing Date. (i) All actions required to be taken by the Bank as a condition to the offer and sale of the Certificates as described herein or the consummation of any of the transactions described in the Prospectus and Registration Statement have been or, prior to the Closing Date, will be taken. 3 4 (j) The Pooling and Servicing Agreement is not required to be qualified under the Trust Indenture Act of 1939. (k) The representations and warranties made by the Bank in the Pooling and Servicing Agreement and made in any Officer's Certificate of the Bank delivered pursuant to the Pooling and Servicing Agreement will be true and correct at the time made and on and as of the Closing Date as if set forth herein. (l) The Receivables (including Receivables in the Additional Accounts, the Receivables of which are expected to be conveyed to the Trust during the period from ___________ __, ___ through the Closing Date) had an aggregate outstanding balance determined as of _________ __, ____ in the amount set forth in the Prospectus. (m) The Bank agrees it has not granted, assigned, pledged or transferred and shall not grant, assign, pledge or transfer to any Person a security interest in, or any other right, title or interest in, the Receivables, except as provided in the Pooling and Servicing Agreement, and agrees to take all action required by the Pooling and Servicing Agreement in order to maintain the security interest in the Receivables granted pursuant to the Pooling and Servicing Agreement. (n) A registration statement on Form S-3 (Nos. 333-___________ and 333-___________), including a form of prospectus and such amendments thereto as may have been required to the date hereof, relating to the Certificates and the offering thereof in accordance with Rule 415 under the Securities Act of 1933, as amended (the "Act"), has been filed with, and has been declared effective by, the Securities and Exchange Commission (the "Commission"). If any post-effective amendment to such registration statement has been filed with the Commission prior to the execution and delivery of this Agreement, the most recent such amendment has been declared effective by the Commission. For purposes of this Agreement, "Effective Time" means the date and time as of which such registration statement, or the most recent posteffective amendment thereto, if any, was declared effective by the Commission, and "Effective Date" means the date of the Effective Time. Such registration statement, as amended at the Effective Time, is hereinafter referred to as the "Registration Statement." The Bank proposes to file with the Commission pursuant to Rule 424(b) ("Rule 424(b)") under the Act a supplement (the "Prospectus Supplement") to the prospectus included in the Registration Statement (such prospectus, in the form it appears in the Registration Statement or in the form most recently revised and filed with the Commission pursuant to Rule 424(b), is hereinafter referred to as the "Base Prospectus") relating to the Certificates and the method of distribution thereof. The Base Prospectus and the Prospectus Supplement, together with any amendment thereof or supplement thereto, are hereinafter referred to as the "Prospectus". (o) On the Effective Date, the Registration Statement conformed in all respects to the requirements of the Act and the rules and regulations of the Commission thereunder (the "Rules and Regulations") and did not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and on the date of this Agreement, the 4 5 Registration Statement and the Prospectus conform, and at the time of filing of the Prospectus pursuant to Rule 424(b) the Registration Statement and the Prospectus will conform, in all respects with the requirements of the Act and the Rules and Regulations, and neither of such documents includes, or will include, any untrue statement of a material fact or omits, or will omit, to state any material fact required to be stated therein or necessary to make the statements therein not misleading, except that the foregoing does not apply to statements in or omissions from either of such documents based upon written information furnished to the Bank by the Underwriter[s] specifically for use therein. The Bank hereby acknowledges that (i) the only information provided by the Class A Underwriter[s] for inclusion in the Registration Statement and the Prospectus is set forth on the cover page of the Prospectus Supplement in the table under the heading "Class A Certificates" and on the line across from "Price to public per certificate," in the last sentence in the risk factor captioned "Ability to Resell Series ____-_ Certificates Not Assured" in the Prospectus Supplement, in the table listing the Class A Underwriter[s] and the Principal Amount of Class A Certificates and in the paragraph immediately following such table under "Underwriting" in the Prospectus Supplement and in the final paragraph under "Underwriting" in the Prospectus Supplement" (the "Class A Underwriter[s]' Information"); and (ii) the only information provided by the Class B Underwriter[s] for inclusion in the Registration Statement and the Prospectus is set forth on the cover page of the Prospectus Supplement in the table under the heading "Class B Certificates" and on the line across from "Price to public per certificate," in the last sentence under the caption "Risk Factors--Ability to Resell Series ____-_ Certificates Not Assured" in the Prospectus Supplement, in the table listing the Class B Underwriter[s] and the Principal Amount of Class B Certificates and in the paragraph immediately following such table under "Underwriting" in the Prospectus Supplement and in the final paragraph under "Underwriting" in the Prospectus Supplement" (the "Class B Underwriter[s]' Information"). (p) There has not been any material adverse change, or any development involving a prospective material adverse change, in the condition, financial or otherwise, or in the earnings, business or operations of the Bank or its subsidiaries, taken as a whole, from __________ __, ____. 3. Purchase, Sale, Payment and Delivery of the Certificates. (a) On the basis of the representations, warranties and agreements herein contained, but subject to the terms and conditions herein set forth, the Bank agrees to sell to the Class A Underwriter[s], and the Class A Underwriter[s] agree to purchase from the Bank, at a purchase price of ________% of the principal amount thereof, $_________ aggregate principal amount of the Class A Certificates, each Underwriter to purchase the amounts shown on Schedule A hereto. (b) On the basis of the representations, warranties and agreements herein contained, but subject to the terms and conditions herein set forth, the Bank agrees to sell to the Class B Underwriter[s], and the Class B Underwriter[s] agree to purchase from the Bank, at a purchase price of ___% of the principal amount thereof, $__________ 5 6 aggregate principal amount of the Class B Certificates, each Underwriter to purchase the amounts shown on Schedule A hereto. (c) The Bank will deliver the Certificates to you against payment of the purchase price in immediately available funds, drawn to the order of the Bank, at the office of __________________, in ________________ at 10:00 A.M., New York City time, on ____________ __, ____, or at such other time not later than seven full business days thereafter as you and the Bank determine, such time being herein referred to as the "Closing Date." Each of the Class A Certificates and the Class B Certificates so to be delivered shall be represented by one or more definitive certificates registered in the name of Cede & Co., as nominee for The Depository Trust Company. The Bank shall make such definitive certificates representing the Class A Certificates and the Class B Certificates available for inspection by the Underwriter[s] at the office at which the Certificates are to be delivered no later than five hours before the close of business in New York City on the business day prior to the Closing Date. 4. Offering by Underwriter[s]. It is understood that after the Effective Date, the Underwriter[s] propose to offer the Certificates for sale to the public (which may include selected dealers) as set forth in the Prospectus. 5. Certain Agreements of the Bank. The Bank agrees with the Underwriter[s] that: (a) Immediately following the execution of this Agreement, the Bank will prepare a Prospectus Supplement setting forth the amount of Certificates covered thereby and the terms thereof not otherwise specified in the Base Prospectus, the price at which such Certificates are to be purchased by the Underwriter[s], the initial public offering price, the selling concessions and allowances, and such other information as the Bank deems appropriate. The Bank will transmit the Prospectus, including such Prospectus Supplement, to the Commission pursuant to Rule 424(b) by a means reasonably calculated to result in filing with the Commission pursuant to Rule 424(b). The Bank will not file any amendment of the Registration Statement with respect to the Certificates or supplement to the Prospectus unless a copy has been furnished to you for your review a reasonable time prior to the proposed filing thereof or to which you shall reasonably object in writing. The Bank will advise you promptly of (i) the effectiveness of any amendment or supplementation of the Registration Statement or Prospectus, (ii) any request by the Commission for any amendment or supplementation of the Registration Statement or the Prospectus or for any additional information, (iii) the receipt by the Bank of any notification with respect to the suspension of qualification of the Certificates for sale in any jurisdiction or the initiation or threatening of any proceeding for such purposes and (iv) the institution by the Commission of any stop order proceeding in respect of the Registration Statement, and will use their best efforts to prevent the issuance of any such stop order and to obtain as soon as possible its lifting, if issued. (b) If at any time when a prospectus relating to the Certificates is required to be delivered under the Act, any event occurs as a result of which the Prospectus, as then amended or supplemented, would include an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the 6 7 circumstances under which they were made, not misleading, or if it is necessary at any time to amend the Prospectus to comply with the Act, the Bank promptly will prepare and file with the Commission an amendment or supplement which will correct such statement or omission or an amendment which will effect such compliance. Neither your consent to, nor the Underwriter[s'] delivery of, any such amendment or supplement shall constitute a waiver of any of the conditions set forth in Section 6. (c) As soon as practicable, the Bank will cause the Trust to make generally available to the Certificateholders an earnings statement or statements of the Trust covering a period of at least 12 months beginning after the Effective Date which will satisfy the provisions of Section 11(a) of the Act and Rule 158 of the Commission promulgated thereunder. (d) The Bank will furnish to you copies of the Registration Statement (one of which will be signed and will include all exhibits), the Prospectus and all amendments and supplements to such documents, in each case as soon as available and in such quantities as you reasonably request. (e) The Bank will endeavor to qualify the Certificates for sale under the securities or Blue Sky laws of such jurisdictions as you shall reasonably request and the determination of the eligibility for investment of the Certificates under the laws of such jurisdictions as you may designate and will continue such qualifications in effect so long as required for the distribution of the Certificates; provided, however, that the Bank shall not be obligated to qualify to do business in any jurisdiction where such qualification would subject the Bank to general or unlimited service of process in any jurisdiction where it is not now so subject. (f) For a period from the date of this Agreement until the retirement of the Certificates, the Bank, as Servicer, will furnish to you copies of each certificate and the annual statements of compliance delivered to the Trustee pursuant to Article III of the Pooling and Servicing Agreement and the annual independent certified public accountant's servicing reports furnished to the Trustee pursuant to Article III of the Pooling and Servicing Agreement, by first class mail as soon as practicable after such certificates, statements and reports are furnished to the Trustee. (g) So long as any Certificate is outstanding, the Bank will furnish to you, by first-class mail as soon as practicable (i) all documents concerning the Certificates distributed by the Bank to Certificateholders, or filed with the Commission pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange Act"), (ii) any order of the Commission under the Act or the Exchange Act applicable to the Trust or to the Bank as originators of the Trust, or pursuant to a "no-action" letter obtained from the staff of the Commission by the Bank and affecting the Trust or the Bank as originators of the Trust and (iii) from time to time, such other information concerning the Trust as you may reasonably request. 7 8 (h) Whether or not the transactions contemplated by this Agreement are consummated or this Agreement is terminated for any reason, except a default by you hereunder, the Bank will pay [description of expenses to be paid by the Bank]. (i) To the extent, if any, that any of the ratings provided with respect to the Certificates by Moody's Investors Service, Inc. or Standard & Poor's Ratings Services are conditional upon the furnishing of documents or the taking of any other actions by the Bank, the Bank shall furnish such documents and take any such other actions. 6. Conditions of the Obligations of the Underwriter[s]. The obligation of the Underwriter[s] to purchase and pay for the Certificates will be subject to the accuracy of the representations and warranties on the part of the Bank herein, to the accuracy of the statements of officers of the Bank made pursuant to the provisions hereof, to the performance by the Bank of its obligations hereunder and to the following additional conditions precedent: (a) On or prior to the date of this Agreement, you shall have received a letter, dated the date of this Agreement, of ______________________, confirming that they are independent public accountants within the meaning of the Act and the applicable published Rules and Regulations thereunder, substantially in the form heretofore agreed to and otherwise in form and in substance satisfactory to you and your counsel. (b) The Prospectus shall have been filed with the Commission in accordance with the Rules and Regulations and Section 5(a) of this Agreement; and, prior to the Closing Date, no stop order suspending the effectiveness of the Registration Statement shall have been issued and no proceedings for that purpose shall have been instituted or, to the knowledge of the Bank or you, shall be contemplated by the Commission. (c) Subsequent to the execution and delivery of this Agreement, there shall not have occurred (i) any change, or any development involving a prospective change, in or affecting particularly the business or properties of the Bank which, in your judgment, materially impairs the investment quality of the Certificates; (ii) any downgrading in the rating of any debt securities of the Bank or FleetBoston Corporation by any "nationally recognized statistical rating organization" (as defined for purposes of Rule 436(g) under the Act), or any public announcement that any such organization has under surveillance or review its rating of any such debt securities (other than an announcement with positive implications of a possible upgrading, and no implication of a possible downgrading, of such rating), (iii) any suspension or limitation of trading in securities generally on the New York Stock Exchange, or any setting of minimum prices for trading on such exchange, or any suspension of trading of any securities of the Bank or Fleet Boston Corporation on any exchange or in the over-the-counter market; (iv) any banking moratorium declared by Federal, Rhode Island or New York authorities; or (v) any outbreak or escalation of major hostilities in which the United States is involved, any declaration of war by Congress or any other substantial national or international calamity or emergency if, in your judgment, the effect of any such outbreak, escalation, declaration, calamity or emergency makes it impractical or inadvisable to proceed with completion of the sale of and payment for the Certificates. 8 9 (d) You shall have received an opinion, dated the Closing Date, of ___________ _________________________ General Counsel for the Bank, to the effect that: (i) The Bank (x) has been duly chartered and is validly existing as a national banking association under the laws of the United States, with power and authority to own its properties and conduct its business as described in the Prospectus; (y) is neither required to qualify, nor to register as a foreign corporation, in any state in order to conduct its credit card business, except where the failure to so qualify or register would not have a material adverse effect upon the Certificateholders; and (z) has the power, authority and legal right to acquire, own and service the Accounts and the Receivables; (ii) The Bank has the power and authority to execute and deliver this Agreement, the Series Supplement and the Certificates and to consummate the transactions contemplated herein and therein and the Bank, at the time of the Assumption Agreement, had the power and authority to execute and deliver the Assumption Agreement and had and at all times since has had and does now have the power to consummate the transactions contemplated by the Assumption Agreement; provided, however, that such counsel may rely on an opinion of Edwards & Angell with respect to the Bank's authorization, execution and delivery of the Assumption Agreement. (iii) Each of the Series Supplement and the Certificates has been duly authorized, executed and delivered by the Bank; (iv) The Assumption Agreement has been duly authorized, executed and delivered by the Bank; (v) This Agreement has been duly authorized, executed and delivered by the Bank; (vi) The Registration Statement has become effective under the Act and to the best of such counsel's knowledge no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or threatened under the Act; (vii) No consent, approval, authorization or order of, or filing of any UCC financing statements with, any court or governmental agency or body having jurisdiction over the Bank is required for the consummation of the transactions contemplated by this Agreement or the Pooling and Servicing Agreement, except for (x) filing of UCC financing statements with respect to the transactions contemplated in the Pooling and Servicing Agreement; (y) such consents, approvals, authorizations, orders or filings as have been obtained under the Act; and (z) such consents, approvals, authorizations, orders or filings as may be required under the state securities or blue sky laws of any jurisdiction; 9 10 (viii) The execution, delivery and performance by the Bank of this Agreement and the Pooling and Servicing Agreement, the transfer of the Receivables to the Trust, the issuance and sale of the Certificates and the consummation of any other of the transactions contemplated herein or in the Pooling and Servicing Agreement will not conflict with, result in a breach of or a violation of any of the terms of, or constitute a default under, (x) the Articles of Association or By-Laws of the Bank or (y) any rule, order, statute or regulation known to such counsel to be currently applicable to the Bank, or (z) any agreement or other instrument, known to such counsel, to which the Bank is a party or by which it is bound; and (ix) To such counsel's knowledge, there are no actions, proceedings or investigations pending before any court, administrative agency or other tribunal (v) which are required to be disclosed in the Prospectus and are not disclosed therein, (w) asserting the invalidity of this Agreement, the Pooling and Servicing Agreement or the Certificates, (x) seeking to prevent the issuance of the Certificates or the consummation of any of the transactions contemplated by this Agreement or the Pooling and Servicing Agreement, (y) which might materially and adversely affect the performance by the Bank of its obligations under, or the validity or enforceability of, this Agreement, the Pooling and Servicing Agreement or the Certificates or (z) seeking adversely to affect the federal income tax attributes of the Certificates as described in the Prospectus Supplement under the heading "Summary of Terms--Tax Status" and in the Base Prospectus under the heading "Federal Income Tax Consequences." (e) You shall have received a letter of Edwards & Angell, counsel for the Bank, to the effect that you may rely on those provision of their opinions to Moody's Investors Service, Inc. and Standard & Poor's Ratings Services with respect to certain matters relating to the transfer of the Receivables to the Trust, with respect to the perfection of the Trust's interest in the Receivables and with respect to other related matters. (f) You shall have received an opinion dated the closing date, of Orrick, Herrington & Sutcliffe LLP, special counsel to the Bank, to the effect that (i) The Pooling and Servicing Agreement, including the allocation of Collections provisions thereof, constitutes the legal, valid and binding obligation of the Bank under the laws of the State of New York, enforceable against the Bank in accordance with its terms. (ii) This Agreement constitutes the legal, valid and binding obligation of the Bank under the laws of the State of New York, enforceable against the Bank in accordance with its terms. (iii) The Certificates, when executed and authenticated in accordance with the terms of the Pooling and Servicing Agreement and delivered to and paid for by the Underwriter[s] in accordance with this Agreement, will be duly and 10 11 validly issued and outstanding and will be entitled to the benefits of the Pooling and Servicing Agreement. (iv) The statements in the Base Prospectus under the headings "Material Legal Aspects of the Receivables," "ERISA Considerations" and "Federal Income Tax Consequences" and the statements in the Prospectus Supplement under the headings "Federal Income Tax Consequences" and "ERISA Considerations" and the summaries thereof under the headings "Summary of Terms--Tax Status" and "--ERISA Considerations" in the Prospectus Supplement, to the extent they constitute matters of law or legal conclusions with respect thereto, have been reviewed by us and are correct in all material respects. (v) This Agreement, the Pooling and Servicing Agreement and the Certificates conform in all material respects to the descriptions thereof contained in the Prospectus. (vi) The Pooling and Servicing Agreement is not required to be qualified under the Trust Indenture Act of 1939, as amended, and the Trust is not now, and immediately following the sale of the Certificates pursuant to this Agreement will not be, required to be registered under the Investment Company Act of 1940, as amended. (vii) For federal income tax purposes the Certificates will properly be characterized as indebtedness and for purposes of Section 6.03(b)(vi) of the Pooling and Servicing Agreement (a) the issuance of the Certificates will not adversely affect the tax characterization as debt of Investor Certificates of any outstanding Series or Class that were characterized as debt at the time of their issuance, (b) following the issuance of the Certificates, the Trust will not be an association (or publicly traded partnership) taxable as a corporation and (c) the issuance of the Certificates will not cause or constitute an event in which gain or loss would be recognized by any Investor Certificateholder or the Trust; provided, however, that such counsel may give the foregoing opinions subject to the discussion of alternative characterizations and risks discussed in the Base Prospectus under the heading "Federal Income Tax Consequences." (viii) The Registration Statement and the Prospectus (other than the financial and statistical information contained therein) on their respective effective dates or dates of issuance appear on their face to be appropriately responsive in all material respects to the applicable requirements of the Act and the Rules and Regulations; such counsel has no reason to believe that either the Registration Statement or the Prospectus, as of such respective dates, contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, or that the Prospectus, as amended or supplemented as of the date of such opinion, contains any untrue statement of a material fact or omits to state any material fact 11 12 required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading (except that such counsel may express no opinion as to (x) any financial statements, supporting schedules or other financial or statistical information included in the Registration Statement or the Prospectus or (y) the exhibits to the Registration Statement. (g) You shall have received from ________________________, special counsel for the Underwriter[s], such opinion or opinions, dated the Closing Date, with respect to such matters relating to this transaction as you may require, and the Bank shall have furnished to such counsel such documents as they request for the purpose of enabling them to pass upon such matters. (h) You shall have received a certificate from the Bank, dated the Closing Date, of two Vice Presidents or more senior officers of the Bank in which such officers, to the best of their knowledge after reasonable investigation, shall state that (u) the representations and warranties of the Bank in this Agreement are true and correct in all material respects on and as of the Closing Date, (v) the Bank has complied with all agreements and satisfied all conditions on its part to be performed or satisfied hereunder at or prior to the Closing Date, (w) the representations and warranties of the Bank, as a Seller and as Servicer, are true and correct as of the dates specified in the Pooling and Servicing Agreement, (x) no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or are threatened by the Commission, (y) nothing has come to such officers' attention that would lead such officers to believe that the Registration Statement or the Prospectus, and any amendment or supplement thereto, as of its date and as of the Closing Date, contained an untrue statement of a material fact or omitted to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, and (z) subsequent to the date of the Prospectus, there has been no material adverse change in the financial position or results of operation of the Bank's credit card business except as set forth in or contemplated by the Prospectus or as described in such certificate. (i) You shall have received an opinion of White & Case, counsel to the Trustee, addressed to you, dated the Closing Date, satisfactory in form and substance to you and your counsel and substantially to the effect that: (i) The Trustee has been duly incorporated and is validly existing as a New York banking corporation and has the power and authority to enter into and to perform all actions required of it under the Pooling and Servicing Agreement; (ii) The Pooling and Servicing Agreement has been duly authorized, executed and delivered by the Trustee and constitutes a legal, valid and binding obligation of the Trustee, enforceable against the Trustee in accordance with its terms, except as the enforceability thereof may be limited by (y) bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors' rights generally, as such laws would apply in the event of a bankruptcy, 12 13 insolvency, liquidation, reorganization or similar occurrence affecting the Trustee, and (z) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law); (iii) The Certificates have been duly authenticated and delivered by the Trustee; (iv) The execution and delivery of the Pooling and Servicing Agreement by the Trustee and the performance by the Trustee of its terms does not conflict with or result in a violation of (y) any law or regulation of the United States of America or the State of New York governing the banking or trust powers of the Trustee, or (z) the Certificate of Incorporation or By-Laws of the Trustee; and (v) No approval, authorization or other action by, or filing with, any governmental authority of the United States of America or the State of New York having jurisdiction over the banking or trust powers of the Trustee is required in connection with the execution and delivery by the Trustee of the Pooling and Servicing Agreement or the performance by the Trustee thereunder. (j) You shall have received evidence satisfactory to you that the Class A Certificates shall be rated ___ by Moody's Investors Service, Inc. and ___ by Standard & Poor's Ratings Services and that the Class B Certificates shall be rated no lower than __ by Moody's Investors Service, Inc. and ____ by Standard & Poor's Ratings Services. The Bank will furnish you with such conformed copies of such opinions, certificates, letters and documents as you reasonably request. 7. Indemnification and Contribution. (a) The Bank will indemnify and hold harmless the Underwriter[s] against any losses, claims, damages or liabilities, joint or several, to which the Underwriter[s] may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the Registration Statement, the Prospectus, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse the Underwriter[s] for any legal or other expenses reasonably incurred by the Underwriter[s] in connection with investigating or defending any such loss, claim, damage, liability or action as such expenses are incurred; provided, however, that the Bank will not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement in or omission or alleged omission from any of such documents in reliance upon and in conformity with the Class A Underwriter[s'] Information or the Class B Underwriter[s']. Information. 13 14 (b) The Underwriter[s] agree, [severally and not jointly], to indemnify and hold harmless the Bank against any losses, claims, damages or liabilities to which the Bank may become subject, under the Act or otherwise and will reimburse any legal or other expenses reasonably incurred by the Bank in connection with investigating or defending any such loss, claim, damage, liability or action as such expenses are incurred, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the Registration Statement, the Prospectus, or any amendment or supplement thereto, or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that, with respect to each of the Class A Underwriter[s] and the Class B Underwriter[s], such untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with the Class A Underwriter[s'] Information or the Class B Underwriter[s'] Information, and will reimburse any legal or other expenses reasonably incurred by the Bank in connection with investigating or defending any such loss, claim, damage, liability or action as such expenses are incurred. (c) Promptly after receipt by an indemnified party under this section of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under subsection (a) or (b) above, notify the indemnifying party of the commencement thereof; but the omission so to notify the indemnifying party will not relieve it from any liability which it may have to any indemnified party otherwise than under subsection (a) or (b) above. In case any such action is brought against any indemnified party and it notifies the indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein and to the extent that it may wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party will not be liable to such indemnified party under this section for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation. (d) If the indemnification provided for in this section is unavailable or insufficient to hold harmless an indemnified party under subsection (a) or (b) above, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of the losses, claims, damages or liabilities referred to in subsection (a) or (b) above (i) in such proportion as is appropriate to reflect the relative benefits received by the Bank on the one hand and the Underwriter[s] on the other from the offering of the Certificates, or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Bank on the one hand and the Underwriter[s] on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities as well as any other relevant equitable considerations. The relative benefits received by the Bank on the 14 15 one hand and the Underwriter[s] on the other shall be deemed to be in the same proportion as the total net proceeds from the offering (before deducting expenses) of the Certificates received by the Bank bear to the total underwriting discounts and commissions received by the Underwriter[s] with respect to the Certificates. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Bank or the Underwriter[s] and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such untrue statement or omission with respect to the Certificates. The amount paid by an indemnified party as a result of the losses, claims, damages or liabilities referred to in the first sentence of this subsection (d) shall be deemed to include any other expenses reasonably incurred by such indemnified party in connection with investigating or defending any action or claim which is the subject of this subsection (d). Notwithstanding the provisions of this subsection (d), the Underwriter[s] shall not be required to contribute any amount in excess of the amount by which the total underwriting discount as set forth on the cover page of the Prospectus Supplement exceeds the amount of damages which the Underwriter[s] have otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission with respect to the Certificates. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. (e) The obligations of the Bank under this Section shall be in addition to any liability which the Bank may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls the Underwriter[s] within the meaning of the Act; and the obligations of the Underwriter[s] under this section shall be in addition to any liability which the Underwriter[s] may otherwise have and shall extend, upon the same terms and conditions, to each director of the Bank, to each officer of the Bank who has signed the Registration Statement and to each person, if any, who controls the Bank within the meaning of the Act. 8. Survival of Certain Representations and Obligations. The respective indemnities, agreements, representations, warranties and other statements of the Bank or their officers and of the Underwriter[s] set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation, or statement as to the results thereof, made by or on behalf of the Underwriter[s], the Bank or any of their respective representatives, officers or directors or any controlling person, and will survive delivery of and payment for the Certificates. If this Agreement is terminated or if for any reason other than default by the Underwriter[s] the purchase of the Certificates by the Underwriter[s] is not consummated, the Bank shall remain responsible for the expenses to be paid by it pursuant to Section 5 and the respective obligations of the Bank and the Underwriter[s] pursuant to Section 7 shall remain in effect. If for any reason the purchase of the Certificates by the Underwriter[s] is not consummated other than solely because of the occurrence of any event specified in clause (iii), (iv) or (v) of Section 6(c), the Bank will reimburse the Underwriter[s] for all out-of-pocket expenses reasonably incurred by them in connection with the offering of the Certificates. 15 16 9. Computational Materials and ABS Term Sheets. (a) Each Underwriter agrees to provide to the Bank, not less than two Business Days prior to the date on which the Bank is required to file the Prospectus Supplement pursuant to Rule 424(b), any information used by it (in such written or electronic format as required by the Bank) with respect to the offering of the Certificates that constitutes "Computational Materials," as defined in the Commission's No-Action Letter, dated May 20, 1994, addressed to Kidder, Peabody Acceptance Corporation I, Kidder, Peabody & Co. Incorporated and Kidder Structured Asset Corporation (as made generally applicable to registrants, issuers and Underwriter[s] by the Commission's response to the request of the Public Securities Association dated May 27, 1994 (the "Kidder/PSA Letter")), that is not contained in the Prospectus (without taking into account information incorporated therein by reference). (a) Each Underwriter agrees to provide to the Bank, not less than two Business Days prior to the date on which the Bank is required to file the Prospectus Supplement pursuant to Rule 424(b), any information used by it (in such written or electronic format as required by the Bank) with respect to the offering of the Certificates that constitutes "ABS Term Sheets," as defined in the Commission's No-Action Letter, dated February 17, 1995, addressed to the Public Securities Association, that is not contained in the Prospectus (without taking into account information incorporated therein by reference). (b) Each Underwriter severally agrees, assuming all information provided by the Bank is accurate and complete in all material respects, to indemnify and hold harmless the Bank, each of the officers and directors of the Bank and each person who controls the Bank within the meaning of Section 15 of the Act against any and all losses, claims, damages or liabilities, joint or several, to which they may become subject under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement of a material fact contained in the Computational Materials or ABS Term Sheets, if any, provided by the Underwriter, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, and agrees to reimburse each such indemnified party for any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending or preparing to defend any such loss, claim, damage, liability or action as such expenses are incurred. The obligations of the Underwriter under this Section 9(c) shall be in addition to any liability that the Underwriter may otherwise have. The procedures set forth in Sections 7(c) and 7(d) shall be equally applicable to this Section 9(c). Notwithstanding anything in this Section 9, each Underwriter represents and warrants that it has not used any Computational Materials or ABS Term Sheets in connection with the offering of the Certificates. 10. Electronic Distribution of Prospectus. Each Underwriter represents that if it furnished an electronic copy of the preliminary Prospectus used in connection with the Certificates to any person, such Underwriter has furnished a printed copy of such preliminary Prospectus to all persons to whom it previously sent an electronic copy. 16 17 11. Notices. All communications hereunder will be in writing and, if sent to the Underwriter[s], will be mailed, delivered or telegraphed and confirmed to: ----------------------- ----------------------- 12. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same Agreement. 13. Applicable Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. 14. Financial Services Act. Each Underwriter represents and warrants to, and agrees with, the Bank that (w) it has complied and shall comply with all applicable provisions of the Financial Services Act 1986 and the Public Offers of Securities Regulations 1995 (the "Regulations") with respect to anything done by it in relation to the Certificates in, from or otherwise involving the United Kingdom; (x) it has only issued or passed on and shall only issue or pass on in the United Kingdom any document received by it in connection with the issue of the Certificates to a person who is of a kind described in Article 11(3) of the Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order 1996 or who is a person to whom the document may otherwise lawfully be issued or passed on; (y) it has not offered or sold and, during the period of six months from the date hereof, will not offer or sell any Certificate to persons in the United Kingdom except to persons whose ordinary activities involve them in acquiring, holding, managing, or disposing of investments (as principal or agent) for the purposes of their businesses or otherwise in circumstances which have not resulted and will not result in an offer to the public in the United Kingdom within the meaning of the Regulations. 17 18 If you are in agreement with the foregoing, please sign two counterparts hereof and return one to the Bank whereupon this letter and your acceptance shall become a binding agreement among the Bank and the Underwriter[s]. Very truly yours, FLEET BANK (RI), NATIONAL ASSOCIATION By: _____________________ Name: Title: The foregoing Agreement is hereby confirmed and accepted as of the date hereof [Representative of the] Underwriter[s] set forth herein By: _____________________ Name: Title: 19 SCHEDULE A Class A Certificates Principal Amount of Underwriter[s] Class A Certificates Class B Certificates Principal Amount of Underwriter[s] Class B Certificates EX-4.5 3 AMEND. NO. 4 TO AMEND. & RESTATED POOLING & SERV. 1 Exhibit 4.5 EXECUTION COPY AMENDMENT NUMBER 4 TO THE AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT THIS AMENDMENT NUMBER 4 TO THE AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT, dated as of May 14, 1999, (this "Amendment") is between FLEET BANK (RI), NATIONAL ASSOCIATION ("Fleet (RI)"), a national banking association, as Seller and Servicer, and BANKERS TRUST COMPANY, as Trustee (the "Trustee") under the Amended and Restated Pooling and Servicing Agreement, dated as of December 1, 1993 (as amended by Amendment Number 1 to the Amended and Restated Pooling and Servicing Agreement, dated as of July 1, 1994, as further amended by Amendment Number 2 to the Amended and Restated Pooling and Servicing Agreement, dated as of October 6, 1995, and as further amended by Amendment Number 3 to the Amended and Restated Pooling and Servicing Agreement, dated as of February 20, 1998, and as assigned by Advanta National Bank, previously known as Advanta National Bank USA and prior to that known as Colonial National Bank USA ("Advanta"), to Fleet (RI) pursuant to an Assignment and Assumption Agreement, dated as of February 20, 1998, among Advanta, Fleet (RI), Fleet Credit Card, LLC and Bankers Trust Company, as Trustee, the "Pooling and Servicing Agreement"), between Fleet (RI), as Seller and Servicer, and the Bankers Trust Company, as Trustee for the Fleet Credit Card Master Trust II. RECITALS WHEREAS, Fleet (RI) wishes to amend the Pooling and Servicing Agreement as provided herein in accordance with Section 13.01(a) of the Pooling and Servicing Agreement and the Trustee is willing to consent to such amendment upon the terms provided for herein. NOW THEREFORE, in consideration of the premises and the agreements contained herein, the parties hereto agree as follows: SECTION 1. Amendment of Section 4.02. Section 4.02 of the Pooling and Servicing Agreement is hereby amended by adding the following paragraph at the end of such section. Notwithstanding the immediately preceding paragraph, the terms of this paragraph shall apply and to the extent of any differences between this paragraph and the immediately preceding paragraph the terms of this paragraph shall control so long as (1) on each Date of Processing if the Seller Amount on such Date of Processing is less than the Required Seller Amount and the Seller makes a deposit 2 into the Excess Funding Account to the extent needed to increase the Seller Amount to the Required Seller Amount and (2) Fleet (RI) remains the Servicer and maintains a certificate of deposit rating of P-1 or better by Moody's. Funds on deposit in the Excess Funding Account shall at the direction of the Servicer 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 Certificateholders. The Trustee shall maintain for the benefit of the Certificateholders possession of the negotiable instruments or securities, if any, evidencing such Eligible Investments. Funds on deposit in the Excess Funding Account on any date (after giving effect to any withdrawals from the Excess Funding Account on such date) will be invested in Eligible Investments that will mature so that funds will be available at the close of business on the Transfer Date following such date or with respect to some or all of the amounts so invested, so that funds will be available on such earlier date as the Servicer directs. Unless directed by the Servicer, funds deposited in the Excess Funding Account on a Transfer Date with respect to the next following Distribution Date are not required to be invested overnight. On each Transfer Date, the Servicer shall instruct the Trustee to withdraw on the related Distribution Date from the Excess Funding Account and deposit in the Collection Account all interest and other investment earnings (net of losses and investment expenses) on funds on deposit in the Excess Funding Account, for application as Collections of Finance Charge Receivables with respect to the prior Monthly Period. Interest (including reinvested interest) and other investment income and earnings on funds on deposit in the Excess Funding Account shall not be considered part of the Excess Funding Amount for purposes of this Agreement. On any Business Day on which no Series is in an Accumulation Period or Amortization Period, the Servicer shall determine the amount by which the Seller Amount exceeds the Required Seller Amount on such date and shall instruct the Trustee in writing to withdraw such amount from the Excess Funding Account on the next succeeding Business Day and pay such amount to the Holders of the Seller Certificates. On any Business Day on which one or more Series is in an Accumulation Period or Amortization Period, if the Servicer determines (i) that, on the first Distribution Date after such Business Day no Principal Shortfall will exist with respect to any Principal Sharing Series and (ii) that, on such Business Day, the Seller Amount exceeds the Required Seller Amount, then the Servicer shall instruct the Trustee in writing to withdraw the amount by which the Seller Amount exceeds the Required Seller Amount from the Excess Funding Account on the next succeeding Business Day and pay such amount to the Holders of the Seller Certificates. For purposes of the immediately preceding sentence, the Servicer shall determine whether or not a Principal Shortfall will exist on the first Distribution Date thereafter solely on the basis of Collections received by the Servicer prior to the Business Day on which such determination is made (and for the Monthly Period related to such Distribution Date) and on the assumption that no additional Collections will be received prior to such Distribution Date. On any Transfer Date on which one or more Series is in an Accumulation Period or Amortization Period, the Servicer shall determine 2 3 the aggregate amount of Principal Shortfalls, if any, with respect to each such Series that is a Principal Sharing Series (after giving effect to the allocation and payment provisions in the Supplement with respect to each such Series), and the Servicer shall instruct the Trustee in writing to withdraw such amount (up to the Excess Funding Amount) from the Excess Funding Account on the succeeding Distribution Date and allocate such amount among each such Series as Shared Principal Collections as specified herein and in each related Supplement. SECTION 2. SECTION 2. Effectiveness. The amendment provided for by this Amendment shall become effective on the date (the "Effective Date") that each of the following events occur: (a) Fleet (RI) shall have delivered to the Trustee an Officer's Certificate from Fleet (RI) stating that Fleet (RI) reasonably believes that the execution and delivery of this Amendment will not have an Adverse Effect. (b) Fleet (RI) shall have received from each Rating Agency written confirmation that the execution and delivery of this Amendment will not result in the reduction or withdrawal of its current rating of any outstanding Series or Class of Investor Certificates. (c) Each of the parties hereto shall have received counterparts of this Amendment, duly executed by each of the parties hereto. SECTION 3. Pooling and Servicing Agreement in Full Force and Effect as Amended. Except as specifically amended hereby, all of the terms and conditions of the Pooling and Servicing Agreement shall remain in full force and effect. All references to the Pooling and Servicing Agreement in any other document or instrument shall be deemed to mean such Pooling and Servicing Agreement as amended by this Amendment. This Amendment shall not constitute a novation of the Pooling and Servicing Agreement, but shall constitute an amendment thereof. The parties hereto agree to be bound by the terms and obligations of the Pooling and Servicing Agreement, as amended by this Amendment, as though the terms and obligations of the Pooling and Servicing Agreement were set forth herein. SECTION 4. Counterparts. This Amendment may be executed in any number of counterparts and by separate parties hereto on separate counterparts, each of which when executed shall be deemed an original, but all such counterparts taken together shall constitute one and the same instrument. SECTION 5. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. 3 4 IN WITNESS WHEREOF, the parties hereto have caused this Amendment to the Pooling and Servicing Agreement to be duly executed by their respective authorized officers as of the day and year first above written. FLEET BANK (RI), NATIONAL ASSOCIATION, Seller and Servicer By: /s/ Jeffrey A. Lipson ------------------------------------- Name: Jeffrey A. Lipson Title: Vice President BANKERS TRUST COMPANY, Trustee By: /s/ Peter Becker ------------------------------------- Name: Peter Becker Title: Assistant Vice President [Signature Page to Amendment No. 4 to the Amended and Restated Pooling and Servicing Agreement] EX-4.7 4 FORM OF SERIES SUPPLEMENT TO AMEND.& RESTATED POOL 1 Exhibit 4.7 OH&S DRAFT 01/11/00 [Form Of Series Supplement] - ------------------------------------------------------------------------------ FLEET BANK (RI), NATIONAL ASSOCIATION Seller and Servicer and BANKERS TRUST COMPANY Trustee on behalf of the Series - Certificateholders ---- - SERIES - SUPPLEMENT ---- - Dated as of , ------------ -- ---- to AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT Dated as of December 1, 1993, as Amended and Restated on May 23, 1994 FLEET CREDIT CARD MASTER TRUST II SERIES - ---- - - ------------------------------------------------------------------------------ 2 TABLE OF CONTENTS
PAGE ARTICLE I Creation of the Series - Certificates ---- - Section 1.1 Designation....................................................1 ARTICLE II Definitions Section 2.1 Definitions....................................................2 ARTICLE III Servicer and Trustee Section 3.1 Servicing Compensation.........................................1 ARTICLE IV Rights of Series ____-_ Certificateholders and Collateral Interest Holder and Allocation and Application of Collections Section 4.1 Collections and Allocations...................................17 Section 4.2 Determination of Monthly Interest.............................19 Section 4.3 Determination of Monthly Principal............................21 Section 4.4 Required Amount...............................................22 Section 4.5 Application of Class A Available Funds, Class B Available Funds, Collateral Available Funds and Available Investor Principal Collections.........................................23 Section 4.6 Defaulted Amounts; Investor Charge-Offs.......................25 Section 4.7 Excess Spread; Excess Finance Charges.........................26 Section 4.8 Reallocated Principal Collections.............................27 Section 4.9 xcess Finance Charges.........................................28 Section 4.10 Shared Principal Collections..................................28 [Section 4.11 Determination of LIBOR........................................29 Section 4.12 Principal Funding Account....................................29
3 TABLE OF CONTENTS (continued)
PAGE Section 4.13 Accumulation Period...........................................30 Section 4.14 Reserve Account...............................................31 ARTICLE V Distributions and Reports to Series ____-_ Certificateholders Section 5.1 Distributions.................................................33 Section 5.2 Certificates and Statements...................................34 ARTICLE VI Series ____-_ Pay Out Events Section 6.1 Series ____-_ Pay Out Events..................................34 ARTICLE VII Optional Repurchase; Series Termination Section 7.1 Optional Repurchase...........................................36 Section 7.2 Series Termination............................................36 ARTICLE VIII Final Distributions Section 8.1 Sale of Receivables or Certificateholders' Interest Pursuant to Section 2.06 or 10.01 of the Agreement........................37 Section 8.2 Distribution of Proceeds of Sale, Disposition or Liquidation of the Receivables Pursuant to Section 9.02 of the Agreement....38 Section 8.3 Instructions Pursuant to Section 9.02(a) of the Agreement.....39 ARTICLE IX Certificates Section 9.1 Book-Entry Certificates.......................................39
ii 4 TABLE OF CONTENTS (continued)
PAGE ARTICLE X Miscellaneous Provisions Section 10.1. Certain Matters Regarding the Collateral Interest Holder......40 Section 10.2 Ratification of Agreement.....................................40 Section 10.3 Counterparts..................................................40 Section 10.4 Governing Law.................................................40 Section 10.5 Notices.......................................................40 Section 10.6 Amendments....................................................40 Section 10.7. Uncertificated Securities.....................................40 Section 10.8. Transfers of the Collateral Interest..........................40
EXHIBITS EXHIBIT A-1 Form of Class A Certificate EXHIBIT A-2 Form of Class B Certificate EXHIBIT B Form of Monthly Payment Instructions EXHIBIT C Form of Monthly Certificateholders' Statement EXHIBIT D Form of Investment Letter iii 5 SERIES ____-_ SUPPLEMENT, dated as of ____________ __, ____ (the "Supplement"), among FLEET BANK (RI), NATIONAL ASSOCIATION, a national banking association, as Seller and Servicer by assignment from ADVANTA NATIONAL BANK pursuant to an Assignment and Assumption Agreement dated as of February 20, 1998, and BANKERS TRUST COMPANY, a New York banking corporation, as Trustee. Pursuant to the Amended and Restated Pooling and Servicing Agreement dated as of December 1, 1993, as Amended and Restated on May 23, 1994 (and as subsequently amended and supplemented, including by the terms of this Supplement, the "Agreement"), among Fleet Bank (RI), National Association (successor to Advanta National Bank), as Seller and Servicer, and the Trustee, the Fleet Credit Card Master Trust II (the "Trust") has been created. Section 6.03 of the Agreement provides that the Seller 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 Seller and the Trustee shall create a new Series of Investor Certificates and specify the Principal Terms thereof. ARTICLE I Creation of the Series ____-_ Certificates Section 1.1 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 "Fleet Credit Card Master Trust II, Series ____-_." The Series of Investor Certificates created hereby shall be issued in two Classes. The first Class shall be known as the "Class A Floating Rate Asset-Backed Certificates, Series ____-_," and the second Class shall be known as the "Class B Floating Rate Asset-Backed Certificates, Series ____-_." In addition, there is hereby created a third Class of interests in the Trust which, except as expressly provided herein, shall be deemed to be "Investor Certificates" for all purposes under the Agreement and this Supplement and shall be in uncertificated form and which shall be known as the "Collateral Interest, Series ____-_." The Collateral Interest Holder shall be the Series Enhancer for Series ____-_. (b) Series ____-_ shall be included in Group One. Series ____-_ shall be a Principal Sharing Series with respect to Group One only. Series ____-_ 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 ____-_ shall be the _____________ __, ____ Distribution Date, and references herein to the Monthly Period relating to the _____________ __, ____ Distribution Date shall mean the period from the Closing Date through the end of _____________, ___. (c) 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. 6 (d) The Collateral Interest Holder, as holder of an "Investor Certificate" under the Agreement, shall be entitled to the benefits of the Agreement and this Supplement. Notwithstanding the foregoing, except as expressly provided herein, (i) the provisions of Article VI and Article XII of the Agreement relating to the execution, authentication, delivery, presentation, cancellation and surrender of Registered Certificates and clauses (a) and (c) of the definition of "Tax Opinion" in Section 1.01 of the Agreement 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 Seller intends, and together with the Collateral Interest Holder, agrees 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 2.1 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. "Accumulation Date" shall mean the close of business on _____________ __, ____. "Accumulation Period" unless a Pay Out Event with respect to Series ____-_ shall have occurred prior thereto, the period commencing on the Accumulation Date or such later date as is determined in accordance with Section 4.13 and ending on the first to occur of (a) the commencement of the Rapid Amortization Period, (b) the payment in full to the Series ____-_ Holders of the Investor Amount or (c) the Series Termination Date. "Accumulation Period Length" shall have the meaning specified in Section 4.13. "Additional Interest" shall mean, at any time of determination, the Class A Additional Interest, the Class B Additional Interest and the Collateral Additional Interest. "Assignee" shall have the meaning specified in subsection 10.8(a). "Available Investor 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 all Collections of Principal Receivables received during such Monthly Period minus (ii) the amount of Reallocated Principal Collections with respect to such Monthly Period which pursuant to Section 4.8 are required to fund any deficiency in the amounts to be distributed pursuant to Sections 4.5(a)(i), (ii) and (iii), 4.5(b)(i), and (ii) and 4.7(d) for the related Distribution Date, plus (b) any Shared Principal Collections with respect to other Series in Group One that are allocated to Series ____-_ in accordance with Section 4.04 of the Agreement and 2 7 Section 4.10 hereof, plus (c) any other amounts which pursuant to subsection 4.5(a)(iii) (including any amounts allocated with respect thereto pursuant to subsection 4.7(a)) and Section 4.7 hereof are to be treated as Available Investor Principal Collections with respect to the related Distribution Date. "Average Principal Balance" shall mean, for any Monthly Period in which an Addition Date occurs, the weighted average of the sum of the Principal Receivables in the Trust and the principal amount on deposit in the Excess Funding Account at the end of the day on the last day of the prior Monthly Period and the sum of the Principal Receivables in the Trust and the principal amount on deposit in the Excess Funding Account at the end of the day on the related Addition Date, weighted, respectively, by a fraction, the numerator of which is the number of days from and including the first day of such Monthly Period, to but excluding the related Addition Date, and the denominator of which is the number of days in such Monthly Period, and by a fraction, the numerator of which is the number of days from and including the related Addition Date to and including the last day of such Monthly Period, and the denominator of which is the number of days in such Monthly Period. "Bank" shall mean Fleet Bank (RI), National Association. "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, the Collateral Minimum Monthly Interest and the Monthly Servicing Fee with respect to the related Distribution Date and the denominator of which is the Investor Amount as of the last day of the preceding Monthly Period. "Class A Additional Interest" shall have the meaning specified in subsection 4.2(a). "Class A Available Funds" shall mean, with respect to any Monthly Period, an amount equal to the sum of (a) the Class A Floating Percentage of the Collections of Finance Charge Receivables allocated to Series 2000-_ (including any amounts that are to be treated as Collections of Finance Charge Receivables in accordance with the Agreement) and (b) the amount of Principal Funding Investment Proceeds, if any, with respect to such Distribution Date and (c) the amount of funds, if any, to be withdrawn from the Reserve Account which, pursuant to Section 4.14, 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 Period with respect to the Class A Certificates, a per annum rate equal to [LIBOR as of the LIBOR Determination Date applicable to such Interest Period plus the Class A Certificate Rate Spread]. "Class A Certificate Rate Spread" shall mean ___% per annum. "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 Seller and authenticated by or on behalf of the Trustee, substantially in the form of Exhibit A-1. 3 8 "Class A Expected Final Distribution Date" shall mean the ____________ __ Distribution Date. "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 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 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 $_____________. "Class A Interest Shortfall" shall have the meaning specified in subsection 4.2(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 the aggregate amount of Class A Investor Charge-Offs for all prior Distribution Dates over the aggregate amount of Class A Investor Charge-Offs reimbursed pursuant to subsection 4.6(a) prior to such date minus (d) the Principal Funding Account Balance (but not in excess of the Class A Initial Invested Amount) on such date. "Class A Investor Amount" shall mean, on any date of determination, an amount equal to the sum of (a) the Class A Invested Amount and (b) the Principal Funding Account Balance (but not in excess of the Class A Initial Invested Amount). "Class A Investor Charge-Off" shall have the meaning specified in Section 4.6(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 the related Monthly Period and (ii) the Class A Floating Percentage for such Monthly Period. "Class A Monthly Interest" shall have the meaning specified in Section 4.2(a). "Class A Monthly Principal" shall have the meaning specified in Section 4.3(a). "Class A Penalty Rate" shall mean the sum of the Class A Certificate Rate and ___% per annum. "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) after 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 Revolving Period, and the denominator of which is the 4 9 Invested Amount as of such last day; 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 the denominator of which is the Initial Invested Amount. "Class A Required Amount" shall have the meaning specified in Section 4.4(a). "Class A Servicing Fee" shall have the meaning specified in Section 3.1. "Class B Additional Interest" shall have the meaning specified in Section 4.2(b). "Class B Available Funds" shall mean, with respect to any Monthly Period, an amount equal to the Class B Floating Percentage of the Collections of Finance Charge Receivables allocated to Series ____-_ (including any amounts that are to be treated as Collections of Finance Receivables in accordance with the Agreement). "Class B Certificate Rate" shall mean, for any Interest Period with respect to the Class B Certificates, a per annum rate equal to [LIBOR as of the LIBOR Determination Date for such Interest Period plus the Class B Certificate Rate Spread]. "Class B Certificate Rate Spread" shall mean ___% per annum. "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 Seller and authenticated by or on behalf of the Trustee, substantially in the form of Exhibit A-2. "Class B Expected Final Distribution Date" shall mean the __________ __ Distribution Date. "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 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 Invested Amount as of 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 $___________. "Class B Interest Shortfall" shall have the meaning specified in Section 4.2(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 on or prior to such date, minus (c) the excess, if any, of the aggregate amount of Class B Investor Charge-Offs for all prior Distribution Dates 5 10 over the aggregate amount of any reimbursement of Class B Investor Charge-Offs pursuant to subsection 4.6(b) for all Distribution Dates preceding such date, minus (d) the aggregate amount of Reallocated Principal Collections allocated on all prior Distribution Dates pursuant to Section 4.8(a) (excluding any Reallocated Principal Collections that have resulted in a reduction in the Collateral Invested Amount pursuant to Section 4.6(c)), 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 Section 4.6(a) plus (f) the aggregate amount of Excess Spread and Excess Finance Charges allocated and available on all prior Distribution Dates pursuant to Section 4.7(e) for the purpose of reimbursing amounts deducted pursuant to the foregoing clauses (c), (d) and (e); and minus (g) the positive difference, if any, between the Principal Funding Account Balance and the Class A Investor Amount on such date; provided, however, that the Class B Invested Amount may not be reduced below zero. "Class B Investor Amount" shall mean, for any date of determination, an amount equal to the sum of (a) the Class B Invested Amount and (b) the positive difference, if any, between the Principal Funding Account Balance and the Class A Investor Amount on such date (such sum not to exceed the Class B Initial Invested Amount). "Class B Investor Charge-Off" shall have the meaning specified in Section 4.6(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 the related Monthly Period and (ii) the Class B Floating Percentage for such Monthly Period. "Class B Monthly Interest" shall have the meaning specified in Section 4.2(b). "Class B Monthly Principal" shall have the meaning specified in Section 4.3(b). "Class B Penalty Rate" shall mean the sum of the Class B Certificate Rate and ___% per annum. "Class B Principal Commencement Date" shall mean, the earlier to occur of (x) the Class B Expected Final Distribution Date (but only if the Class A Investor Amount is paid in full on such date) and (y) the Special Payment Date on which the Class A Investor Amount is paid in full. "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) after 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 Revolving Period, and the denominator of which is the Invested Amount as of such last day; 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. 6 11 "Class B Required Amount" shall have the meaning specified in Section 4.4(b). "Class B Servicing Fee" shall have the meaning specified in Section 3.1. "Closing Date" shall mean __________ __, ____. "Collateral Additional Interest" shall have the meaning specified in Section 4.2(c). "Collateral Available Funds" shall mean, with respect to any Monthly Period, an amount equal to the Collateral Floating Percentage of the Collections of Finance Charge Receivables allocated to Series ____-_ (including any amounts that are to be treated as Collections of Finance Charge Receivables in accordance with the Agreement). "Collateral Default Amount" shall mean, with respect to each Distribution Date, an amount equal to the product of (i) the Investor Default Amount for the related Monthly Period and (ii) the Collateral Floating Percentage for such Monthly Period. "Collateral Expected Final Distribution Date" shall mean the __________ ____ Distribution Date. "Collateral 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 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 equal to the Invested Amount as of such 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 $_____________. "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, 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 4.7(k), 4.14(e), 4.14(f), 8.1(b), 8.2(a) and 8.2(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 4.2(c). "Collateral Invested Amount" shall mean, for any date of determination, an amount equal to (a) the Collateral Initial Invested Amount, minus (b) an amount equal to the 7 12 amount by which the Collateral Invested Amount has been reduced on all prior Distribution Dates pursuant to Section 4.6, minus (c) the aggregate amount paid pursuant to subsection 4.5(e)(iii) prior to such date, plus (d) the aggregate amount of Excess Finance Charges and Excess Spread allocated and available on all prior Distribution Dates pursuant to subsection 4.7(i) for the purpose of reimbursing amounts deducted pursuant to the foregoing clause (b); provided, however, that the Collateral Invested Amount may not be reduced below zero. "Collateral Minimum Interest Rate" shall mean the rate designated as such in the Transfer Agreement; provided, that for purposes or this Supplement, such rate shall not exceed _____% per annum. "Collateral Minimum Monthly Interest" shall have the meaning specified in Section 4.2(c). "Collateral Monthly Principal" shall have the meaning specified in Section 4.3(c). "Collateral Principal Commencement Date" shall mean, the earlier to occur of (x) the Collateral Expected Final Distribution Date (but only if the Class A Investor Amount and the Class B Investor Amount are paid in full on or prior to such date) and (y) the Special Payment Date on which the Class A Investor Amount and the Class B Investor Amount are paid in full. "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) after 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 Revolving Period, and the denominator of which is the Invested Amount as of such last day; 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 specified in Section 3.1. "Controlled Accumulation Amount" shall mean (a) for any Distribution Date with respect to the Accumulation Period, the sum of the Class A Initial Invested Amount and the Class B Initial Invested Amount divided by 9; provided, however, that, if the Accumulation Period is modified pursuant to Section 4.13, (i) the Controlled Accumulation Amount for each Distribution Date with respect to the Accumulation Period shall mean the amount determined in accordance with Section 4.13 on the date on which the Accumulation Period has most recently been modified and (ii) the sum of the Controlled Accumulation Amounts for all Distribution Dates with respect to the modified Accumulation Period shall not be less than the Initial Invested Amount. "Controlled Deposit Amount" shall mean, for any Distribution Date with respect to the Accumulation Period, an amount equal to the sum of the Controlled Accumulation 8 13 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 Accumulation Period or the first Special Payment Date if such Special Payment Date occurs prior to the date on which the Class A Investor Amount is paid in full, 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 preceding Distribution Date to but excluding such Distribution Date and the denominator of which is 360, times (B) the Class A Certificate Rate and (ii) the Principal Funding Account Balance (but not in excess of the Class A Initial Invested Amount), if any, as of the preceding Distribution Date. "Deficit Controlled Accumulation Amount" shall mean (a) on the first Distribution Date with respect to the Accumulation Period, the excess, if any, of the Controlled Accumulation Amount for such Distribution Date over the amount distributed from the Collection Account as Class A Monthly Principal and Class B Monthly Principal for such Distribution Date and (b) on each subsequent Distribution Date with respect to the Accumulation Period, the excess, if any, of the Controlled Deposit Amount for such subsequent Distribution Date over the amount distributed from the Collection Account as Class A Monthly Principal and Class B Monthly Principal for such subsequent Distribution Date. "Designated Maturity" shall mean, for any LIBOR Determination Date, one month; provided, [that LIBOR for the initial Interest Period will be determined by straight-line interpolation (based on the actual number of days in the initial Interest Period) between two rates determined in accordance with the definition of LIBOR, one of which will be determined for a Designated Maturity of one month and the other of which will be determined for a Designated Maturity of two months.] "Distribution Date" shall have the meaning assigned thereto in the Agreement, except that with respect to the Series ____-_ Certificates, the first Distribution Date shall be _____________ __, ____. "Excess Finance Charges" shall have the meaning specified in Section 4.9. "Excess Spread" shall mean, with respect to any Distribution Date, the sum of the amounts, if any, specified pursuant to Sections 4.5(a)(iv), 4.5(b)(iii) and 4.5(c)(ii) with respect to such Distribution Date. "Finance Charge Shortfall" shall have the meaning specified in Section 4.9. "Fitch" shall mean Fitch IBCA, Inc., or its successors. "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 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 greater of (1) the sum of (x) the total amount of Principal Receivables in the Trust at the end of the day on such date (or with respect to the first Monthly Period, at the end of the day 9 14 on the Closing Date) and (y) the principal amount on deposit in the Excess Funding Account as of the end of the day on such date and (2) the sum of the numerators used to calculate the Series Percentages (as such term is defined in the Agreement) with respect to Finance Charge Receivables or Defaulted Receivables, as applicable, for all Series then outstanding; provided, however, that with respect to any Monthly Period in which an Addition Date occurs and the Servicer need not make daily deposits of Collections into the Collection Account, the denominator in (x) above shall be the Average Principal Balance; provided further, however, that with respect to any Monthly Period in which an Addition Date occurs and the Servicer is required to make daily deposits of Collections into the Collection Account, the denominator in (x) above shall be (1) for the period from and including the first day of such Monthly Period to but excluding the related Addition Date, the aggregate amount of Principal Receivables in the Trust at the end of the day on the last day of the prior Monthly Period and (2) for the period from and including the related Addition Date to and including the last day of such Monthly Period, the aggregate amount of Principal Receivables in the Trust at the end of the day on the related Addition Date. "Group One" shall mean Series 1995-A, Series ________, __________ and ________ and each other outstanding Series hereafter specified in the related Supplement to be included in Group One. "Initial Invested Amount" shall mean the sum of the Class A Initial Invested Amount, the Class B Initial Invested Amount and the Collateral Initial Invested Amount. "Initial Servicing Fee" shall have the meaning specified in Section 3.1. "Interchange" shall mean, with respect to Series ____-_ and with respect to each Distribution Date, an amount of Interchange (as defined in the Agreement) equal to one-twelfth of ____% of the outstanding balance of the Principal Receivables allocable to Series ____-_ on the last day of the preceding Monthly Period. "Interest Period" shall mean, with respect to any Distribution Date, the period 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) 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 10.8(b). "Investor Amount" shall mean, as of any date of determination, an amount equal to the sum of (a) the Invested Amount and (b) the Principal Funding Account Balance. "Investor Charge-Offs" shall mean Class A Investor Charge-Offs and Class B Investor Charge-Offs. 10 15 "Investor Default Amount" shall mean, with respect to any Distribution Date, an amount equal to the product of (a) the Defaulted Amount for the related Monthly Period and (b) the Floating Allocation Percentage for such Monthly Period. ["LIBOR" shall mean an interest rate per annum determined by the Trustee for each Interest Period in accordance with the provisions of Section 4.11.] ["LIBOR Determination Date" shall mean ____________ __, ____ with respect to the period from the Closing Date through ____________ __, ____; and, with respect to each Interest Period thereafter, the second London Business Day prior to every Distribution Date on which such Interest Period begins commencing with the ____________ __, ____ Distribution Date.] "London Business Day" shall mean a Business 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 Servicing Fee" shall have the meaning specified in Section 3.1. "Net Portfolio Yield" shall mean, with respect to any Monthly Period, the annualized percentage equivalent of a fraction, the numerator of which is equal to (a) an amount equal to the product obtained by multiplying the Floating Allocation Percentage with respect to such Monthly Period and the amount of Collections of Finance Charge Receivables with respect to such Monthly Period (including any other amounts that are to be treated as Collections of Finance Charge Receivables in accordance with the Agreement), plus (b) the amount of any Principal Funding Investment Proceeds for the related Distribution Date, plus (c) the amount of funds, if any, to be withdrawn from the Reserve Account which, pursuant to subsection 4.14(d), are required to be deposited into the Collection Account and included in Class A Available Funds with respect to such Distribution Date, minus (d) the Investor Default Amount for the Distribution Date with respect to such Monthly Period, and the denominator of which is the Investor Amount as of the last day of the preceding Monthly Period. "Percentage Allocation" shall have the meaning specified in Section 4.1(b)(ii). "Permitted Assignee" shall mean any Person who, if it were the Collateral Interest Holder or 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 Monthly Period: (a) during the Revolving Period, the percentage equivalent (which percentage shall never exceed 100%) of a fraction, (x) the numerator of which is the Invested Amount as of the last day of the immediately preceding Monthly Period (or, in the case of the first Monthly 11 16 Period, the Closing Date) and (y) the denominator of which is the greater of (i) the sum of (A) the total amount of Principal Receivables in the Trust as of the last day of the immediately preceding Monthly Period and (B) the principal amount on deposit in the Excess Funding Account as of such last day (or, in the case of the first Monthly Period, the Closing Date) and (ii) the sum of the numerators used to calculate the Series Percentages applicable to Principal Receivables for all Series outstanding as of the date as to which such determination is being made; (b) during the Accumulation Period or the Rapid Amortization Period, the percentage equivalent (which percentage shall never exceed 100%) of a fraction, (x) the numerator of which is the Invested Amount as of the last day of the Revolving Period or, if the numerator has been reduced as described in the first proviso below during the Accumulation Period and a Rapid Amortization Period commences, as of the last day of the Accumulation Period, and (y) the denominator of which is the greater of (i) the sum of (A) the total amount of Principal Receivables in the Trust as of the last day of the immediately preceding Monthly Period and (B) the principal amount on deposit in the Excess Funding Account as of such last day and (ii) the sum of the numerators used to calculate the Series Percentages applicable to Principal Receivables for all Series outstanding as of the date as to which such determination is being made; provided however, that during the Accumulation Period, on any date, at the option of the Servicer, the numerator of the Principal Allocation Percentage may be reduced below the numerator used in the previous Monthly Period, to an amount not less than the greater of (x) the Invested Amount as of the last day of the immediately preceding Monthly Period (less the amount of any distributions of principal deposited in the Principal Funding Account since the last day of the immediately preceding Monthly Period) and (y) an amount that, if used as the numerator of the Principal Allocation Percentage for the remainder of the Accumulation Period, assuming for this purpose that (1) the payment rate with respect to Collections of Principal Receivables remains constant at the level of the immediately preceding Monthly Period, (2) the total amount of Principal Receivables in the Trust (and the principal amount on deposit in the Excess Funding Account, if any) remains constant at the level on the date of such reduction, (3) no Pay Out Event with respect to any Series will subsequently occur and (4) no additional Series (other than any Series being issued on the date of such reduction) will be subsequently issued, would assure that Available Investor Principal Collections for Series ____-_ would equal at least ___% of the Controlled Accumulation Amount for each Monthly Period for so long as the Invested Amount is greater than zero; provided further, however, that any such reduction of the numerator of the Principal Allocation Percentage shall be subject to the receipt by the Trustee of an Officer's Certificate of the Servicer to the effect that the Servicer does not expect that the Available Investor Principal Collections for any Monthly Period would be less than the Controlled Accumulation Amount; provided further, however that with respect to any Monthly Period in which an Addition Date occurs and the Servicer need not make daily deposits of Collections into the Collection Account, the amount in clause (y) (i) of paragraphs (a) and (b) above shall be the Average Principal Balance; provided further, however, that with respect to any Monthly Period in which an Addition Date occurs and the Servicer is required to make daily deposits of Collections into the Collection Account, the amount in clause (y) (i) of paragraphs (a) and (b) above shall be (1) for the period from and including the first day of such Monthly Period to but excluding the related Addition Date, the sum of (x) the aggregate amount of Principal Receivables in the Trust at the end of the day on the last day of the prior Monthly Period and (y) the principal amount on deposit in the Excess Funding Account as of such last day and (2) for the 12 17 period from and including the related Addition Date to and including the last day of such Monthly Period, the sum of (x) the aggregate amount of Principal Receivables in the Trust at the end of the day on the related Addition Date and (y) the principal amount on deposit in the Excess Funding Account at the end of the day on the related Addition Date. "Principal Funding Account" shall have the meaning set forth in subsection 4.12(a)(i). "Principal Funding Account Balance" shall mean, with respect to any date of determination during the Accumulation Period, the principal amount, if any, on deposit in the Principal Funding Account on such date of determination. "Principal Funding Investment Proceeds" shall have the meaning specified in subsection 4.12(a)(ii). "Principal Shortfall" shall have the meaning specified in Section 4.10. "Rapid Amortization Period" shall mean, (a) if on the day on which a Trust Pay Out Event or a Series ____-_ Pay Out Event is deemed to have occurred the Servicer need not make daily deposits into or withdrawals from the Collection Account pursuant to Section 4.03(a) of the Agreement, the period commencing at the close of business on the Business Day immediately preceding the first day of the Monthly Period in which such Trust Pay Out Event or Series ____-_ Pay Out Event is deemed to have occurred or (b) otherwise, the period commencing at the close of business on the Business Day immediately preceding the day on which a Trust Pay Out Event or a Series ____-_ Pay Out Event is deemed to have occurred, and ending on the first to occur of (i) the payment in full to the Class A Certificateholders and the Class B Certificateholders of the Class A Investor Amount and the Class B Investor Amount, respectively, and the payment in full to the Collateral Interest Holder of the Collateral Invested Amount, or (ii) the Series Termination Date. "Reallocated Principal Collections" shall mean, with respect to any Monthly Period, the product of (a) the Principal Allocation Percentage with respect to such Monthly Period, (b) the aggregate amount of Collections in respect of Principal Receivables for such Monthly Period and (c) the sum of the Class B Principal Percentage and the Collateral Principal Percentage with respect to such Monthly Period. Reallocated Principal Collections allocable to the Class B Certificates shall equal, with respect to any Monthly Period, the product of (a) the Principal Allocation Percentage with respect to such Monthly Period of the aggregate amount of Collections in respect of Principal Receivables deposited in the Collection Account for such Monthly Period and (b) the Class B Principal Percentage with respect to such Monthly Period. Reallocated Principal Collections allocable to the Collateral Interest shall equal, with respect to any Monthly Period, the product of (a) the Principal Allocation Percentage with respect to such Monthly Period of the aggregate amount of Collections in respect of Principal Receivables deposited in the Collection Account for such Monthly Period and (b) the Collateral Principal Percentage with respect to such Monthly Period. In no event will the Collections of Principal Receivables allocable to the Collateral Interest on any Distribution Date exceed the Collateral Invested Amount on such Distribution Date and in no event will the Collections of Principal 13 18 Receivables allocable to the Class B Certificates on any Distribution Date exceed the Class B Invested Amount. "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 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 ____-_ Holders 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 ____-_ Holders on a prior Distribution Date. ["Reference Banks" shall mean ____________________________, and __________________________ or such other major banks in the London interbank market selected by the Servicer from time to time.] "Required Reserve Account Amount" shall mean, with respect to any Distribution Date prior to the Reserve Account Funding Date, $0, and on or after the Reserve Account Funding Date, an amount equal to (a) the product of (i) ___% of the Class A Investor Amount as of the preceding Distribution Date (after giving effect to all changes therein on such date) and (ii) a fraction, the numerator of which is the number of Monthly Periods scheduled to be included in the Accumulation Period as of such date and the denominator of which is nine (except that if such numerator is one, the Required Reserve Account Amount determined pursuant to this clause (a) shall be $0) or (b) any other amount designated by the Seller, provided that, if such designation is of a lesser amount, the Seller (i) shall have received written notice from each Rating Agency that such designation will not result in the reduction or withdrawal of the rating of the Series ____-_ Certificates and shall have delivered copies of each such written notice to the Servicer and the Trustee, and (ii) shall have delivered to the Trustee a certificate of an authorized officer to the effect that, based on the facts known to such officer at such time, in the reasonable belief of the Seller, such designation will not cause a Pay Out Event or an event that, after the giving of notice or the lapse of time, would cause a Pay Out Event, to occur with respect to Series ____-_. "Reserve Account" shall have the meaning specified in Section 4.14(a). "Reserve Account Funding Date" shall mean the Distribution Date with respect to the Monthly Period which commences three months prior to the Monthly Period in which, as of the related Determination Date, the Accumulation Period is scheduled to commence. "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 Section 4.14(c). "Revolving Period" shall mean the period beginning on the Closing Date and ending on the earlier of (a) the close of business on the day preceding the commencement of the Accumulation Period and (b) the close of business on the day preceding the commencement of the Rapid Amortization Period. 14 19 "Series Invested Amount" shall mean the Invested Amount. "Series Investor Amount" shall mean, as of any date of determination, an amount equal to the numerator of the Principal Allocation Percentage on such date. "Series ____-_" shall mean the Series of Investor Certificates, the terms of which are specified in this Supplement and shall include the Class A Certificates, the Class B Certificates and the Collateral Interest. "Series ____-_ Certificate" shall mean a Class A Certificate or a Class B Certificate. "Series ____-_ Certificateholder" shall mean a Class A Certificateholder or a Class B Certificateholder. "Series ____-_ Holder" shall mean a Class A Certificateholder, a Class B Certificateholder or the Collateral Interest Holder. "Series ____-_ Pay Out Event" shall have the meaning specified in Section 6.1. "Series ____-_ Supplement" shall mean this Supplement. "Series Percentage" shall mean with respect to Finance Charge Receivables and Defaulted Receivables, the Floating Allocation Percentage, and with respect to Principal Receivables, the Principal Allocation Percentage. "Series Termination Date" shall mean the earlier to occur of (i) the __________ __ Distribution Date and (ii) the termination of the Trust pursuant to Section 12.01 of the Agreement. "Servicing Base Amount" shall have the meaning specified in Section 3.1. "Servicing Fee Rate" shall mean ___%. "Special Payment Date" shall mean each Distribution Date with respect to the Rapid Amortization Period. "Telerate Page 3750" shall mean the display page currently so designated on the Bridge Telerate Capital Markets Report (or such other page as may replace such page on such service for the purpose of displaying comparable rates or prices). "Transfer" shall have the meaning specified in subsection 10.8(a). "Transfer Agreement" shall mean the agreement between Fleet (RI) and the Collateral Interest Holder, dated as of _____________ __, ____, as amended or modified from time to time, relating to the transfer of the Collateral Interest. 15 20 (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 ____-_, Moody's, Standard & Poor's and Fitch; provided, however, that references to "Rating Agency" in the definition of "Eligible Investments" shall be deemed to not include Fitch to the extent that an investment is rated by Moody's and Standard & Poor's, but not by Fitch. Reference to rating categories of Moody's and Standard & Poor's in the Agreement shall be deemed to be references to the equivalent rating categories of Fitch. (c) All capitalized terms used herein and not otherwise defined herein have the meanings ascribed to them in the Agreement. (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, Section or Exhibit are references to Articles, Sections and Exhibits in or to this Supplement unless otherwise specified; and the term "including" means "including without limitation." (e) Unless the context otherwise requires, references in this Supplement to the "Seller" and from and after the date any Additional Seller is designated pursuant to Section 2.08(e) of the Agreement, such references shall mean the Bank in its capacity as Seller and any such Additional Seller(s). ARTICLE III Servicer and Trustee Section 3.1 Servicing Compensation. The share of the Servicing Fee allocable to the Series ____-_ Holders with respect to any Distribution Date (the "Monthly Servicing Fee"), shall be equal to one-twelfth the product of (i) the Servicing Fee Rate and (ii) the Invested Amount, if any, as of the last day of the Monthly Period preceding such Distribution Date (the amount calculated pursuant to this clause (ii) is referred to as the "Servicing Base Amount"); provided, however, with respect to the ____________ ____ Distribution Date, the Monthly Servicing Fee (the "Initial Servicing Fee") shall be $___________. 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; provided, however, that with respect to the ____________ ____ Distribution Date, the Class A Servicing Fee shall be $________. 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; provided, however, that with respect to the _____________ ____ Distribution Date, the Class B Servicing Fee shall be $______. The share of the Monthly Servicing Fee allocable to the Collateral Interest Holder with respect to any Distribution Date (the "Collateral Servicing Fee"), 16 21 shall be equal to one-twelfth of the product of (a) the Collateral Floating Percentage, (b) the Servicing Fee Rate and (c) the Servicing Base Amount; provided, however, that with respect to the ___________ ____ Distribution Date, the Collateral Servicing Fee shall be $______. In no event shall the Trust, the Trustee, or the Series ____-_ Holders be liable for the share of the Servicing Fee to be paid by the Holders of the Seller Certificates or the Certificateholders of any other Series. The Class A Servicing Fee shall be payable to the Servicer solely to the extent amounts are available for distribution in respect thereof pursuant to Section 4.5(a)(ii), 4.7(a) or 4.8(a); the Class B Servicing Fee shall be payable solely to the extent amounts are available for distribution in respect thereof pursuant to Section 4.5(b)(ii), 4.7(c) or 4.8(b); and the Collateral Servicing Fee shall be payable solely to the extent amounts are available for distribution in respect thereof pursuant to Section 4.5(c)(i) or 4.7(g). ARTICLE IV Rights of Series ____-_ Certificateholders and Collateral Interest Holder and Allocation and Application of Collections Section 4.1 Collections and Allocations. The Servicer will apply, or will instruct the Trustee in writing to apply, all Collections and other funds on deposit in the Collection Account that are allocated to the Series ____-_ Holders as follows: (a) Allocations During the Revolving Period. During the Revolving Period, the Servicer shall, on or prior to the close of business on the second Business Day following any Date of Processing, allocate the following amounts as set forth below: (i) Allocate to the Series ____-_ Holders the product of (x) the Floating Allocation Percentage on such Date of Processing and (y) the aggregate amount of Collections of Finance Charge Receivables on such Date of Processing, and of that allocation, deposit and retain in the Collection Account (A) prior to the LIBOR Determination Date occurring in such Monthly Period, an amount equal to the product of (v) the Floating Allocation Percentage on such Date of Processing and (w) the aggregate amount of Collections of Finance Charge Receivables on such Date of Processing and (B) on and after such LIBOR Determination Date, the difference between (1) Monthly Interest for the related Distribution Date (plus, if the Bank is not the Servicer, the Monthly Servicing Fee for such Monthly Period) and (2) the amounts previously deposited in the Collection Account with respect to such Monthly Period pursuant to this subsection (a)(i); (ii) Allocate to the Series ____-_ Holders an amount equal to the product of (A) the Principal Allocation Percentage on such Date of Processing and (B) the aggregate amount of Collections of Principal Receivables on such Date of Processing, which amount shall be first, if any other Principal Sharing Series in Group One is outstanding and in its Amortization Period or Accumulation Period (as such terms are defined in the Agreement), retained in the Collection Account for application, to the extent necessary, as Shared Principal 17 22 Collections in accordance with Section 4.04 of the Agreement to other Series in Group One on the related Distribution Date, and second paid to the Holders of the Seller Certificates; provided, however, that the amount to be paid to the Holders of the Seller Certificates pursuant to this Section 4.1(a)(ii) on any Date of Processing shall be paid to such Holders only if the Seller Amount on such Date of Processing is greater than the Required Seller Amount (after giving effect to all Principal Receivables transferred to the Trust on such day and any amounts deposited in the Excess Funding Account on such day) and otherwise shall be deposited in the Excess Funding Account until the Seller Amount is greater than the Required Seller Amount and applied in accordance with Section 4.02 of the Agreement and the remainder shall be paid to the Holders of the Seller Certificates. (b) Allocations During the Accumulation Period. During the Accumulation Period, the Servicer shall, prior to the close of business on the second Business Day following any Date of Processing, allocate the following amounts as set forth below: (i) Allocate to the Series ____-_ Holders and deposit and retain in the Collection Account an amount equal to the product of (A) the Floating Allocation Percentage on such Date of Processing and (B) the aggregate amount of Collections of Finance Charge Receivables on such Date of Processing. (ii) Allocate to the Series ____-_ Holders and deposit and retain in the Collection Account an amount equal to the product of (x) the Principal Allocation Percentage on such Date of Processing and (y) the aggregate amount of Collections of Principal Receivables on such Date of Processing (for any such date, a "Percentage Allocation"); provided, however, that if the sum of such Percentage Allocations with respect to the same Monthly Period exceeds the Controlled Deposit Amount 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 in Group One is outstanding and in its Amortization Period or Accumulation Period (as such terms are defined in the Agreement), retained in the Collection Account for application, to the extent necessary, as Shared Principal Collections in accordance with Section 4.04 of the Agreement to other Series in Group One on the related Distribution Date, and second paid to the Holders of the Seller Certificates only if the Seller Amount on such Date of Processing is greater than the Required Seller Amount (after giving effect to all Principal Receivables transferred to the Trust on such day and any amounts deposited in the Excess Funding Account on such day) and otherwise shall be deposited in the Excess Funding Account until the Seller Amount is greater than the Required Seller Amount and applied in accordance with Section 4.02 of the Agreement and the remainder shall be paid to the Holders of the Seller Certificates. (c) Allocations During the Rapid Amortization Period. During the Rapid Amortization Period, the Servicer shall, prior to the close of business on the second Business Day following any Date of Processing, allocate the following amounts as set forth below: 18 23 (i) Allocate to the Series ____-_ Holders and deposit and retain in the Collection Account an amount equal to the product of (A) the Floating Allocation Percentage on such Date of Processing and (B) the aggregate amount of Collections of Finance Charge Receivables on such Date of Processing. (ii) Allocate to the Series ____-_ Holders and deposit and retain in the Collection Account an amount equal to the product of (A) the Principal Allocation Percentage on such Date of Processing and (B) the aggregate amount of Collections of Principal Receivables on such Date of Processing; provided, however, that after the date on which an amount of such Collections equal to the Invested Amount has been deposited into the Collection Account and allocated to the Series ____-_ Holders, the amount determined in accordance with this subparagraph (ii) in excess thereof shall be first, if any other Principal Sharing Series in Group One is outstanding and in its Amortization Period or Accumulation Period (as such terms are defined in the Agreement), retained in the Collection Account for application, to the extent necessary, as Shared Principal Collections in accordance with Section 4.04 of the Agreement to other Series in Group One on the related Distribution Date, and second paid to the Holders of the Seller Certificates only if the Seller Amount on such Date of Processing is greater than the Required Seller Amount (after giving effect to all Principal Receivables transferred to the Trust on such day and any amounts deposited in the Excess Funding Account on such day) and otherwise shall be deposited in the Excess Funding Account until the Seller Amount is greater than the Required Seller Amount and applied in accordance with Section 4.02 of the Agreement and the remainder shall be paid to the Holders of the Seller Certificates. (d) Notwithstanding anything to the contrary in this Section 4.1, if on any Date of Processing the aggregate amount of Principal Receivables is less than the sum of the Series Investor Amounts for all Series outstanding, all Collections of Principal Receivables on such date that are otherwise payable to the Holders of the Seller Certificates shall, unless such Collections are to be retained in the Collection Account, be deposited in the Excess Funding Account and applied in accordance with Section 4.02 of the Agreement. (e) Notwithstanding the foregoing, the Servicer need not make daily deposits of Collections into the Collection Account at any time when the requirements of Section 4.03 of the Agreement are satisfied. Section 4.2 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 each 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 related Interest Period and the denominator of which is 360, times (B) the Class A Certificate Rate and (ii) the outstanding principal amount of the Class A Certificates as of the close of business on the preceding Record Date; provided, however, with respect to the ____________ ____ Distribution Date, Class A Monthly Interest shall be equal to the interest accrued on the Class A Initial Invested Amount at the applicable Class A Certificate Rate for the 19 24 period from the Closing Date through ____________ __, ____ (calculated on the basis of the actual number of days in such period and a year of 360 days). 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) a fraction, the numerator of which is the actual number of days from and including the Distribution Date on which there is a shortfall to but excluding such subsequent Distribution Date and the denominator of which is 360, times (B) the Class A Penalty Rate and (ii) 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 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 each 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 related Interest Period and the denominator of which is 360, times (B) the Class B Certificate Rate and (ii) the outstanding principal amount of the Class B Certificates as of the close of business on the preceding Record Date; provided, however, with respect to the ____________ ____ Distribution Date, Class B Monthly Interest shall be equal to the interest accrued on the Class B Initial Invested Amount at the applicable Class B Certificate Rate for the period from the Closing Date through ____________ __, ____ (calculated on the basis of the actual number of days in such period and a year of 360 days). 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) a fraction, the numerator of which is the actual number of days in the period from and including the Distribution Date on which there is a shortfall to but excluding such subsequent Distribution Date and the denominator of which is 360, times (B) the Class B Penalty Rate and (ii) 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 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 Interest on each Distribution Date shall be an amount equal to one-twelfth of the product of (i) the Collateral 20 25 Minimum Interest Rate and (ii) the outstanding principal amount of the Collateral Interest as of the close of business on the preceding Record Date; provided, however, with respect to the ____________ ____ Date, the Collateral Minimum Monthly Interest shall be $________. On the Determination Date preceding each Distribution Date, the Servicer shall determine the excess, if any (the "Collateral Interest Shortfall"), of (x) the Collateral Minimum Monthly Interest for such Distribution Date over (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") equal to one-twelfth of the product of (i) the Collateral Minimum Interest Rate and (ii) such Collateral Interest Shortfall (or the portion thereof which has not been paid to the Collateral Interest Holder) shall be payable as provided herein with respect to the Collateral Interest. 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 4.3 Determination of Monthly Principal. (a) The amount of monthly principal ("Class A Monthly Principal") distributable from the Collection Account with respect to the Class A Certificates on each Distribution Date, beginning with the first Distribution Date with respect to the Accumulation Period or the Rapid Amortization Period, shall be equal to the least of (x) the Available Investor Principal Collections on deposit in the Collection Account with respect to such Distribution Date, (y) for each Distribution Date with respect to the Accumulation Period (and on or prior to the Class A Expected Final Distribution Date), the Controlled Deposit Amount for such Distribution Date and (z) the Class A Invested Amount on such Distribution Date. (b) The amount of monthly principal ("Class B Monthly Principal") distributable from the Collection Account with respect to the Class B Certificates on each Distribution Date, beginning with the first Distribution Date with respect to the Accumulation Period on which the full amount of the Class A Investor Amount is on deposit in the Principal Funding Account or has been paid to the Class A Certificateholders or, if earlier, the first Special Payment Date on which the Class A Investor Amount is paid in full, shall be equal to the least of (x) the Available Investor Principal Collections on deposit in the Collection Account with respect to such Distribution Date (minus the portion of such Available Investor Principal Collections applied to Class A Monthly Principal on such Distribution Date), (y) for each Distribution Date with respect to the Accumulation Period (and on or prior to the Class B Expected Final Distribution Date), the Controlled Deposit Amount for such Distribution Date (minus the portion of such Controlled Deposit Amount for such Distribution Date applied to Class A Monthly Principal on such Distribution Date) and (z) the Class B Invested Amount on such Distribution Date. (c) The amount of monthly principal ("Collateral Monthly Principal") distributable from the Collection Account with respect to the Collateral Interest on each Distribution Date, beginning with the Collateral Principal Commencement Date, shall be equal to the lesser of (x) the Available Investor Principal Collections on deposit in the Collection Account 21 26 with respect to such Distribution Date (minus the portion of such Available Investor Principal Collections applied to Class A Monthly Principal and Class B Monthly Principal on such Distribution Date), and (y) the Collateral Invested Amount on such Distribution Date. Section 4.4 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 (a) 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 any Class A Additional Interest previously due but not paid to the Class A Certificateholders on a prior Distribution Date, (iv) the Class A Servicing Fee for such Distribution Date, (v) any Class A Servicing Fee previously due but not paid to the Servicer and (vi) the Class A Investor Default Amount, if any, for such Distribution Date exceeds (b) the Class A Available Funds. In the event that the Class A Required Amount for such Distribution Date is greater than zero, all or a portion of the Excess Spread and the Excess Finance Charges allocable to Series ____-_ with respect to the related Monthly Period in an amount equal to the Class A Required Amount for such Distribution Date shall be distributed from the Collection Account on such Distribution Date pursuant to Section 4.7(a). In the event that the Class A Required Amount for such Distribution Date exceeds the amount of Excess Spread and the amount of Excess Finance Charges allocable to Series ____-_ with respect to the related Monthly Period, all or a portion of the Reallocated Principal Collections with respect to such Monthly Period in an amount equal to such excess shall be distributed from the Collection Account on such Distribution Date pursuant to Section 4.8(a). (b) With respect to each Distribution Date on the related Determination Date, the Servicer shall determine the amount (the "Class B Required Amount"), equal to the sum of (I) 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 on a prior Distribution Date, (iii) any Class B Additional Interest for such Distribution Date and any Class B Additional Interest previously due but not paid to the Class B Certificateholders on a prior Distribution Date, (iv) the Class B Servicing Fee for such Distribution Date and (v) any Class B Servicing Fee previously due but not paid to the Servicer exceeds (b) the Class B Available Funds, plus (II) the Class B Investor Default Amount for such Distribution Date. In the event that the Class B Required Amount for such Distribution Date is greater than zero, all or a portion of Excess Spread and the Excess Finance Charges allocable to Series ____-_ (other than Excess Spread and Excess Finance Charges applied pursuant to Sections 4.7(a) and (b) with respect to such Distribution Date) with respect to the related Monthly Period shall be applied to fund the Class B Required Amount. In the event that the Class B Required Amount for such Distribution Date exceeds the portion of Excess Spread and Excess Finance Charges allocated to Series ____-_ with respect to the related Monthly Period and available to fund the Class B Required Amount as provided in the preceding sentence, all or a portion of the Reallocated Principal Collections allocable to the Collateral Invested Amount available therefor with respect to such Monthly Period in an amount equal to such excess shall be distributed from the Collection Account on such Distribution Date pursuant to Section 4.8(b). 22 27 Section 4.5 Application of Class A Available Funds, Class B Available Funds, Collateral Available Funds and Available Investor Principal Collections. The Servicer shall apply or shall direct the Trustee in writing to apply, on each Distribution Date, Class A Available Funds, Class B Available Funds, Collateral Available Funds and Available Investor Principal Collections for the Monthly Period 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 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 the 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 the Class A Certificateholders on a prior Distribution Date, shall be distributed to the Paying Agent for payment to the Class A Certificateholders; (ii) 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 Investor Principal Collections for such Distribution Date; and (iv) the balance, if any, shall constitute Excess Spread and shall be allocated and distributed as set forth in Section 4.7. (b) On each Distribution Date, an amount equal to the Class B Available Funds with respect to such Distribution Date will be distributed 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 the 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 the Class B Certificateholders on a prior Distribution Date, shall be distributed to the Paying Agent for payment to the Class B Certificateholders; (ii) 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 as set forth in Section 4.7. 23 28 (c) On each Distribution Date, an amount equal to the Collateral Available Funds with respect to such Distribution Date will be distributed in the following priority: (i) if the Bank or the Trustee 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 as set forth in Section 4.7. (d) On each Distribution Date with respect to the Revolving Period, an amount equal to the Available Investor Principal Collections 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 Accumulation Period, or the Rapid Amortization Period, an amount equal to the Available Investor Principal Collections for the related Monthly Period will be distributed in the following priority: (i) an amount equal to Class A Monthly Principal for such Distribution Date, up to the Class A Invested Amount on such Distribution Date, shall be deposited in the Principal Funding Account for payment to the Class A Certificateholders by the Paying Agent in accordance with Section 5.1(b) on each Distribution Date beginning on the earlier to occur of the Class A Expected Final Distribution Date or the first Special Payment Date; (ii) after giving effect to the distribution referred to in clause (i) above, an amount equal to Class B Monthly Principal for such Distribution Date, up to the Class B Invested Amount on such Distribution Date, shall be deposited in the Principal Funding Account for payment to the Class B Certificateholders by the Paying Agent in accordance with subsection 5.1(d) on each Distribution Date beginning on the Class B Principal Commencement Date; (iii) after giving effect to the distributions referred to in clauses (i) and (ii) above, an amount equal to Collateral Monthly Principal for such Distribution Date, up to the Collateral Invested Amount for such Distribution Date shall be distributed to the Collateral Interest Holder in accordance with subsection 5.1(e) on each Distribution Date beginning on the Collateral Principal Commencement Date; and (iv) for each Distribution Date, after giving effect to the distributions referred to in clauses (i), (ii) and (iii) above, an amount equal to the balance, if any, of such Available Investor Principal Collections then on deposit in the Collection Account shall be treated as Shared Principal Collections and applied in accordance with Section 4.04 of the Agreement. 24 29 Section 4.6 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 with respect to such Monthly Period and (y) the amount of Excess Spread and the Excess Finance Charges allocable to Series ____-_ with respect to such Distribution Date, the Collateral Invested Amount shall be reduced by the amount of such excess, but not by more than the excess of the Class A Investor Default Amount for such Distribution Date over the sum of the amount of Reallocated Principal Collections and Excess Spread and Excess Finance Charges used to fund 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 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 A Investor Default Amount for such Distribution Date over the sum of the amount of such reduction, if any, of the Collateral Invested Amount with respect to such Distribution Date and the amount of Reallocated Principal Collections and Excess Spread and Excess Finance Charges used to fund the Class A Investor Default Amount for 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 sum of the aggregate amount of the reductions, if any, of the Collateral Invested Amount and the Class B Invested Amount for such Distribution Date and the amount of Reallocated Principal Collections and Excess Spread and Excess Finance Charges used to fund the Class A Investor Default 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 Charges allocated and available for that purpose pursuant to Section 4.7(b). (b) On each Determination Date, the Servicer shall calculate the Class B Required 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 Charges allocated to Series ____-_ with respect to the related Monthly Period which are not used to fund the Class A Required Amount and Class A Investor Charge-Offs on the related Distribution Date and (y) the amount of Reallocated Principal Collections which are available to fund the Class B Required Amount on such Distribution Date pursuant to Section 4.8(b), then the Collateral Invested Amount shall be reduced by the amount of such excess, but not by more than the excess of the Class B Investor Default Amount for such Distribution Date over the sum of the amount of Reallocated Principal Collections and Excess Spread and Excess Finance Charges used to fund the Class B 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 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 25 30 Investor Default Amount for such Distribution Date over the sum of the amount of such reduction, if any, of the Collateral Invested Amount with respect to such Distribution Date and the amount of Reallocated Principal Collections and Excess Spread and Excess Finance Charges used to fund the Class B Investor Default Amount for 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 Charges allocated and available for that purpose pursuant to subsection 4.7(e). (c) If, on any Distribution Date, Reallocated Principal Collections for such Distribution Date are applied pursuant to Section 4.8(a) or (b), the Collateral Invested Amount shall be reduced by the amount of such Reallocated Principal Collections. 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. (d) If, on any Distribution Date, the Collateral Default Amount exceeds the amount of Excess Spread and Excess Finance Charges available to fund the Collateral Default Amount pursuant to subsection 4.7(h) on such Distribution Date, then the Collateral Invested Amount shall be reduced by the amount of such excess; provided, however, that the Collateral Invested Amount shall not be reduced below zero. Section 4.7 Excess Spread; Excess Finance Charges. The Servicer shall apply or shall direct the Trustee in writing to apply, on each Distribution Date, Excess Spread and Excess Finance Charges allocated to Series ____-_ with respect to the related Monthly Period, to make the following distributions in the following 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 any deficiency pursuant to Sections 4.5(a)(i), (ii) and (iii), in that order of priority; (b) an amount equal to the aggregate amount of Class A Investor Charge-Offs which have not been previously reimbursed as provided in Section 4.6(a) (after giving effect to the allocation on such Distribution Date of any amount for that purpose pursuant to Section 4.6(a)) shall be treated as a portion of Available Investor Principal Collections for such Distribution Date; (c) an amount up to the Class B Required Amount, if any, with respect to such Distribution Date shall be distributed by the Trustee to fund any deficiency pursuant to Sections 4.5(b)(i) and (ii), in that order of priority; (d) an amount equal to the Class B Investor Default Amount for such Distribution Date shall be treated as a portion of Available Investor Principal Collections for such Distribution Date; 26 31 (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 2.1 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 Investor Principal Collections for such Distribution Date; (f) an amount equal to the Collateral Minimum Monthly Interest for such Distribution Date, plus the amount of any Collateral Minimum Monthly Interest previously due but not distributed to the Collateral Interest Holder on a prior Distribution Date pursuant to this subsection plus the amount of any Collateral Additional Interest for such Distribution Date and any Collateral Additional Interest previously due but not distributed to the Collateral Interest Holder on a prior Distribution Date shall be paid to the Collateral Interest Holder; (g) an amount equal to the Collateral Servicing Fee for such Distribution Date (or if the Bank or the Trustee is no longer the Servicer, the portion of the Collateral Servicing Fee for such Distribution Date not paid pursuant to Section 4.5(c)(i)), 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; (h) an amount equal to the Collateral Default Amount for such Distribution Date shall be treated as a portion of Available Investor Principal Collections with respect to such Distribution Date; (i) an amount equal to the aggregate amount by which the Collateral Invested Amount has been reduced pursuant to clause (b) of the definition of "Collateral Invested Amount" (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 Investor Principal Collections with respect to such Distribution Date; (j) an amount up to the excess, if any, of the Required Reserve Account Amount over the amount on deposit therein, shall be deposited into the Reserve Account; and (k) the balance, if any, shall be distributed to the Collateral Interest Holder. Section 4.8 Reallocated Principal Collections. The Servicer shall apply or shall direct the Trustee in writing to apply on each Distribution Date, Reallocated Principal Collections (applying all such Collections with respect to the Collateral Invested Amount prior to applying any such Collections with respect to the Class B Invested Amount and applying no such Collections with respect to the Class B Invested Amount pursuant to clause (b) below) with respect to such Distribution Date, to make the following distributions in the following priority: (a) an amount equal to the excess, if any, of (i) the Class A Required Amount, if any, with respect to such Distribution Date over (ii) the amount of Excess Spread and Excess Finance Charges allocated to Series ____-_ with respect to the related Monthly Period shall, be distributed by the Trustee to fund any deficiency pursuant to Sections 4.5(a)(i), (ii) and (iii), in that order of priority; 27 32 (b) an amount equal to the excess, if any, of (i) the Class B Required Amount, if any, with respect to such Distribution Date over (ii) the amount of Excess Spread and Excess Finance Charges allocated and available to the Class B Certificates pursuant to Sections 4.7(c) and (d) on such Distribution Date, shall be distributed by the Trustee to fund any deficiency pursuant to Sections 4.5(b)(i) and (ii) and Section 4.7(d), in that order of priority; and (c) the balance, if any, of such Reallocated Principal Collections shall be treated as a portion of Available Investor Principal Collections to be applied in accordance with subsections 4.5(d) and (e). Section 4.9 Excess Finance Charges. On each Distribution Date, (a) the Servicer shall allocate the aggregate amount for all outstanding Series in Group One that the related Supplements or Transfer Agreements specify are to be treated as a portion of Excess Finance Charges for such Distribution Date (collectively, "Excess Finance Charges") as specified in the Supplements or Transfer Agreements for each Series in Group One and (b) the Servicer shall withdraw (or shall instruct the Trustee in writing to withdraw) from the Collection Account and pay to the Holders of the Seller Certificates an amount equal to the excess, if any, of (x) the Excess Finance Charges for such Distribution Date over (y) the aggregate amount for all Series in Group One that the related Supplements specify are Finance Charge Shortfalls (as defined in the related Supplements or Transfer Agreements ) for such Distribution Date. Excess Finance Charges for any Distribution Date will be allocated to Series ____-_ in an amount equal to the product of (x) the aggregate amount of Excess Finance Charges for such Distribution Date and (y) a fraction, the numerator of which is the Finance Charge Shortfall for Series ____-_ for such Distribution Date and the denominator of which is the aggregate amount of Finance Charge Shortfalls for all the Series in Group One for such Distribution Date. The amount of "Excess Finance Charges" for Series ____-_ for any Distribution Date shall be specified in the Transfer Agreement. On each Distribution Date, the Trustee shall deposit in the Collection Account for application in accordance with Section 4.5 of the Agreement, the amount of "Excess Finance Charges" received by the Trustee pursuant to the Transfer Agreement on such date. The "Finance Charge Shortfall" for Series ____-_ for any Distribution Date shall be equal to the excess, if any, of (a) the full amount required to be paid, without duplication, pursuant to Sections 4.5(a), 4.5(b), 4.5(c) and 4.7(a) through (j) on such Distribution Date over (b) the sum of Class A Available Funds, Class B Available Funds and Collateral Available Funds with respect to the related Monthly Period. Section 4.10 Shared Principal Collections. Subject to Section 4.04 of the Agreement, Shared Principal Collections for any Distribution Date will be allocated to Series ____-_ in an amount equal to the product of (x) the aggregate amount of Shared Principal Collections with respect to all Series in Group One for such Distribution Date and (y) a fraction, the numerator of which is the Principal Shortfall for Series ____-_ for such Distribution Date and the denominator of which is the aggregate amount of Principal Shortfalls for all the Series which are Principal Sharing Series in Group One for such Distribution Date. The "Principal Shortfall" for Series ____-_ shall be equal to (a) for any Distribution Date with respect to the Revolving Period and the Rapid Amortization Period, zero, and (b) for any Distribution Date with respect to the Accumulation Period on or prior to the Class B Expected Final Distribution Date, the excess, if any, of the Controlled Deposit Amount with respect to such Distribution Date over the amount of Available Investor Principal Collections for such Distribution Date (excluding any portion 28 33 thereof attributable to Shared Principal Collections) and (c) for each Distribution Date on or after the Class B Expected Final Distribution Date, the excess, if any, of the Invested Amount over the amount of Available Investor Principal Collections for such Distribution Date (excluding any portion thereof attributable to Shared Principal Collections). [Section 4.11 Determination of LIBOR. (a) On each LIBOR Determination Date, the Trustee shall determine LIBOR based on the rate for deposits in United States dollars for a period of the Designated Maturity which appears on Telerate Page 3750 as of 11:00 A.M. (London Time) on such date. (b) If such rate does not appear on Telerate Page 3750, the Trustee will determine LIBOR on the basis of quotations of the offered rates for deposits in United States dollars provided by the Reference Banks at approximately 11:00 A.M. (London time) on such LIBOR Determination Date to prime banks in the London interbank market for a period of the Designated Maturity. If at least two such quotations are provided, LIBOR will be the arithmetic mean of such quotations. (c) If, on the LIBOR Determination Date, such rate does not appear on Telerate Page 3750 and only one or none of the Reference Banks provides such offered quotations, LIBOR will be the rate per annum that the Trustee determines to be the arithmetic mean of the offered quotations that three major banks in The City of New York selected by the Servicer are quoting at approximately 11:00 A.M. (New York City time) on that day for loans in United States dollars to leading European banks for a period of the Designated Maturity.] Section 4.12 Principal Funding Account. (a)(i) The Servicer, for the benefit of the Series ____-_ Holders, 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 are held for the benefit of the Series ____-_ Certificateholders. The Principal Funding Account shall initially be established by the Trustee. (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 ____-_ Certificateholders; provided that on each Distribution Date all interest and other investment income (net of losses and investment expenses ) ("Principal Funding 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. No Eligible Investment shall be disposed of prior to its maturity; provided, however, that the Trustee may sell, liquidate or dispose of an Eligible Investment before its maturity, if so directed in writing by the Servicer, the Servicer having reasonably 29 34 determined that the interest of the Series ____-_ Certificateholders may be adversely affected if such Eligible Investment is held to its maturity. 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. (iii) On each Distribution Date with respect to the 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 Investment Proceeds then on deposit in the Principal Funding Account, and such Principal Funding Investment Proceeds shall be treated as a portion of Class A Available Funds for such Distribution Date. (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. (v) The Trustee shall possess all right, title and interest in all funds on deposit from time to time in the Principal Funding Account and in all proceeds thereof. The Principal Funding Account shall be under the sole dominion and control of the Trustee for the benefit of the Series ____-_ Certificateholders. If, at any time, the Principal Funding Account ceases to be an Eligible Deposit Account, the Trustee 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 and/or any investments to such new Principal Funding Account. (vi) Pursuant to the authority granted to the Servicer in Section 3.01(b) of the Agreement, the Servicer shall have the power, revocable by the Trustee, to make withdrawals and payments or to instruct the Trustee in writing 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 5.1 of this Supplement and Section 6.07 of the Agreement, the Paying Agent shall have the power, revocable by the Trustee, to withdraw funds from the Principal Funding Account for the purpose of making distributions to the Series ____-_ Certificateholders. Section 4.13 Accumulation Period. The Accumulation Period is scheduled to commence on the Accumulation Date; provided, however, that if the Accumulation Period Length on any Determination Date (determined as described below) is less than nine months, upon notice to the Trustee, the Seller, each Rating Agency and the Collateral Interest Holder, the Servicer, at its option, may elect to modify the date on which the Accumulation Period actually commences to the first day of the month that is a number of months prior to the month in which the Class A Expected Final Distribution Date occurs at least equal to the Accumulation Period Length (so that, as a result, the number of Monthly Periods in the Accumulation Period will at least equal the Accumulation Period Length); provided, however, that (i) the length of the 30 35 Accumulation Period will not be less than one month; and (ii) notwithstanding any other provision of this Supplement to the contrary, no election to postpone the commencement of the Accumulation Period shall be made after a Pay Out Event (as defined in the related Supplement) shall have occurred and is continuing with respect to any other Series. On each Determination Date, the Servicer will determine the "Accumulation Period Length," which will mean a number of months such that the amount available for distribution of principal on the Class A Certificates on the Class A Expected Final Distribution Date and for distribution of principal on the Class B Certificates on the Class B Expected Final Distribution Date will equal or exceed the sum of the Class A Investor Amount and the Class B Investor Amount, assuming for this purpose that (1) the payment rate with respect to Collections of Principal Receivables remains constant at the lowest level of such payment rate during the twelve preceding Monthly Periods (or such lower payment rate as the Servicer may select), (2) the total amount of Principal Receivables in the Trust (and the principal amount on deposit in the Excess Funding Account, if any) remains constant at the level on such date of determination, (3) no Pay Out Event with respect to any Series will subsequently occur and (4) no additional Series (other than any Series being issued on such date of determination) will be subsequently issued. Any notice by the Servicer electing to modify the commencement of the Accumulation Period pursuant to this Section 4.13 shall specify (i) the Accumulation Period Length, (ii) the commencement date of the Accumulation Period and (iii) the Controlled Accumulation Amount with respect to each Monthly Period during the Accumulation Period. Section 4.14 Reserve Account. (a) The Servicer shall establish and maintain, in the name of the Trustee, on behalf of the Trust, for the benefit of the Series ____-_ Holders, an Eligible Deposit Account (the "Reserve Account") bearing a designation clearly indicating that the funds deposited therein are held for the benefit of the Series ____-_ Holders. The Reserve Account shall initially be established with the Trustee. The Trustee shall possess all right, title and interest in all funds on deposit from time to time in the Reserve Account and in all proceeds thereof. The Reserve Account shall be under the sole dominion and control of the Trustee for the benefit of the Series ____-_ Holders. If at any time the Reserve 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 Reserve Account meeting the conditions specified above as an Eligible Deposit Account, and shall transfer any cash and/or any investments to such new Reserve Account. The Trustee, at the written direction of the Servicer, shall (i) make withdrawals from the Reserve Account from time to time for the purposes set forth in this Supplement, and (ii) on each Distribution Date (from and after the Reserve Account Funding Date) prior to the termination of the Reserve Account make a deposit into the Reserve Account in the amount specified in, and otherwise in accordance with, Section 4.7(j). (b) Funds on deposit in the Reserve Account shall be invested at the written direction of the Servicer by the Trustee in Eligible Investments. Funds on deposit in the Reserve Account on any Transfer Date, after giving effect to any withdrawals from the Reserve Account on such Transfer Date, shall be invested in such investments that will mature so that such funds will be available for withdrawal on or prior to the immediately succeeding Transfer Date. The Trustee shall maintain for the benefit of the Series ____-_ Holders possession of the negotiable 31 36 instruments or securities, if any, evidencing such Eligible Investments. No Eligible Investment shall be disposed of prior to its maturity; provided, however, that the Trustee may sell, liquidate or dispose of an Eligible Investment before its maturity, if so directed by the Servicer in writing, the Servicer having reasonably determined that the interest of the Series ____-_ Holders may be adversely affected if such Eligible Investment is held to its maturity. On each Distribution Date, all interest and earnings (net of losses and investment expenses) accrued since the preceding Distribution Date on funds on deposit in the Reserve Account shall be retained in the Reserve Account (to the extent that the amount on deposit in the Reserve Account is less than the Required Reserve Account Amount) and the balance, if any, shall be deposited in the Collection Account and treated as Collections of Finance Charge Receivables allocable to Series ____-_. For purposes of determining the availability of funds or the balance in the Reserve Account for any reason under this Supplement, except as otherwise provided in the preceding sentence, investment earnings on such funds shall be deemed not to be available or on deposit. (c) On the Determination Date preceding each Distribution Date with respect to the Accumulation Period (prior to the Class B Expected Final Distribution Date) and the first Special Payment Date, the Servicer shall calculate the "Reserve Draw Amount" which shall be equal to the excess, if any, of the Covered Amount with respect to such Distribution Date or Special Payment Date over the Principal Funding Investment Proceeds with respect to such Distribution Date or Special Payment Date; provided, that such amount will be reduced to the extent that funds otherwise would be available for deposit in the Reserve Account under subsection 4.7(j) with respect to such Distribution Date. (d) In the event that for any Distribution Date the Reserve Draw Amount is greater than zero, the Reserve Draw Amount, up to the amount on deposit in the Reserve Account, shall be withdrawn from the Reserve Account on the related Transfer Date by the Trustee (acting in accordance with the instructions of the Servicer), deposited into the Collection Account and included in the Class A Available Funds for such Distribution Date. (e) In the event that the Reserve Account Surplus on any Distribution Date, after giving effect to all deposits to and withdrawals from the Reserve Account with respect to such Distribution Date, is greater than zero, the Trustee, acting in accordance with the written instructions of the Servicer, shall withdraw from the Reserve Account, and distribute to the Collateral Interest Holder, an amount equal to such Reserve Account Surplus. (f) Upon the earliest to occur of (i) the termination of the Trust pursuant to Article XII of the Agreement, (ii) the day on which the Class A Investor Amount is paid in full to the Class A Certificateholders, (iii) if the Accumulation Period has not commenced, the occurrence of a Pay Out Event with respect to Series ____-_ and (iv) if the Accumulation Period has commenced, the earlier of the first Special Payment Date and the Class A Expected Final Distribution Date, the Trustee, acting in accordance with the written instructions of the Servicer, after the prior payment of all amounts owing to the Series ____-_ Certificateholders which are payable from the Reserve Account as provided herein, shall withdraw from the Reserve Account and distribute to the Collateral Interest Holder all amounts, if any, on deposit in the Reserve Account and the Reserve Account shall be deemed to have terminated for purposes of this Supplement. 32 37 ARTICLE V Distributions and Reports to Series ____-_ Certificateholders Section 5.1 Distributions. (a) On each Distribution Date, the Paying Agent shall distribute to each Class A Certificateholder of record on the related Record Date (other than as provided in Section 12.02 of the Agreement) such Class A Certificateholder's pro rata share of the amounts that are allocated and available on such Distribution Date to pay interest on the Class A Certificates pursuant to this Supplement. (b) On each Distribution Date, commencing with the first to occur of the Class A Expected Final Payment Date and the first Special Payment Date, the Paying Agent shall distribute to each Class A Certificateholder of record on the related Record Date (other than as provided in Section 12.02 of the Agreement) such Class A Certificateholder's pro rata share of the amounts that are on deposit in the Principal Funding Account or that are otherwise allocated and available on such date to pay principal of the Class A Certificates pursuant to this Supplement up to a maximum amount on any such date equal to the Class A Investor Amount on such date (unless there has been an optional repurchase of the Certificateholders' Interest pursuant to Section 10.01 of the Agreement, in which event the foregoing limitation will not apply). (c) On each Distribution Date, the Paying Agent shall distribute to each Class B Certificateholder of record on the related Record Date (other than as provided in Section 12.02 of the Agreement) such Class B Certificateholder's pro rata share of the amounts that are allocated and available on such Distribution Date to pay interest on the Class B Certificates pursuant to this Supplement. (d) On each Distribution Date, commencing with the Class B Principal Commencement Date, the Paying Agent shall distribute to each Class B Certificateholder of record on the related Record Date (other than as provided in Section 12.02 of the Agreement) such Class B Certificateholder's pro rata share of the amounts that are on deposit in the Principal Funding Account (after payments have been made to the Class A Certificateholders as provided in (b) above) or that are otherwise allocated and available on such date to pay principal of the Class B Certificates pursuant to this Supplement up to a maximum amount on any such date equal to the Class B Investor Amount on such date (unless there has been an optional repurchase of the Certificateholders' Interest pursuant to Section 10.01 of the Agreement, in which event the foregoing limitation will not apply). (e) On each Transfer Date, the Trustee shall distribute to the Collateral Interest Holder the aggregate amount payable to the Collateral Interest Holder pursuant to Sections 4.5, 4.7 and 4.14 to the Collateral Interest Holder's account, as specified in writing by the Collateral Interest Holder, in immediately available funds. 33 38 (f) The distributions to be made pursuant to this Section 5.1 are subject to the provisions of Sections 2.06, 9.02, 10.01 and 12.02 of the Agreement and Sections 8.1 and 8.2 of this Supplement. (g) Except as provided in Section 12.02 of the Agreement with respect to a final distribution, distributions to Series ____-_ Certificateholders hereunder shall be made by check mailed to each Series ____-_ Certificateholder at such Series ____-_ Certificateholder's address appearing in the Certificate Register without presentation or surrender of any Series ____-_ Certificate or the making of any notation thereon; provided, however, that with respect to Series ____-_ Certificates registered in the name of a Clearing Agency, such distributions shall be made to such Clearing Agency in immediately available funds. Section 5.2 Certificates and Statements. (a) Not later than each Determination Date, the Servicer shall deliver to the Trustee, the Paying Agent, each Rating Agency and the Collateral Interest Holder, a certificate substantially in the form of Exhibit B prepared by the Servicer. (b) On each Distribution Date, the Paying Agent, on behalf of the Trustee, shall forward to each Series ____-_ Certificateholder a statement substantially in the form of Exhibit C prepared by the Servicer. (c) A copy of each statement or certificate provided pursuant to paragraph (a) or (b) may be obtained by any Series ____-_ Certificateholder or any Certificate Owner thereof by a request in writing to the Servicer. (d) On or before January 31 of each calendar year, beginning with calendar year ____, the Paying Agent, on behalf of the Trustee, shall furnish or cause to be furnished to each Person who at any time during the preceding calendar year was a Series ____-_ Certificateholder, a statement prepared by the Servicer containing the information which is required to be contained in the statement to Series ____-_ Certificateholders, as set forth in paragraph (b) above, aggregated for such calendar year or the applicable portion thereof during which such Person was a Series ____-_ Certificateholder, together with other information as is required to be provided by an issuer of indebtedness under the Internal Revenue Code. Such obligation of the Servicer shall be deemed to have been satisfied to the extent that substantially comparable information shall be provided by the Paying Agent pursuant to any requirements of the Internal Revenue Code as from time to time in effect. ARTICLE VI Series ____-_ Pay Out Events Section 6.1 Series ____-_ Pay Out Events. If any one of the following events (each, a "Series Pay Out Event") shall occur with respect to Series ____-_: (a) failure on the part of the Seller (A) to make any payment or deposit required by the terms of the Agreement on or before the date occurring five Business Days after 34 39 the date such payment or deposit is required to be made herein or (B) duly to observe or perform in any material respect any other covenants or agreements of the Seller set forth in the Agreement which has a material adverse effect on the Series ____-_ Holders (which determination shall be made, for so long as the Collateral Invested Amount is greater than zero, without reference to whether any funds are available pursuant to Series Enhancement) and continues unremedied for a period of 60 days after the date on which written notice of such failure, requiring the same to be remedied, shall have been given to the Seller by the Trustee, or to the Seller and the Trustee by Series ____-_ Holders aggregating not less than 50% of the outstanding principal balance of the Series ____-_; (b) any representation or warranty made by the Seller in the Agreement or any information contained in a computer file or microfiche list required to be delivered by the Servicer on behalf of the Seller pursuant to Section 2.01 or 2.08 of the Agreement (A) shall prove to have been incorrect in any material respect when made or when delivered, which continues to be incorrect in any material respect for a period of 60 days after the date on which written notice of such failure, requiring the same to be remedied, shall have been given to the Seller by the Trustee, or to the Seller and the Trustee by Holders of the Series ____-_ Certificates aggregating not less than 50% of the outstanding principal balance of the Series ____-_ Certificates and (B) as a result of which the interests of the Series ____-_ Certificateholders are materially and adversely affected (which determination shall be made, for so long as the Collateral Invested Amount is greater than zero, without reference to whether any funds are available pursuant to any Series Enhancement); provided, however, that a Series Pay Out Event pursuant to this subparagraph (b) shall not be deemed to occur hereunder if the Seller has accepted reassignment of the related Receivable, or all of such Receivables, if applicable, during such period (or such longer period as the Trustee may specify) in accordance with the provisions hereof and of the Agreement; (c) (1) with respect to the last day of any prior Monthly Period during which the Seller Amount is less than the Required Seller Amount, the failure of the Seller to convey on or prior to the Required Designation Date Receivables in Additional Accounts to the Trust such that the Seller Amount shall be at least equal to the Required Seller Amount as of the close of business on the applicable Addition Date; or (2) with respect to the last day of any prior Monthly Period during which the aggregate amount of Principal Receivables is less than the Required Principal Balance as of such day, the failure of the Seller to convey on or prior to the Required Designation Date Receivables in Additional Accounts to the Trust such that the aggregate amount of the Principal Receivables shall be at least equal to the Required Principal Balance as of the close of business on the applicable Addition Date; (d) the Net Portfolio Yield averaged over three consecutive Monthly Periods is less than the Base Rate averaged over such period; (e) any Servicer Default shall occur which would have a material adverse effect on the Series ____-_ Certificateholders (which determination shall be made, for so long as the Collateral Invested Amount is greater than zero, without reference to whether any funds are available pursuant to any Series Enhancement); or 35 40 (f) the Class A Investor Amount shall not be paid in full on the Class A Expected Final Distribution Date or the Class B Investor Amount shall not be paid in full on the Class B Expected Final Distribution Date or the Collateral Invested Amount shall not be paid in full on the Collateral Expected Final Distribution Date; then, in the case of any event described in subparagraph (a), (b) or (e), after the applicable grace period, if any, set forth in such subparagraphs, either the Trustee or the holders of Investor Certificates (including the Collateral Interest Holder) of Series ____-_ evidencing more than 50% of the aggregate unpaid principal amount of such Investor Certificates (including the Collateral Interest) by notice then given in writing to the Seller and the Servicer (and to the Trustee if given by the Holders of Investor Certificates (including the Collateral Interest Holder) of Series ____-_) may declare that a Pay Out Event has occurred with respect to Series ____-_ as of the date of such notice, and, in the case of any event described in subparagraph (c), (d) or (f) a Pay Out Event shall occur with respect to Series ____-_ without any notice or other action on the part of the Trustee or Holders of Investor Certificates (including the Collateral Interest Holder) of Series ____-_ immediately upon the occurrence of such event. ARTICLE VII Optional Repurchase; Series Termination Section 7.1 Optional Repurchase. On any day occurring on or after the date on which the Investor Amount is reduced to 5% or less of the Initial Invested Amount, the Seller shall have the option to purchase the interest of the Series ____-_ Holders, at a purchase price equal to (i) if such day is a Distribution Date, the Reassignment Amount for such Distribution Date or (ii) if such day is not a Distribution Date, the Reassignment Amount for the Distribution Date following such day. Section 7.2 Series Termination. (a) If, on the ______________ ____ Distribution Date, the Investor Amount (after giving effect to all changes therein on such date) would be greater than zero, the Servicer, on behalf of the Trustee, shall, within the 40-day period which begins on such Distribution Date, solicit bids for the sale of Principal Receivables and the related Finance Charge Receivables (or interests therein) in an amount equal to the Investor Amount and accrued and unpaid interest thereon at the close of business on the last day of the Monthly Period preceding the Series Termination Date (after giving effect to all distributions required to be made on the Series Termination Date, except pursuant to this Section 7.2; provided, however that in no event shall such amount exceed the Series Percentage of Receivables on the Series Termination Date). Such bids shall require that such sale shall (subject to Section 7.2(b)) occur on the Series Termination Date. The Seller and the Collateral Interest Holder shall be entitled to participate in, and to receive from the Trustee a copy of each other bid submitted in connection with, such bidding process. (b) The Servicer, on behalf of the Trustee, shall sell such Receivables (or interests therein) on the Series Termination Date to the bidder who made the highest cash purchase offer. The proceeds of any such sale shall be treated as Collections on the Receivables 36 41 allocated to Series ____-_ pursuant to the Agreement and this Supplement; provided, however, that the Servicer shall determine conclusively the amount of such proceeds which are allocable to Finance Charge Receivables and the amount of such proceeds which are allocable to Principal Receivables. During the period from the __________ ____ Distribution Date to the Series Termination Date, the Servicer shall continue to collect payments on the Receivables and allocate and deposit such collections in accordance with the provisions of the Agreement and the Supplements. ARTICLE VIII Final Distributions Section 8.1 Sale of Receivables or Certificateholders' Interest Pursuant to Section 2.06 or 10.01 of the Agreement. (a) Purchase Price. The amount to be paid with respect to Series ____-_ in connection with (i) a reassignment of Receivables to the Seller pursuant to Section 2.06 of the Agreement or (ii) a repurchase of the Certificateholders' Interest pursuant to Section 10.01 of the Agreement shall equal the Reassignment Amount for the first Distribution Date following the Monthly Period in which the reassignment obligation arises under the Agreement. (b) Distributions Pursuant to Section 7.1 or 7.2 of this Supplement and Section 10.01 of the Agreement. With respect to the Reassignment Amount deposited into the Collection Account pursuant to Section 7.1 or 8.1(a)(ii) or any amounts allocable to Series ____-_ deposited into the Collection Account pursuant to Section 7.2, the Trustee shall, not later than 3:00 p.m. New York City time, on the related Distribution Date, make deposits or distributions of the following amounts (in the priority set forth below and, in each case, after giving effect to any deposits and distributions otherwise to be made on such date) in immediately available funds: (i) (x) the Class A Investor Amount on such Distribution Date will be distributed to the Paying Agent for payment to the Class A Certificateholders and (y) an amount equal to the sum of (A) Class A Monthly Interest for such Distribution Date, (B) any Class A Monthly Interest previously due but not distributed to the Class A Certificateholders on a prior Distribution Date and (C) the amount of Class A Additional Interest, if any, for such Distribution Date and any Class A Additional Interest previously due but not distributed to the Class A Certificateholders on any prior Distribution Date, will be distributed to the Paying Agent for payment to the Class A Certificateholders, (ii) (x) the Class B Investor Amount on such Distribution Date will be distributed to the Paying Agent for payment to the Class B Certificateholders and (y) an amount equal to the sum of (A) Class B Monthly Interest for such Distribution Date, (B) any Class B Monthly Interest previously due but not distributed to the Class B Certificateholders on a prior Distribution Date and (C) the amount of Class B Additional Interest, if any, for such Distribution Date and any Class B Additional Interest previously due but not distributed to the Class B Certificateholders on any prior Distribution Date, will be distributed to the Paying Agent for payment to the Class B Certificateholders and (iii) all remaining amounts will be distributed to the Collateral Interest Holder. (c) Distributions Pursuant to Section 2.06 of the Agreement. With respect to any amounts deposited into the Collection Account pursuant to subsection 8.1(a)(i), the Trustee 37 42 shall, not later than 3:00 p.m., New York City time, on the related Distribution Date, deposit the principal portion of such amounts that are allocable to the Class A Certificates and the Class B Certificates into the Collection Account and the principal portion of such amounts allocable to the Collateral Interest shall be distributed to the Collateral Interest Holder. (d) Notwithstanding anything to the contrary in this Supplement or the Agreement, all amounts distributed to the Paying Agent pursuant to Section 8.1(b) for payment to the Series ____-_ Certificateholders shall be deemed distributed in full to the Series ____-_ Certificateholders on the date on which such funds are distributed to the Paying Agent pursuant to this Section and shall be deemed to be a final distribution pursuant to Section 12.02 of the Agreement. Section 8.2 Distribution of Proceeds of Sale, Disposition or Liquidation of the Receivables Pursuant to Section 9.02 of the Agreement. (a) Not later than 12:00 noon, New York City time, on the Distribution Date following the date on which the Insolvency Proceeds are deposited into the Collection Account pursuant to Section 9.02(b) of the Agreement, the Trustee shall (in the following priority and, in each case, after giving effect to any deposits and distributions otherwise to be made on such Distribution Date) (i) deduct an amount equal to the Class A Investor Amount on such Distribution Date from the portion of the Insolvency Proceeds allocated to Collections of Principal Receivables and distribute such amount to the Paying Agent for payment to the Class A Certificateholders, provided that the amount of such distribution shall not exceed the product of (x) the portion of the Insolvency Proceeds allocated to Collections of Principal Receivables and (y) the Principal Allocation Percentage with respect to the related Monthly Period, (ii) deduct an amount equal to the Class Investor Amount on such Distribution Date from the portion of the Insolvency Proceeds allocated to Collections of Principal Receivables and distribute such amount to the Paying Agent for payment to the Class B Certificateholders, provided that the amount of such distribution shall not exceed (x) the product of (A) the portion of such Insolvency Proceeds allocated to Collections of Principal Receivables and (B) the Principal Allocation Percentage with respect to the related Monthly Period minus (y) the amount distributed to the Paying Agent pursuant to clause (i) of this sentence and (iii) distribute the remaining amount of the Insolvency Proceeds to the Collateral Interest Holder. (b) Not later than 12:00 noon, New York City time, on such Distribution Date, the Trustee shall (in the following priority and, in each case, after giving effect to any deposits and distributions otherwise to be made on such Distribution Date) (i) deduct an amount equal to the sum of (w) Class A Monthly Interest for such Distribution Date, (x) any Class A Monthly Interest previously due but not distributed to the Class A Certificateholders on a prior Distribution Date and (y) the amount of Class A Additional Interest, if any, for such Distribution Date and any Class A Additional Interest previously due but not distributed to the Class A Certificateholders on a prior Distribution Date from the portion of the Insolvency Proceeds allocated to Collections of Finance Charge Receivables and distribute such amount to the Paying Agent for payment to the Class A Certificateholders, provided that the amount of such distribution shall not exceed the product of (x) the portion of the Insolvency Proceeds allocated to Collections of Finance Charge Receivables, (y) the Floating Allocation Percentage with respect to the related Monthly Period and (z) the Class A Floating Percentage with respect to 38 43 such Monthly Period and (ii) deduct an amount equal to the sum of (w) Class B Monthly Interest for such Distribution Date, (x) Class B Monthly Interest previously due but not distributed to the Class B Certificateholders and (y) the amount of Class B Additional Interest, if any, for such Distribution Date and any Class B Additional Interest previously due but not distributed to the Class B Certificateholders on a prior Distribution Date from the portion of the Insolvency Proceeds allocated to Collections of Finance Charge Receivables and distribute such amount to the Paying Agent for payment to the Class B Certificateholders, provided that the amount of such distribution shall not exceed the product of (x) the portion of the Insolvency Proceeds allocated to Collections of Finance Charge Receivables, (y) the Floating Allocation Percentage with respect to the related Monthly Period and (z) the Class B Floating Percentage with respect to such Monthly Period. To the extent that the product of (A) the portion of the Insolvency Proceeds allocated to Collections of Finance Charge Receivables and (B) the Floating Allocation Percentage with respect to the related Monthly Period exceeds the aggregate amount distributed to the Paying Agent pursuant to the preceding sentence, the excess shall be distributed to the Collateral Interest Holder. (c) Notwithstanding anything to the contrary in this Supplement or the Agreement, all amounts distributed to the Paying Agent pursuant to this Section for payment to the Series ____-_ Certificateholders shall be distributed in full to the Series ____-_ Certificateholders on the date on which funds are distributed to the Paying Agent pursuant to this Section and shall be deemed to be a final distribution pursuant to Section 12.02 of the Agreement. Section 8.3 Instructions Pursuant to Section 9.02(a) of the Agreement. The Holders of Investor Certificates of Series ____-_ evidencing more than 50% of the Investor Amount of each Class (including the Collateral Interest) shall not be considered as having disapproved of any liquidation of the Receivables and to continue transferring Principal Receivables to the Trust pursuant to Section 9.02(a) of the Agreement unless Holders of more than 50% of the Investor Amount of each of the Class A Certificates, the Class B Certificates and the Collateral Interest instruct the Trustee to such effect in the manner required pursuant to Section 9.02(a) of the Agreement. ARTICLE IX Certificates Section 9.1 Book-Entry Certificates. The Class A Certificates and the Class B Certificates shall be delivered as Book-Entry Certificates. The Clearing Agency for the Class A Certificates and the Class B Certificates shall be The Depository Trust Company, and the Class A Certificates and the Class B Certificates shall be initially registered in the name of Cede & Co., its nominee. 39 44 ARTICLE X Miscellaneous Provisions Section 10.1. Certain Matters Regarding the Collateral Interest Holder. Amounts payable to the Collateral Interest Holder hereunder shall be applied in accordance with the provisions of the Transfer Agreement. Section 10.2 Ratification of Agreement. As supplemented by this Supplement, the Agreement is in all respects ratified and confirmed and the Agreement as so supplemented by this Supplement shall be read, taken and construed as one and the same instrument. Section 10.3 Counterparts. This Supplement may be executed in two or more counterparts, and by different parties on separate counterparts, each of which shall be an original, but all of which shall constitute one and the same instrument. Section 10.4 Governing Law. THIS SUPPLEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING THE UCC AS IN EFFECT IN THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. Section 10.5 Notices. All directions, notices and instructions to the Trustee shall be in writing (which may be facsimile). Section 10.6 Amendments. This Supplement may be amended by the Seller without the consent of the Servicer, the Trustee or any Investor Certificateholder if the Seller provides the Trustee with (i) an Opinion of Counsel to the effect that such amendment or modification would reduce the risk that the Trust would be treated as taxable as a publicly traded partnership pursuant to Code section 7704 and (ii) an Officer's Certificate that such amendment or modification would not materially and adversely affect any Investor Certificateholder, provided that no such amendment shall be deemed effective without (i) the Trustee's consent, if the Trustee's rights, duties and obligations hereunder are thereby modified and (ii) the Trustee having obtained written assurance that such amendment or modification will not, by itself, lower the current ratings on the Series ____-_ Certificates. The Seller shall provide the Rating Agencies with prior written notice of any such amendment or modification. Section 10.7. Uncertificated Securities. The Collateral Interest shall be delivered in uncertificated form. Section 10.8. Transfers of the Collateral Interest. (a) Unless otherwise consented to by the Seller, no portion of the Collateral Interest or any interest therein may be sold, conveyed, assigned, hypothecated, pledged, participated, exchanged or otherwise transferred (each, a "Transfer") except in accordance with this Section 10.8 and only to a Permitted Assignee. Any attempted or purported transfer, assignment, exchange, conveyance, pledge, hypothecation or grant other than to a Permitted 40 45 Assignee shall be void. Unless otherwise consented to by the Seller, no portion of the Collateral Interest or any interest therein may be Transferred to any Person (each such Person acquiring the Collateral Interest or any interest therein, an "Assignee") unless such Assignee shall have executed and delivered to the Seller on or before the effective date of any Transfer a letter substantially in the form attached hereto as Exhibit D (an "Investment Letter"), executed by such Assignee, with respect to the related Transfer to such Assignee of all or a portion of the Collateral Interest. (b) Each Assignee will certify that the Collateral Interest or the interest therein purchased by such Assignee will be acquired for investment only and not with a view to any public distribution thereof, and that such Assignee will not offer to sell or otherwise dispose of the Collateral Interest or any interest therein so acquired by it in violation of any of the registration requirements of the Securities Act, or any applicable state or other securities laws. Each Assignee will acknowledge and agree that (i) it has no right to require the Seller to register under the Securities Act or any other securities law the Collateral Interest or the interest therein to be acquired by the Assignee and (ii) the sale of the Collateral Interest is not being made by means of the prospectus prepared in connection with the sale of the Series ____-_ Certificates. Each Assignee will agree with the Seller that: (a) such Assignee will deliver to the Seller on or before the effective date of any Transfer a letter in the form annexed hereto as Exhibit E (an "Investment Letter"), executed by such Assignee with respect to the purchase by such Assignee of all or a portion of the Collateral Interest and (b) all of the statements made by such Assignee in its Investment Letter shall be true and correct as of the date made. (c) No portion of the Collateral Interest or any interest therein may be Transferred, and each Assignee will certify that it is not, (a) an "employee benefit plan" (as defined in Section 3(3) of ERISA), including governmental plans and church plans, (b) any "plan" (as defined in Section 4975(e)(1) of the Code) including individual retirement accounts and Keogh plans, or (c) any other entity whose underlying assets include "plan assets" (within the meaning of Department of Labor Regulation Section 2510.3-101, 29 C.F.R. Section 2510.3-101 or otherwise under ERISA) by reason of a plan's investment in the entity, including, without limitation, an insurance company general account. 41 46 IN WITNESS WHEREOF, the undersigned have caused this Supplement to be duly executed and delivered by their respective duly authorized officers on the day and year first above written. FLEET BANK (RI), NATIONAL ASSOCIATION, Seller and Servicer, By: -------------------------------- Name: Title: BANKERS TRUST COMPANY, Trustee By: -------------------------------- Name: Title: [Signature Page for Series ____-_ Supplement] EX-5.1 5 OPINION OF ORRICK, HERRINGTON & SUTCLIFF-LEGALITY 1 Exhibit 5.1 [Letterhead of Orrick, Herrington & Sutcliffe LLP] February 4, 2000 Fleet Bank (RI), National Association 111 Westminster Street Providence, Rhode Island 02903 RE: FLEET CREDIT CARD MASTER TRUST II FLEET BANK (RI), NATIONAL ASSOCIATION (SELLER AND SERVICER) REGISTRATION STATEMENT ON FORM S-3 NO. 333- Ladies and Gentlemen: We have acted as counsel for Fleet Bank (RI), National Association, a national banking association (the "Bank"), in connection with the Registration Statement on Form S-3 (the "Registration Statement") filed with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the "Act"), for the registration under the Act of Asset Backed Certificates (collectively, the "Certificates") to be issued from time to time in series (each, a "Series") and representing undivided interests in the Fleet Credit Card Master Trust II (the "Trust"). The Certificates will be issued pursuant to the Amended and Restated Pooling and Servicing Agreement, as amended (the "Pooling and Servicing Agreement"), between the Bank, as Seller and Servicer by assignment from the previous seller and servicer, and Bankers Trust Company, as Trustee. We have examined such instruments, documents and records as we deemed relevant and necessary as a basis of our opinion hereinafter expressed. In such examination, we have assumed the following: (a) the authenticity of original documents and the genuineness of all signatures; (b) the conformity to the originals of all documents submitted to us as copies; and (c) the truth, accuracy and completeness of the information, representations and warranties contained in the records, documents, instruments and certificates we have reviewed. Based on such examination, we are of the opinion that when the issuance of each Series of the Certificates has been duly authorized by the appropriate corporate action and the Certificates of such Series have been duly executed, authenticated and delivered in accordance with the Pooling and Servicing Agreement, and sold in the manner described in the Registration 2 Fleet Bank (RI), National Association February 4, 2000 Page 2 Statement, any amendment thereto and the prospectus and prospectus supplement relating thereto, the Certificates will be legally issued, fully paid, non-assessable and binding obligations of the Trust and the holders of the Certificates of such Series will be entitled to the benefits of the Pooling and Servicing Agreement, except as enforcement thereof may be limited by applicable bankruptcy, insolvency, reorganization, arrangement, fraudulent conveyance, moratorium, or other laws relating to or affecting the rights of creditors generally and general principles of equity, including without limitation concepts of materiality, reasonableness, good faith and fair dealing, and the possible unavailability of specific performance or injunctive relief, regardless of whether such enforceability is considered in a proceeding in equity or at law. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the use of our name wherever appearing in the Registration Statement and the prospectus contained therein. In giving such consent, we do not admit that we are "experts," within the meaning of the term as used in the Act or the rules and regulations of the Securities and Exchange Commission issued thereunder, with respect to any part of the Registration Statement, including this opinion as an exhibit or otherwise. Very truly yours, /s/ ORRICK, HERRINGTON & SUTCLIFFE LLP ORRICK, HERRINGTON & SUTCLIFFE LLP EX-8.1 6 OPINION OF ORRICK, HERRINGTON & SUTCLIFF-TAX 1 Exhibit 8.1 [Letterhead of Orrick, Herrington & Sutcliffe LLP] February 4, 2000 Fleet Bank (RI), National Association 111 Westminster Street Providence, Rhode Island 02903 Re: FLEET CREDIT CARD MASTER TRUST II FLEET BANK (RI), NATIONAL ASSOCIATION (SELLER AND SERVICER) REGISTRATION STATEMENT ON FORM S-3 No. 333- Ladies and Gentlemen: We have acted as counsel for Fleet Bank (RI), National Association, a national banking association (the "Bank"), in connection with the preparation of the Registration Statement on Form S-3 (the "Registration Statement") filed on February 4, 2000 with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the "Act"), for the registration under the Act of Asset Backed Certificates (collectively, the "Certificates") to be issued from time to time in series (each, a "Series") and representing an undivided interest in Fleet Credit Card Master Trust II (the "Trust"). Such Certificates will be issued pursuant to a pooling and servicing agreement (the "Pooling and Servicing Agreement"), between the Bank, as Seller and Servicer by assignment from the previous seller and servicer, and Bankers Trust Company, as Trustee. We hereby confirm that the statements set forth in the prospectus relating to the Certificates (the "Prospectus") forming a part of the Registration Statement under the heading "Federal Income Tax Consequences," and the statements set forth in the prospectus supplement relating to the Certificates (the "Prospectus Supplement") forming a part of the Registration Statement under the headings "Summary of Terms--Tax Status" and "Federal Income Tax Consequences," which statements have been prepared by us, to the extent that they constitute matters of law or legal conclusions with respect thereto, are correct in all material respects, and we hereby adopt and confirm the opinions set forth therein. We note that the form of Prospectus Supplement does not relate to a specific transaction. Accordingly, the above-referenced description of federal income tax consequences and opinions may, under certain circumstances, require modification in the context of an actual transaction. In the event that our opinions referred to in the preceding paragraph were to require modification in the context of an actual transaction, we hereby undertake, if we are special tax counsel to the Bank with respect to such transaction, to include any such modifications in a tax 2 Fleet Bank (RI), National Association February 4, 2000 Page 2 opinion (including a consent to filing) filed with the Securities and Exchange Commission pursuant to a post-effective Amendment or Form 8-K prior to the time of sales. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement. In giving such consent, we do not admit that we are "experts" within the meaning of the term used in the Act or the rules and regulations of the Securities and Exchange Commission issued thereunder, with respect to any part of the Registration Statement, including this opinion as an exhibit or otherwise. Very truly yours, /s/ ORRICK, HERRINGTON & SUTCLIFFE LLP ORRICK, HERRINGTON & SUTCLIFFE LLP -----END PRIVACY-ENHANCED MESSAGE-----