-----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, W0VYSBI2u0RHAEZG/U2AKrlAGa0EXXnrHevb49uHbvW2XUyozeMvBJyNx2fCs/YO H9+f3sAmPr/+2JGMubi5Ig== 0000889812-96-001560.txt : 19961031 0000889812-96-001560.hdr.sgml : 19961031 ACCESSION NUMBER: 0000889812-96-001560 CONFORMED SUBMISSION TYPE: S-1/A PUBLIC DOCUMENT COUNT: 12 FILED AS OF DATE: 19961030 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIRESTONE RETAIL CREDIT CORP CENTRAL INDEX KEY: 0000889416 STANDARD INDUSTRIAL CLASSIFICATION: PERSONAL CREDIT INSTITUTIONS [6141] IRS NUMBER: 133205598 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-1/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-07185 FILM NUMBER: 96650628 BUSINESS ADDRESS: STREET 1: ONE INTERNATIONAL PLACE STE 520 STREET 2: C/O ROPES & GRAY CITY: BOSTON STATE: MA ZIP: 02110 BUSINESS PHONE: 6179517000 MAIL ADDRESS: STREET 1: ONE INTERNATIONAL PL CITY: BOSTON STATE: MA ZIP: 02110-2624 S-1/A 1 AMENDMENT NO. 4 TO REGISTRATON STATEMENT As filed with the Securities and Exchange Commission on October 30, 1996 Registration No. 333-07185 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ----------------- AMENDMENT NO. 4 to FORM S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ----------------- BRIDGESTONE/FIRESTONE MASTER TRUST (Issuer of the Certificates) ----------------- FIRESTONE RETAIL CREDIT CORPORATION (Originator of the Trust described herein and exact name of registrant as specified in its government instrument.) ----------------- Massachusetts 6141 13-3205598 (State of (Primary Standard Industrial (IRS Employer Incorporation) Classification Code Number) Identification Number) JH Management Corporation R. Douglas Donaldson One International Place, Suite 520 Boston, Massachusetts 02110-2624 (617) 951-7690 (Address, including zip code, and telephone number, including area code of registrant's principal executive offices) ----------------- copies to: Saul Solomon, Esq. Reed D. Auerbach, Esq. Cathy Kaplan, Esq. Bridgestone/Firestone, Inc. Stroock & Stroock & Lavan Brown & Wood LLP 50 Century Boulevard Seven Hanover Square 1 World Trade Center Nashville, Tennessee 37214 New York, New York 10004-2696 New York, New York 10048 (615) 872-1496 (212) 806-6648 (212) 839-5531
----------------- Approximate date of commencement of proposed sale to the public. As soon as practicable on or after the effective date of this Registration Statement, as determined by market conditions. If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 of the Securities Act of 1933, please check the following box. / / 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 Maximum Maximum Offering Aggregate Amount of Title of Securities Amount Being Price Offering Registration Being Registered Registered Per Unit Price Fee(1) - ----------------------------------------------------------------------------------------------------------------------------------- Class A Asset Backed Certificates, Series 1996-1............................. $200,000,000 100% $200,000,000 $60,606.07 - ----------------------------------------------------------------------------------------------------------------------------------- Class B Asset Backed Certificates, Series 1996-1............................. $28,205,129 100% $28,205,129 $8,547.01 ===================================================================================================================================
(1) Total Registration Statement Fee of $69,153.08 ($870 paid in June, 1996). 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 the Registration Statement shall thereafter 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 Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine. FIRESTONE RETAIL CREDIT CORPORATION FURNISHED PURSUANT TO ITEM 501(b) OF REGULATION S-K
Form S-1 Item Number and Heading Heading in Prospectus - -------------------------------- --------------------- 1. Forepart of the Registration Statement and Forefront of Registration Statement and Outside Front Cover Page of Outside Front Page of Prospectus . . . . . . Prospectus 2. Inside Front and Outside Back Cover Pages Inside Front Cover and Outside Back Cover Page of the Prospectus of Prospectus . . . . . . . . . . . . . . . . 3. Summary Information and Risk Factors . . . Summary of Terms; Risk Factors Ratio of Earnings to Fixed Charges . . . . . . . * 4. Use of Proceeds . . . . . . . . . . . . . . Use of Proceeds 5. Determination of Offering Price . . . . . . . * 6. Dilution . . . . . . . . . . . . . . . . . . * 7. Selling Security Holders . . . . . . . . . . * 8. Plan of Distribution . . . . . . . . . . . . Underwriting 9. Description of Securities to be Registered The Trust; Description of the Offered Certificates and the Agreement 10. Interests of Named Experts and Counsel . . Legal Matters 11. Information with Respect to the Registrant. . The Transferor and Bridgestone/Firestone 12. Disclosure of Commission Position on See Part II Indemnification for Securities Act Liabilities . . . . . . . . . . . . . . . . .
- ------------------ *Answer negative or item inapplicable. 2 INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE. SUBJECT TO COMPLETION, PRELIMINARY PROSPECTUS DATED OCTOBER 30, 1996 PROSPECTUS DATED , 1996 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- $228,205,129 BRIDGESTONE/FIRESTONE MASTER TRUST $200,000,000 % CLASS A ASSET BACKED CERTIFICATES, SERIES 1996-1 $ 28,205,129 % CLASS B ASSET BACKED CERTIFICATES, SERIES 1996-1 FIRESTONE RETAIL CREDIT CORPORATION BRIDGESTONE/FIRESTONE, INC. TRANSFEROR SERVICER Each Class A Asset Backed Certificates, Series 1996-1 (the 'Class A Certificates') and each Class B Asset Backed Certificates, Series 1996-1 (the 'Class B Certificates' and, together with the Class A Certificates, the 'Offered Certificates') will evidence an undivided interest in the Bridgestone/Firestone Master Trust (the 'Trust') created pursuant to the Amended and Restated Pooling and Servicing Agreement, dated as of November 1, 1996, as supplemented by the Series 1996-1 Supplement, dated as of November 1, 1996, and each among Firestone Retail Credit Corporation, as transferor (the 'Transferor'), Bridgestone/Firestone, Inc. ('Bridgestone/Firestone'), as servicer (the 'Servicer'), and The Fuji Bank and Trust Company, as trustee (the 'Trustee'). The Trust assets (the 'Trust Assets') include (i) a portfolio of account balances (the 'Receivables') generated or to be generated under a private label credit card program (the 'Credit Card Program') established by Credit First National Association ('CFNA'; together with any successor originator, the 'Originator'), (ii) a portfolio of certain designated Receivables to be generated by the Originator under other credit card programs to be established by the Originator (the 'Alternative Programs'), (iii) all monies due or to become due under the Receivables, (iv) the right to receive certain merchant fees attributed to cardholder charges giving rise to Receivables (the 'Merchant Fees'), (v) all Recoveries on Defaulted (Continued on the next page) There currently is no secondary market for the Offered Certificates and there can be no assurance that one will develop. The Underwriters expect, but are not obligated, to make a market in the Offered Certificates. THERE CAN BE NO ASSURANCE THAT ANY SUCH MARKET WILL CONTINUE. POTENTIAL INVESTORS SHOULD CONSIDER, AMONG OTHER THINGS, THE INFORMATION SET FORTH IN 'RISK FACTORS' ON PAGE 35 IN THE PROSPECTUS. THE OFFERED CERTIFICATES REPRESENT INTERESTS IN THE TRUST ONLY AND DO NOT REPRESENT INTERESTS IN OR RECOURSE OBLIGATIONS OF THE TRANSFEROR, THE SERVICER, THE ORIGINATOR OR ANY AFFILIATE THEREOF. AN OFFERED CERTIFICATE IS NOT A DEPOSIT AND NEITHER THE OFFERED CERTIFICATES NOR THE UNDERLYING ACCOUNTS OR RECEIVABLES ARE INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION (THE 'COMMISSION') OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. [CAPTION] INITIAL PUBLIC UNDERWRITING PROCEEDS TO OFFERING PRICE(1) DISCOUNT TRANSFEROR(1)(2) Per Class A Certificate............... % % % Per Class B Certificate............... % % % Total................................. $ $ $
(1) Plus accrued interest, at the Class A Certificate Rate or Class B Certificate Rate, as applicable, from November , 1996. (2) Before deducting estimated expenses of $ payable by the Transferor. The Offered Certificates are offered by the Underwriters as described in 'Underwriting', subject to receipt and acceptance by the Underwriters and subject to their right to reject any order in whole or in part. It is expected that the Offered Certificates will be delivered in book-entry form on or about November , 1996 (the 'Closing Date') through the facilities of The Depository Trust Company, Cedel Bank, societe anonyme and the Euroclear System. CITICORP SECURITIES, INC. CHASE SECURITIES INC. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (Continued from the previous page) Receivables, (vi) any Enhancement issued with respect to any Series, (vii) the proceeds of the Servicer Letter of Credit and the Transferor Letter of Credit, (viii) all of the Transferor's right, title and interest in and to the Purchase and Sale Agreement and the Participation Agreement, (ix) all moneys on deposit in the Collection Account and any other accounts established for the benefit of any other Series (which other accounts will not be available to Certificateholders) and (x) all proceeds of any of the foregoing. Concurrently with the issuance of the Offered Certificates, the Trust will issue $10,000,000 principal amount of an uncertificated interest in the Trust (the 'Collateral Interest') and the Subordinated Transferor Certificate (the 'Subordinated Transferor Certificate' and, together with the Collateral Interest and the Offered Certificates, the 'Series 1996-1 Interests'). The fractional undivided interest in the Trust represented by the Class B Certificates will be subordinated to the extent necessary to fund payments with respect to the Class A Certificates as described herein. The Collateral Interest and the Subordinated Transferor Certificate will be subordinated to the extent necessary to fund payments with respect to the Class A Certificates and the Class B Certificates as described herein. See 'Description of the Offered Certificates and the Agreement.' The Collateral Interest and the Subordinated Transferor Certificate are not being offered hereby. The Class A Certificateholders and the Class B Certificateholders (the 'Offered Certificateholders') will be entitled to certain assets of the Trust, including the right to receive a varying percentage of each month's collections with respect to the Receivables at the times and in the manner described herein. The Trust has also issued a certificate representing a one percent interest in the Trust to Bridgestone/Firestone, Inc. (the 'Bridgestone/Firestone Certificate'). The Transferor will own the remaining interest in the Trust not represented by the Series 1996-1 Interests (subject to the Participation Agreement (as defined herein) with Bridgestone/Firestone), the Bridgestone/Firestone Certificate and the interest of holders of other outstanding Series. In addition, the Transferor will retain the Subordinated Transferor Certificate (subject to the Participation Agreement with Bridgestone/Firestone). The Transferor has offered and from time to time may offer other series of certificates that evidence undivided interests in the Trust (each, a 'Series'), which may have terms significantly different from the Series 1996-1 Interests, by exchanging a portion of its interest in the Trust. See 'Description of the Offered Certificates and the Agreement.' Interest will accrue on the Class A Certificates at the rate of % per annum (the 'Class A Certificate Rate'). Interest will accrue on the Class B Certificates at the rate of % per annum (the 'Class B Certificate Rate'). Interest will accrue on the basis of a 360-day year of twelve 30-day months. Interest with respect to the Offered Certificates is payable monthly on the 1st of each month (or, if such day is not a business day, the next succeeding business day) (each, a 'Distribution Date'), commencing in December, 1996. Principal on the Class A Certificates is scheduled to be distributed on each Distribution Date commencing on the Distribution Date in December, 1999, and ending on the Distribution Date in November, 2000, but may be paid earlier or later under certain limited circumstances described herein. Principal on the Class B Certificates is scheduled to be distributed on each Distribution Date commencing November, 2000, but may be paid earlier or later under certain limited circumstances described herein. No principal will be payable to the Class B Certificates until the final principal payment has been made to the Class A Certificates. No principal will be payable to the Collateral Interest until the final payment has been made to the Class A Certificates and Class B Certificates. No principal will be payable to the Subordinated Transferor Certificate until the final payment has been made to the Class A Certificates, the Class B Certificates and the Collateral Interest. See 'Maturity Assumptions.' The issuance of the Class B Certificates, the Collateral Interest and the Subordinated Transferor Certificate are conditions precedent to the issuance of the Class A Certificates. The issuance of the Collateral Interest and the Subordinated Transferor Certificate are conditions precedent to the issuance of the Class B Certificates. See 'Description of the Offered Certificates and the Agreement.' An application will be made to list the Offered Certificates on the Luxembourg Stock Exchange. 2 IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE OFFERED CERTIFICATES OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE LUXEMBOURG STOCK EXCHANGE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. ------------------------ REPORTS TO CERTIFICATEHOLDERS Unless and until Definitive Certificates (as defined herein) are issued, monthly and annual reports, containing information concerning the Trust and prepared by the Servicer, will be sent on behalf of the Trust to Cede & Co. ('Cede'), as registered holder of the Offered Certificates, pursuant to the Agreement. On each Distribution Date a Payment Date Statement (as defined herein) prepared by the Servicer will be provided setting forth information regarding the Offered Certificates. Such reports will be made available on a monthly basis by The Depository Trust Company to Participants (as hereinafter defined), upon request by such Participants to The Depository Trust Company, in accordance with the rules, regulations and procedures creating and affecting The Depository Trust Company. Certificate Owners (as defined herein) may contact their Participants or the Trustee to receive copies of such reports. See 'Description of the Offered Certificates and the Agreement--Book-Entry Registration' and '--Reports to Certificateholders.' Such reports will not contain information that has been examined and reported on by independent public accountants and will not constitute financial statements prepared in accordance with generally accepted accounting principles. The Transferor does not intend to send any of its financial reports to Certificateholders or to the owners of beneficial interests in the Offered Certificates (the 'Certificate Owners'). The Servicer on behalf of the Trust will file with the Commission such periodic reports with respect to the Trust as are required under the Securities Exchange Act of 1934, as amended (the 'Exchange Act'), and the rules and regulations of the Commission thereunder. However, in accordance with the Exchange Act and the rules and regulations of the Commission thereunder, the Transferor expects that the Trust's obligation to file such reports will be terminated following the end of 1996. Upon the termination of the Trust's obligation, the Transferor intends not to file Exchange Act reports. AVAILABLE INFORMATION The Transferor, as originator of the Trust, has filed a Registration Statement under the Securities Act of 1933, as amended (the 'Act'), with the Commission with respect to the Offered Certificates offered pursuant to this Prospectus. For further information, reference is made to the Registration Statement and amendments and exhibits thereto (the 'Registration Statement'), which are available for inspection without charge at the public reference facilities maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549; 7 World Trade Center, New York, New York 10048; and Citicorp Atrium Center, 500 West Madison Street, Chicago, Illinois 60661-2511. Copies of the Registration Statement may be obtained from the Public Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates and electronically through the Commission's Electronic Data Gathering Analysis and Retrieval system at the Commission's Web site (http:\\www.sec.gov). 3 SUMMARY OF TERMS The following summary is qualified in its entirety by reference to the detailed information appearing elsewhere in this Prospectus. Certain capitalized terms used in this summary are defined elsewhere in this Prospectus. A listing of the pages on which some of such terms are defined is found in the 'Index of Terms' herein. Securities Offered........................ $200,000,000 Class A Asset Backed Certificates, Series 1996-1 (the 'Class A Certificates') and $28,205,129 Class B Asset Backed Certificates, Series 1996-1 (the 'Class B Certificates', together with the Class A Certificates, the 'Offered Certificates'). The Offered Certificates will be issued pursuant to the Amended and Restated Pooling and Servicing Agreement, dated as of November 1, 1996 (the 'Agreement') as supplemented by the Series 1996-1 Supplement, dated as of November 1, 1996 (the 'Series 1996-1 Supplement') (the term 'Agreement,' unless the context requires otherwise, refers to the Agreement as supplemented by the Series 1996-1 Supplement), among Firestone Retail Credit Corporation, as transferor (the 'Transferor'), Bridgestone/Firestone, Inc. ('Bridgestone/Firestone'), as servicer (the 'Servicer') and The Fuji Bank and Trust Company, as trustee (the 'Trustee'). The Collateral Interest and the Subordinated Transferor Certificate (herein collectively referred to as the 'Other Interests'), to be issued pursuant to the Agreement (see 'Description of the Offered Certificates and the Agreement' below), are not being offered hereby. The issuance of the Other Interests is a condition precedent to the issuance of the Offered Certificates. The Other Interests, together with the Offered Certificates, will be referred to herein as the 'Series 1996-1 Interests.' Any information contained herein regarding the Other Interests is included solely to permit a better understanding of the Offered Certificates. See 'Description of the Offered Certificates and the Agreement--General.' Bridgestone/Firestone is a direct wholly owned subsidiary of Bridgestone Corporation, a corporation organized under the laws of Japan. Bridgestone/Firestone is a multinational organization whose principal business is the development, manufacture and sale of a broad line of tires for passenger, truck and agricultural vehicles, in both the original equipment and replacement markets. Credit First National Association ('CFNA' or together with any successor originator, the 'Originator'), a wholly owned subsidiary of Bridgestone/Firestone, was organized for the purpose of making credit card loans and activities incidental thereto. The Offered Certificates represent beneficial interests in the Trust only and do not represent interests in or recourse obligations of the Transferor, the Servicer, CFNA or any affiliate thereof. The Trust has previously issued several other Series. See 'Annex I: Outstanding Series' for a summary of all Series currently outstanding. Transferor................................ Firestone Retail Credit Corporation, a Massachusetts corporation, is the transferor of the Receivables and the originator of the Trust. The Transferor is a nominally capitalized special purpose corporation and was organized for the limited purpose of purchasing, holding, 4 owning and selling receivables and any activities incidental to and necessary or convenient for the accomplishment of the foregoing. The Transferor's principal executive offices are located at One International Place, Suite 520, Boston, Massachusetts 02110. Its telephone number is (617) 951-7690. See 'The Transferor and Bridgestone/Firestone.' Servicer.................................. The Receivables will be serviced by Bridgestone/Firestone, Inc., an Ohio corporation. CFNA will perform certain sub-servicing functions on behalf of the Servicer including, but not limited to, the approval of new account applications, the approval of all credit charge transactions involving existing accounts and collection efforts. Trust Assets.............................. The Trust Assets include (i) a portfolio of account balances (the 'Receivables') generated or to be generated by the Originator in the ordinary course of its business and existing or arising in certain credit card accounts (the 'Accounts') established or to be established under a private label credit card program described more fully herein (the 'Credit Card Program') established by the Originator for customers of (a) Bridgestone/Firestone stores, which sell tires and automotive maintenance and repair products and services, (b) dealers and marketers which have contractual arrangements with Bridgestone/Firestone to market Bridgestone/Firestone tires and related products, as well as automotive maintenance and repair services, and (c) certain other dealers and marketers of automotive products, which include tires and automotive maintenance and repair services, which dealers and marketers do not have such contractual arrangements with Bridgestone/Firestone, (ii) a portfolio of certain designated Receivables generated or to be generated by the Originator and existing or arising under certain accounts to be established under other credit card programs, established or to be established by the Originator (the 'Alternative Programs'), (iii) all monies due or to become due under the Receivables on or after the billing cycle cut- off dates occurring in the Collection Period (as defined below) from October 19, 1992 to November 18, 1992 (the 'Cut-off Date'), (iv) the right to receive certain merchant fees attributed to cardholder charges giving rise to Receivables ('Merchant Fees') pursuant to the Purchase and Sale Agreement (as defined below), (v) all Recoveries (as defined below) on Defaulted Receivables (as defined below), (vi) any Enhancement (as defined below) issued with respect to any Series, (vii) the proceeds of the Servicer Letter of Credit and the Transferor Letter of Credit (each as defined below), (viii) all of the Transferor's right, title and interest in and to the Purchase and Sale Agreement and the Participation Agreement (as defined below), (ix) all moneys on deposit in the Collection Account and any other accounts established for the benefit of any other series (which other accounts will not be available to Certificateholders) and (x) all proceeds of any of the foregoing. On the first Transfer Date (as defined below) CFNA shall transfer Merchant Fees to the Trust in an amount equal to $350,000. On each Transfer Date thereafter, CFNA shall transfer Merchant Fees collected during the calendar month preceding the related Transfer 5 Date in an amount equal to the lesser of (a) $350,000 and (b) the amount of Merchant Fees actually collected by CFNA during such calendar month, to the Transferor. Such Merchant Fees shall be transferred pursuant to the Purchase and Sale Agreement (as defined below). The Transferor will transfer such Merchant Fees to the Trust pursuant to the Agreement. The Accounts will include (i) eligible credit card accounts ('Eligible Accounts') established under the Credit Card Program as of and subsequent to the Cut-off Date and (ii) eligible accounts established under Alternative Programs subsequent to the Closing Date which are designated by the Transferor as Eligible Alternative Accounts (as defined below) in accordance with selection criteria relating to the addition of accounts. See 'The Credit Card Program--General' and 'Description of the Offered Certificates and the Agreement--Addition of Accounts' herein. The term 'Defaulted Receivables' shall mean with respect to any Collection Period, all Receivables in any Account which are written off as uncollectible in such Collection Period in accordance with the Servicer's guidelines. Notwithstanding the foregoing sentence, a Receivable shall be deemed a Defaulted Receivable no later than the last day of the Collection Period following the Collection Period in which it becomes 180 days delinquent. The term 'Recoveries,' with respect to any Collection Period, shall mean all amounts or payments received by the Servicer with respect to Receivables which have previously become Defaulted Receivables in a prior Collection Period, net of reasonable expenses of the Servicer incurred and deducted from such amounts or payments. The term 'Enhancement' shall mean, with respect to any Series or class within a Series, any letter of credit, guaranteed rate agreement, cash collateral account, cash collateral guaranty, liquidity facility, maturity guaranty facility, tax protection agreement, interest rate swap or other contract or agreement for the benefit of the certificateholders of such Series. The Receivables have been and will be purchased by the Transferor from the Originator pursuant to the Second Amended and Restated Purchase and Sale Agreement, dated as of November 1, 1996 (the 'Purchase and Sale Agreement'), among the Transferor, Bridgestone/Firestone and the Originator. The Purchase and Sale Agreement provides, among other things, that the Originator shall sell and assign to the Transferor, and the Transferor will purchase from the Originator, on each business day, all Eligible Receivables (as defined herein) arising in the Accounts under the Credit Card Program and certain Eligible Alternative Receivables arising in designated Alternative Accounts (as defined herein) under the Alternative Programs, provided, among other things, that the Transferor is not in default thereunder and that no Servicer Event of Default (as defined herein) and no Originator insolvency shall have occurred. See 'Description of the Purchase and Sale Agreement.' The right to receive certain Merchant Fees will also be transferred by the Originator to the Transferor pursuant to the Purchase and Sale Agreement. The Transferor has transferred and will transfer such Receivables and will transfer such Merchant Fees to the Trust 6 pursuant to the Agreement. See 'Description of the Offered Certificates and the Agreement--Conveyance of Receivables.' The 'Receivables' consist of amounts charged by cardholders under the Accounts for goods and services, and all late fees, returned check charges, convenience checks and amounts charged in respect of credit-related insurance and periodic finance charges as described herein. A portion of the Collections (as defined below) received in any applicable billing cycle for an Account (the monthly billing cycle periods for the Accounts ending in the period of time commencing on the 19th calendar day of each calendar month and ending on the 18th calendar day of the next succeeding calendar month during the term of the Trust being collectively referred to herein as a 'Collection Period') allocable to Receivables will be treated as 'Finance Charge Collections' and a portion will be treated as 'Principal Collections.' Under the Agreement and as otherwise specified therein, the Collections on the Receivables for any Collection Period will be allocated such that all finance charges billed or accrued in respect of Receivables in the prior Collection Period (less certain rebates as described herein) will be deemed Finance Charge Collections and the remaining amount of such Collections will be deemed Principal Collections. Notwithstanding the foregoing, Recoveries received in any Collection Period shall be treated as Finance Charge Collections for such Collection Period for all purposes. In addition, Merchant Fees transferred to the Trust on any Transfer Date shall be treated as Finance Charge Collections for the related Collection Period for all purposes. As of the Collection Period ended on September 18, 1996 the amount of Aggregate Receivables (as defined below) in the Trust was $434,750,566. The total amount of Receivables and Merchant Fees in the Trust will fluctuate from day to day as a result of the transfer of new Receivables to the Trust and as a result of collections on existing Receivables ('Collections'). 'Aggregate Receivables' shall mean, at any time, (a) the aggregate amount of Eligible Receivables as of the end of the prior Collection Period minus Defaulted Receivables minus (b) the amount of Discount Option Receivables as of the end of the prior Collection Period minus (c) (i) an amount equal to finance charges billed in respect of such Eligible Receivables in such Collection Period minus (ii) an amount equal to finance charges credited as a rebate in respect of such Eligible Receivables during such prior Collection Period minus (iii) amounts billed in item (i) above, net of rebates in item (ii) above, with respect to that portion of such Eligible Receivables that are Discount Option Receivables. Addition of Accounts...................... The Accounts consist of Eligible Accounts established under the Credit Card Program as of and subsequent to the Cut-off Date. In addition, the Transferor is permitted (subject to certain limitations and conditions) to designate from time to time additional eligible Accounts established under Alternative Programs ('Eligible Alternative Accounts') and to convey to the Trust Receivables of such Eligible Alternative Accounts, whether such Receivables are then existing or thereafter created until either the Ten Percent 7 Number Test (as defined below) or Ten Percent Aggregate Test (as defined below) is met. Thereafter, if the Transferor has not obtained the consent of the applicable rating agencies, as described below, additional accounts and additional receivables from Alternative Programs shall not be transferred to the Trust. Such 'Alternative Programs' are programs for which CFNA underwrites and originates Accounts and Receivables and may include, but are not limited to, the establishment of additional private label credit card programs and the offering of general purpose credit cards. As of the Closing Date, the Originator has not established any of these Alternative Programs. The 'Ten Percent Number Test' is determined as of any date on which Alternative Accounts are to be added to the Trust and met when the number of Eligible Alternative Accounts as of such date equals 10% of the number of all Accounts in the Trust as of such date. The 'Ten Percent Aggregate Test' is determined as of any date on which Alternative Accounts are to be added to the Trust and met when the dollar amount of Receivables from such Eligible Alternative Accounts as of such date equals 10% of the Aggregate Receivables as of such date. See 'Description of the Offered Certificates and the Agreement--Addition of Accounts.' Once the Transferor has met the Ten Percent Number Test or the Ten Percent Aggregate Test, the Transferor must request written confirmation from the applicable rating agencies to transfer to the Trust additional Accounts related to an Alternative Program and all Receivables arising from such Accounts. In addition and subject to certain limitations set forth in the Agreement, on an annual basis, the Transferor will be permitted to include additional Eligible Accounts and all Eligible Receivables arising from such Eligible Accounts up to an aggregate number equal to 20% of the total number of Eligible Accounts already included in the Trust without written confirmation from the applicable rating agencies. Removal of Accounts....................... The Transferor has the right to accept Accounts for removal from the Trust in an amount not greater than the lesser of (a) the excess of the Transferor Amount (plus the B/F Amount and amounts available under the Transferor Letter of Credit) over 7% of the Aggregate Certificateholders' Interest (as defined herein) and (b) 5% of Aggregate Receivables on such date of removal, provided, among other conditions, that the Transferor has not employed a selection procedure adverse to the interests of the Certificateholders and the Transferor reasonably believes that the removal of such Accounts from the Trust will not result in the occurrence of an Amortization Event. See 'Description of the Offered Certificates and the Agreement--Removal of Accounts.' Description of the Series 1996-1 Interests............................... Payments received on the Trust's assets will be allocated among the interest of the Class A Certificateholders (the 'Class A Interest'), the interest of the Class B Certificateholders (the 'Class B Interest'), the interest of the holder of the Collateral Interest (the 'Collateral Interest') and the interest of the holder of the 8 Subordinated Transferor Certificate (the 'Subordinated Transferor Interest,' together with the Class A Interest, the Class B Interest and the Collateral Interest, the 'Certificateholders' Interest'), the interest of the holders of other outstanding Series (together with the Certificateholders' Interest, the 'Aggregate Certificateholders' Interest'), the interest of Bridgestone/Firestone as holder of the Bridgestone/Firestone Certificate (the 'B/F Interest') and the pari passu interest of the Transferor (the last being referred to as the 'Transferor Interest'). The amount of the Transferor Interest at any time (the 'Transferor Amount') shall equal the Aggregate Receivables at such time minus the sum of the invested amount of the holders of other outstanding Series, the Class A Invested Amount (as defined below), Class B Invested Amount, (as defined below), the Collateral Interest Invested Amount (as defined below), the Subordinated Transferor Amount (as defined below), and the amount of the B/F Interest (the 'B/F Amount'). The Transferor Interest will be evidenced by a certificate (the 'Exchangeable Transferor Certificate') which will evidence an undivided interest in the Trust Assets allocated to the Transferor Interest. The principal amount of the Transferor Interest will fluctuate as the amount of the Receivables held by the Trust changes from time to time. The Transferor Amount (plus the amount available under the Transferor Letter of Credit (as defined below) and the B/F Amount) shall at all times equal 7% or more of the aggregate invested amount of all outstanding Series of certificates. As of the Collection Period ended September 18, 1996, the initial Transferor Amount is equal to $33,602,934. The Class A Certificates offered hereby will evidence undivided interests in the Trust Assets allocated to the Class A Interest and will represent the right to receive from such Trust Assets funds up to (but not in excess of) the amounts required to make payments of interest at the rate per annum equal to % (the 'Class A Certificate Rate') payable monthly on each Distribution Date commencing December 1996, and the payment of principal on each Distribution Date commencing December, 1999, or earlier or later under certain circumstances, to the extent of the Class A Invested Amount (as defined herein) (which may be less than the aggregate unpaid principal balance of the Class A Certificates, in certain circumstances, if the Investor Default Amount (as defined herein) exceeds available Excess Finance Charge Collections and Reallocated Principal Collections (as defined herein) and the Class B Invested Amount, the Collateral Interest Invested Amount and the Subordinated Transferor Amount are each zero). See 'Description of the Offered Certificates and the Agreement--General,' '--Allocation Percentages,' '--Reallocation of Cash Flows,' '--Distributions from the Collection Account' and '--Subordination of the Class B Certificates.' The Class B Certificates offered hereby will evidence undivided interests in the Trust Assets allocated to the Class B Interest and will represent the right to receive from such Trust Assets funds up to (but not in excess of) the amounts required to make payments of interest at the rate per annum equal to % (the 'Class B Certificate 9 Rate') payable monthly on each Distribution Date commencing December 1996, and the payment of principal on each Distribution Date commencing November, 2000, or earlier or later under certain circumstances, to the extent of the Class B Invested Amount (which may be less than the aggregate unpaid principal balance of the Class B Certificates, in certain circumstances, if the Investor Default Amount exceeds available Excess Finance Charge Collections and Reallocated Principal Collections and the Collateral Interest Invested Amount and the Subordinated Transferor Amount are each zero). The Class B Certificates are subordinate in right of payment to the Class A Certificates to the extent necessary to fund payments with respect to the Class A Certificates. See 'Description of the Offered Certificates and the Agreement--General,' '--Allocation Percentages,' '--Reallocation of Cash Flows,' '--Distributions from the Collection Account' and '--Subordination of the Class B Certificates.' The Collateral Interest will evidence undivided interests in the Trust Assets allocated to the Collateral Interest and will represent the right to receive from such Trust assets funds up to (but not in excess of) the amounts required to make payments of interest at a rate per annum equal to the London interbank offered rate for one month United States dollar deposits ('LIBOR') plus a percent per annum not in excess of 1.0% (the 'Collateral Interest Rate') payable monthly on each Distribution Date commencing December, 1996 and of principal with respect to the Collateral Interest to the extent of the Collateral Interest Invested Amount (which may be less than the aggregate unpaid principal balance of the Collateral Interest, in certain circumstances, if the Investor Default Amount exceeds available Excess Finance Charge Collections and Reallocated Principal Collections and the Subordinated Transferor Amount is zero) following the final principal payment with respect to the Offered Certificates. The Collateral Interest is subordinated in right of payment to the Offered Certificates to the extent necessary to fund payments with respect to the Offered Certificates. The Collateral Interest will be sold pursuant to a Loan Agreement, dated as of the Closing Date (the 'Loan Agreement'), by and among the Transferor, the Servicer, the Trustee and the purchaser of the Collateral Interest (the 'Collateral Interest Holder') and is not being offered hereby. The Collateral Interest will be in an initial amount of $10,000,000 (the 'Initial Collateral Interest Invested Amount'). The Subordinated Transferor Certificate will evidence an undivided interest in the Trust Assets allocated to the Subordinated Transferor Interest and will represent the right to receive from such assets funds up to (but not in excess of) the amounts required to make payments of principal with respect to the Subordinated Transferor Certificate following the final principal payment with respect to the Collateral Interest (which may be less than the aggregate unpaid principal balance of the Subordinated Transferor Certificate, in certain circumstances, if the Investor Default Amount exceeds available Excess Finance Charge Collections and Reallocated Principal Collections). The holder of the Subordinated Transferor Certificate will not be entitled to receive any payments of interest. The 10 Subordinated Transferor Certificate is subordinate in right of payment to the Offered Certificates and the Collateral Interest to the extent necessary to fund payments with respect to the Offered Certificates and the Collateral Interest. The Subordinated Transferor Certificate will be retained by the Transferor and participated to Bridgestone/Firestone pursuant to the Participation Agreement and is not being offered hereby. The Subordinated Transferor Certificate will be in an initial amount of $18,205,129 (the 'Initial Subordinated Transferor Amount'). The Series 1992-A Certificates and the Series 1992-B Certificates (collectively, the 'Series 1992 Certificates'), the Series 1995-A Asset Backed Certificates (the 'Series 1995-A Certificates'), the Bridgestone/Firestone Certificate and the Exchangeable Transferor Certificate are the only certificates that have been issued by the Trust as of the date hereof. None of the Series 1992 Certificates, the Series 1995-A Certificates, the Collateral Interest, the Subordinated Transferor Certificate, the Bridgestone/Firestone Certificate and the Exchangeable Transferor Certificate are being offered hereby. The Series 1992-A Certificates are no longer outstanding. On the Closing Date, the Series 1995-A Certificates will be repaid from the proceeds of the Offered Certificates, as set forth in 'Use of Proceeds' herein. Each outstanding Series represents a pari passu interest in the Trust. The Class A Interest, the Class B Interest, the Collateral Interest and the Subordinated Transferor Interest will each include the right to receive (but only to the extent needed to make required payments under the Agreement) varying percentages of Finance Charge Collections and Principal Collections during each Collection Period. Finance Charge Collections and Defaulted Receivables will be allocated at all times to the Class A Interest, the Class B Interest, the Collateral Interest and the Subordinated Transferor Interest based on the Floating Allocation Percentage (as defined herein) applicable to such Class or Interest during the related Collection Period. The 'Class A Floating Allocation Percentage', the 'Class B Floating Allocation Percentage', the 'Collateral Interest Floating Allocation Percentage' and the 'Subordinated Floating Allocation Percentage' shall be equal to the percentage equivalent of the ratio which the Class A Invested Amount, Class B Invested Amount, Collateral Interest Invested Amount or the Subordinated Transferor Amount, as applicable, on the last day of the immediately preceding Collection Period bears to the amount of Aggregate Receivables in the Trust, or, with respect to Finance Charge Collections, bears to the sum of the numerators used to calculate the invested percentage with respect to Finance Charge Collections for all Series of certificates outstanding during such Collection Period and the B/F Percentage. See 'Description of the Offered Certificates and the Agreement--Allocation Percentages.' During the Revolving Period (as defined below), subject to certain limitations, all Principal Collections allocable to the Series 1996-1 Interests (other than Reallocated Principal Collections (as defined below) that are used to pay Required Amounts due on the Class A and Class B Certificates and the Collateral Interest) will be paid to 11 the Transferor in respect of the Transferor Interest. During the Controlled Amortization Period (as defined below) and any Rapid Amortization Period (as defined below), Principal Collections allocable to the Series 1996-1 Interests will be allocated to the Class A Interest, the Class B Interest, the Collateral Interest and the Subordinated Transferor Interest based on the Fixed Allocation Percentage with respect to such Class or Interest. The Floating Allocation Percentage and Fixed Allocation Percentage are sometimes referred to herein as an 'Invested Percentage.' See 'Principal Payments; Controlled Amortization Period' herein. Exchanges................................. The Agreement authorizes the Trustee to issue three types of certificates: (i) one or more Series of certificates which may be in one or more classes and which may be transferable and have the characteristics described below, (ii) the Bridgestone/Firestone Certificate which is currently and will continue to be held by Bridgestone/Firestone and which is not transferable, and (iii) the Exchangeable Transferor Certificate, which is held by the Transferor and in which Bridgestone/Firestone has a 100% participation pursuant to an Amended and Restated Participation Agreement, dated as of November 1, 1996, by and between the Transferor and Bridgestone/Firestone (the 'Participation Agreement'). The Agreement also provides that, pursuant to any one or more supplements to the Agreement (each, a 'Supplement'), the Transferor may tender the Exchangeable Transferor Certificate or, if permitted by the applicable Supplement, certificates representing any Series of certificates and the Exchangeable Transferor Certificate, to the Trustee and, upon satisfying certain other terms and conditions, cause the Trustee to issue one or more new series and reissue an Exchangeable Transferor Certificate (any such tender, an 'Exchange'). Any Exchange involving only the tender of the Exchangeable Transferor Certificate to the Trustee will have the effect of decreasing the Transferor Interest. Under the Agreement, the Transferor may define, with respect to any Series, the Principal Terms (as defined below) of the Series. The Transferor may offer any Series to the public or other investors under a prospectus or other disclosure document (a 'Disclosure Document') in transactions either registered under the Act or exempt from registration thereunder, directly or through the Underwriters (as defined below) or one or more other underwriters or placement agents, in fixed-price offerings or in negotiated transactions or otherwise. See Annex I for a listing of all outstanding Series. The Transferor may offer, from time to time, additional Series issued by the Trust. Under the Agreement and pursuant to a Supplement, an Exchange may occur only upon delivery to the Trustee of the following: (i) a Supplement specifying the Principal Terms of such Series, (ii) an opinion of counsel to the effect that the certificates of such Series under existing law will be characterized as either indebtedness or an interest in a partnership under existing law for Federal income tax purposes and that the issuance of such Series will not materially adversely affect the Federal income tax characterization of any outstanding Series that have been the subject of a previous opinion 12 of tax counsel, (iii) if required by the related Supplement, a form of Enhancement and any related agreement, (iv) written confirmation from the applicable Rating Agency (see 'Summary of Terms-- Rating of the Offered Certificates' below) that the Exchange will not result in such Rating Agency reducing or withdrawing its rating on any then outstanding Series rated by it or otherwise adversely affect any rating on any then outstanding Series, and (v) the existing Exchangeable Transferor Certificate and, if applicable, the certificates representing the Series to be exchanged. See 'Description of the Offered Certificates and the Agreement-- Exchanges.' Registration of the Offered Certificates............................ The Class A Certificates will be issued in book-entry form only in the initial principal amount of $200,000,000 (the 'Initial Class A Invested Amount') (which will be decreased or reinstated under certain circumstances as described herein). The Class A Certificates will initially be represented by one or more Class A Certificates registered in the name of Cede & Co. ('Cede') as the nominee of The Depository Trust Company ('DTC'), in the United States, or Cedel Bank, societe anonyme ('CEDEL') or the Euroclear System ('Euroclear') in Europe. The Class B Certificates will be issued in book-entry form only in the initial principal amount of $28,205,129 (the 'Initial Class B Invested Amount') (which will be decreased or reinstated under certain circumstances as described herein and, accordingly, the amount available to fund payments with respect to the Class A Certificates may be decreased). The Class B Certificates will initially be represented by one or more Certificates registered in the name of Cede as the nominee of DTC, in the United States or CEDEL or Euroclear in Europe. Transfers within DTC, CEDEL or Euroclear, as the case may be, will be in accordance with the usual rules and operating procedures of the relevant system. So long as Offered Certificates are in book-entry form, such Offered Certificates will be evidenced by one or more securities registered in the name of Cede, as the nominee of DTC or one or the relevant depositaries (collectively, the 'European Depositaries'). Cross-market transfers between persons holding directly or indirectly through DTC, on the one hand, and counterparties holding directly or indirectly through CEDEL or Euroclear, on the other, will be effected in DTC through Citibank N.A. ('Citibank') or The Chase Manhattan Bank ('Chase'), the relevant depositaries of CEDEL and Euroclear, respectively, and each a participating member of DTC. See 'Description of the Offered Certificates and the Agreement--Definitive Certificates.' As used herein, the term 'Class A Certificateholders' refers to registered holders of the Class A Certificates, the term 'Class B Certificateholders' refers to registered holders of the Class B Certificates, the term 'Collateral Interest Holder' refers to registered holders of the Collateral Interest, and the term 'Offered Certificateholders' refers to the Class A Certificateholders and the Class B Certificateholders collectively. The holders of beneficial interests in the Class A Certificates and the Class B Certificates (the 'Certificate Owners') will not be entitled to receive a definitive certificate representing such person's interest, 13 except in the event that Definitive Certificates are issued under the limited circumstances described herein. In such event, interests in the Class A Certificates and Class B Certificates will be available in denominations of $1,000 and in integral multiples thereof. All references herein to Class A Certificateholders, Class B Certificateholders or Offered Certificateholders shall refer to Certificate Owners, except as otherwise specified herein. See 'Description of the Offered Certificates and the Agreement--Book- Entry Registration' and '--Definitive Certificates.' Interest on the Class A Certificates...... Interest will accrue on the unpaid principal amount of the Class A Certificates at a per annum rate equal to the Class A Certificate Rate and, except as otherwise provided herein, be distributed to Class A Certificateholders monthly on each Distribution Date, commencing December, 1996, in an amount equal to one-twelfth of the product of (i) the Class A Certificate Rate and (ii) the outstanding principal balance of the Class A Certificates as of the preceding Distribution Date (or in the case of the first Distribution Date, as of the Closing Date). Interest for any Distribution Date due but not paid on any Distribution Date will be due on the next succeeding Distribution Date together with, to the extent permitted by applicable law, additional interest on such amount at the Class A Certificate Rate. Interest for the first Distribution Date will include accrued interest at the Class A Certificate Rate from the Closing Date through November 30, 1996. Interest will be calculated on the basis of a 360-day year of twelve 30-day months ('30/360 Basis'). See 'Description of the Offered Certificates and the Agreement--General' and '--Distributions from the Collection Account.' Interest on the Class B Certificates...... Interest will accrue on the unpaid principal amount of the Class B Certificates at a per annum rate equal to the Class B Certificate Rate and, except as otherwise provided herein, be distributed to Class B Certificateholders monthly on each Distribution Date, commencing December, 1996, in an amount equal to one-twelfth of the product of (i) the Class B Certificate Rate and (ii) the outstanding principal balance of the Class B Certificates as of the preceding Distribution Date (or in the case of the first Distribution Date, as of the Closing Date). Interest for any Distribution Date due but not paid on any Distribution Date will be due on the next succeeding Distribution Date together with, to the extent permitted by applicable law, additional interest on such amount at the Class B Certificate Rate. Interest for the first Distribution Date will include accrued interest at the Class B Certificate Rate from the Closing Date through November 30, 1996. Interest will be calculated on a 30/360 Basis. See 'Description of the Offered Certificates and the Agreement--General' and '--Distributions from the Collection Account.' Distribution Date......................... The 1st day of each month (or, if such day is not a business day, the next succeeding business day). Record Date............................... The 15th day of the month immediately preceding any Distribution Date. Revolving Period.......................... No principal will be payable to the Class A Certificateholders until the Distribution Date occurring in December, 1999, or upon the occurrence of an Amortization Event (as defined below) as 14 described herein, on the first Distribution Date following the Collection Period during which an Amortization Event occurs. No principal will be payable to the Class B Certificateholders until the final principal payment has been made to the Class A Certificateholders. No principal will be payable to the Collateral Interest Holder until the final principal payment has been made to the Offered Certificateholders. No principal will be payable to the holder of the Subordinated Transferor Certificate until the final principal payment has been made to the Offered Certificateholders and the Collateral Interest Holder. For each Collection Period during the period beginning after the Closing Date and ending on the day prior to the day on which the Controlled Amortization Period or the Rapid Amortization Period commences (the 'Revolving Period'), all Principal Collections otherwise allocable to the Certificateholders' Interest (other than Shared Principal Collections paid to holders of certificates of other Series and any Reallocated Principal Collections that are used to pay Required Amounts due on the Class A and Class B Certificates and the Collateral Interest) will, subject to certain limitations, be distributed to the Transferor in respect of the Transferor Interest. Principal Payments; Controlled Amortization Period..................... Unless or until an Amortization Event (as defined below) has occurred, commencing on the Distribution Date occurring three years after the Closing Date and ending when the Class A Invested Amount has been paid in full or on July 1, 2003 (the 'Final Series 1996-1 Termination Date') or on the day on which an Amortization Event occurs or is deemed to have occurred (the 'Controlled Amortization Period'), Principal Collections and Shared Principal Collections allocable to the Series 1996-1 Interests (other than Reallocated Principal Collections that are used to pay Required Amounts due on the Class A and Class B Certificates and the Collateral Interest) will be distributed monthly to the Class A Certificateholders, as provided herein, on each Distribution Date beginning with the Distribution Date in December, 1999 and the Class A Invested Amount is expected to be paid in full to the Class A Certificateholders on November 1, 2000 (the 'Class A Expected Final Payment Date'). During the Controlled Amortization Period, the amount of Principal Collections and Shared Principal Collections allocable to the Class A Certificates will generally equal the product of such Principal Collections and the Class A Fixed Allocation Percentage (as defined below) which will be paid through to the Class A Certificateholders to the extent of the lesser of (a) such product and certain other amounts and (b) $16,666,666.67 (the 'Controlled Amortization Amount'). See 'Description of the Offered Certificates and the Agreement--General' and '--Distributions from the Collection Account.' Principal Collections received during the Controlled Amortization Period and Rapid Amortization Period will be allocated to the Class A Invested Amount, Class B Invested Amount, Collateral Interest and Subordinated Transferor Invested Amount based on the Class A Fixed Allocation Percentage, Class B Fixed Allocation Percentage, Collateral Interest Fixed Allocation Percentage and Subordinated Transferor Fixed Allocation Percentage, respectively. 15 The 'Fixed Allocation Percentage' means, with respect to any Collection Period, the percentage equivalent of a fraction, the numerator of which is the sum of the Class A Invested Amount, the Class B Invested Amount, the Collateral Interest Invested Amount and the Subordinated Transferor Interest (the 'Invested Amount'), as of the close of business on the last day of the Revolving Period and the denominator of which is the greater of (x) the Aggregate Receivables as of the close of business on the last day of the prior Collection Period and (y) the sum of the numerators used to calculate the investor percentages for allocations with respect to Principal Collections for all Series of certificates outstanding for the current Distribution Date. During the Controlled Amortization Period and any Rapid Amortization Period, all Principal Collections will be allocated to the Class A Interest, the Class B Interest, the Collateral Interest and the Subordinated Transferor Interest based on the percentage equivalent of the ratio which the Class A Invested Amount, the Class B Invested Amount, the Collateral Interest Invested Amount and the Subordinated Transferor Amount, as applicable, each as of the last day of the Revolving Period, bears to the greater of (a) the Aggregate Receivables on the last day of the prior Collection Period and (b) the sum of the numerators used to calculate the Invested Percentage with respect to Principal Collections for all Series of certificates outstanding for such Collection Period (the 'Class A Fixed Allocation Percentage', the 'Class B Fixed Allocation Percentage', the 'Collateral Interest Fixed Allocation Percentage' and the 'Subordinated Transferor Fixed Allocation Percentage', as applicable) and the remainder will be allocated to the Transferor Interest and to the B/F Interest. The Class B Certificateholders will not receive any payments of principal until the Class A Certificateholders have received all payments of principal due to them. Once the Class A Invested Amount has been reduced to zero, the Class B Invested Amount is expected to be paid in full to the Class B Certificateholders on November 1, 2000 (the 'Class B Expected Final Payment Date'). See 'Description of the Offered Certificates and the Agreement--General' and '--Distributions from the Collection Account.' The Collateral Interest will not receive any payments of principal until the Class A and the Class B Certificateholders have received all payments of principal due to them. Once the Class A Invested Amount and the Class B Invested Amount have been reduced to zero, the Collateral Interest Invested Amount will be paid in full to the Collateral Interest Holder. The holder of the Subordinated Transferor Certificate will not receive any payments of principal until the Class A and the Class B Certificateholders and the Collateral Interest Holder have received all payments of principal due to them. Once the Class A Invested Amount, the Class B Invested Amount and the Collateral Interest Invested Amount have been reduced to zero, the Subordinated Transferor Amount will be paid in full to the holder of the Subordinated Transferor Certificate. 16 Rapid Amortization Period................. During the period from the earlier of the date on which (i) the Class A Invested Amount has been paid in full or (ii) an Amortization Event occurs or is deemed to have occurred and ending on the earlier of the date on which the Invested Amount has been paid in full or the Final Series 1996-1 Termination Date (the 'Rapid Amortization Period'), Principal Collections, Shared Principal Collections and certain other amounts allocable to the Certificateholders' Interest will no longer be distributed to the Transferor but instead will be distributed as principal payments on each Distribution Date beginning with the first Distribution Date following the Collection Period in which the Class A Invested Amount has been paid in full or an Amortization Event occurs or is deemed to have occurred. Such Principal Collections, Shared Principal Collections and certain other amounts will be distributed to the Class A Certificateholders (to the extent not already paid in full) and, following the final principal payment to the Class A Certificateholders, to the Class B Certificateholders and, following the final principal payment to the Class B Certificateholders, to the Collateral Interest Holder, and, following the final principal payment to the Collateral Interest Holder, to the holder of the Subordinated Transferor Certificate. See 'Description of the Offered Certificates and the Agreement--Amortization Events.' Flow of Funds............................. Funds on deposit in the Collection Account allocable to the Class A and Class B Certificates, the Collateral Interest and the Subordinated Transferor Certificate with respect to each Distribution Date shall be applied in the priority set forth below: (a) the Class A Floating Allocation Percentage of Finance Charge Collections will be distributed as follows: (i) Class A Monthly Interest, plus the amount of any unpaid interest due; (ii) the Class A Investor Default Amount will be distributed to the Transferor in respect of the Transferor Interest during the Revolving Period up to the amount of the Transferor Interest after the purchase of new Receivables (and thereafter will be included in the funds available to make principal payments); (iii) the Class A Monthly Servicing Fee (in the event Bridgestone/Firestone is not the Servicer, this amount will be distributed before the amount in clause (ii)); and (iv) the balance, if any, will constitute a portion of Excess Finance Charge Collections (as defined below) and will be allocated and distributed as described under '--Excess Finance Charge Collections.' (b) the Class B Floating Allocation Percentage of Finance Charge Collections will be distributed as follows: (i) Class B Monthly Interest, plus the amount of any unpaid interest due; 17 (ii) the Class B Monthly Servicing Fee; and (iii) the balance, if any, will constitute a portion of Excess Finance Charge Collections and will be allocated and distributed as described under '--Excess Finance Charge Collections.' (c) the Collateral Interest Floating Allocation Percentage of Finance Charge Collections will be distributed as follows: (i) Collateral Interest Monthly Interest, plus the amount of any unpaid interest due; (ii) the Collateral Interest Monthly Servicing Fee; and (iii) the balance, if any, will constitute a portion of Excess Finance Charge Collections and will be allocated and distributed as described under '--Excess Finance Charge Collections.' (d) the Subordinated Transferor Floating Allocation Percentage of Finance Charge Collections will be distributed as follows: (i) the Subordinated Transferor Monthly Servicing Fee; and (ii) the balance, if any, will constitute a portion of Excess Finance Charge Collections and will be allocated and distributed as described under '--Excess Finance Charge Collections.' (e) For each Distribution Date with respect to the Revolving Period, the remaining funds on deposit in the Collection Account allocable to the Class A and Class B Certificates, the Collateral Interest and the Subordinated Transferor Certificate (other than certain Excess Finance Charge Collections and Reallocated Principal Collections) will be applied as Shared Principal Collections and the balance will be distributed to the Transferor in respect of the Transferor Interest. (f) For each Distribution Date with respect to the Controlled Amortization Period or any Rapid Amortization Period, the remaining funds on deposit in the Collection Account allocable to the Class A and Class B Certificates, the Collateral Interest and the Subordinated Transferor Certificate (other than certain Excess Finance Charge Collections and Reallocated Principal Collections) will be distributed as follows: (i) Class A Monthly Principal for such Distribution Date until the Class A Invested Amount is paid in full; (ii) once the Class A Invested Amount is paid in full, the remaining amount will be distributed to the Class B Certificateholders until the Class B Invested Amount is paid in full; (iii) once the Class B Invested Amount is paid in full, the remaining amount will be distributed to the Collateral Interest Holder until the Collateral Interest Invested Amount is paid in full; 18 (iv) once the Collateral Interest Invested Amount is paid in full, the remaining amount will be distributed to the holder of the Subordinated Transferor Certificate until the Subordinated Transferor Amount is paid in full; (v) an amount equal to the balance of any such remaining funds on deposit in the Collection Account will be paid to the Transferor in respect of the Transferor Interest up to the amount of the Transferor Interest; and (vi) the balance will be applied as Shared Principal Collections to the extent necessary and the remainder will be distributed to the Transferor in respect of the Transferor Interest. 'Class A Monthly Interest' equals, with respect to any Distribution Date, one-twelfth of the product of (i) the Class A Certificate Rate and (ii) the outstanding principal balance of the Class A Certificates as of the preceding Distribution Date (after subtracting therefrom the aggregate amount of all distributions of principal made to the Class A Certificateholders on such Distribution Date) or, with respect to the first Distribution Date, the Initial Class A Invested Amount, provided, however, that with respect to the initial Distribution Date, Class A Monthly Interest shall equal $ . 'Class B Monthly Interest' equals, with respect to any Distribution Date, one-twelfth of the product of (i) the Class B Certificate Rate and (ii) the outstanding principal balance of the Class B Certificates as of the preceding Distribution Date (after subtracting therefrom the aggregate amount of all distributions of principal made to the Class B Certificateholders on such Distribution Date) or, with respect to the first Distribution Date, the Initial Class B Invested Amount, provided, however, that with respect to the initial Distribution Date, Class B Monthly Interest shall equal $ . 'Collateral Interest Monthly Interest' equals, with respect to any Distribution Date, the product of (i) the actual number of days in the related Collateral Interest Accrual Period (as defined below) divided by 360, (ii) the Collateral Interest Rate and (iii) the outstanding principal balance of the Collateral Interest as of the preceding Distribution Date (after subtracting therefrom the aggregate amount of all distributions of principal made to the Collateral Interest Holder on such Distribution Date) or, with respect to the first Distribution Date, the Initial Collateral Interest Invested Amount. With respect to any Distribution Date, the 'Collateral Interest Accrual Period' is the period from and including the first day of the preceding calendar to and including the last day of such preceding calendar month, except the initial Collateral Interest Accrual Period shall be deemed to be the period from the Closing Date through the last day of the calendar month preceding the initial Distribution Date. 'Class A Investor Default Amount' means, a portion of all Defaulted Receivables which will be allocated to the Class A Certificateholders for each Distribution Date in an amount equal to the product of the Class A Floating Allocation Percentage applicable during the immediately preceding Collection Period and the amount of Defaulted Receivables for such Collection Period. 19 'Class B Investor Default Amount' means, a portion of all Defaulted Receivables which will be allocated to the Class B Certificateholders for each Distribution Date in an amount equal to the product of the Class B Floating Allocation Percentage applicable during the immediately preceding Collection Period and the amount of Defaulted Receivables for such Collection Period. 'Collateral Interest Investor Default Amount' means, a portion of all Defaulted Receivables which will be allocated to the Collateral Interest Holder for each Distribution Date in an amount equal to the product of the Collateral Interest Floating Allocation Percentage applicable during the immediately preceding Collection Period and the amount of Defaulted Receivables for such Collection Period. 'Subordinated Transferor Default Amount' means, a portion of all Defaulted Receivables which will be allocated to the holder of the Subordinated Transferor Certificate for each Distribution Date in an amount equal to the product of the Subordinated Transferor Floating Allocation Percentage applicable during the immediately preceding Collection Period and the amount of Defaulted Receivables for such Collection Period. 'Investor Default Amount' means the sum of the Class A Investor Default Amount, the Class B Investor Default Amount, the Collateral Interest Investor Default Amount and the Subordinated Transferor Investor Default Amount. 'Monthly Servicing Fee' means, with respect to any Distribution Date, the sum of (a) the Class A Monthly Servicing Fee, the Class B Monthly Servicing Fee, the Collateral Interest Monthly Servicing Fee and the Subordinated Transferor Monthly Servicing Fee and (b) the Servicing Fee allocable to the Transferor Amount and the B/F Amount. The portion of the Servicing Fee allocable to the Class A Interest on each Distribution Date (the 'Class A Monthly Servicing Fee'), to the Class B Interest on each Distribution Date (the 'Class B Monthly Servicing Fee'), to the Collateral Interest on each Distribution Date (the 'Collateral Interest Monthly Servicing Fee') and to the Subordinated Transferor Interest on each Distribution Date (the 'Subordinated Transferor Monthly Servicing Fee') generally will be equal to one-twelfth of the product of 2.00% per annum and the amount of the Class A Invested Amount, the Class B Invested Amount, the Collateral Interest Invested Amount, or the Subordinated Transferor Amount, as the case may be, on the last day of the second preceding Collection Period (in the case of the first Distribution Date, the initial principal amount of the Class A Certificates and Class B Certificates, the Collateral Interest or the Subordinated Transferor Certificate, as the case may be). 'Class A Invested Amount' for any date means an amount equal to (i) the initial principal balance of the Class A Certificates, minus the (ii) amount of principal payments made to Class A Certificateholders prior to such date and minus (iii) the excess, if any, of the aggregate amount of Class A Investor Charge-Offs (as defined below) for all Distribution Dates preceding such date over 20 the aggregate amount of any reimbursements of Class A Investor Charge-Offs for all Distribution Dates preceding such date. 'Class B Invested Amount' for any date means an amount equal to (i) the initial principal balance of the Class B Certificates, minus (ii) the amount of principal payments made to the Class B Certificateholders prior to such date, minus (iii) the aggregate amount of Class B Investor Charge-Offs (as defined below) for all prior Distribution Dates, minus (iv) the aggregate amount of Class B Reallocated Principal Collections for all prior Distribution Dates, minus (v) an amount equal to the aggregate 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 herein, and plus (vi) the amount of Excess Finance Charge Collections applied on all prior Distribution Dates for the purpose of reimbursing amounts deducted pursuant to the foregoing clauses (iii), (iv) and (v). 'Collateral Interest Invested Amount' for any date means an amount equal to (i) the initial principal balance of the Collateral Interest, minus (ii) the amount of principal payments made to the Collateral Interest Holder prior to such date, minus (iii) the aggregate amount of Collateral Interest Investor Charge-Offs (as defined below) for all prior Distribution Dates, minus (iv) the aggregate amount of Collateral Interest Reallocated Principal Collections, minus (v) an amount equal to the aggregate amount by which the Collateral Interest Invested Amount has been reduced to fund the Class A and Class B Investor Default Amounts on all prior Distribution Dates as described herein, and plus (vi) the amount of Excess Finance Charge Collections applied on all prior Distribution Dates for the purpose of reimbursing amounts deducted pursuant to the foregoing clauses (iii), (iv) and (v). 'Subordinated Transferor Amount' for any date means an amount equal to (i) the initial principal balance of the Subordinated Transferor Certificate, minus (ii) the amount of principal payments made to the holder of the Subordinated Transferor Certificate prior to such date, minus (iii) the aggregate amount of Subordinated Transferor Charge-Offs (as defined below) for all prior Distribution Dates, minus (iv) the aggregate amount of Subordinated Transferor Reallocated Principal Collections for all prior Distribution Dates, minus (v) an amount equal to the aggregate amount by which the Subordinated Transferor Amount has been reduced to fund the Class A, Class B and Collateral Interest Investor Default Amounts on all prior Distribution Dates as described herein, and plus (vi) the amount of Excess Finance Charge Collections applied on all prior Distribution Dates for the purpose of reimbursing amounts deducted pursuant to the foregoing clauses (iii), (iv) and (v). 'Excess Finance Charge Collections' shall mean, with respect to any Distribution Date, an amount equal to the sum of the amounts described in clause (a)(iv), clause (b)(iii), clause (c)(iii) and clause (d)(ii) above. 21 See 'Description of the Offered Certificates and the Agreement-- Distributions from the Collection Account.' Excess Finance Charge Collections......... Excess Finance Charge Collections will be applied as follows: (a) to fund the Class A Required Amount; (b) to distribute Class A Investor Charge-Offs which have not been previously reimbursed to the Transferor in respect of the Transferor Interest during the Revolving Period up to the amount of the Transferor Interest after the purchase of new Receivables (and thereafter will be included in the funds available to make principal payments); (c) to fund the Class B Required Amount; (d) to distribute the Class B Investor Default Amount to the Transferor in respect of the Transferor Interest during the Revolving Period up to the amount of the Transferor Interest after the purchase of new Receivables (and thereafter will be included in the funds available to make principal payments); (e) to distribute an amount equal to the amount by which the Class B Invested Amount has been reduced below the Initial Class B Invested Amount (for reasons other than the payment of principal to the Class B Certificateholders) to the Transferor in respect of the Transferor Interest during the Revolving Period, up to the amount of the Transferor Interest after the purchase of new Receivables (and thereafter will be included in the funds available to make principal payments); (f) to fund the Collateral Interest Required Amount; (g) to distribute the Collateral Interest Investor Default Amount to the Transferor in respect of the Transferor Interest during the Revolving Period up to the amount of the Transferor Interest after the purchase of new Receivables (and thereafter will be included in the funds available to make principal payments); (h) to distribute an amount equal to the amount by which the Collateral Interest Invested Amount has been reduced below the Initial Collateral Interest Invested Amount (for reasons other than the payment of principal to the Collateral Interest Holder) to the Transferor in respect of the Transferor Interest during the Revolving Period up to the amount of the Transferor Interest after the purchase of new Receivables (and thereafter will be included in the funds available to make principal payments); (i) to fund any additional amounts required to be paid on such Distribution Date pursuant to the terms of the Loan Agreement; (j) to distribute the Subordinated Transferor Default Amount to the Transferor during the Revolving Period up to the amount of the Transferor Interest after the purchase of new Receivables (and thereafter will be included in the funds available to make principal payments); (k) to distribute the amount by which the Subordinated Transferor Amount has been reduced below the Initial Subordinated Transferor Amount (for reasons other than the payment of principal to the holder of the Subordinated Transferor Certificate) to the Transferor 22 in respect of the Transferor Interest during the Revolving Period up to the amount of the Transferor Interest after the purchase of new Receivables (and thereafter will be included in the funds available to make principal payments); (l) the balance, if any, will be treated as Shared Excess Finance Charge Collections to the extent necessary; and (m) any remaining amounts not treated as Shared Excess Finance Charge Collections will be treated as Shared Principal Collections. The 'Class A Required Amount' means the amount, if any, by which the sum of Class A Monthly Interest, any overdue Class A Monthly Interest (with interest thereon), the Class A Investor Default Amount, the Class A Monthly Servicing Fee for such Collection Period exceeds the funds allocable to the Class A Certificates to pay such amounts. The 'Class B Required Amount' means the amount, if any, by which the sum of Class B Monthly Interest, any overdue Class B Monthly Interest (with interest thereon) and the Class B Monthly Servicing Fee for such Collection Period exceeds the funds allocable to the Class B Certificates to pay such amounts. The 'Collateral Interest Required Amount' means the amount, if any, by which the sum of Collateral Interest Monthly Interest, any overdue Collateral Interest Monthly Interest (with interest thereon) and the Collateral Interest Monthly Servicing Fee for such Collection Period exceeds the funds allocable to the Collateral Interest to pay such amounts. The 'Required Amount' shall equal the sum of the Class A Required Amount, the Class B Required Amount and the Collateral Interest Required Amount. See 'Description of the Offered Certificates and the Agreement-- Excess Finance Charge Collections.' Reallocated Principal Collections......... If Excess Finance Charge Collections available with respect to such Collection Period are less than the remaining Required Amount, Principal Collections allocable to the Subordinated Transferor Interest, the Collateral Interest and the Class B Interest with respect to a Collection Period will be applied to the following Required Amounts, if any, in the following order of priority: (i) Subordinated Transferor Reallocated Principal Collections, first, to the remaining components of the Class A Required Amount, if any, then to the remaining components of the Class B Required Amount, if any, and then to the remaining components of the Collateral Interest Required Amount, if any; (ii) Collateral Interest Reallocated Principal Collections, first, to the remaining components of the Class A Required Amount, if any, then to the remaining components of the Class B Required Amount, if any; and (iii) Class B Reallocated Principal Collections, to the remaining components of the Class A Required Amount, if any. 'Subordinated Transferor Reallocated Principal Collections' means, with respect to each Distribution Date, the Principal 23 Collections allocable to the Subordinated Transferor Certificate with respect to such Distribution Date (equal to the Subordinated Transferor Floating Allocation Percentage of Principal Collections for the related Collection Period for any such Distribution Date during the Revolving Period or the Subordinated Transferor Fixed Allocation Percentage of Principal Collections for any such Distribution Date during the Controlled Amortization Period or Rapid Amortization Period) in an amount equal to the Class A, Class B and Collateral Interest Required Amounts, if any, with respect to such Distribution Date (after giving effect to any payment of the Class A, Class B and Collateral Interest Required Amounts from Excess Finance Charge Collections). 'Collateral Interest Reallocated Principal Collections' means, with respect to each Distribution Date, the Principal Collections Allocable to the Collateral Interest with respect to such Distribution Date (equal to the Collateral Interest Floating Allocation Percentage of Principal Collections for the related Collection Period for any such Distribution Date during the Revolving Period or the Collateral Interest Fixed Allocation Percentage of Principal Collections for any such Distribution Date during the Controlled Amortization Period or Rapid Amortization Period) in an amount equal to the Class A and Class B Required Amounts, if any, with respect to such Distribution Date (after giving effect to any payment of the Class A and Class B Required Amounts from Excess Finance Charge Collections and Subordinated Transferor Reallocated Principal Collections). 'Class B Reallocated Principal Collections' means with respect to each Distribution Date, the Principal Collections allocable to the Class B Certificates with respect to such Distribution Date (equal to the Class B Floating Allocation Percentage of Principal Collections for the related Collection Period for any such Distribution Date during the Revolving Period or the Class B Fixed Allocation Percentage of Principal Collections for any such Distribution Date during the Controlled Amortization Period or Rapid Amortization Period) in an amount equal to the Class A Required Amount, if any, with respect to such Distribution Date (after giving effect to any payment of the Class A Required Amount from Excess Finance Charge Collections, Subordinated Transferor Reallocated Principal Collections and Collateral Interest Reallocated Principal Collections). 'Reallocated Principal Collections' will equal the sum of Subordinated Transferor Reallocated Principal Collections, Collateral Interest Reallocated Principal Collections and Class B Reallocated Principal Collections. Collections not applied in the foregoing manner (and therefore not constituting Reallocated Principal Collections) will during the Revolving Period, be applied as Shared Principal Collections and, during the Controlled Amortization Period or any Rapid Amortization Period, will be included in the funds available to make principal payments. See 'Description of the Offered Certificates and the Agreement-- Reallocated Principal Collections.' 24 Additional Amounts Available to Certificateholders...................... Excess Finance Charge Collections will be applied to fund the Required Amount, if any, as described herein under 'Excess Finance Charge Collections.' If Excess Finance Charge Collections available with respect to such Collection Period are less than the remaining Required Amount, Principal Collections for such Collection Period will then be used to fund the remaining Required Amount as described herein under 'Description of the Offered Certificates and the Agreement--Reallocated Principal Collections.' If Reallocated Principal Collections with respect to any Collection Period are insufficient to fund the remaining Class A Required Amount for such Collection Period, then a portion of the Subordinated Transferor Amount (after giving effect to reductions for any Subordinated Transferor Charge-Offs and Subordinated Transferor Reallocated Principal Collections for such Collection Period) equal to such insufficiency (but not in excess of the Class A Investor Default Amount for such Distribution Date) will be allocated to the Class A Certificates to avoid a charge-off with respect to the Class A Certificates, and the Subordinated Transferor Amount will be reduced by such amount. If such reduction would cause the Subordinated Transferor Amount to be negative, the Subordinated Transferor Amount will be reduced to zero. If the Subordinated Transferor Amount is reduced to zero, the Collateral Interest Invested Amount (after giving effect to reductions for any Collateral Interest Investor Charge-Offs and any Collateral Interest Reallocated Principal Collections for such Collection Period for which the Subordinated Transferor Interest was not reduced) will be reduced by the amount by which the Subordinated Transferor Amount would have been reduced below zero (but not by more than the excess of the Class A Investor Default Amount for such Distribution Date over the amount of such reduction, if any, of the Subordinated Transferor Amount for such Distribution Date) and such amount will be allocated to the Class A Certificates to avoid a charge-off with respect to the Class A Certificates. If such reduction would cause the Collateral Interest Invested Amount to be negative, the Collateral Interest Invested Amount will be reduced to zero. If the Collateral Interest Invested Amount is reduced to zero, the Class B Invested Amount (after giving effect to reductions for any Class B Investor Charge-Offs and any Class B Reallocated Principal Collections for such Collection Period for which the Subordinated Transferor Amount and the Collateral Interest Invested Amount was not reduced) will be reduced by the amount by which the Collateral Interest Invested Amount would have been reduced below zero (but not by more than the excess of the Class A Investor Default Amount for such Distribution Date over the amount of such reduction, if any, of the Subordinated Transferor Amount and the Collateral Interest Invested Amount for such Distribution Date) and such amount will be allocated to the Class A Certificates to avoid a charge-off with respect to the Class A Certificates. If such reduction would cause the Class B Invested Amount to be negative, the Class B Invested Amount will be reduced to zero. 25 If the Class B Invested Amount is reduced to zero, 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 of the Class A Investor Default Amount for such Distribution Date over the reduction in the Subordinated Transferor Amount the Collateral Interest Invested Amount and the Class B Invested Amount for such Collection Period (a 'Class A Investor Charge-Off '), and the Class A Certificateholders will bear directly the credit and other risks associated with their undivided interest in the Trust. After payment of the Class A Required Amount, if Collateral Interest Reallocated Principal Collections and Subordinated Transferor Reallocated Principal Collections not required to fund the Class A Required Amount with respect to any Collection Period are insufficient to fund the remaining Class B Required Amount for such Collection Period, then a portion of the Subordinated Transferor Amount (after giving effect to reductions for any Subordinated Transferor Charge-Offs, Subordinated Transferor Reallocated Principal Collections and any adjustments made thereto for the benefit of the Class A Certificateholders) equal to such insufficiency (but not in excess of the Class B Investor Default Amount for such Distribution Date) will be allocated to the Class B Certificates to avoid a charge-off with respect to the Class B Certificates, and the Subordinated Transferor Amount will be reduced by such amount. If such reduction would cause the Subordinated Transferor Amount to be negative, the Subordinated Transferor Amount will be reduced to zero. If the Subordinated Transferor Amount is reduced to zero, the Collateral Interest Invested Amount (after giving effect to reductions for any Collateral Interest Investor Charge-Offs, Collateral Interest Reallocated Principal Collections and any adjustments made thereto for the benefit of the Class A Certificateholders) will be reduced by the amount by which the Subordinated Transferor Amount would have been reduced below zero (but not by more than the excess of the Class B Investor Default Amount for such Distribution Date over the amount of such reduction, if any, of the Subordinated Transferor Amount for such Distribution Date) and such amount will be allocated to the Class B Certificates to avoid a charge-off with respect to the Class B Certificates. If such reduction would cause the Collateral Interest Invested Amount to be negative, the Collateral Interest Invested Amount will be reduced to zero. If the Collateral Interest Invested Amount is reduced to zero, the Class B Invested Amount will be reduced by the amount by which the Collateral Interest Invested Amount would have been reduced below zero, but not by more than the excess of the Class B Investor Default Amount for such Distribution Date over the reduction in the Subordinated Transferor Amount and the Collateral Interest Invested Amount (a 'Class B Investor Charge-Off'), and the Class B Certificateholders will bear directly the credit and other risks associated with their undivided interest in the Trust. If such reduction would cause the Class B Invested Amount to be negative, the Class B Invested Amount will be reduced to zero. 26 After payment of the Class B Required Amount, if Subordinated Transferor Reallocated Principal Collections with respect to any Collection Period are insufficient to fund the remaining Collateral Interest Required Amount for such Collection Period, then a portion of the Subordinated Transferor Amount (after giving effect to reductions for any Subordinated Transferor Charge-Offs, Subordinated Transferor Reallocated Principal Collections and any adjustments made thereto for the benefit of the Class A and Class B Certificateholders) equal to such insufficiency (but not in excess of the Collateral Interest Investor Default Amount for such Distribution Date) will be allocated to the Collateral Interest to avoid a charge- off with respect to the Collateral Interest, and the Subordinated Transferor Amount will be reduced by such amount. If such reduction would cause the Subordinated Transferor Amount to be negative, the Subordinated Transferor Amount will be reduced to zero. If the Subordinated Transferor Amount is reduced to zero, the Collateral Interest Invested Amount will be reduced by the amount by which the Subordinated Transferor Amount would have been reduced below zero, but not by more than the excess of the Collateral Interest Investor Default Amount for such Distribution Date over the reduction in the Subordinated Transferor Amount (a 'Collateral Interest Investor Charge-Off '), and the Collateral Interest Holder will bear directly the credit and other risks associated with their undivided interest in the Trust. If such reduction would cause the Collateral Interest Invested Amount to be negative, the Collateral Interest Invested Amount will be reduced to zero. On each Distribution Date, if the Subordinated Transferor Default Amount for such Distribution Date exceeds the amount of Excess Finance Charge Collections which is allocated and available to fund such amount as described under 'Excess Finance Charge Collections', the Subordinated Transferor Amount (after giving effect to reductions for Subordinated Transferor Reallocated Principal Collections and the amount of any adjustments made thereto for the benefit of the Class A or Class B Certificateholders or the Collateral Interest Holder) will be reduced but not in excess of the Subordinated Transferor Default Amount (the 'Subordinated Transferor Charge-Off '). If such reduction would cause the Subordinated Transferor Amount to be negative, the Subordinated Transferor Amount will be reduced to zero. In the event that any of the Subordinated Transferor Amount, the Collateral Interest Invested Amount, the Class B Invested Amount or the Class A Invested Amount is reduced, such amount will thereafter be increased (but not to a level in excess of the unpaid principal balance of the Subordinated Transferor Certificate, the Collateral Interest, the Class B Certificates or the Class A Certificates, as applicable) on any Distribution Date by the amount of Excess Finance Charge Collections allocated and available for that purpose as described under '--Excess Finance Charge Collections.' 27 See 'Description of the Offered Certificates--Additional Amounts Available to Certificateholders.' Principal Payments; Certain Allocations..................... Principal Collections with respect to any Collection Period will be allocated on the related Determination Date on the basis of the applicable Invested Percentage. Under the Agreement, such collections will be either paid to the Transferor in respect of the Transferor Interest, as described above during the Revolving Period, or to the holders of the Series 1996-1 Interests in respect of the Class A Invested Amount, Class B Invested Amount, the Collateral Interest Invested Amount or Subordinated Transferor Amount, or to both the Transferor and the holders of the Series 1996-1 Interests. Such allocations will be performed during the Revolving Period, Controlled Amortization Period and any Rapid Amortization Period. In the event that other Series are offered by the Trust, such other Series may or may not have amortization periods like the Controlled Amortization Period or the Rapid Amortization Period or revolving periods like the Revolving Period for the Series 1996-1 Interests, and such periods may have different lengths and begin on different dates than the Controlled Amortization Period, the Rapid Amortization Period or the Revolving Period. Thus, certain Series may be in their revolving periods, while others are in periods during which Principal Collections are distributed to such Series. Under certain circumstances, one or more Series may be in their amortization periods, while other Series are not. In addition, other Series may allocate Principal Collections based upon different invested percentages. Shared Principal Collections.............. To the extent that Principal Collections and other amounts that are allocated to the interest of the holders of any class of any series (other than the Transferor Interest) are not needed to make payments to the certificateholders of such class, they may be applied to cover principal payments due to or for the benefit of certificateholders of another Series ('Shared Principal Collections'). Any such reallocation will not result in a reduction in the interest of the holders of the Series to which such Principal Collections were initially allocated. In addition, Principal Collections and certain other amounts otherwise allocable to other Series, to the extent such collections are not needed to make payments to the certificateholders of such other Series, may be applied to cover principal payments due to or for the benefit of the holders of the Series 1996-1 Interests. See 'Description of the Offered Certificates and the Agreement--Shared Principal Collections.' Sharing of Excess Finance Charge Collections............................. Finance Charge Collections on any business day in excess of the amounts necessary to make required payments on such business day with respect to the Series 1996-1 Interests will be applied to cover any shortfalls with respect to amounts payable from Finance Charge Collections allocable to any other Series then outstanding, pro rata based upon the amount of the shortfall, if any, with respect to such other Series. In addition, Finance Charge Collections in excess of the amounts necessary to make required payments on such business day with respect to certificates of other outstanding Series will be 28 applied to cover any shortfalls with respect to Finance Charge Collections allocable to the Series 1996-1 Interests. Any Excess Finance Charge Collections remaining after covering shortfalls with respect to all outstanding Series will be paid to the Transferor in respect of the Transferor Interest. See 'Description of the Offered Certificates and the Agreement--Sharing of Excess Finance Charge Collections.' Discount Option........................... The Agreement provides that the Transferor may at any time and from time to time, but without any obligation to do so, designate a fixed percentage or a variable percentage based on a formula (the 'Discount Percentage'), but in either case not to exceed 6%, of Receivables giving rise to Principal Collections ('Principal Receivables') that are charges for goods or services or obligations for repayment of cash advances, part of which have not previously been sold as Discount Option Receivables, arising from then on to be treated as Receivables giving rise to Finance Charge Collections ('Finance Charge Receivables'). Such Receivables will be designated 'Discount Option Receivables.' After any such designation, pursuant to the Agreement, the Transferor may, without notice to or consent of the Certificateholders, from time to time increase, reduce or withdraw the Discount Percentage. Such increase, reduction or withdrawal will become effective upon satisfaction of the conditions in the Agreement, including written confirmation by each Rating Agency. On each Distribution Date on or after the date the exercise of the discount option takes effect, the lower of (a) the product of the Discount Percentage then in effect and Collections received during such Collection Period and (b) the Discount Option Receivables outstanding at the end of such Collection Period that otherwise would be Principal Receivables will be deemed collections of Finance Charge Receivables and will be applied accordingly. Such feature is intended to permit the Transferor to increase the Portfolio Yield and thereby decrease the risk of the occurrence of an Amortization Event. On the Closing Date, the Transferor will designate an initial Discount Percentage equal to 2.0%. Any increase, reduction or withdrawal of such Discount Percentage will be made in accordance with the conditions described in the Agreement. See 'Description of the Offered Certificates and the Agreement-- Discount Option.' Amortization Events....................... An 'Amortization Event' with respect to the Series 1996-1 Interests refers to any of the following events: (i) failure on the part of the Servicer, the Originator or the Transferor to make any payment or deposit required by the terms of the Agreement on or before five business days after the date such payment or deposit is required to be made thereunder; 29 (ii) the failure on the part of the Servicer, the Originator or the Transferor duly to observe or perform in any material respect certain covenants or agreements set forth in the Agreement or the Purchase and Sale Agreement which, in the case of certain of such covenants or agreements, 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 Servicer, the Originator or the Transferor, as applicable, provided, however, that an Amortization Event shall not be deemed to occur if the Transferor has accepted the transfer 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 of the Agreement or the Purchase and Sale Agreement; (iii) any representation or warranty made by the Servicer, the Originator or the Transferor in the Agreement or the Purchase and Sale Agreement or any information required to be delivered by the Transferor 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 Servicer, the Originator or the Transferor, as applicable, and as a result of which the interests of the certificateholders are materially and adversely affected; provided, however, that such an Amortization Event shall not be deemed to have occurred if the Transferor has accepted the transfer 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 of the Agreement; (iv) certain events of insolvency, conservatorship, receivership or bankruptcy with respect to the Originator, Bridgestone/Firestone or the Transferor; (v) the annualized percentage equivalent of a fraction, the numerator of which is the amount of Finance Charge Collections for the related Collection Period, calculated on an accrual basis after subtracting the Investor Default Amount and that portion of Finance Charge Collections arising from Receivables that are ninety or more days delinquent, and the denominator of which is the Aggregate Receivables as of the end of the preceding Collection Period (the 'Portfolio Yield') averaged over any three consecutive Collection Periods is less than a fraction, calculated as of the related Determination Date, the numerator of which is the sum of (a) the product of the Class A Certificate Rate and the Class A Invested Amount, (b) the product of the Class B Certificate Rate and the Class B Invested Amount and (c) the product of the Collateral Interest Rate and the Collateral Interest Invested Amount, and the denominator which is the sum of the Class A Invested Amount, the Class B Invested Amount, the Collateral Interest Invested Amount and the Subordinated Transferor Amount (each such Certificate Rate and Invested Amount calculated as of the 30 related Determination Date and such fraction equaling the 'Weighted Average Certificate Rate') plus 2.00% per annum (the 'Base Rate'); (vi) the Trust shall become an 'investment company' within the meaning of the Investment Company Act of 1940, as amended; (vii) the Transferor Amount (plus the amount available under the Transferor Letter of Credit and the B/F Amount) is less than 7% of the aggregate invested amount of all outstanding Series of certificates issued by the Trust as of the last day of any Collection Period; (viii) the sum of (a) the Transferor Amount, (b) the B/F Amount, (c) the Subordinated Transferor Amount and (d) the invested amount of any subordinated class of certificates of any other Series which, when issued, is retained by the Transferor and with respect to which no legal opinion is delivered characterizing such certificates as indebtedness is less than 7% of the Aggregate Receivables as of the last day of any Collection Period; (ix) the Class A Invested Amount is not paid in full on the Class A Expected Final Payment Date or the Class B Invested Amount is not paid in full on the Class B Expected Final Payment Date; (x) the Transferor becomes unable for any reason to transfer Receivables to the Trust in accordance with the provisions of the Agreement; (xi) the Aggregate Receivables as of the last day of any Collection Period are less than the sum of (a) the Transferor Amount (plus the amount available under the Transferor Letter of Credit and the BIF Amount) and (b) the aggregate initial invested amount of Series 1996-1; and (xii) any Servicer Event of Default shall occur which would have a material adverse effect on the Certificateholders. See 'Description of the Offered Certificates and the Agreement-- Amortization Events.' Final Payment of Principal; Termination of the Trust............................... The Series 1996-1 Interests will be subject to optional repurchase by the Transferor on any Distribution Date on or after which the Invested Amount is reduced to an amount less than or equal to $11,910,257 (5% of the sum of the Initial Class A Invested Amount, Initial Class B Invested Amount and Initial Collateral Interest Invested Amount), unless certain events of bankruptcy, insolvency or receivership have occurred with respect to the Transferor. The repurchase price will be equal to the Invested Amount plus accrued and unpaid interest on the Series 1996-1 Interests through the day preceding the Distribution Date on which the repurchase occurs. After such date, neither the Trust nor the Transferor will have any further obligation to pay principal or interest on the Series 1996-1 Interests. In any event, the final payment of principal and interest on 31 the Class A Certificates will be no later than the July 1, 2003, Distribution Date (the 'Final Class A Termination Date') and the final payment of principal and interest on the Class B Certificates will be no later than the July 1, 2003, Distribution Date (the 'Final Class B Termination Date'). Servicing................................. Under the Agreement, the Servicer (initially, Bridgestone/Firestone) will be responsible for servicing, managing and making collections on all Receivables in the Trust. Subject to certain conditions including the availability of the Servicer Letter of Credit (as defined below), the Servicer may use for its own benefit and not segregate Collections of Receivables received in each Collection Period until the business day preceding the Distribution Date for such Collection Period (the 'Transfer Date'). On the second business day preceding each Distribution Date (each, a 'Determination Date') or, at the Servicer's option, more frequently, the Servicer will allocate as described herein all Collections of Receivables received with respect to the related Collection Period to the Series 1996-1 Interests, any other applicable Series, Bridgestone/Firestone and the Transferor and on the Transfer Date will deposit the portion allocable to the Certificateholders and the holders of certificates of any other Series into a segregated trust account held in the name of the Trustee for the benefit of certificateholders (the 'Collection Account'). In certain limited circumstances, Bridgestone/Firestone may resign or be removed as Servicer, in which event either the Trustee or a third-party servicer may be appointed as successor Servicer (Bridgestone/Firestone or any such successor Servicer is referred to herein as the 'Servicer'). As servicing compensation from the Trust, the Servicer will receive a Servicing Fee from allocations of Finance Charge Collections based upon the outstanding principal amount, from time to time, of certificates issued by the Trust. See 'Description of the Offered Certificates and the Agreement--Collection and Other Servicing Procedures,' '--Servicer Covenants,' '--Servicing Compensation and Payment of Expenses,' '--Servicer Events of Default' and '--Certain Matters Regarding the Servicer.' The Servicer may perform any of its obligations under the Agreement through one or more Subservicers. The Servicer will remain liable for its servicing duties and obligations as if the Servicer alone were servicing the Receivables. CFNA shall initially act as a Subservicer. Servicer Letter of Credit................. The Servicer has obtained an irrevocable letter of credit (the 'Servicer Letter of Credit') issued by The Sumitomo Bank, Limited, acting through its New York Branch (the 'Letter of Credit Bank'), in favor of the Trustee on behalf of certificateholders of all Series, to secure timely remittance of Collections by the Servicer to the Trustee. The Servicer Letter of Credit was initially in the stated amount of $45,000,000 and will expire on May 30, 1997, unless extended or earlier terminated by the Letter of Credit Bank. During the period that Bridgestone/Firestone is the Servicer, if aggregate Collections at any time held by Bridgestone/Firestone exceed the amount available under the Servicer Letter of Credit, the Servicer shall deposit all such Collections in excess of the amount available 32 under the Servicer Letter of Credit into the Collection Account no later than the second business day after the date of processing thereof. In the event that (i) the Letter of Credit Bank's unsecured short-term debt ratings are reduced below A-1 + or P-1 or F-1+ (the 'Required Ratings') by the applicable Rating Agency and either (x) a substitute Servicer Letter of Credit is not delivered to the Trustee, (y) the Servicer Letter of Credit is not drawn on in full as described in the Prospectus or (z) the Servicer has not established a cash collateral account in the name of the Trustee for the benefit of Certificateholders or (ii) the Servicer is not Bridgestone/Firestone, the Servicer shall deposit Collections into the Collection Account no later than the second business day after the date of processing thereof. In addition, in the event that a substitute Servicer Letter of Credit is not delivered to the Trustee on or before the fifth business day prior to the expiration of the Servicer Letter of Credit or a cash collateral account has not been established, the Servicer shall commence depositing Collections into the Collection Account no later than the second business day after the date of processing thereof. The Letter of Credit Bank's unsecured short-term debt rating has been reduced to below the Required Ratings and the full amount of the proceeds from the Servicer Letter of Credit are currently held in a segregated trust account available to the Trustee in the event Bridgestone/Firestone fails to timely remit Collections to the Collection Account. See 'The Letter of Credit Bank' and 'Description of the Offered Certificates and the Agreement--The Letters of Credit.' Transferor Letter of Credit............... The Transferor has obtained an irrevocable letter of credit (the 'Transferor Letter of Credit') issued by the Letter of Credit Bank in favor of the Trustee, on behalf of Certificateholders, to secure the obligation of the Transferor to make certain payments in respect of returned merchandise and other credit adjustments on the Receivables. The Transferor Letter of Credit was initially in the stated amount of $15,000,000 and will expire on May 30, 1997, unless extended or earlier terminated by the Letter of Credit Bank. The Transferor Letter of Credit will be available, up to its stated amount, to cover any shortfall in payments allocated to any Series and required to be deposited into the Collection Account by the Transferor. The proceeds of any drawing on the Transferor Letter of Credit will be allocated in much the same manner as are the Collections (generally speaking, such allocations to the Series 1996-1 Interests will be based on the ratio of the Invested Amount to the Aggregate Receivables). As a result, if other Series of certificates are outstanding, such other Series will benefit from drawings made on the Transferor Letter of Credit. See 'The Letter of Credit Bank' and 'Description of the Offered Certificates and the Agreement--The Letters of Credit.' Currently, the full amount of the proceeds from the Transferor Letter of Credit are held in a segregated trust account available to the Trustee to cover any shortfall in payments allocated to any Series and required to be deposited in the Collection Account by the Transferor. 33 Certain Federal Income Tax Consequences... Special tax counsel to the Transferor has advised the Transferor that, in its opinion, (i) the Offered Certificates will be treated for Federal income tax purposes as indebtedness and (ii) the Trust will not be treated as either an association or a publicly traded partnership taxable as a corporation for Federal income tax purposes. Under the Agreement, the Transferor, the Trustee and, pursuant to the terms of the Offered Certificates by virtue of the acceptance thereof, the Offered Certificateholders and the Certificate Owners agree to treat the Offered Certificates as debt for Federal and state tax purposes. If the Offered Certificates are not characterized as debt, there may be adverse tax consequences for Certificate Owners. See 'Federal Income Tax Consequences.' ERISA Considerations...................... Under the regulations issued by the Department of Labor, the Trust's assets would not be deemed 'plan assets' of any employee benefit plan holding interests in the Class A Certificates if certain conditions are met, including that interests in the Class A Certificates be held by at least 100 independent persons upon completion of the public offering being made hereby. The Underwriters expect, although no assurance can be given, that interests in the Class A Certificates will be held by at least 100 independent persons, and it is anticipated that the other conditions of the regulations will be met. However, if the Class A Certificates are not held by at least 100 independent persons and the Trust's assets were deemed to be 'plan assets' of such a plan, there is uncertainty as to whether existing exemptions from the 'prohibited transaction' rules of the Employee Retirement Income Security Act of 1974, as amended ('ERISA') would apply to all transactions involving the Trust's assets. Accordingly, employee benefit plans contemplating purchasing the Class A Certificates should consult their counsel before making a purchase. See 'ERISA Considerations.' The Class B Certificates may not be purchased by any employee benefit plan subject to the requirements of the fiduciary responsibility provisions of ERISA, or the provisions of Section 4975 of the Internal Revenue Code of 1986, as amended (the 'Code'), including any individual retirement accounts. Rating of the Offered Certificates........ It is a condition to the issuance of the Class A Certificates that they be rated 'AAA' by Standard & Poor's Rating Services, a division of The McGraw-Hill Companies, Inc. ('S&P') and 'Aaa' by Moody's Investors Service, Inc. ('Moody's'). It is a condition to the issuance of the Class B Certificates that they be rated 'A' by S&P and 'A2' by Moody's. Such ratings are based primarily on the quality of the Receivables and the terms of the subordination of the Class B Certificates, the Collateral Interest and the Subordinated Transferor Certificate, as applicable. Risk Factors.............................. There are risks associated with the purchase of the Offered Certificates. See 'Risk Factors' herein. 34 RISK FACTORS Investors should consider, among other things, the following factors in connection with the purchase of the Offered Certificates: No Assurance that Secondary Market Will Develop. There currently is no secondary market for the Offered Certificates, and there can be no assurance that a secondary market will develop or, if it does develop, that it will provide Offered Certificateholders with liquidity of investment or will continue for the life of the Offered Certificates. The Underwriters expect, but are not obligated, to make a market in the Offered Certificates. There can be no assurance that any such market will continue. Non-Recourse Obligation. Certificateholders will not have recourse for payment of their Offered Certificates to any assets of the Transferor, the Originator, Bridgestone/Firestone, the Servicer or any of their affiliates. Consequently, the Certificateholders must rely solely upon payments on the Receivables for the payment of principal of and interest on the Offered Certificates. Furthermore, under the Agreement, the Certificateholders have an interest in the Receivables and Collections with respect thereto only to the extent of the Certificateholders' Interest. Should the Offered Certificates not be paid in full on a timely basis, Certificateholders may not look to any assets of any of the Transferor, Bridgestone/Firestone, the Servicer, the Originator or any affiliates thereof to satisfy their claims. Commingling. While Bridgestone/Firestone is the Servicer, Collections held by Bridgestone/Firestone may, subject to certain conditions, including the availability of the Servicer Letter of Credit, be commingled and used for Bridgestone/Firestone's own benefit prior to the business day preceding each Distribution Date and, in the event of the bankruptcy or insolvency of Bridgestone/Firestone or, in certain circumstances, the lapse of certain time periods, the Trust may not have a perfected interest in such Collections and such Collections are subject to risk of loss, including risk of loss due to Bridgestone/Firestone's bankruptcy or insolvency. During the period that Bridgestone/Firestone is the Servicer, if aggregate Collections at any time held by Bridgestone/Firestone exceed the amount available under the Servicer Letter of Credit, the Servicer shall deposit all such Collections in excess of the amount available under the Servicer Letter of Credit into the Collection Account no later than the second business day after the date of processing thereof. In the event that either (x) the unsecured short-term debt rating of the Letter of Credit Bank is reduced below A-1+, P-1 or F-1+ by the applicable Rating Agency (the 'Required Ratings'), within 35 days of notice thereof to the Servicer or (y) in the event that the Servicer Letter of Credit is scheduled to expire within five business days, either (i) Bridgestone/Firestone will begin depositing Collections received within two business days of the date of processing thereof directly into the Collection Account, (ii) Bridgestone/Firestone will provide the Trustee with a substitute letter of credit substantially similar to the Servicer Letter of Credit issued by a financial institution whose unsecured short-term debt rating is A-1+, P-1 or F-1+ by the applicable Rating Agency or (iii) the Trustee will, but only with respect to clause (x) hereof, make a demand under the Servicer Letter of Credit for the full amount available thereunder and deposit the proceeds of such demand into a segregated trust account to be available to the Trustee in the event Bridgestone/Firestone fails to timely remit Collections to the Collection Account. The Letter of Credit Bank's unsecured short-term debt rating has been reduced to A-1, which is below the Required Ratings and the full amount of the proceeds from the Servicer Letter of Credit are currently held in a segregated trust account available to the Trustee in the event Bridgestone/Firestone fails to timely remit Collections to the Collection Account. The Letter of Credit Bank's unsecured short-term rating is unlikely to increase to the Required Ratings. Furthermore, there can be no assurance that any increase in the Letter of Credit Bank's unsecured short-term rating will occur. See 'Description of the Offered Certificates and the Agreement-- Allocation of Collections; Deposits in Collection Account.' Potential Priority of Certain Liens. The Originator warrants in the Purchase and Sale Agreement that the sale or transfer of the Receivables thereunder by it to the Transferor is free and clear of any lien, security interest, encumbrance or other right, title or interest of any person and that all filings and recordings required to perfect the title of the Transferor in the Receivables have been accomplished and are in full force and effect, and the Transferor warrants in the Agreement that the transfer of such Receivables to the Trust is either a valid transfer and assignment of the Receivables to the Trust or the grant to the Trust of a security interest in the Receivables. The Originator and the Transferor will take all actions as are required under Ohio and Massachusetts law to perfect the Trust's interest in the Receivables and the Transferor warrants that if the transfer by the Transferor to 35 the Trust granted the Trust a security interest in the Receivables, the Trust will at all times have a first priority perfected security interest therein and, with certain exceptions, and for certain limited periods of time, in proceeds thereof. Nevertheless, if the sale or transfer of Receivables to the Transferor or the transfer of the Receivables to the Trust is deemed to create a security interest therein under the New York, Ohio and Massachusetts Uniform Commercial Code (collectively, the 'UCC'), a tax or government lien or other nonconsensual lien on property of the Originator or the Transferor arising before any Receivable comes into existence may have priority over the Transferor's or the Trust's interest in such Receivable or, if the Federal Deposit Insurance Corporation were appointed receiver of the Originator, the receiver's administrative expenses may also have priority over the Trust's interest in such Receivables. The existence of such liens or the rights of the receiver of the Originator could reduce the amount payable on the Receivables and result in possible reductions in the amounts of payments on the Offered Certificates. See 'Certain Legal Aspects of the Receivables--Transfer of Receivables.' Insolvency or Bankruptcy of Originator. The Originator and the Transferor have treated and will treat the transfer of Receivables under the Purchase and Sale Agreement as a sale. A court could treat such transactions as assignments of collateral as security. To the extent that the Originator has granted or will grant a security interest in the Receivables to the Transferor and that security interest was validly perfected before any insolvency of the Originator and was not granted or taken in or will not be granted or taken in contemplation of insolvency or with the intent to hinder, delay or defraud the Originator or its creditors, that security interest should not be subject to avoidance in the event of the insolvency and receivership of the Originator, and payments to the Transferor with respect to the Receivables should not be subject to recovery by a conservator or receiver for the Originator. If, however, the conservator or receiver were to assert a contrary position, or were to require the Transferor to establish its rights to those payments by submitting to and completing the administrative claims procedure established under the Financial Institutions Reform, Recovery and Enforcement Act of 1989 ('FIRREA'), or the conservator or receiver were to request a stay of proceedings with respect to the Originator as provided under FIRREA, delays in payments on the Offered Certificates and possible reductions in the amount of such payments could occur. If a conservator or receiver is appointed for the Originator, pursuant to the Purchase and Sale Agreement, new Receivables would not be sold to the Transferor and an Amortization Event would occur. Upon the occurrence of an Amortization Event, if a conservator or receiver is appointed for the Originator and no other Amortization Event other than such conservatorship, receivership or insolvency of the Originator exists, the conservator or receiver may have the power to prevent the commencement of the Rapid Amortization Period. See 'Certain Legal Aspects of the Receivables--Certain Matters Relating to Bankruptcy.' Sole Remedy for Breaches of Representations and Warranties Relating to the Receivables. The Transferor will make certain representations and warranties relating to the validity and enforceability of the Accounts and the Receivables. However, it is not anticipated that the Trustee will make any examination of the Receivables or the records relating thereto for the purpose of establishing the presence or absence of defects, compliance with such representations and warranties, or for any other purpose. Pursuant to the Agreement, in the event of a material breach of such representations and warranties with respect to any Receivables, the Transferor will be obligated to accept the transfer of such Receivables, whereupon such Receivables will no longer be included in the Trust. With certain exceptions, such obligation will constitute the sole remedy in the event of any such breach. Pursuant to the agreement by which Bridgestone/Firestone purchased a participation interest in the Exchangeable Transferor Certificate and will purchase a participation interest in the Subordinated Transferor Certificate (the 'Participation Agreement'), Bridgestone/Firestone will agree, for the benefit of the Trustee, to purchase from the Transferor any Ineligible Receivable required to be repurchased by the Transferor from the Trust. See 'Description of the Offered Certificates and the Agreement--Covenants, Representations and Warranties.' Effects of Consumer Protection and Banking Laws. The Accounts and the Receivables are subject to numerous Federal and state consumer protection laws which impose requirements on the extension of consumer credit and collections of such obligations. In addition, the extension of credit, and the interest charged thereon, by national banks such as the Originator, is subject to regulation under Federal law. Such laws, as well as any new laws, rulings or decisions construing such laws or rulings which may be adopted, whether Federal or state, may adversely affect the ability of the Servicer to collect on the Receivables or maintain previous levels of monthly finance charges and other charges. One effect of any legislation which regulates the amount of interest and other 36 charges that may be assessed on credit card account balances would be to reduce the Portfolio Yield on Accounts. If a significant reduction in Portfolio Yield occurred, an Amortization Event could occur, in which case the Rapid Amortization Period would commence. See 'Certain Legal Aspects of the Receivables--Consumer Protection and Banking Laws.' Application of Federal and state bankruptcy, debtor relief or consumer protection laws would affect the interest of the Certificateholders in the Receivables, if such laws result in any Receivables being written off as uncollectible when there are no funds available from other sources to cover any resulting shortfalls in amounts payable to Certificateholders. See 'Description of the Offered Certificates and the Agreement--Defaulted Receivables; Recoveries, Rebates and Fraudulent Charges.' Effects of New Legislation. From time to time, there are proposed in the Congress and certain state legislatures new laws and amendments to existing laws to regulate further the consumer credit industry. The Transferor is unable to determine and has no basis on which to predict whether or to what extent changes in laws or regulations will affect charge use, payment patterns or revenues. Dependence on Bridgestone/Firestone. Because the credit cards issued under the Credit Card Program are primarily used by customers of Bridgestone/Firestone stores and dealers and marketers of Bridgestone/Firestone products, the Trust is largely dependent upon Bridgestone/Firestone and such dealers and marketers for the generation of Receivables and new Accounts. In addition to manufacturing a full line of tires, Bridgestone/Firestone is a major retailer of tires, automotive maintenance and repair services in the United States with approximately 1,500 company operated tire and automotive service centers and is a major supplier of tires to several thousand independent dealer outlets. However, there are thousands of competitors that compete with Bridgestone/Firestone operated service centers and independent dealer outlets. The automotive service and repair industry is highly competitive. Many considerations enter into the competition for the customer's patronage, including quality, service, product mix, convenience, price and credit availability and terms. Further, there can be no assurance that new Accounts or new Receivables will continue to be generated under the Credit Card Program at the same rate as in prior years or that the Originator will implement Alternative Programs. In addition, in April 1994, the contract between certain Bridgestone/Firestone employees now represented by the United Steelworkers of America ('Union') and Bridgestone/Firestone expired and the parties were unable to reach agreement on a new contract. In July, 1994, a strike by such employees commenced. Although the strike ended in June, 1995, Bridgestone/Firestone and the Union have not yet agreed on a new contract. There is no assurance that Bridgestone/Firestone and the Union will agree on a new contract and future labor difficulties could negatively impact Bridgestone/Firestone's ability to manufacture automotive products and the ability of CFNA to generate new Accounts or new Receivables. Competition in the Credit Card Industry. The credit card market is highly competitive and is experiencing increasing use of advertising, target marketing and pricing competition in finance charges and other fees as traditional and new credit card issuers seek to expand or enter the market. The ability of the Credit Card Program and any Alternative Programs to compete in the credit card industry will affect the Originator's ability to generate new Accounts and new Receivables. Bridgestone/Firestone stores and dealers accept certain third-party credit cards not issued by the Originator. If consumers choose to use competing sources of payment or credit, the rate at which the new Accounts are opened and/or new Receivables are generated in Accounts may be reduced and certain purchase and payment patterns with respect to Receivables may be affected. Historically, the opening of new Accounts has been a primary source for the generation of new Receivables. If the rate at which the new Accounts are opened and/or the new Receivables are generated declines significantly, an Amortization Event could occur, in which case, a Rapid Amortization Period would commence. See 'The Credit Card Program.' Social, Legal and Economic Factors. Changes in card use and payment patterns by cardholders may result from a variety of legal, economic and social factors, including the rate of unemployment and inflation and relative interest rates offered for various types of loans. Such factors will also be reflected in changes in consumer spending and payment patterns including increased risk of default by cardholders. The Transferor is unable to determine, and has no means of predicting, whether or to what extent legal or economic factors will affect future credit purchases or repayment patterns. 37 Timing of Payments and Maturity. A number of legal and economic factors may affect payment patterns and there is no accurate means of predicting the effect of such factors. The Receivables may be paid at any time and there is no assurance that any particular pattern of cardholder repayments will occur or that sufficient eligible Receivables will be generated to maintain required levels of collateralization. A significant decline in the amount of Receivables generated or the failure of the Transferor to maintain the Aggregate Receivables as of the last day of each Collection Period at a level sufficient to result in (i) the Transferor Amount (plus the amount available to be drawn under the Transferor Letter of Credit and the B/F Amount) being not less than 7% of the aggregate invested amount of all outstanding Series of certificates (including the Series 1996-1 Interests) issued by the Trust or (ii) the Transferor Amount plus the B/F Amount plus the Subordinated Transferor Amount (plus the invested amount of any subordinated class of certificates of additional Series which, when issued, is retained by the Transferor and with respect to which no legal opinion is delivered characterizing such certificates as indebtedness) being not less than 7% of Aggregate Receivables could result in the occurrence of an Amortization Event. During either the Controlled Amortization Period or a Rapid Amortization Period (either such period, an 'Amortization Period'), a significant decrease in the cardholder monthly payment rate could slow the return of principal. See 'The Credit Card Program' and 'Maturity Assumptions.' Effect of Subordination. The Class B Certificates will be subordinated in right of payment of principal to the Class A Certificates. Payments of principal in respect of the Class B Certificates will not commence until after the Class A Invested Amount has been paid in full. Moreover, the Class B Invested Amount is subject to reduction on any Determination Date if Principal Collections allocable to the Class B Certificates are reallocated to cover the Class A Required Amount or (b) if Collateral Interest Reallocated Principal Collections or Subordinated Transferor Reallocated Principal Collections with respect to any Collection Period are insufficient to fund the remaining Class A Required Amount and the Subordinated Transferor Amount and the Collateral Interest Invested Amount have been reduced to zero. If the Class B Invested Amount suffers such a reduction, Finance Charge Collections allocable to the Class B Certificateholders' Interest in future Collection Periods will be reduced. Moreover, to the extent the amount of such reduction in the Class B Certificateholders is not reimbursed, the amount of principal distributable to the Class B Certificateholders will be reduced. See 'Description of the Offered Certificates and the Agreement--Allocation Percentages,' '--Reallocated Principal Collections,' '--Additional Amounts Available to Certificateholders' and '--Subordination of the Class B Certificates.' The Originator's Ability to Change Terms of Receivables or Policies Relating to the Accounts. Subject to applicable law and with the consent of Bridgestone/Firestone, the Originator reserves the right to amend the terms or policies applicable to the Accounts, including, without limitation, the level of finance charges and other fees applicable from time to time to the Accounts and the minimum monthly payments required on the Accounts. Except as specified in the next succeeding sentence, there are no restrictions on the Originator's ability to change the terms or policies of the Accounts or other credit card guidelines or policies, including policies on credit approval. Under the Purchase and Sale Agreement, the Originator will agree that, except as otherwise required by law or as is deemed by the Originator, in its sole discretion, based upon a good faith assessment by it of the nature of its competition, to be necessary or advisable, it will not reduce the annual percentage rate of the monthly finance charge assessed on the Receivables, if as a result of such reduction, its reasonable expectation is that the Portfolio Yield (defined below) (see 'Description of the Offered Certificates and the Agreement-- Amortization Events') would be a rate less than the Base Rate, or reduce the minimum payment terms or otherwise alter the terms of the Accounts or the policies applicable thereto, if, as a result of such change, in its reasonable expectation, an Amortization Event with respect to the Series 1996-1 Interests or any other Series of certificates would occur. While the Originator and Bridgestone/Firestone have no current intention of changing the terms of the Accounts, there can be no assurance that changes in applicable law, in the marketplace or prudent business practice might not result in a determination by the Originator and Bridgestone/Firestone to make or to consent to such a change. Master Trust Considerations and the Effect of the Issuance of Additional Series. The Trust, as a master trust, may issue additional Series from time to time. While the Principal Terms of any Series will be specified in a Supplement, the provisions of a Supplement and, therefore, the terms of any additional Series, will not be subject to the prior review or consent of holders of the certificates of any previously issued Series. Such Principal Terms may include methods for determining applicable investor percentages and allocating Collections, 38 provisions creating different or additional security or other credit enhancement, provisions subordinating such Series to another Series or other Series (if the Supplement relating to such Series so permits) to such Series, and any other amendment or supplement to the Agreement which is made applicable only to such Series. As long as the Offered Certificates are outstanding, a condition to the execution of any Supplement will be that each applicable Rating Agency shall have advised the Trustee that the issuance of such Series will not result in the reduction or withdrawal of their rating of any prior outstanding Series (including the Offered Certificates). See 'Description of the Offered Certificates and the Agreement--Exchanges.' Any such determination by any such Rating Agency would not, however, provide any assurance that the issuance of any such Series would not, in fact, have a materially adverse effect on the Offered Certificates. In addition, certain remedies require the consent of a majority of the holders of all outstanding Series of certificates, and the interest of the holders of one Series of certificates may conflict with the interest of another Series of certificates. See 'Description of the Offered Certificates and the Agreement--Exchanges.' Scope of Certificate Rating. It is a condition to the issuance of the Class A Certificates that they be rated at least 'AAA' by S&P and 'Aaa' by Moody's and to the issuance of the Class B Certificates that they be rated at least 'A' by S&P and 'A2' by Moody's (the rating agency or rating agencies requested by the Transferor and initially rating any Series is herein referred to as the 'Rating Agency'). The rating of the Class A Certificates is based primarily on the credit quality of the Receivables and the terms of the subordination of the Class B Certificates, the Collateral Interest and the Subordinated Transferor Certificate. The rating of the Class B Certificates is based primarily on the credit quality of the Receivables and the terms of the subordination of the Collateral Interest and the Transferor Subordinated Certificate. The ratings of the Offered Certificates are not a recommendation to purchase, hold or sell the Offered Certificates, and such ratings do not comment as to market price or suitability for a particular investor. There is no assurance that the rating will remain for any given period of time or that the rating will not be lowered or withdrawn entirely by the Rating Agency, if in its judgment circumstances in the future so warrant. Discount Option. Pursuant to the Agreement, the Transferor has the option, from time to time, to designate a fixed or variable percentage of Receivables (the 'Discount Percentage') that otherwise would be treated as Principal Receivables to be treated as Finance Charge Receivables. Any such designation would result in an increase in the amount of Finance Charge Receivables and a slower rate of payment of collections in respect of Principal Receivables than otherwise would occur. On the Closing Date, the Transferor will designate an initial Discount Percentage of 2.0%. Pursuant to the Agreement, the Transferor can increase, reduce or withdraw such Discount Percentage without notice to or the consent of the Certificateholders. The Transferor must provide 30 days' prior written notice to the Servicer, the Trustee, and any provider of Enhancement and each Rating Agency of any increase, reduction or withdrawal of the Discount Percentage, and such designation will become effective only if (i) in the reasonable belief of the Transferor such designation would not cause to occur a Series 1996-1 Amortization Event or an event which with notice or the lapse of time or both would constitute a Series 1996-1 Amortization Event and (ii) each Rating Agency confirms in writing its then current rating on any outstanding Series. See 'Description of the Offered Certificates--Discount Option.' Effects of Book-Entry Registration. The Offered Certificates initially will be represented by 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. As a result, unless and until Definitive Certificates are issued, Certificate Owners will not be recognized by the Trustee as Certificateholders, as that term is used in the Agreement. Until such time, Certificate Owners will only be able to receive payments from, and exercise the rights of Certificateholders indirectly, through DTC, CEDEL or Euroclear and their participating organizations, and, unless a Certificate Owner requests a copy of any such report from the Trustee, Certificate Owners will receive reports and other information provided for under the Agreement only if, when and to the extent provided to Certificate Owners at such Certificate Owners' request through DTC and its participating organizations. In addition, the ability of Certificate Owners to pledge Offered Certificates to persons or entities that do not participate in the DTC system, or otherwise take actions in respect of such Certificates, may be limited due to the lack of physical certificates for such Certificates. See 'Description of the Offered Certificates and the Agreement--Book-Entry Registration' and '--Definitive Certificates.' 39 Effect of the Issuance of New Series. The Trust, as a master trust, is expected to issue new Series from time to time. While the terms of any Series will be specified in a Supplement, the provisions of a Supplement and, therefore, the terms of any new Series, will not be subject to the prior review or consent of holders of the Certificates of any previously issued Series. Such terms may include methods for determining applicable investor percentages and allocating collections, provisions creating different or additional security or other enhancements, provisions subordinating such Series to other Series or subordinating other Series (if the Supplement relating to such Series so permits) to such Series, and any other amendment or supplement to the Pooling and Servicing Agreement which is made applicable only to such Series. The obligation of the Trustee to issue any new Series is subject to the condition that the Trustee shall have received the following: (a) a Supplement in form satisfactory to the Trustee executed by the Transferor and specifying the principal terms of such Series, (b) the applicable Enhancement, if any, (c) an opinion of counsel to the effect that the newly issued Series will be characterized as either indebtedness or an interest in a partnership under existing law for Federal income tax purposes and that the issuance of the newly issued Series will not have any material adverse impact on the Federal income tax characterization of any outstanding Series that have been the subject of a previous opinion of tax counsel, (d) an agreement, if any, to provide Enhancement, (e) written confirmation from each Rating Agency that such issuance will not result in the Rating Agency's reducing or withdrawing its rating or otherwise adversely affect any rating on any then outstanding Series rated by it and (f) the existing Exchangeable Transferor Certificate or applicable Series, as the case may be. There can be no assurance, however, that the issuance of any other Series, including any Series issued from time to time hereafter, might not have an impact on the timing or amount of payments received by a Certificateholder. USE OF PROCEEDS The net proceeds from the sale of the Series 1996-1 Asset Backed Certificates will be used first to repay an outstanding Series of Investor Certificates, the Series 1995-A Certificates. The remaining balance will be paid to the Transferor. The proceeds will be distributed by the Transferor to Bridgestone/Firestone in accordance with the Participation Agreement. THE TRANSFEROR AND BRIDGESTONE/FIRESTONE The Transferor was incorporated in Massachusetts on October 24, 1983 under the name 1200 Capital Corporation, which was later amended to Firestone Consumer Funding Corporation. On October 3, 1989, Firestone Consumer Funding Corporation filed a Certificate of Merger, merging it with Firestone Retail Credit Corporation. The Transferor was the surviving corporation. The Transferor is a nominally capitalized special purpose corporation and was organized for the limited purpose of purchasing, holding, owning and selling receivables and any activities incidental to and necessary or convenient for the accomplishment of such purpose. The Transferor's principal executive office is located at the following address: c/o JH Management Corporation, One International Place, Suite 520, Boston, Massachusetts 02110, telephone (617) 951-7690. Bridgestone/Firestone, formerly named The Firestone Tire & Rubber Company, was incorporated in Ohio on March 4, 1910 and is the successor to the business founded by Harvey S. Firestone in 1900. Pursuant to a merger which became effective on May 5, 1988, Bridgestone/Firestone became a direct wholly owned subsidiary of Bridgestone Corporation, a corporation organized under the laws of Japan. On August 1, 1989, Bridgestone/Firestone adopted its current name. Bridgestone/Firestone is a multinational organization whose principal business is the development, manufacture and sale of a broad line of tires for passenger, truck and agricultural vehicles, in both the original equipment and replacement markets. It sells tires under Firestone, Bridgestone, Dayton and other brand names through a large network of independent dealers. Bridgestone/Firestone also provides a wide range of automotive maintenance and repair services and sells tires and automotive replacement parts and supplies through Bridgestone/Firestone operated retail stores. Other products sold by Bridgestone/Firestone include single-ply rubber roofing systems, synthetic rubber, air springs, and synthetic fibers and textiles. 40 THE CREDIT CARD PROGRAM GENERAL The Receivables that the Originator has sold and will sell to the Transferor pursuant to the Purchase and Sale Agreement and which the Transferor has or will in turn transfer to the Trust pursuant to the Agreement have been and will be generated primarily from purchases charged under credit cards issued by the Originator pursuant to a private label credit card program (the 'Credit Card Program') established for customers of (a) Bridgestone/Firestone stores, which sell tires and automotive maintenance and repair products and services, (b) dealers and marketers which have contractual arrangements with Bridgestone/Firestone to market Bridgestone/Firestone tires and related products as well as automotive maintenance and repair services and (c) certain other dealers and marketers of automotive products, which include tires and automotive maintenance and repair services, which dealers and marketers do not have such contractual arrangements with Bridgestone/Firestone (collectively, the 'Retail Establishments'). The Receivables will also include a portfolio of certain designated Receivables generated or to be generated by the Originator and existing or arising under certain accounts to be established under other credit card programs established or to be established by the Originator (the 'Alternative Programs'). See 'Description of the Offered Certificates and the Agreement-- Addition of Accounts' herein. The initial purpose of a credit card program was to support the merchandising efforts of The Firestone Tire & Rubber Company, now known as Bridgestone/Firestone, Inc. ('Bridgestone/Firestone'). Credit cards were first issued in 1978 to revolving account holders at company operated stores. In early 1979, the credit card program was extended to include customers of independent authorized Firestone dealers. In 1983, the program was extended again to include independent authorized dealers of Dayton and Road King tires, which are associate brands manufactured by Bridgestone/Firestone. Such credit card program was replaced in 1985 by the Credit Card Program described herein. In July 1989, the Credit Card Program was extended to customers of Bridgestone dealers. In 1990, the Credit Card Program was extended to unaffiliated third-parties including Merchants, Inc., and American Car Care Centers, Inc. In 1992, the program was extended to certain customers of independent dealers selling Bridgestone/Firestone manufactured private brand tires. Prior to 1993, Society National Bank ('SNB') acted as originator of the Credit Card Program. In 1993, Credit First National Association ('CFNA' or the 'Originator'), a wholly owned subsidiary of Bridgestone/Firestone, was organized for the purpose of making credit card loans and activities incidental to such purpose and replaced SNB. In 1994, the Credit Card Program with American Car Care Center, Inc. terminated. Also, in 1994, Bridgestone/Firestone introduced convenience checks drawn on the Originator for use by existing Credit Card Program cardholders to purchase consumer merchandise. Such cash advances made via convenience checks are estimated to be less than 3% of total card sales. In 1995, the Credit Card Program was further extended to Meineke Discount Muffler Shops, Inc., an unaffiliated third-party. As originator of the credit cards, the Originator is responsible for all aspects of the Credit Card Program, including underwriting and granting of credit, issuance of cards and direct customer service. BFS Credit Services ('Credit Services'), a stand-alone profit center of Bridgestone/Firestone based in Brook Park, Ohio, provides certain administration and servicing functions on behalf of the Originator. The Originator earns certain Merchant Fees attributed to cardholder charges giving rise to Receivables. On the first Transfer Date, CFNA shall transfer Merchant Fees to the Trust in an amount equal to $350,000. On each Transfer Date thereafter, Merchant Fees in an amount equal to the lesser of (a) $350,000 and (b) the Merchant Fees collected by CFNA in the calendar month preceding such Transfer Date, shall be transferred to the Transferor pursuant to the Purchase and Sale Agreement. The Transferor will transfer such Merchant Fees to the Trust pursuant to the Agreement. The Accounts consist of eligible credit card accounts ('Eligible Accounts') established under the Credit Card Program as of or subsequent to the Cut-off Date and accounts to be established under Alternative Programs subsequent to the Cut-off Date which are designated by the Transferor as Eligible Accounts in accordance with the selection criteria relating to the addition of accounts. The Receivables will include all amounts payable by cardholders under the Accounts as of the Cut-off Date and thereafter. The Initial Invested Amounts were determined by taking into account, among other considerations, the nature of the Accounts and the Receivables. 41 Account balances are created primarily by the purchase of merchandise and service from the Retail Establishments. The Trust will consequently depend on the continued ability of the Retail Establishments to generate credit sales. In addition, since many of the Retail Establishments accept other credit cards, such as American Express, Diner's Club and Carte Blanche charge cards and Visa, MasterCard and Discover credit cards, the Trust also will depend upon decisions of customers purchasing merchandise at the Retail Establishments to use the cards of the Credit Card Program and any Alternative Programs, rather than other credit cards. See 'Risk Factors--Competition in the Credit Card Industry.' The following table shows the relationship between Credit Card Program sales at Bridgestone/Firestone company operated stores and total Credit Card Program sales for the periods indicated. CREDIT CARD PROGRAM SALES AT BRIDGESTONE/FIRESTONE COMPANY OPERATED STORES ($ IN THOUSANDS)
PERCENT OF CREDIT CARD CREDIT CARD SALES AT SALES AT BRIDGESTONE/FIRESTONE- TOTAL CREDIT BRIDGESTONE/FIRESTONE- YEAR ENDING DECEMBER 31, OPERATED STORES CARD SALES OPERATED STORES - ------------------------------------ ---------------------- ------------ ---------------------- 1989................................ $386,001 $528,610 73.02% 1990................................ 409,145 568,364 71.99 1991................................ 419,054 594,152 70.53 1992................................ 412,470 593,284 69.52 1993................................ 396,353 592,392 66.91 1994................................ 401,589 618,219 64.96 1995................................ 392,894 617,485 63.63 September 1996, year to date........ 279,310 446,952 62.49
MARKETING AND ORIGINATION CFNA is responsible for the marketing of the Credit Card Program. CFNA works directly with the sales organizations of Bridgestone/Firestone and other dealers and marketers of automotive products and services. CFNA promotes each credit card program primarily through (i) communicating through a wide variety of mediums (such as point of sale displays and mail promotions) the advantages of using the credit card; (ii) coordinating the activities of Credit Services' field account representatives; and (iii) developing client incentive programs to increase credit card activity and acquire new accountholders. In addition, CFNA directs and administers various accountholder direct response programs, such as direct mail merchandise programs and other services available to accountholders, which promote the use of the credit card and generate additional revenue for the credit card operations. NEW ACCOUNT ORIGINATION The Credit Authorization area ('Credit Authorization') of CFNA is responsible for (i) processing credit applications to establish new accounts, (ii) authorizing sales to existing accounts, and (iii) managing credit limits and continually assessing credit risk. New accounts are generated primarily through Retail Establishment operations. Credit card applications are available in the Retail Establishments, whose personnel offer the Credit Card Program to customers. Customers interested in purchasing specified merchandise or services on credit may complete a credit card application in the Retail Establishment. An application may be processed either by direct telephone contact with Credit Authorization or by mailing a completed application to Credit Authorization. Most new accounts are opened at the point of sale in a Retail Establishment. Through the use of a direct computer link with the major credit bureaus and a computer supported credit scoring system, most decisions on new credit applications are made within three to four minutes. In accordance with CFNA credit card policies, Credit Authorization evaluates the ability of an applicant to repay credit card balances by applying a credit scoring model jointly developed by CFNA and outside consultants. Credit scoring is intended to provide a general indication, based upon available information (including credit bureau reports), of the applicant's willingness and ability to repay account balances. The result 42 of the credit scoring computed for a prospective cardholder is the primary factor in determining the approval decision and the initial credit limit. The scores required for credit approval are established on the basis of expected profitability from the accounts. Profitability is projected on the basis of anticipated finance charge receipts as these may be offset by credit losses sustained in the accounts. The probability of losses is predicted on the basis of statistical evaluation performed by the credit scoring models which are based on past performance, periodically reviewed for statistical accuracy, of credit card accounts. Initial credit limits, which are based on an applicant's risk, score and, in certain cases, income, range from $300 to $2,500. Credit limits for individual accounts may be adjusted periodically based upon an evaluation of the cardholder's payment performance. Credit limits may be increased annually for accounts that exceed a pre-determined score. Credit limits on delinquent accounts may be reduced at any time if warranted by the risk score. Decisions to adjust credit limits are based upon a customer's payment history and/or credit bureau status. BILLING AND PAYMENT The accounts are grouped into billing cycles. Each billing cycle has a separate monthly billing date on which the activity in the related accounts during the month ended on such billing date is processed and billed to cardholders. New accounts are assigned to billing cycles in a manner generally intended, for purposes of administrative convenience, to equalize the number of accounts in the billing cycles. In connection with the servicing of the Credit Card Program, Credit Services generates and mails to each cardholder at the end of each cardholder's monthly billing cycle a statement summarizing account activity, unless there is no balance, no payment due (as occurs in the 'No Payment for 90 Days' payment plan described below) or no account activity. Accordingly, cardholders must make a minimum monthly payment by the date shown on the monthly statement. The minimum monthly payment is calculated by taking 5% of the new balance resulting after a purchase of products and services that are charged to the account and rounding that amount to an even $5.00 increment. To that amount Credit Services adds any past due to establish the total minimum payment due. The minimum payment due will not be less than $10.00 except where the remaining balance plus unpaid finance charges and other fees is less than $10.00. A monthly finance charge is assessed on the account when the account is not paid in full. The periodic rate now ranges between 1.587% and 1.82% monthly (or between 19.04% and 21.84% per annum). The finance charge is a flat rate, based on competitive conditions. No finance charge is assessed on unpaid finance charges. The monthly finance charge is calculated by multiplying the periodic rate times the average daily balance. The average daily balance is determined, where permitted by applicable state law, by taking the beginning balance each day, subtracting any payments or credits and adding any new purchases each day. All the daily balances are added for the billing cycle and divided by the number of days in the billing cycle. The Originator currently has a 'No Payment for 90 Days' payment plan where if the full amount of any qualifying purchase made under such plans is not paid within the specified time (i.e., within 90 days from the initial billing date), finance charges associated with the purchase will be imposed from the date of purchase. A minimum monthly payment is not required under this plan during the 90-day period. A pay-ahead option is also available for cardholders who are not past due and who make a payment of at least twice the amount of the minimum payment due. A minimum monthly payment will not be due in the following month. There are also special promotions, in which certain rights under the credit card agreement may be waived from time to time for limited periods for qualifying purchases. LOSS AND DELINQUENCY EXPERIENCE CFNA performs certain collection activity on behalf of Credit Services. Collection methods with regard to delinquent credit card receivables include collection activity by company personnel, collection agencies and attorneys in private practice. Delinquent cardholders who do not make scheduled payments by the payment due date may be subject to several actions. These actions include billing statement notices, collection letters, automated telephone reminders, telephone contact with collectors for accounts delinquent from 30-150 days and placement with third-party collection agencies or collection attorneys for accounts delinquent beyond 150 days. The specific action or 43 actions depend on the number of missed payments, the dollar amount of the outstanding balance and a statistical probability of further delinquency which is developed using a customized statistical scoring model. An account generally is closed to further purchases when two payments are past due. Pursuant to the Agreement, Receivables in any Account will be deemed defaulted and classified as 'Defaulted Receivables' on the last day of the Collection Period following the Collection Period in which such Receivable becomes 180 days delinquent or earlier upon the Servicer's receipt of notice of bankruptcy. Cardholders requesting financial relief may be given a reduction in their minimum monthly payment if certain conditions are met and upon receipt of the new monthly payment amount. If qualified, the account is re-aged to current. Credit Card Program credit evaluation, servicing and charge-off policies and collection practices may change at any time in accordance with the Agreement, the Purchase and Sale Agreement and applicable law and the business judgment of the Originator and the Servicer. Losses and delinquencies are affected by a number of factors such as competitive behavior and general economic conditions, including consumer debt levels. Bridgestone/Firestone has informed the Transferor that it is unable to determine the extent to which, if any, loss and delinquency experience described herein reflects the influence of these or other factors. The following tables set forth the historical default and delinquency experience for the Receivables generated in Eligible Accounts under the Credit Card Program. The statistics are with respect to payments by cardholders for the Collection Periods noted. There can be no assurance, however, that default and delinquency experience for the Receivables in the future will be similar to the historical experience. DEFAULTED RECEIVABLES ($ IN THOUSANDS)
NINE COLLECTION TWELVE COLLECTION PERIODS PERIODS ENDING ENDING DECEMBER 18, SEPTEMBER 18, -------------------------------- 1996 1995 1994 1993 --------------- -------- -------- -------- Average Receivables Outstanding(1)......................... $ 448,907 $457,317 $445,293 $418,862 Defaulted Receivables(2): Contractual Past-due aging (210 days past due)............. $ 29,143 $ 28,234 $ 21,102 $ 21,593 Bankrupt/Other............................................. 8,628 9,416 8,106 8,925 Less--Recoveries(3)........................................ (5,694) (6,448) (6,576) (7,064) --------------- -------- -------- -------- Net Defaulted Receivables................................ $ 32,077 $ 31,202 $ 22,632 $ 23,454 Percent per annum of Average Receivables Outstanding............................... 9.53% 6.82% 5.08% 5.60%
- ------------------ (1) Average Receivables Outstanding is a thirteen-point average. It averages the December 19 receivables balance at the start of the first Collection Period ending in the year indicated with the ending balances of each of the twelve Collection Periods ending in the year indicated (or in the case of 1996, with the ending balance of each of the nine Collection Periods through September 18, 1996). (2) 'Contractual Past-due aging' Defaulted Receivables represent those Receivables deemed Defaulted Receivables on the last day of the Collection Period following the period in which such Receivable becomes 180 days delinquent. 'Bankrupt' Defaulted Receivables represents those Receivables deemed Defaulted Receivables upon the Servicer's notice of bankruptcy. (3) Recoveries are gross account receivable recoveries. They are not net of collection costs and commission. 44 AVERAGE DELINQUENCIES ($ IN THOUSANDS)
NINE COLLECTION TWELVE COLLECTION PERIODS ENDING DECEMBER 18, PERIODS ENDING ----------------------------------------------------------------- SEPTEMBER 18, 1996 1995 1994 1993 ------------------------- ------------------------- ------------------------- --------- AMOUNT(1) PERCENTAGE(2) AMOUNT(1) PERCENTAGE(2) AMOUNT(1) PERCENTAGE(2) AMOUNT(1) --------- ------------- --------- ------------- --------- ------------- --------- Delinquent Receivables: 1-30 Days............ $ 63,650 14.18% $ 64,633 14.13% $ 67,425 15.14% $ 78,719 31-60 Days............ 19,820 4.42 18,932 4.14 17,007 3.82 19,630 61-90 Days............ 9,169 2.04 8,042 1.76 6,694 1.50 7,208 91-180 Days........... 15,123 3.37 12,081 2.64 9,460 2.13 9,672 Average Receivables Outstanding......... $ 448,907 100.00% $ 457,317 100.00% $ 445,293 100.00% $ 418,862 PERCENTAGE(2) ------------- Delinquent Receivables: 1-30 Days............ 18.79% 31-60 Days............ 4.69 61-90 Days............ 1.72 91-180 Days........... 2.31 Average Receivables Outstanding......... 100.00%
- ------------------ (1) Average amounts outstanding of Delinquent Receivables and total receivables are calculated by the thirteen-point average method, described in Footnote 1 of the table titled 'Defaulted Receivables.' (2) Percentages are calculated by dividing Delinquent Receivables by Average Receivables Outstanding for the applicable period. REVENUE EXPERIENCE The following table sets forth the gross revenues from monthly finance charge billings for the Collection Periods noted. The table includes only the Receivables and finance charge billings generated in Eligible Accounts under the Credit Card Program. The historic gross revenue figures in the table are calculated on an as billed basis and represent amounts billed to cardholders before deduction of charge-offs, reductions due to fraud, returned goods and customer disputes and other expenses. Future cash collections on Receivables may not reflect the historical experience in the table. During periods of increasing delinquencies, billings of monthly finance charges may exceed cash as amounts collected on Receivables lag behind amounts billed to cardholders. Conversely, as delinquencies decrease, cash may exceed billings of monthly finance charges as amounts collected in a current period may include amounts billed during prior periods. However, the Transferor believes that during the periods shown, revenues on a billed basis closely approximated revenues on a cash basis. Revenues from monthly finance charges on both a billed and a cash basis will be affected by numerous factors, including the monthly finance charges on principal receivables, the percentage of cardholders who pay off their balances in full each month and do not incur monthly finance charges on purchases, the number of promotional programs offered to cardholders and changes in the delinquency rate on the Receivables. REVENUE EXPERIENCE ($ IN THOUSANDS)
NINE COLLECTION TWELVE COLLECTION PERIODS PERIODS ENDING ENDING DECEMBER 18, SEPTEMBER 18, -------------------------------- 1996 1995 1994 1993 --------------- -------- -------- -------- Average Start-of-Month Receivables(1)...................... $ 449,771 $456,513 $444,147 $417,475 Finance Charges Billed(2).................................. $ 58,856 $ 81,026 $ 78,828 $ 78,547 Finance Charges Billed as Percentage of Average Receivables Outstanding.............................................. 17.45% 17.75% 17.75% 18.81%
- ------------------ (1) 'Average Start-of-Month Receivables' is a twelve-point average. It averages the receivables balances at the start of each of the twelve Collection Periods ending in the year indicated. It differs from the Average Receivables in the 'Defaulted Receivables' and 'Average Delinquencies' tables, which are thirteen-point averages. (2) Finance Charges are as billed during the Collection Periods noted in each column, adjusted for rebated finance charges and accruals of 'No Payment for 90 Days' finance charges. 45 PROMOTIONS The Credit Card Program features a 'No Payment for 90 Days' payment plan which is intended to increase sales to existing cardholders and to generate new accounts. Under this program, if customers pay the full purchase price of merchandise or services within 90 days from the initial billing date, the finance charges associated with the initial purchase will not be imposed on the account. If the customer does not pay the full purchase price within the specified 90-day period, finance charges associated with the purchase will be imposed from the date of purchase. Special financing programs are offered to customers from time to time to promote merchandise and service sales and the greater utilization of the Credit Card Program. The most frequently offered program is a deferred payment program in which customers may be allowed to defer their payment obligations for a period generally ranging from two to six months. Typically, finance charges accrue during the deferral period. THE ACCOUNTS The following tables summarize the portfolio of Active and Creditworthy Accounts in the Credit Card Program by various criteria as of September 30, 1996. An Account is an 'Active Account' if it currently has a balance. An Account is a 'Creditworthy Account' if it does not currently have a balance, but it has had a balance within the last 17 months and is eligible for further sales. Given the specialized nature of the eligible merchandise and services offered under the Credit Card Program, customers typically use their credit cards infrequently. Because the future composition of the Credit Card Program portfolio will change over time, these tables are not necessarily indicative of future results. As of September 30, 1996, the Active and Creditworthy Accounts in the Credit Card Program totaled 4,289,184 Accounts and Receivables outstanding totaled $435,910,099. Approximately 10.53%, 9.21%, 8.93% and 5.75% of the Total Receivables Outstanding related to Account holders having billing addresses in Texas, Florida, California and Ohio, respectively. Economic and social conditions in these states may negatively impact the ability of obligors in such states to pay their outstanding card balances in a timely manner or to pay such balances at all. Not more than 5% of the Receivables related to Account holders having billing addresses in any other single state. COMPOSITION OF ACTIVE AND CREDITWORTHY ACCOUNTS BY TYPE OF RETAILER AS OF SEPTEMBER 30, 1996
PERCENTAGE PERCENTAGE NUMBER OF TOTAL OF TOTAL OF NUMBER RECEIVABLES RECEIVABLES CARD PROGRAM PARTICIPANTS ACCOUNTS OF ACCOUNTS OUTSTANDING OUTSTANDING - ---------------------------------------------------------- --------- ----------- ------------ ----------- Bridgestone/Firestone operated stores and Participating Dealers................................................. 4,040,958 94.21% $420,471,205 96.46% Third-Party Dealers and marketers without contractual arrangements............................................ 248,226 5.79 15,438,895 3.54 --------- ----------- ------------ ----------- Total................................................ 4,289,184 100.00% $435,910,099 100.00%
COMPOSITION OF ACTIVE AND CREDITWORTHY ACCOUNTS BY CREDIT LIMIT AS OF SEPTEMBER 30, 1996
PERCENTAGE PERCENTAGE OF TOTAL OF TOTAL NUMBER OF NUMBER RECEIVABLES RECEIVABLES CREDIT LIMIT(1) ACCOUNTS OF ACCOUNTS OUTSTANDING OUTSTANDING - ---------------------------------------------------------- --------- ----------- ------------ ----------- $0(2)..................................................... 265,025 6.2% $ 61,492,900 14.1% $100 to $500.............................................. 360,190 8.4 41,499,281 9.5 $600 to 1,000............................................. 1,848,572 43.1 156,143,445 35.8 $1,100 to $1,500.......................................... 1,081,816 25.2 66,306,727 15.2 $1,600 to $2,000.......................................... 686,955 16.0 105,567,049 24.2 $2,100 or More............................................ 46,626 1.1 4,900,698 1.1 --------- ----------- ------------ ----------- Total................................................ 4,289,184 100.0% $435,910,099 100.0%
(Footnotes on next page) 46 (Footnotes from previous page) - ------------------ (1) Credit limits are in increments of $100. (2) Credit policy sets credit limit to $0 for any cardholder 90 days or more delinquent. COMPOSITION OF ACTIVE AND CREDITWORTHY ACCOUNTS BY ACCOUNTS BALANCE AS OF SEPTEMBER 30, 1996
PERCENTAGE PERCENTAGE OF TOTAL OF TOTAL NUMBER OF NUMBER RECEIVABLES RECEIVABLES ACCOUNT BALANCE ACCOUNTS OF ACCOUNTS OUTSTANDING OUTSTANDING - ---------------------------------------------------------- --------- ----------- ------------ ----------- Credit Balance(1)......................................... 16,939 0.39% $ (684,627) (0.16)% No Balance(2)............................................. 3,081,723 71.85 -- -- $.01 to $100.............................................. 221,279 5.16 10,524,448 2.41 $101 to $200.............................................. 194,116 4.53 29,148,835 6.69 $201 to $300.............................................. 187,853 4.38 46,886,809 10.76 $301 to $400.............................................. 167,179 3.90 58,401,262 13.40 $401 to $500.............................................. 133,773 3.12 59,891,809 13.74 $501 to $600.............................................. 88,741 2.07 48,508,844 11.13 $601 to $1,000............................................ 139,075 3.24 104,878,819 24.06 $1,001 and up............................................. 58,506 1.36 78,353,900 17.97 --------- ----------- ------------ ----------- Total................................................ 4,289,184 100.0% $435,910,099 100.0%
- ------------------ (1) Credit balances are a result of cardholder payments and credit adjustments applied in excess of an Account's unpaid balance. Accounts currently with a credit balance are included, as Receivables may be generated with respect thereto in the future. (2) Accounts currently with no balance are included, as Receivables may be generated with respect thereto in the future. COMPOSITION OF ACTIVE AND CREDITWORTHY ACCOUNTS BY AGE AS OF SEPTEMBER 30, 1996
PERCENTAGE PERCENTAGE OF TOTAL OF TOTAL NUMBER OF NUMBER RECEIVABLES RECEIVABLES AGE(1) ACCOUNTS OF ACCOUNTS OUTSTANDING OUTSTANDING - ---------------------------------------------------------- --------- ----------- ------------ ----------- Under 6 months............................................ 300,988 7.02% $ 50,382,519 11.56% 6 months to 1 year........................................ 295,649 6.89 39,070,155 8.96 1-2 years................................................. 675,884 15.76 75,596,531 17.34 2-3 years................................................. 537,860 12.54 43,669,963 10.02 3-4 years................................................. 481,247 11.22 30,800,234 7.07 4-5 years................................................. 497,923 11.61 26,455,882 6.07 5-6 years................................................. 339,263 7.91 24,042,440 5.52 6-7 years................................................. 257,738 6.01 21,423,891 4.91 7-8 years................................................. 171,169 3.99 16,259,922 3.73 8-9 years................................................. 109,710 2.56 11,910,929 2.73 9-10 years................................................ 103,387 2.41 12,281,658 2.82 10 years or older......................................... 518,366 12.09 84,015,975 19.27 --------- ----------- ------------ ----------- Total................................................ 4,289,184 100.0% $435,910,099 100.0%
- ------------------ (1) Age is calculated based on the initial opening of the account. 47 MATURITY ASSUMPTIONS The Agreement provides that the Controlled Amortization Period will commence three years after the Closing Date and that the Rapid Amortization Period will commence on the earlier of the day on which (i) an Amortization Event occurs or is deemed to occur and (ii) the Class A Invested Amount has been reduced to zero. Although it is anticipated that principal payments will be made on the Class A Certificates in an amount equal to the Controlled Amortization Amount beginning on the December, 1999 Distribution Date and on the Class B Certificates beginning on the November, 2000 Distribution Date, no assurance can be given in that regard. Payments of principal are scheduled to be made on the Class A Certificates on each Distribution Date during the Controlled Amortization Period in an amount equal to the lesser of (a) the Controlled Amortization Amount and (b) (i) the product of the Fixed Allocation Percentage and all Principal Collections in respect of the applicable Collection Period (other than Reallocated Principal Collections that are used to pay Required Amounts due on the Class A Certificates, Class B Certificates and the Collateral Interest) plus (ii) certain other amounts. Based on the following assumptions, among others: cardholder monthly payment rates for the Accounts being not less than 7.89% of the Receivables outstanding under Eligible Accounts at the time of the Controlled Amortization Period (which rate is below the average monthly payment rate shown in the 'Monthly Payment Rates' table below), Aggregate Receivables being constant, the Net Defaulted Receivables as a percentage of Average Receivables outstanding remaining constant at the levels indicated in the tables above for the Collection Period ended September 18, 1996, the Series 1992-B Certificates are not outstanding and revolving, there is sharing of principal among series and no Amortization Event, Servicer Event of Default (defined below) or default by the Transferor under the Purchase and Sale Agreement occurring during the Controlled Amortization Period, the Transferor believes that there will be sufficient funds on each Distribution Date of the Controlled Amortization Period to pay the Controlled Amortization Amount on such date. However, the actual rate of payment of principal to Certificateholders will depend, among other factors, on the rate of repayment, the rate of default by cardholders and the amount of Aggregate Receivables. In the event of the occurrence of an Amortization Event, the Rapid Amortization Period will begin on the day on which such Amortization Event occurs or is deemed to occur. During the Rapid Amortization Period, distributions of principal to Class A Certificateholders will not be subject to the Controlled Amortization Amount. Principal Collections allocable to the Certificateholders' Interest will no longer be distributed to the Transferor but instead will be distributed as principal payments to the Class A Certificateholders and, following the final principal payment to the Class A Certificateholders, to the Class B Certificateholders. Although the Transferor believes that the likelihood of an Amortization Event occurring is remote, there can be no assurance that an Amortization Event will not occur. See 'Description of the Offered Certificates and the Agreement-- Amortization Events.' The following table sets forth the cardholder payment rates for Eligible Accounts under the Credit Card Program. For the groups of nine or twelve Collection Periods noted, the table gives the lowest payment rate for any Collection Period, the highest payment rate for any Collection Period, and the average payment rate for all nine or twelve Collection Periods. The payment rate for any Collection Period represents the payments received under Eligible Accounts for the Collection Period, divided by the Receivables outstanding under Eligible Accounts as of the beginning of such Collection Period. Payments shown in the table include amounts which would be deemed Principal Collections and Finance Charge Collections (except Recoveries on Defaulted Receivables, certain credit-related insurance proceeds and Merchant Fees) under the Agreement. MONTHLY PAYMENT RATES
TWELVE COLLECTION PERIODS NINE COLLECTION ENDING DECEMBER 18, PERIODS ENDING ----------------------- PAYMENT RATE SEPT. 18, 1996 1995 1994 1993 - --------------------------------------------------- ---------------- ----- ----- ----- Low................................................ 11.00% 11.60% 11.30% 12.14% High............................................... 13.34% 13.07% 12.87% 13.62% Average............................................ 12.51% 12.30% 12.41% 13.20%
48 The amount of Collections may vary from period to period, due to seasonal variations, general economic conditions and payment habits of individual cardholders. Accordingly, there can be no assurance that future cardholder monthly payment rate experience, and thus the rate at which Certificateholders could expect to receive payments of principal on their Offered Certificates during any Rapid Amortization Period, will be similar to the historical experience shown above. See 'Risk Factors.' THE LETTER OF CREDIT BANK The Servicer Letter of Credit and Transferor Letter of Credit has been issued by The Sumitomo Bank, Limited, New York Branch (the 'Letter of Credit Bank'), a New York state licensed branch of The Sumitomo Bank, Limited (the 'Bank'). Upon request therefor, the Bank will provide without charge to each person to whom this Prospectus is delivered, a copy of the annual report of the Bank which contains the consolidated statements of the Bank for fiscal year ended 1995. Written requests should be sent to The Sumitomo Bank, Limited, New York Branch, 277 Park Avenue, New York, NY 10172 Attention: Loan Operations. DESCRIPTION OF THE OFFERED CERTIFICATES AND THE AGREEMENT The Series 1996-1 Interests will be issued pursuant to the Agreement, as supplemented by the Series 1996-1 Supplement, each entered into among the Transferor, the Servicer and the Trustee, substantially in the forms filed as exhibits to the Registration Statement of which this Prospectus is a part. Pursuant to the Agreement, the Transferor may execute further Supplements thereto between the Transferor and the Trustee in order to issue additional Series. See '--Exchanges.' The Trustee will provide a copy of the Agreement (without exhibits or schedules), including any Supplements, to Offered Certificateholders without charge upon written request. The following summary describes certain terms of the Agreement and the Series 1996-1 Supplement. GENERAL The Class A Certificates and the Class B Certificates will represent undivided interests in the Trust, including the right to receive the Class A Invested Percentage and the Class B Invested Percentage, respectively, of all Collections received with respect to the Receivables in the Trust. The Trust Assets will consist of the following: (i) the Receivables existing on or created after the Cut-off Date under the Accounts established under the Credit Card Program, (ii) Receivables arising under designated Accounts established under Alternative Programs, (iii) all amounts due or to become due on or after the Cut-off Date, (iv) all Recoveries with respect to previously Defaulted Receivables, net of reasonable expenses of the Servicer incurred and deducted from such amounts or payments, (v) the right to receive certain Merchant Fees attributed to cardholder charges giving rise to Receivables, (vi) all of the Transferor's right, title and interest under the Purchase and Sale Agreement and the Participation Agreement, (vii) the proceeds of the Servicer Letter of Credit and the Transferor Letter of Credit, (viii) all moneys on deposit in the Collection Account and any other accounts established for the benefit of any other Series (which other accounts will not be available to Certificateholders), (ix) payments made in respect of Enhancements issued with respect to any other Series (the drawing on or payment of such Enhancement not being available to Certificateholders) and (x) all proceeds of any of the foregoing. The term 'Enhancement' is defined in the Agreement as any letter of credit, liquidity facility, guaranteed rate agreement, maturity guaranty, facility, cash collateral account, cash collateral guaranty, tax protection agreement, interest rate swap or other contract or agreement for the benefit of the certificateholders of any Series issued by the Trust. As of the Closing Date, the Initial Class A Invested Amount will be $200,000,000 and the Initial Class B Invested Amount will be $28,205,129. The Transferor will initially hold the interest (the 'Transferor Interest') not represented by the Series 1996-1 Interests, the Bridgestone/Firestone Certificate and any other Series of certificates issued or to be issued. The Transferor Interest will be evidenced by the Exchangeable Transferor Certificate and will represent an undivided interest in the Trust, which may vary from month to month. The Transferor has participated its interest in the Exchangeable Transferor Certificate to Bridgestone/Firestone pursuant to the Participation Agreement and will participate its interest in the Subordinated Transferor Certificate to Bridgestone/Firestone pursuant to the Participation Agreement. The issuance of the Class B Certificates, the Collateral Interest and the Subordinated Transferor Certificate are conditions precedent to the issuance of the Class A Certificates. The issuance of the 49 Collateral Interest and the Subordinated Transferor Certificate are conditions precedent to the issuance of the Class B Certificates. Interest will accrue on the unpaid principal amount of the Class A Certificates at a per annum rate equal to the Class A Certificate Rate and, except as otherwise provided herein, be distributed to the Class A Certificateholders monthly on each Distribution Date, commencing December, 1996, in an amount equal to Class A Monthly Interest. 'Class A Monthly Interest' equals, with respect to any Distribution Date, one-twelfth of the product of (i) the Class A Certificate Rate and (ii) the outstanding principal balance of the Class A Certificates as of the preceding Distribution Date (after subtracting therefrom the aggregate amount of all distributions of principal made to the Class A Certificateholders on such Distribution Date) or, with respect to the first Distribution Date, the Initial Class A Invested Amount, provided, however, that with respect to the initial Distribution Date, Class A Monthly Interest shall equal $ . Interest will accrue on the unpaid principal amount of the Class B Certificates at a per annum rate equal to the Class B Certificate Rate and, except as otherwise provided herein, be distributed to the Class B Certificateholders monthly on each Distribution Date, commencing December, 1996, in an amount equal to Class B Monthly Interest. 'Class B Monthly Interest' equals, with respect to any Distribution Date, one-twelfth of the product of (i) the Class B Certificate Rate and (ii) the outstanding principal balance of the Class B Certificates as of the preceding Distribution Date (after subtracting therefrom the aggregate amount of all distributions of principal made to the Class B Certificateholders on such Distribution Date) or, with respect to the first Distribution Date, the Initial Class B Invested Amount, provided, however, that with respect to the initial Distribution Date, Class B Monthly Interest shall equal $ . No principal payments will be made to the Class A Certificateholders until the Distribution Date occurring in December, 1996, or, upon the occurrence of an Amortization Event as described herein. No principal payments will be made to the Class B Certificateholders until the final principal payment has been made to the Class A Certificateholders. No principal payments will be made to the Collateral Interest Holder until the final principal payment has been made to the Class B Certificateholders. The holder of the Subordinated Transferor Certificate will not receive any payments of principal until the Offered Certificateholders and the Collateral Interest Holder have received all payments of principal due them. On each Distribution Date with respect to the Revolving Period (and, at the option of the Servicer, more frequently), Principal Collections allocable to the Certificateholders' Interest will, subject to certain limitations, including certain Excess Finance Charge Collections and the reallocation of any Reallocated Principal Collections with respect to the related Collection Period, be applied as Shared Principal Collections and the balance will be paid to the Transferor in respect of the Transferor Interest to maintain the Class A Invested Amount, the Class B Invested Amount, the Collateral Interest Invested Amount and the Subordinated Transferor Amount. Unless and until an Amortization Event shall have occurred, on each Distribution Date with respect to the Controlled Amortization Period, all Principal Collections allocable to the Certificateholders' Interest plus certain other amounts comprising Class A Monthly Principal and principal allocable to the Class B Certificates and the Collateral Interest and certain other amounts will no longer be paid to the Transferor as described above but instead an amount thereof up to the Controlled Amortization Amount will be distributed to the Class A Certificateholders. Any such collections in excess of the Controlled Amortization Amount will be paid to the Transferor in respect of the Transferor Interest. Distributions of principal and interest on the Offered Certificates will be made by the Trustee directly to Certificateholders in accordance with the procedures set forth herein and in the Agreement. Interest payments and any principal payments on each Distribution Date will be made to Certificateholders in whose name the Offered Certificates were registered (expected to be Cede, as nominee of DTC) at the close of business on the 15th day of the calendar month preceding such Distribution Date (each a 'Record Date') (however, the final payment on any Offered Certificates will be made only upon presentation and surrender of such Offered Certificate). Distributions will be made to DTC in immediately available funds. The Offered Certificates will initially be represented by one or more Certificates registered in the name of the nominee of The Depository Trust Company ('DTC') (together with any successor depository selected by the Transferor, the 'Depository') except as set forth below. The interests of holders of beneficial interests in the Class A Certificates and the Class B Certificates ('Certificate Owners') will be available for purchase in 50 denominations of $1,000 and integral multiples thereof in book-entry form only. The Transferor has been informed by DTC that DTC's nominee will be Cede. Accordingly, Cede is expected to be the holder of record of the Offered Certificates. Unless and until Definitive Certificates are issued under the limited circumstances described herein, no Certificate Owner will be entitled to receive a certificate representing such person's interest in the Offered Certificates. All references herein to actions by Certificateholders shall refer to actions taken by DTC upon instructions from its participating organizations (the 'Participants') and all references herein 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 Class A Certificates and the Class B Certificates, as the case may be, for distribution to Certificate Owners in accordance with DTC procedures. See '--Book-Entry Registration' and '--Definitive Certificates.' BOOK-ENTRY REGISTRATION Holders of the Certificates or the Offered Certificates (the 'Offered Certificates') may hold through DTC (in the United States) or, solely in the case of the Offered Certificates, CEDEL or Euroclear (in Europe) if they are participants of such systems, or indirectly through organizations that are participants in such systems. The Certificates may not be held, directly or indirectly, through CEDEL or Euroclear. Cede, as nominee for DTC, will hold the Offered Certificates. CEDEL and Euroclear will hold omnibus positions in the Offered Certificates on behalf of the CEDEL Participants and the Euroclear Participants, respectively, through customers' securities accounts in CEDEL's and Euroclear's names on the books of their respective depositaries (collectively, the 'Depositaries'), which in turn will hold such positions in customers' securities accounts in the Depositaries' names on the books of DTC. Transfers between DTC's participating organizations (the 'Participants') will occur in accordance with DTC rules. Transfers between CEDEL Participants 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, on the one hand, and directly or indirectly through CEDEL Participants 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, such cross-market transactions will require delivery of instructions to the relevant European international clearing system by the counterparty in such system in accordance with its rules and procedures and within its established deadlines (European time). 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. CEDEL Participants and Euroclear Participants may not deliver instructions directly to the Depositaries. Because of time-zone differences, credits of securities in CEDEL or Euroclear as a result of a transaction with a Participant will be made during the subsequent securities settlement processing, dated the business day following the DTC settlement date, and such credits or any transactions in such securities settled during such processing will be reported to the relevant CEDEL Participant or Euroclear Participant on such business day. Cash received in CEDEL or Euroclear as a result of sales of securities by or through a CEDEL Participant or a Euroclear Participant to a Participant will be received with value on the DTC settlement date but will be available in the relevant CEDEL or Euroclear cash account only as of the business day following settlement in DTC. For a description of transfers between persons holding directly or indirectly through DTC, see also 'Global Clearance, Settlement and Tax Documentation Procedures' in Annex II to this Prospectus. Cedel Bank, societe anonyme ('CEDEL') is incorporated under the laws of Luxembourg as a professional depository. CEDEL holds securities for its participating organizations ('CEDEL Participants') and facilitates the clearance and settlement of securities transactions between CEDEL Participants through electronic book-entry changes in accounts of CEDEL Participants, thereby eliminating the need for physical movement of certificates. Transactions may be settled in CEDEL in any of 28 currencies, including United States dollars. CEDEL provides to its CEDEL Participants, among other things, services for safekeeping, administration, clearance and settlement of internationally traded securities and securities lending and borrowing. CEDEL 51 interfaces with domestic markets in several countries. As a professional depository, CEDEL is subject to regulation by the Luxembourg Monetary Institute. CEDEL Participants are recognized financial institutions around the world, including underwriters, securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations and may include the Underwriters. Indirect access to CEDEL is also available to others, such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a CEDEL Participant, either directly or indirectly. The Euroclear System was created in 1968 to hold securities for participants of the Euroclear System ('Euroclear Participants') 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 Euroclear in any of 32 currencies, including United States dollars. The Euroclear System includes various other services, including securities lending and borrowing, and interfaces with domestic markets in several countries generally similar to the arrangements for cross-market transfers with DTC described in 'Global Clearance, Settlement and Tax Documentation Procedures' in Annex II of the Prospectus. The Euroclear System is operated by Morgan Guaranty Trust Company of New York, Brussels, Belgium office (the 'Euroclear Operator' or 'Euroclear'), under contract with Euroclear Clearance System, S.C., a Belgian cooperative corporation (the 'Cooperative'). 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 on behalf of Euroclear Participants. Euroclear Participants include banks (including central banks), securities brokers and dealers and other professional financial intermediaries and may include the Underwriters. Indirect access to the Euroclear System is also available to other firms that clear through or 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 such, 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 and applicable Belgian law (collectively, the 'Terms and Conditions'). The 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 Offered Certificates held through CEDEL or Euroclear will be credited to the cash accounts of CEDEL Participants or Euroclear Participants in accordance with the relevant system's rules and procedures, to the extent received by its Depositary. Such distributions will be subject to tax reporting in accordance with relevant United States tax laws and regulations. See 'Federal Income Tax Consequences' herein and 'Global Clearance, Settlement and Tax Documentation Procedures' in Annex II to this Prospectus. CEDEL or the Euroclear Operator, as the case may be, will take any other action permitted to be taken by a Certificateholder under the Indenture on behalf of a CEDEL Participant 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, CEDEL and Euroclear have agreed to the foregoing procedures in order to facilitate transfers of Offered Certificates among participants of DTC, CEDEL and Euroclear, they are under no obligation to perform or continue to perform such procedures and such procedures may be discontinued at any time. In the event that any of DTC, CEDEL or Euroclear should discontinue its services, the Administrator would seek an alternative depository (if available) or cause the issuance of Definitive Securities to the owners thereof or their nominees in the manner described in 'Global Clearance, Settlement and Tax Document Procedures' in Annex II to this Prospectus. 52 DEFINITIVE CERTIFICATES The Offered Certificates will be issued in fully registered, certificated form to Certificate Owners or their nominees (the 'Definitive Certificates'), rather than to DTC or its nominee, only if (i) the Transferor advises the Trustee in writing that DTC is no longer willing or able to discharge properly its responsibilities as Depository with respect to the Offered Certificates, and the Trustee or the Transferor is unable to locate a qualified successor, (ii) the Transferor, at its option, elects to terminate the book-entry system through DTC, or (iii) after the occurrence of a Servicer Event of Default, Certificate Owners representing in the aggregate not less than a majority of the aggregate invested amount of all Series then issued and outstanding advise the Trustee and DTC through Participants in writing that the continuation of a book-entry system through any Depository is no longer in the best interest of the Certificate Owners. Upon the occurrence of any of the events described in the immediately preceding paragraph, the Trustee, through DTC, is required to notify all Participants of the availability through DTC of Definitive Certificates. Upon surrender by DTC to the Trustee of the Definitive Certificates representing the Offered Certificates and instructions for re-registration, the Trustee will issue the Offered Certificates as Definitive Certificates, and thereafter the Trustee will recognize the holders of such Definitive Certificates as holders under the Agreement ('Holders'). Distributions of principal and interest on the Offered Certificates will be made by the Paying Agent directly to Holders of Definitive Certificates in accordance with the procedures set forth herein and in the Agreement. Interest and 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. Distributions will be made by check mailed to the address of such Holder as it appears on the certificate register. The final payment on any Offered Certificate (whether Definitive Certificates or the Offered Certificates registered in the name of Cede representing the Offered Certificates), however, will be made only upon presentation and surrender of such Offered Certificate at the office or agency specified in the notice of final distribution to Certificateholders. The Trustee will provide such notice to registered Certificateholders not later than the day of such final distribution. Definitive Certificates will be transferable and exchangeable at the offices of the transfer agent and registrar, which shall initially be the Trustee. No service charge will be imposed for any registration of transfer or exchange, but the transfer agent and registrar may require payment of a sum sufficient to cover any tax or other governmental charge imposed in connection therewith. CONVEYANCE OF RECEIVABLES Pursuant to the Agreement, the Transferor has transferred and assigned to the Trust all of its right, title and interest in and to Eligible Receivables in the Accounts outstanding as of the Cut-off Date, all of the Eligible Receivables thereafter created under the Eligible Accounts and the proceeds of all of the foregoing (including Recoveries with respect to previously charged-off Receivables). Prior to such transfer and assignment, and pursuant to the Purchase and Sale Agreement, the Originator sold to the Transferor all Eligible Receivables existing under the Eligible Accounts as of the Cut-off Date. Pursuant to the Purchase and Sale Agreement, provided, among other things, that the Transferor is not in default of its obligations under the Purchase and Sale Agreement and no Servicer Event of Default or Originator insolvency shall have occurred, the Originator has agreed to sell and assign to the Transferor, and the Transferor has agreed to purchase from the Originator, on each business day, all Eligible Receivables arising in the Accounts. On the Closing Date, the Trustee will authenticate the Offered Certificates and deliver such Offered Certificates to the Transferor which will in turn deliver the Offered Certificates to the Underwriters against payment of the net proceeds of the sale of the Offered Certificates. The Trustee will also deliver a newly issued Exchangeable Transferor Certificate and the Subordinated Transferor Certificate to the Transferor. In connection with the sale of the Receivables by the Originator to the Transferor and the transfer of the Receivables by the Transferor to the Trust, the Originator and Bridgestone/Firestone will indicate in their computer files that such Receivables have been sold to the Transferor and then transferred to the Trust and the Transferor will indicate in its files that such Receivables have been transferred from the Transferor to the Trust. Bridgestone/Firestone, as initial Servicer, will retain and will not deliver to the Trustee any other records or agreements relating to the Accounts or the Receivables. Except as set forth above, the records and agreements 53 relating to the Accounts and the Receivables will not be segregated from those relating to other consumer accounts and receivables and neither the computer files nor the physical documentation relating to the Accounts or Receivables will be stamped or marked to reflect the transfer of Receivables to the Trust. The Trustee will have reasonable access to such records and agreements as required by applicable law or to enforce the rights of the Certificateholders. The Originator will file one or more financing statements under the Uniform Commercial Code in accordance with Ohio state law to perfect the Transferor's interest in the Receivables. The Transferor, in turn, will file one or more financing statements in accordance with Massachusetts state law to perfect the Trust's interest in the Receivables. See 'Risk Factors' and 'Certain Legal Aspects of the Receivables.' ADDITION OF ACCOUNTS The Accounts consist of Eligible Accounts established under the Credit Card Program as of and subsequent to the Cut-off Date. In addition, the Transferor is permitted (subject to certain limitations and conditions) to designate from time to time eligible Accounts established under Alternative Programs ('Eligible Alternative Accounts') and to convey to the Trust Receivables of such Eligible Additional Accounts, whether such Receivables are then existing or thereafter created until either the Ten Percent Number Test (as defined below) or Ten Percent Aggregate Test (as defined below) is met. Thereafter, if the Transferor has not obtained the consent of the applicable rating agencies, as described below, additional accounts and additional receivables from Alternative Programs shall not be transferred to the Trust. Such 'Alternative Programs' are programs for which CFNA underwrites and originates Accounts and Receivables and may include, but are not limited to, the establishment of additional private label credit card programs and the offering of general purpose credit cards. As of the Closing Date, the Originator has not established any of these Alternative Programs. The 'Ten Percent Number Test' is determined as of any date on which Alternative Accounts are to be added to the Trust and met when the number of Eligible Alternative Accounts as of such date equals 10% of the number of all Accounts in the Trust as of such date. The 'Ten Percent Aggregate Test' is determined as of any date on which Alternative Accounts are to be added to the Trust and met when the dollar amount of Receivables from such Eligible Alternative Accounts as of such date equals 10% of the Aggregate Receivables as of such date. See 'Description of the Offered Certificates and the Agreement--Addition of Accounts.' Once the Transferor has met the Ten Percent Number Test or the Ten Percent Aggregate Test, the Transferor must request written confirmation from the applicable rating agencies to transfer to the Trust additional Accounts related to an Alternative Program and all Receivables arising from such Accounts. In addition and subject to certain limitations set forth in the Agreement, on an annual basis, the Transferor will be permitted to include additional Eligible Accounts and all Eligible Receivables arising from such Eligible Accounts up to an aggregate number equal to 20% of the total number of Eligible Accounts already included in the Trust without written confirmation from the applicable rating agencies. REMOVAL OF ACCOUNTS Subject to the conditions set forth in the next succeeding sentence, on each Determination Date on which the Transferor Amount (plus the B/F Amount and any amounts available under the Transferor Letter of Credit) exceeds 7% of the aggregate invested amount of all outstanding Series of certificates issued by the Trust, the Transferor may, but shall not be obligated to, accept all Receivables and proceeds thereof from certain Accounts offered to it by the Trustee ('Removed Accounts'), without notice to the Certificateholders, in an aggregate amount not greater than the lesser of (a) the excess of the Transferor Amount (plus amounts available to be drawn under the Transferor Letter of Credit or the Transferor Escrow Account plus the B/F Amount) over 7% of the Aggregate Certificateholders' Interest and (b) 5% of Aggregate Receivables on such date of removal. The Transferor may, at its sole discretion, accept such offer in an aggregate amount equal to an amount not greater than the excess of the Transferor Amount (plus the B/F Amount and any amounts available under the Transferor Letter of Credit) over 7% of the aggregate invested amount of all outstanding Series of certificates issued by the Trust. The Transferor is permitted to designate and require reassignment to it of the Receivables from Removed Accounts only upon satisfaction of the conditions set forth in the Agreement, including the following conditions: (i) the Trustee shall have executed and delivered to the Transferor a written reassignment and the Transferor shall 54 have delivered a computer file or microfiche list containing a true and complete list of all Accounts in the Trust after such removal, the Accounts to be identified by account number, (ii) the Transferor shall represent and warrant that no selection procedure used by the Transferor which is adverse to the interests of the certificateholders was utilized in selecting the Removed Accounts, (iii) the removal of any Receivables of any Removed Accounts shall not, in the reasonable belief of the Transferor, cause an Amortization Event to occur, (iv) the Transferor shall have delivered written notice twenty days prior to such removal to each Rating Agency which has rated any outstanding Series and prior to the date on which such Receivables are to be removed the Trustee shall have received confirmation from each Rating Agency of its intention not to reduce or withdraw the rating of any Series of certificates as a result of such removal and (v) the Transferor shall have delivered to the Trustee an officer's certificate confirming the items set forth in clauses (i) through (iv) above. EXCHANGES The Agreement provides for the Trustee to issue four types of certificates: (i) one or more Series of certificates which generally are transferable and have the characteristics described below, (ii) the Bridgestone/Firestone Certificate, which is currently and will continue to be held by Bridgestone/Firestone and which generally is not transferable, (iii) the Exchangeable Transferor Certificate, a certificate which evidences the Transferor Interest, and (iv) the Subordinated Transferor Certificate, a certificate of the Transferor which evidences an interest subordinate to the Transferor Certificate. The Exchangeable Transferor Certificate was initially held by the Transferor and participated to Bridgestone/Firestone pursuant to a Participation Agreement by and between the Transferor and Bridgestone/Firestone (the 'Participation Agreement'). The Subordinated Transferor Certificate will also be participated to Bridgestone/Firestone pursuant to the Participation Agreement. The Agreement also provides that, pursuant to any one or more Supplements, the Transferor may tender the Exchangeable Transferor Certificate, or the Exchangeable Transferor Certificate and the certificates evidencing any Series of certificates to the Trustee in exchange for one or more new Series and a reissued Exchangeable Transferor Certificate. Under the Agreement, the Transferor may define, with respect to any newly issued Series: (i) its name or designation, (ii) its initial principal amount (or method for calculating such amount), (iii) its coupon rate (or formula for the determination thereof), (iv) the interest payment date or dates and the date or dates from which interest shall accrue, (v) the method for allocating collections to certificateholders, (vi) the names of any accounts to be used by such Series and the terms governing the operation of any such accounts, (vii) the percentage used to calculate monthly servicing fees, (viii) the minimum transferor interest percentage, (ix) the minimum amount of Aggregate Receivables required to be maintained by the Transferor, (x) the issuer and terms of any Enhancement with respect thereto, (xi) the base rate applicable to such Series, (xii) the terms on which the certificates of such Series may be repurchased by the Transferor or remarketed to other investors, (xiii) the Series termination date, (xiv) any deposit into any account maintained for the benefit of certificateholders, (xv) the number of classes of such Series, and if more than one class, the rights and priorities of each such class, (xvi) the extent to which the certificates of such Series will be issuable in bearer form and any limitations imposed thereon, (xvii) the priority of any Series with respect to any other Series, (xviii) the rights of the holder of the Exchangeable Transferor Certificate that have been transferred to the holders of such Series and (xix) any other relevant terms (all such terms, the 'Principal Terms' of such Series). None of the Transferor, the Servicer, the Trustee or the Trust is required to obtain the consent of any Certificateholder to issue any additional Series. However, as a condition of an Exchange, the Transferor will deliver to the Trustee written confirmation that the Exchange will not result in the applicable Rating Agency reducing or withdrawing its rating of any outstanding Series or otherwise adversely affect any rating on any then outstanding Series, including the Offered Certificates. The Transferor may offer any Series to the public under a Disclosure Document in transactions either registered under the Act or exempt from registration thereunder directly, through the Underwriters or one or more other underwriters or placement agents, in fixed-price offerings or in negotiated transactions or otherwise. Any such Series may be issued in fully registered or book-entry form in minimum denominations determined by the Transferor. See Annex I for a listing of Outstanding Series. The Transferor may offer, from time to time, additional Series. The Agreement provides that the Transferor may perform Exchanges and define Principal Terms such that each Series has a period during which amortization of the principal amount thereof is intended to occur which may have a different length and begin on a different date than such period for any other Series. Further, one or more Series may be in their amortization periods while other Series are not. Thus, certain Series may be in their 55 revolving periods, while other Series are amortizing. Moreover, each Series may have the benefits of a form of Enhancement issued by issuers different from the issuers of the form of Enhancement with respect to any other Series. Under the Agreement, the Trustee shall hold any such Enhancement only on behalf of the Series with respect to which each relates. Likewise, with respect to each such Enhancement, the Transferor may deliver a different form of Enhancement agreement. The Agreement also provides that the Transferor may specify different coupon rates and monthly servicing fees with respect to each Series. Finance Charge Collections not used to pay interest on the certificates, the monthly servicing fee, the investor default amount or investor charge-offs with respect to any Series will be allocated as provided in such form of Enhancement agreement, if applicable. The Transferor also has the option under the Agreement to vary between Series the terms upon which a Series may be repurchased by the Transferor or remarketed to other investors. Additionally, certain Series may be subordinated to other Series, or classes within a Series may have different priorities. No Series of certificates may be senior to this Series 1996-1 Interests. The Class B Certificates will be subordinate to the Class A Certificates but not to any other Series of certificates. The Collateral Interest and the Subordinated Transferor Certificate will be subordinated to the Class A and Class B Certificates but not to any other Series of Certificates. There is no limit to the number of Exchanges that the Transferor may perform under the Agreement. The Trust will terminate only as provided in the Agreement. Under the Agreement and pursuant to a Supplement, an Exchange may only occur upon the satisfaction of certain conditions provided in the Agreement. Under the Agreement, the Transferor may perform an Exchange by notifying the Trustee, at least five days in advance of the date upon which the Exchange is to occur. Under the Agreement, the notice will state the designation of any Series to be issued on the date of the Exchange and, with respect to each such Series: (i) its initial principal amount (or method for calculating such amount) and (ii) its certificate rate. On the date of the Exchange, the Agreement provides that the Trustee will issue any such Series only upon delivery to it of the following: (i) a Supplement in form satisfactory to the Trustee signed by the Transferor and specifying the Principal Terms of such Series, (ii) an opinion of counsel to the effect that certificates of such Series will be characterized as either indebtedness or an interest in a partnership under existing law for Federal income tax purposes and that the issuance of such Series will not materially adversely impact the Federal income tax characterization of any outstanding Series that have been the subject of a previous opinion of counsel, (iii) the Enhancement, if any, and the form of Enhancement agreement, if any, with respect thereto executed by the Transferor and the provider of the form of Enhancement, (iv) written confirmation from the applicable Rating Agency that the Exchange will not result in such Rating Agency reducing or withdrawing its rating on any outstanding Series or otherwise adversely affect any rating on any then outstanding Series and (v) the existing Exchangeable Transferor Certificate and the applicable certificates of the Series to be exchanged, if applicable. Upon satisfaction of such conditions, the Trustee will cancel the existing Exchangeable Transferor Certificate and the certificates of the exchange Series, if applicable, and issue the new Series and a new Exchangeable Transferor Certificate. COVENANTS, REPRESENTATIONS AND WARRANTIES The Transferor will covenant to the Trustee for the benefit of all certificateholders of all Series which from time to time may have an interest in the Trust that, as to the Receivables and the Accounts, unless cured within 60 days from the earlier to occur of the discovery of such event by the Transferor or Bridgestone/Firestone or receipt of notice by the Transferor or Bridgestone/Firestone from the Trustee, the Servicer or the Originator, the Transferor will accept the transfer of any Receivable which is determined to be an Ineligible Receivable. Additionally, the Transferor covenants in the Agreement to accept, under certain conditions, the transfer of each Receivable which is subject to certain specified liens immediately upon the discovery of such liens. The Transferor shall accept the transfer of any Receivable as described above (an 'Ineligible Receivable') by paying the principal balance of such Receivables to the Trust (the 'Transfer Deposit Amount'). In the event that such payment is not made, the principal balance of such Receivables shall be deducted from the amount of Aggregate Receivables used to calculate the Transferor Interest; provided, however, that if such deduction would reduce the Transferor Interest below zero or would otherwise not be permitted by law, the principal balance of such Receivables shall be deducted from the B/F Amount. In the event that such removal would reduce the B/F Amount below zero, such Ineligible Receivable shall not be removed from the Trust. Any such deposit shall be 56 treated as a collection of such Receivable and be allocated as provided in the Agreement. Such remedy with respect to such breach will constitute the sole remedy of the Certificateholders in the event of any such breach. In the Agreement, the Transferor has made additional representations and warranties as to the following: (i) the organization and good standing of the Transferor and the legality and enforceability of the Agreement against the Transferor, (ii) that the Agreement constitutes a valid transfer to the Trust of all right, title and interest of the Transferor in and to the Receivables, whether then existing or thereafter created in the applicable Accounts, and the proceeds thereof (including amounts in any of the accounts established for the benefit of the Certificateholders) or the grant of a first priority perfected security interest in such Receivables and the proceeds thereof (including amounts in any of the accounts established for the benefit of the Certificateholders), which is effective as to each Receivable upon the transfer thereof to the Trust or upon its creation, as the case may be, (iii) that all material information with respect to the Accounts and Receivables provided to the Trustee was true and correct in all material respects as of the Closing Date, (iv) each Receivable conveyed to the Trust is free and clear of liens (except for liens which may be permitted by the Agreement), (v) the Transferor has obtained all consents, licenses, approvals or authorizations required in connection with the conveyance of the Receivables to the Trust, (vi) the due qualification of the Transferor, (vii) the due authorization of the Transferor to execute and deliver the Purchase and Sale Agreement, the Participation Agreement, the Agreement and the Series 1996-1 Interests, (viii) the creation of a binding obligation of the Transferor by the Purchase and Sale Agreement, the Participation Agreement and the Agreement, (ix) the non-violation by the execution and delivery of the Purchase and Sale Agreement, the Participation Agreement, the Agreement and the Series 1996-1 Interests of any agreement binding the Transferor or its property, (x) the non-existence of any proceedings threatening the transfer of the Receivables or the issuance of the Series 1996-1 Interests and (xi) the eligibility of each Receivable. In the event that any of the representations and warranties described in clauses (ii), (iii), (iv), (v) and (viii) above are not true and correct and such event has a material adverse effect on the interests of holders of the certificates of all Series, either the Trustee or the holders of certificates evidencing undivided interests in the Trust aggregating more than 50% of the outstanding principal balance of all Series, by written notice to the Transferor (and to the Trustee and the Servicer, if given by the certificateholders), may direct the Transferor to purchase all certificates of all Series outstanding (including the Series 1996-1 Interests) within 60 days of such notice. The Transferor shall be obligated to purchase all Series on a Distribution Date occurring within such applicable period, unless the representations and warranties shall then be satisfied in all material respects and any adverse effect on the certificateholders caused thereby shall have been cured. The purchase price for the certificates shall be equal to the aggregate invested amount of all Series on the Record Date related to the applicable payment date on which the purchase is scheduled to be made plus an amount equal to all interest accrued but unpaid on all Series at the applicable certificate rates through the end of the interest accrual periods of such Series. The payment of such purchase price into the Collection Account in immediately available funds will be considered a prepayment in full of all Receivables and will be paid in full to the certificateholders upon presentation and surrender of their certificates. The obligations described above shall be the sole remedies respecting the foregoing representations, warranties and events available to the Trustee or the certificateholders. Pursuant to the Participation Agreement, Bridgestone/Firestone will agree, for the benefit of the Trustee, to purchase from the Transferor any Ineligible Receivable repurchased by the Transferor from the Trust and any certificates purchased by the Transferor as described above. An 'Eligible Receivable' is defined to mean each receivable (i) which has risen under an Eligible Account or an Eligible Alternative Account (as defined below), (ii) which was created in compliance with all requirements of law and pursuant to an accountholder agreement which complies with all requirements of law in either case other than those with respect to which there is no reasonable likelihood that a failure to comply could have a material adverse effect upon certificateholders, (iii) with respect to which all consents, licenses, approvals or authorizations of, or registrations with, any governmental authority required to be obtained or given in connection with the creation of such Receivable or the execution, delivery and performance of the related accountholder agreement have been duly obtained or given and are in full force and effect as of such date of creation, (iv) as to which the Trust will at all times have good and marketable title, free and clear of all liens, encumbrances, charges and security interests (except those permitted by the Agreement), (v) which has been the subject of either a valid transfer and assignment from the Transferor to the Trust of all of the Transferor's right, title and interest therein or the grant to the Trust of a perfected security interest therein (and in the proceeds thereof) which is prior to any interest of all third-parties, effective until the termination of the Trust, (vi) which will at all times be the legal, 57 valid and binding payment obligation of the accountholder thereof enforceable against such accountholder in accordance with its terms, subject to certain bankruptcy and equity related exceptions, (vii) which constitutes either an 'account' or a 'general intangible' under and as defined in Article 9 of the UCC as then in effect in the States of New York and Ohio and the Commonwealth of Massachusetts, (viii) which, at the time of its transfer to the Trust, has not been waived or modified except as permitted by the Agreement, (ix) which is not subject to any right of rescission, setoff, counterclaim or other defense (including the defense of usury), other than certain bankruptcy and equity related defenses and adjustments permitted by the Agreement to be made by the Servicer, (x) as to which each of the Originator and the Transferor has satisfied all obligations to be fulfilled pursuant to the credit card agreement or in connection with the transfer of the Receivable at the time of transfer of the Receivable to the Trust or at the time of sale of such Receivable to the Transferor and (xi) as to which the Originator and the Transferor have done nothing, at the time of its transfer to the Trust, to impair the rights of the Trust or certificateholders therein. An 'Eligible Account' is defined to mean an account (i) which has been established under the Credit Card Program, (ii) which is denominated in U.S. dollars, (iii) the credit card or cards related to which have not been reported lost or stolen, (iv) the obligor on which has provided, as its most recent billing address, an address with a zip code in the United States or its territories or possessions, (v) which is not an account of an obligor in bankruptcy or an account as to which the Servicer has any confirmed record of any fraud-related activity, and (vi) the Receivables in which have not been charged off or the account itself has not been closed prior to its billing cycle cut-off date. An 'Eligible Alternative Account' is defined to mean an account (i) which has been established under an Alternative Program subsequent to the Closing Date, (ii) which has been designated by the Transferor in accordance with the criteria relating to the Addition of Accounts, (iii) which is denominated in U.S. dollars, (iv) the credit card or cards related to which have not been reported lost or stolen, (v) the obligor on which has provided, as its most recent billing address, an address with a zip code in the United States or its territories or possessions, (vi) which is not an account of an obligor in bankruptcy or an account as to which the Servicer has any confirmed record of any fraud-related activity, and (vii) the Receivables in which have not been charged off or the account itself has not been closed prior to its billing cycle cut-off date. It is not required or anticipated that the Trustee will 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 Transferor's representations and warranties or for any other purpose. In addition, it is not anticipated or required that the Trustee will make any initial or periodic general examination of the Servicer for the purpose of establishing the compliance by the Servicer with its representations or warranties or the performance by the Servicer of its obligations under the Agreement for any other purpose. The Servicer, however, is required to deliver to the Trustee on or before March 31 of each year an opinion of counsel with respect to the necessity of filing additional UCC financing statements or other filings as may be required under state law to continue the Trust's perfection of the security interest of the Trust in and to the Receivables and certain other components of the Trust. COLLECTION ACCOUNT The Trustee has caused to be established and maintained an account with respect to the Certificates (the 'Collection Account') for deposit of Collections received from the Servicer. Funds on deposit in the Collection Account shall be invested in one or more Permitted Investments maturing no later than the next succeeding Transfer Date. Net investment earnings on funds in the Collection Account will be paid monthly to the Transferor. The Servicer has the revocable power to withdraw funds from the Collection Account and to instruct the Trustee to make withdrawals and payments from the Collection Account for the purpose of carrying out the Servicer's or the Trustee's duties under the Agreement. The term 'Permitted Investments' means (a) investments having maturities at the date of purchase of not later than the next succeeding Transfer Date in the following: (i) obligations issued by, or the principal of and interest on which is fully guaranteed by, the United States of America; (ii) commercial paper rated A-1+ by S&P, F-1+ by Fitch Investors Service, Inc. ('Fitch') and P-1 by Moody's; (iii) certificates of deposit, other deposits or bankers' acceptances, which are rated A-1+ by S&P, F-1+ by Fitch and P-1 by Moody's, or money market funds rated A-1+ by S&P, F-1+ by Fitch and P-1 by Moody's, (iv) investments in money market funds having the highest long-term rating granted by the applicable Rating Agency and maintained by commercial banks having unimpaired capital and unimpaired surplus of at least $500,000,000; (v) eurodollar time deposits that have been 58 rated A-1+ by S&P and F-1+ by Fitch and P-1 by Moody's; and (vi) repurchase agreements involving any of the Permitted Investments described in clauses (i) through (iv) above so long as the other party to the repurchase agreement has the rating described in clause (ii) above and (vii) any other investment the applicable Rating Agency confirms will not adversely affect any ratings of the Series 1996-1 Interests and (b) demand deposit or time deposits in any institution described in clause (iii) above. SUBORDINATION OF THE CLASS B CERTIFICATES The Class B Certificate will be subordinated to the extent necessary to fund certain payments with respect to the Class A Certificates. Certain principal payments otherwise allocable to the Class B Certificateholders may be reallocated to cover amounts in respect of the Class A Certificates and the Class B Invested Amount may be reduced if the Collateral Interest Invested Amount and the Subordinated Transferor Amount are equal to zero. To the extent the Class B Invested Amount is reduced, the percentage of collections of Finance Charge Receivables allocated to the Class B Certificates in subsequent Collection Periods will be reduced. Moreover, to the extent the amount of such reduction in the Class B Invested Amount is not reimbursed, the amount of principal distributable to, and the amounts available to be distributed with respect to interest on, the Class B Certificateholders will be reduced. No principal will be paid to the Class B Certificateholders until the Class A Invested Amount is paid in full. See 'Risk Factors--Effect of Subordination' and '--Allocation Percentages,' '--Reallocated Principal Collections' and '--Additional Amounts Available to Certificateholders.' ALLOCATION PERCENTAGES Pursuant to the Agreement, for each Collection Period the Servicer will allocate Finance Charge Collections (including Recoveries on Defaulted Receivables and Merchant Fees), all Principal Collections and the amount of all Defaulted Receivables (defined below) (see '--Defaulted Receivables; Recoveries; Rebates and Fraudulent Charges') among the Class A Interest, the Class B Interest, the Collateral Interest, the Subordinated Transferor Interest, any other Series of certificates issued by the Trust, the B/F Interest and, in the case of Principal Collections and the amount of Defaulted Receivables, the Transferor Interest. Finance Charge Collections will be allocated at all times to the Class A Interest, the Class B Interest, the Collateral Interest and the Subordinated Transferor Interest based on the percentage equivalent of the ratio which the amount of the Class A Invested Amount, the Class B Invested Amount, the Collateral Interest Invested Amount or the Subordinated Transferor Amount, as applicable, on the last day of the immediately preceding Collection Period bears to the amount of Aggregate Receivables in the Trust, or, with respect to Finance Charge Collections, bears to the sum of the numerators used to calculate the Invested Percentage with respect to Finance Charge Collections for all Series of certificates outstanding during such Collection Period and the B/F Percentage (the 'Class A Floating Allocation Percentage,' the 'Class B Floating Allocation Percentage,' the 'Collateral Interest Floating Allocation Percentage' and the 'Subordinated Transferor Floating Allocation Percentage,' in each case with respect to Finance Charge Collections). The amount of Defaulted Receivables will be allocated to the Class A Interest, the Class B Interest, the Collateral Interest and the Subordinated Transferor Interest based on the percentage equivalent of the ratio which the Class A Invested Amount, the Class B Invested Amount, the Collateral Interest Invested Amount and the Subordinated Transferor Amount, as applicable, on the last day of the immediately preceding Collection Period bears to the Aggregate Receivables on the last day of the immediately preceding Collection Period (the 'Class A Floating Allocation Percentage,' the 'Class B Floating Allocation Percentage,' the 'Collateral Interest Floating Allocation Percentage' and the 'Subordinated Transferor Floating Allocation Percentage,' in each case with respect to the amount of Defaulted Receivables). During the initial Collection Period following the Closing Date, the Class A Floating Allocation Percentage, the Class B Floating Allocation Percentage, the Collateral Interest Floating Allocation Percentage and the Subordinated Transferor Floating Allocation Percentage will be calculated by reference to the date of such issuance. During the Revolving Period, all Principal Collections will be allocated and paid to the Transferor (except for Reallocated Principal Collections used to pay Required Amounts on the Class A Certificates, Class B Certificates and the Collateral Interest, as described under '--Reallocation of Cash Flows' and Shared Principal Collections distributable to the holder of the Bridgestone/Firestone Certificate in accordance with its interest in the Trust) but not exceeding the Transferor Interest after giving effect to any purchases of Receivables. During the Controlled Amortization Period and any Rapid Amortization Period, all Principal Collections will be allocated to the Class A Interest, the Class B Interest, the Collateral Interest and the Subordinated Transferor Interest based on the percentage equivalent of the ratio 59 which the Class A Invested Amount, the Class B Invested Amount, the Collateral Interest Invested Amount and the Subordinated Transferor Amount, as applicable, each as of the last day of the Revolving Period, bears to the greater of (a) the Aggregate Receivables on the last day of the prior Collection Period and (b) the sum of the numerators used to calculate the Invested Percentage with respect to Principal Collections for all Series of certificates outstanding for such Collection Period (the 'Class A Fixed Allocation Percentage', the 'Class B Fixed Allocation Percentage', the 'Collateral Interest Fixed Allocation Percentage' and the 'Subordinated Transferor Fixed Allocation Percentage', as applicable) and the remainder will be allocated to the Transferor Interest and to the B/F Interest. 'Class A Invested Amount' for any date means an amount equal to the initial principal balance of the Class A Certificates, minus the amount of principal payments made to Class A Certificateholders prior to such date and minus the excess, if any, of the aggregate amount of Class A Investor Charge-Offs (as defined below) for all Distribution Dates preceding such date over the aggregate amount of any reimbursements of Class A Investor Charge-Offs for all Distribution Dates preceding such date. 'Class B Invested Amount' for any date means an amount equal to (i) the initial principal balance of the Class B Certificates, minus (ii) the amount of principal payments made to Class B Certificateholders prior to such date, minus (iii) the aggregate amount of Class B Investor Charge-Offs (as defined below) for all prior Distribution Dates, minus (iv) the aggregate amount of Class B Reallocated Principal Collections for all prior Distribution Dates, minus (v) an amount equal to the aggregate 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 herein and plus (vi) the amount of Excess Finance Charge Collections applied on all prior Distribution Dates for the purpose of reimbursing amounts deducted pursuant to the foregoing clauses (iii), (iv) and (v). 'Collateral Interest Invested Amount' for any date means an amount equal to (i) the initial principal balance of the Collateral Interest, minus (ii) the amount of principal payments made to the Collateral Interest Holder prior to such date, minus (iii) the aggregate amount of Collateral Interest Investor Charge-Offs (as defined below) for all prior Distribution Dates, minus (iv) the aggregate amount of Collateral Interest Reallocated Principal Collections for all prior Distribution Dates, minus (v) an amount equal to the aggregate amount by which the Collateral Interest Invested Amount has been reduced to fund the Class A and Class B Investor Default Amount on all prior Distribution Dates as described herein, and plus (vi) the amount of Excess Finance Charge Collections applied on all prior Distribution Dates for the purpose of reimbursing amounts deducted pursuant to the foregoing clauses (iii), (iv) and (v). 'Subordinated Transferor Amount' for any date means an amount equal to (i) the initial principal balance of the Subordinated Transferor Certificate, minus (ii) the amount of principal payments made to the holder of the Subordinated Transferor Certificate prior to such date, minus (iii) the aggregate amount of Subordinated Transferor Charge-Offs (as defined below) for all prior Distribution Dates, minus (iv) the aggregate amount of Subordinated Transferor Reallocated Principal Collections for all prior Distribution Dates, minus (v) an amount equal to the aggregate amount by which the Subordinated Transferor Amount has been reduced to fund the Class A, Class B and Collateral Interest Investor Default Amount on all prior Distribution Dates as described herein, and plus (vi) the amount of Excess Finance Charge Collections applied on all prior Distribution Dates for the purpose of reimbursing amounts deducted pursuant to the foregoing clauses (iii), (iv) and (v). 'Invested Amount' means the sum of the Class A Invested Amount, the Class B Invested Amount, the Collateral Interest Invested Amount and the Subordinated Transferor Amount. 'Transferor Percentage' means (i) when used with respect to Principal Collections during the Revolving Period and the amount of Defaulted Receivables, 100% minus the sum of the applicable Floating Allocation Percentages with respect to all Series of certificates then issued and outstanding and 1% (the 'B/F Percentage') and (ii) when used with respect to Principal Collections during the Controlled Amortization Period and any Rapid Amortization Period, 100% minus the sum of the Fixed Allocation Percentages with respect to all Series of certificates then issued and outstanding and the B/F Percentage. As a result of the Class A Floating Allocation Percentage, the Class B Floating Allocation Percentage, the Collateral Interest Floating Allocation Percentage and the Subordinated Transferor Floating Allocation Percentage, Finance Charge Collections allocated to the Class A and Class B Certificateholders, Collateral 60 Interest Holder and the Subordinated Transferor Certificateholder may change each Collection Period based on the relationship between the amount of the Class A Invested Amount, the Class B Invested Amount, the Collateral Interest Invested Amount and the Subordinated Transferor Amount to the aggregate invested amount of all Series of certificates issued by the Trust. In addition, the portion of Defaulted Receivables allocated to the Class A and Class B Certificateholders, Collateral Interest Holder and the Subordinated Transferor Certificateholder will change each Collection Period based in part on the relationship of the amount of the Class A Invested Amount, the Class B Invested Amount, the Collateral Interest Invested Amount and the Subordinated Transferor Amount to the Aggregate Receivables on the last day of the immediately preceding Collection Period. The numerator used to calculate the Fixed Allocation Percentage each day during the Controlled Amortization Period or any Rapid Amortization Period will remain fixed; however, the denominator used to calculate such percentage may increase or decrease from time to time. ALLOCATION OF COLLECTIONS; DEPOSITS IN COLLECTION ACCOUNT The Servicer, no later than the second business day following the date of processing, will deposit into the Collection Account any payment collected by the Servicer on the Receivables and will make the allocations and payments described below to the Collection Account and the parties shown below on the day of such deposit; provided, however, that for so long as Bridgestone/Firestone is the Servicer, and either (i) the unsecured short-term debt ratings of the Letter of Credit Bank have not been reduced below A-1+ or F-1+ by the applicable Rating Agency or withdrawn by the Rating Agency for a period in excess of 35 days of notice to the Servicer thereof, and at least five business days remain prior to the expiration of the Servicer Letter of Credit, (ii) the Servicer has delivered to the Trustee a substitute Servicer Letter of Credit issued by a financial institution whose unsecured short-term debt ratings are A-1+ and F-1+ by the applicable Rating Agency and at least five business days remain prior to the expiration of such substitute Servicer Letter of Credit or (iii) the Trustee has drawn the full amount available under the Servicer Letter of Credit and deposited the proceeds of such demand into a segregated trust account available to the Trustee in the event the Servicer fails to timely remit Collections to the Collection Account, then the Servicer may use for its own benefit all such Collections up to the amount of the Servicer Letter of Credit until the business day preceding the Distribution Date, at which time the Servicer will make a deposit to the Collection Account in an amount equal to the net amount of such deposits and withdrawals which would have been made had the conditions of this proviso not applied. While Collections are held by the Servicer pending deposit into the Collection Account, the Servicer shall be permitted to use such funds for its own benefit and the certificateholders of all Series (including the Certificateholders) are subject to risk of loss, including risk of loss resulting from the bankruptcy or insolvency of the Servicer. The Servicer Letter of Credit will be available in the event that Bridgestone/Firestone as Servicer fails to deposit the required amount of Collections into the Collection Account on the business day prior to any Distribution Date, including any such failure caused by the bankruptcy or insolvency of Bridgestone/Firestone as Servicer. The Servicer will not pay to the Trust any fee for use of the Collections. See 'Risk Factors-- Commingling.' Under the Agreement, the Collections on the Receivables for any Collection Period will be allocated such that all finance charges billed or accrued in respect of Receivables in the prior Collection Period (less the aggregate amount of finance charges billed or accrued on Accounts in prior periods which are rebated to cardholders during such Collection Period) will be deemed Finance Charge Collections and the remaining amount of such Collections will be deemed Principal Collections. Notwithstanding the foregoing, Recoveries received in any Collection Period shall be treated as Finance Charge Collections for such Collection Period for all purposes. In addition, when any Discount Percentage is in effect, certain Principal Receivables will be deemed to be Finance Charge Receivables and the collections thereon will be treated as Finance Charge Collections. Merchant Fees received or accrued in any Collection Period shall also be treated as Finance Charge Collections for such Collection Period for all purposes. If the amount in respect of Finance Charge Collections to be deposited into the Collection Account on any Distribution Date pursuant to the preceding sentence exceeds the sum of (a) the Class A Monthly Interest for such Distribution Date, any overdue Class A Monthly Interest (plus any additional interest accrued on such overdue Class A Monthly Interest), the Class A Investor Default Amount, the Class B Monthly Interest for such Distribution Date, any overdue Class B Monthly Interest (plus any additional interest accrued on such overdue Class B Monthly Interest), the Collateral Interest Monthly Interest for such Distribution Date and any overdue 61 Collateral Interest Monthly Interest (plus any additional interest accrued on such overdue Collateral Interest Monthly Interest for such Distribution Date) and (b) the Class A Monthly Servicing Fee, the Class B Monthly Servicing Fee, the Collateral Interest Monthly Servicing Fee and the Subordinated Transferor Monthly Servicing Fee (collectively, the 'Monthly Servicing Fee'), the Servicer may deduct the Monthly Servicing Fee (see '-- Servicing Compensation and Payment of Expenses'), and during the Revolving Period, the Class A Investor Default Amount, the Class B Investor Default Amount, the Collateral Interest Investor Default Amount and the Subordinated Transferor Default Amount (which will be distributed to the Transferor in respect of the Transferor Interest, but not in an amount exceeding the Transferor Interest on such day (after giving effect to any new Receivables transferred to the Trust on such day)) from the net amount to be deposited into the Collection Account. APPLICATION OF COLLECTIONS Any amounts in respect of Principal Collections not distributed to the Transferor because such Principal Collections would exceed the Transferor Interest (after giving effect to any new Receivables transferred to the Trust for the Collection Period relating to such Determination Date) ('Unallocated Principal Collections') will be held in the Collection Account until distributable to the Transferor or, if the Controlled Amortization Period or the Rapid Amortization Period has commenced, on each Distribution Date all or a portion thereof will be treated as part of Class A Monthly Principal. Any Transfer Deposit Amounts, Adjustment Payments and the proceeds of any sale, disposition or liquidation of Receivables following the occurrence of an Amortization Event caused by the bankruptcy or insolvency of the Transferor or Bridgestone/Firestone or in connection with the Final Series 1996-A Termination Date will also be deposited into the Collection Account immediately upon receipt and will be allocated as Principal Collections or Finance Charge Collections, as applicable. THE LETTERS OF CREDIT Bridgestone/Firestone as Servicer has delivered to the Trustee the Servicer Letter of Credit. The Servicer Letter of Credit will be available, up to its stated amount, to cover any shortfall in Collections allocated to any Series and required to be deposited into the Collection Account by the Servicer. The Servicer Letter of Credit shall provide that the Trustee may make a demand thereunder on any day on which Bridgestone/Firestone as Servicer fails to remit to the Collection Account the full amount of Collections required to be remitted pursuant to the Agreement. The amount of any such demand shall be equal to the difference between the total Collections required to be so deposited and the total Collections actually so deposited. The initial stated amount of the Servicer Letter of Credit shall be $45,000,000. The proceeds of any drawing on the Servicer Letter of Credit will be allocated among all outstanding Series of certificates (including the Series 1996-1 Interests issued by the Trust). Such allocations will be performed in much the same manner as are allocations of Collections (generally speaking, such allocations will be based on the ratio of the Invested Amount to the Aggregate Receivables). During the period that Bridgestone/Firestone is the Servicer, if aggregate Collections at any time held by the Servicer exceed the amount available under the Servicer Letter of Credit, the Servicer shall deposit all such Collections in excess of the amount available under the Servicer Letter of Credit into the Collection Account no later than the second business day after the date of processing thereof. In the event that either the unsecured short-term debt rating of the Letter of Credit Bank is lowered below A-1+, P-1 or F-1+ by the applicable Rating Agency, then within 35 days of notice to the Servicer of such event (or immediately if such rating is reduced to or below A-2, P-2 or F-2 by the applicable Rating Agency) or in the event that five business days or less remain prior to the expiration of the Servicer Letter of Credit, Bridgestone/Firestone shall either (i) commence depositing Collections into the Collection Account within two business days of the date of processing thereof or (ii) deliver to the Trustee an irrevocable letter of credit substantially identical to the Servicer Letter of Credit (a 'Substitute Servicer Letter of Credit') issued by a financial institution whose unsecured short-term debt is rated A-1+, P-1 or F-1+ by the applicable Rating Agency or (iii) only in the event that the unsecured short-term debt rating of the Servicer Letter of Credit Bank is lowered below A-1+, P-1, or F-1+ by the applicable Rating Agency, the Trustee shall draw on the Servicer Letter of Credit in full and deposit the proceeds of such drawing in a segregated trust account maintained for the benefit of the certificateholders of all Series. Any amounts on deposit in such account shall be invested in Permitted Investments. The Trustee shall withdraw funds from such account under the same circumstances as it would have 62 drawn under the Servicer Letter of Credit. Upon the earlier of (x) the delivery to the Trustee of a Substitute Servicer Letter of Credit meeting the requirements described in clause (ii) above or (y) the originally scheduled expiration date of the Servicer Letter of Credit, the Trustee shall release to the Letter of Credit Bank any funds on deposit in such account. The Transferor Letter of Credit will be delivered to the Trustee on the Closing Date. The Transferor Letter of Credit will be available, up to its stated amount, to cover any shortfall in payments allocated to any Series and required to be deposited into the Collection Account by the Transferor. The Transferor Letter of Credit shall provide that the Trustee may make a demand thereunder on any day on which the Transferor fails to make any required deposit to the Collection Account in respect of Adjustment Payments (see '--Defaulted Receivables; Recoveries; Rebates and Fraudulent Charges' below). The amount of any such demand shall be the difference between the amount of any required Adjustment Payment and the amount in respect thereof actually deposited into the Collection Account. The Transferor Letter of Credit shall be issued by the Letter of Credit Bank and shall have an initial stated amount of $15,000,000. The proceeds of any drawing on the Transferor Letter of Credit will be allocated among all outstanding Series of certificates (including the Series 1996-1 Interests issued by the Trust). Such allocations will be performed in much the same manner as are allocations of Collections (generally speaking, such allocations will be based on the ratio of the Invested Amount to the Aggregate Receivables). In the event that either the unsecured short-term debt rating of the Letter of Credit Bank is lowered below A-1+, P-1 or F-1+ (the 'Required Rating') by the applicable Rating Agency, then within 35 days of notice to the Servicer of such event (or immediately if such rating is reduced to or below A-2, P-2 or F-2 by the applicable Rating Agency) or in the event that five business days or less remain prior to the expiration of the Transferor Letter of Credit, either (i) there shall be delivered to the Trustee an irrevocable letter of credit substantially similar to the Transferor Letter of Credit (a 'Substitute Transferor Letter of Credit') issued by a financial institution whose unsecured short-term debt is rated A-1+, P-1 or F-1+ by the applicable Rating Agency or (ii) only in the event that the unsecured short-term debt rating of the Letter of Credit Bank has been lowered below A-1+, P-1 or F-1+ by the applicable Rating Agency, the Trustee shall draw on the Transferor Letter of Credit in full and deposit the proceeds of such drawing in a segregated trust account maintained for the benefit of the certificateholders of all Series. Any amounts on deposit in such account shall be invested in Permitted Investments. The Trustee shall withdraw funds from such account under the same circumstances as it would have drawn under the Transferor Letter of Credit. Upon the earlier of (x) the delivery to the Trustee of a Substitute Transferor Letter of Credit meeting the requirements described in clause (i) above or (y) the originally scheduled expiration date of the Transferor Letter of Credit, the Trustee shall release to the Letter of Credit Bank any funds on deposit in such account. If the Transferor Letter of Credit expires and is not replaced, an Amortization Event may occur if the sum of the Transferor Amount and the B/F Amount does not equal at least 7% of the aggregate invested amounts of the outstanding Series of certificates issued by the Trust. See '--Amortization Events.' The Letter of Credit Bank's unsecured short-term debt rating has been reduced to A-1, which is below the Required Ratings and the full amount of the proceeds from the Servicer Letter of Credit are currently held in a segregated trust account available to the Trustee in the event Bridgestone/Firestone fails to timely remit Collections to the Collection Account. In addition, the full amount of the proceeds from the Transferor Letter of Credit are held in a segregated trust account available to the Trustee to cover any shortfall in payments required to be deposited in the Collection Account by the Transferor. After any drawing under either the Servicer Letter of Credit or the Transferor Letter of Credit for any reason other than a clerical error by the Servicer or Transferor or a drawing resulting from a lowering of the Letter of Credit Bank's short-term debt rating, then (i) Bridgestone/Firestone will begin daily deposits of Collections into the Collection Account, (ii) the Letter of Credit Bank may, at its option, terminate the Servicer Letter of Credit upon 21 days advance notice to the Servicer and (iii) the Transferor shall purchase Class A REMARCs in order to increase the Transferor Amount to a level such that the sum of the Transferor Amount and the B/F Amount equals at least 7% of the aggregate invested amounts of the outstanding Series of certificates issued by the Trust, after which time the Transferor Letter of Credit may be terminated. 63 REALLOCATION OF CASH FLOWS On each Determination Date, the Servicer will determine the Class A Required Amount, the Class B Required Amount and the Collateral Interest Required Amount. The 'Class A Required Amount' means the amount, if any, by which the sum of Class A Monthly Interest, any overdue Class A Monthly Interest (with interest thereon), the Class A Investor Default Amount and the Class A Monthly Servicing Fee for such Collection Period exceeds the funds allocable to the Class A Certificates to pay such amounts. The 'Class B Required Amount' means the amount, if any, by which the sum of Class B Monthly Interest, any overdue Class B Monthly Interest (with interest thereon) and the Class B Monthly Servicing Fee for such Collection Period exceeds the funds allocable to the Class B Certificates to pay such amounts. The 'Collateral Interest Required Amount' means the amount, if any, by which the sum of Collateral Interest Monthly Interest, any overdue Collateral Interest Monthly Interest (with interest thereon) and the Collateral Interest Monthly Servicing Fee for such Collection Period exceeds the funds allocable to the Collateral Interest to pay such amounts. The 'Required Amount' shall equal the sum of the Class A, Class B and Collateral Interest Required Amounts. If Finance Charge Collections allocable to interest for any Collection Period are insufficient to pay the Required Amount, Excess Finance Charge Collections will be used to pay the Required Amount with respect to such Distribution Date. See '--Excess Finance Charge Collections.' If such Excess Finance Charge Collections are insufficient to pay the Required Amount, Principal Collections allocable to the Subordinated Transferor Interest, the Collateral Interest and the Class B Interest will then be used to fund the remaining Required Amount. See '--Reallocated Principal Collections.' If Reallocated Principal Collections with respect to any Collection Period are insufficient to fund the remaining Required Amount for such Collection Period, then a portion of the Subordinated Transferor Amount, the Collateral Interest Invested Amount and the Class B Invested Amount, as applicable, may be reduced for the benefit of interests senior to such interests. In the event of such reductions, Excess Finance Charge Collections in subsequent periods, if any, will be used to increase the Class B Invested Amount, Collateral Interest Invested Amount and the Subordinated Transferor Amount, as applicable (but not in excess of the initial invested amounts). See '--Additional Amounts Available to Certificateholders.' In certain instances, Principal Collections and certain other amounts otherwise allocable to other Series, to the extent such collections are not needed to make payments to the certificateholders of such other series, may be applied to cover principal payments due to or for the benefit of the holders of the Series 1996-1 Interests. See '--Shared Principal Collections.' In addition, Finance Charge Collections in excess of the amounts necessary to make required payments with respect to certificates of other outstanding series will be applied to cover shortfalls with respect to Finance Charge Collections allocable to the Series 1996-1 Interests. See '--Sharing of Excess Finance Charge Collections.' DISTRIBUTIONS FROM THE COLLECTION ACCOUNT On any day on which the Servicer makes a deposit into the Collection Account with respect to the Revolving Period, the Servicer will withdraw from the Collection Account and pay to the Transferor an amount equal to the aggregate amount of such deposits in respect of Principal Collections (other than Reallocated Principal Collections used to pay Required Amounts due on the Class A Certificates, Class B Certificates and the Collateral Interest), but not exceeding the Transferor Interest on such day (after giving effect to any new Receivables transferred to the Trust on such day). On any day on which the Servicer makes a deposit into the Collection Account with respect to the Controlled Amortization Period and any Rapid Amortization Period, the Servicer will withdraw from the Collection Account and pay to the Transferor an amount equal to the Transferor's Percentage of the amount of such deposits in respect of Principal Collections, except that the amount of such payments with respect to Principal Collections shall not exceed the amount of the Transferor Interest on such day (after giving effect to any new Receivables transferred to the Trust on such day). On any such day, the Servicer shall also withdraw from the Collection Account and pay to Bridgestone/Firestone, as holder of the Bridgestone/Firestone Certificate, the B/F Percentage of the aggregate amount of such deposits in respect of Principal Collections and Finance Charge Collections. There will also be deposited into the Collection Account, Collections which are not allocable to the Series 1996-1 Interests, the Bridgestone/Firestone Certificate or the Transferor (i.e., such Collections will be allocable to other Series, including the Series 1992-B Certificates). Such Collections will be distributed as provided in the 64 Supplement to the Agreement relating to such other Series and will not be available for distribution to the Certificateholders. The Servicer shall apply or shall cause the Trustee to apply the funds on deposit in the Collection Account allocable to the Series 1996-1 Interests with respect to each Distribution Date in the priority set forth below: (a) An amount equal to the Class A Floating Allocation Percentage of Finance Charge Collections deposited in the Collection Account for the collection Period immediately preceding such Distribution Date will be distributed in the following priority: (i) an amount equal to the Class A Monthly Interest for such Distribution Date, plus the amount of any Class A Monthly Interest previously due but not paid on a prior Distribution Date, plus any additional interest for such Distribution Date, plus the amount of any additional interest with respect to interest amounts that were due but not paid on a prior Distribution Date, will be distributed to the Class A Certificateholders; (ii) an amount equal to the aggregate Class A Investor Default Amount for such Distribution Date will be distributed to the Transferor in respect of the Transferor Interest on Distribution Dates with respect to the Revolving Period (unless such amount has been previously netted against deposits to the Collection Account), but not exceeding the Transferor Interest (after giving effect to any new Receivable transferred to the Trust on such date) and thereafter will be included in the funds available to make principal payments; (iii) an amount equal to the Class A Monthly Servicing Fee for such Distribution Date will be distributed to the Servicer (unless such amount has been previously netted against deposits to the Collection Account) (in the event Bridgestone/Firestone is not the Servicer, amounts described in this clause (iii) shall have priority over the amounts described in clause (ii) above); and (iv) the balance, if any, will constitute a portion of Excess Finance Charge Collections and will be allocated and distributed as described under '--Excess Finance Charge Collections.' (b) An amount equal to the Class B Floating Allocation Percentage of Finance Charge Collections deposited in the Collection Account for the Collection Period immediately preceding such Distribution Date will be distributed in the following priority: (i) an amount equal to the Class B Monthly Interest for such Distribution Date, plus the amount of any Class B Monthly Interest previously due but not paid on a prior Distribution Date, plus any additional interest for such Distribution Date, plus the amount of any additional interest with respect to interest amounts that were due but not paid on a prior Distribution Date, will be distributed to the Class B Certificateholders; (ii) an amount equal to the Class B Monthly Servicing Fee for such Distribution Date will be distributed to the Servicer (unless such amount has been previously netted against deposits to the Collection Account); and (iii) the balance, if any, will constitute a portion of Excess Finance Charge Collections and will be allocated and distributed as described under '--Excess Finance Charge Collections.' (c) An amount equal to the Collateral Interest Floating Allocation Percentage of Finance Charge Collections deposited in the Collection Account for the Collection Period immediately preceding such Distribution Date will be distributed in the following priority: (i) an amount equal to the Collateral Interest Monthly Interest for such Distribution Date, plus the amount of any Collateral Interest Monthly Interest previously due but not paid on a prior Distribution Date, plus any additional interest for such Distribution Date, plus the amount of any additional interest with respect to interest amounts that were due but not paid on a prior Distribution Date, will be distributed to the Collateral Interest Holders; (ii) an amount equal to the Collateral Interest Monthly Servicing Fee for such Distribution Date will be distributed to the Servicer (unless such amount has been previously netted against deposits to the Collection Account); and 65 (iii) the balance, if any, will constitute a portion of Excess Finance Charge Collections and will be allocated and distributed as described under '--Excess Finance Charge Collections.' (d) An amount equal to the Subordinated Transferor Floating Allocation Percentage of Finance Charge Collections deposited in the Collection Account for the Collection Period immediately preceding such Distribution Date will be distributed in the following priority: (i) an amount equal to the Subordinated Transferor Monthly Servicing Fee for such Distribution Date will be distributed to the Servicer (unless such amount has been previously netted against deposits to the Collection Account); and (ii) the balance, if any, will constitute a portion of Excess Finance Charge Collections and will be allocated and distributed as described under '--Excess Finance Charge Collections.' (e) For each Distribution Date with respect to the Revolving Period, the remaining funds on deposit in the Collection Account allocable to the Class A and Class B Certificates, the Collateral Interest and the Subordinated Transferor Certificate (other than certain Excess Finance Charge Collections and Reallocated Principal Collections) will be applied as Shared Principal Collections and the balance will be distributed to the Transferor in respect of the Transferor Interest. (f) For each Distribution Date with respect to the Controlled Amortization Period or any Rapid Amortization Period, the remaining funds on deposit in the Collection Account allocable to the Class A and Class B Certificates, the Collateral Interest and the Subordinated Transferor Certificate (other than certain Excess Finance Charge Collections and Reallocated Principal Collections) will be distributed as follows: (i) an amount equal to Class A Monthly Principal for such Distribution Date will be distributed to the Class A Certificateholders until the Class A Invested Amount is paid in full; (ii) once the Class A Invested Amount is paid in full, the remaining amount will be distributed to the Class B Certificateholders until the Class B Invested Amount is paid in full; (iii) once the Class B Invested Amount is paid in full, the remaining amount will be distributed to the Collateral Interest Holder until the Collateral Interest Invested Amount is paid in full; (iv) once the Collateral Interest Invested Amount is paid in full, the remaining amount will be distributed to the holder of the Subordinated Transferor Certificate until the Subordinated Transferor Amount is paid in full; (v) an amount equal to the balance of any such remaining funds on deposit in the Collection Account will be paid to the Transferor in respect of the Transferor Interest up to the amount of the Transferor Interest; and (vi) an amount equal to the balance will be applied as Shared Principal Collections, to the extent necessary, and the remainder will be distributed to the Transferor in respect of the Transferor Interest. Class A Monthly Interest means, with respect to any Distribution Date, the Class A Monthly Interest equals one-twelfth of the product of (i) the Class A Certificate Rate and (ii) the outstanding principal balance of the Class A Certificates as of the preceding Distribution Date (after subtracting therefrom the aggregate amount of all distributions of principal made to the Class A Certificateholders on such Distribution Date) or, with respect to the first Distribution Date, the Initial Class A Invested Amount, provided, however, that with respect to the initial Distribution Date, Class A Monthly Interest shall equal $ . Class B Monthly Interest means, with respect to any Distribution Date, the Class B Monthly Interest equals one-twelfth of the product of (i) the Class B Certificate Rate and (ii) the outstanding principal balance of the Class B Certificates as of the preceding Distribution Date (after subtracting therefrom the aggregate amount of all distributions of principal made to the Class B Certificateholders on such Distribution Date) or, with respect to the first Distribution Date, the Initial Class B Invested Amount, provided, however, that with respect to the initial Distribution Date, Class B Monthly Interest shall equal $ . Collateral Interest Monthly Interest means, with respect to any Distribution Date, the product of (i) the actual number of days in the related Collateral Interest Accrual Period divided by 360, (ii) the Collateral Interest Certificate Rate and (iii) the outstanding principal balance of the Collateral Interest as of the preceding Distribution Date (after subtracting therefrom the aggregate amount of all distributions of principal made to the 66 Collateral Interest Holder on such Distribution Date) or, with respect to the first Distribution Date, the Initial Collateral Interest Invested Amount. Class A Investor Default Amount means, a portion of all Defaulted Receivables which will be allocated to the Class A Certificateholders for each Distribution Date in an amount equal to the product of the Class A Floating Allocation Percentage applicable during the immediately preceding Collection Period and the amount of Defaulted Receivables for such Collection Period. Class B Investor Default Amount means, a portion of all Defaulted Receivables which will be allocated to the Class B Certificateholders for each Distribution Date in an amount equal to the product of the Class B Floating Allocation Percentage applicable during the immediately preceding Collection Period and the amount of Defaulted Receivables for such Collection Period. Collateral Interest Investor Default Amount means, a portion of all Defaulted Receivables which will be allocated to the Collateral Interest Holders for each Distribution Date in an amount equal to the product of the Collateral Interest Floating Allocation Percentage applicable during the immediately preceding Collection Period and the amount of Defaulted Receivables for such Collection Period. Subordinated Transferor Default Amount means, a portion of all Defaulted Receivables which will be allocated to the holder of the Subordinated Transferor Certificate for each Distribution Date in an amount equal to the product of the Subordinated Transferor Floating Allocation Percentage applicable during the immediately preceding Collection Period and the amount of Defaulted Receivables for such Collection Period. Investor Default Amount shall equal the sum of the Class A Investor Default Amount, Class B Investor Default Amount, Collateral Interest Investor Default Amount and Subordinated Transferor Default Amount. Monthly Servicing Fee means, with respect to any distribution date, the sum of (a) the Class A Monthly Servicing Fee, the Class B Monthly Servicing Fee, the Collateral Interest Monthly Servicing Fee and the Subordinated Transferor Monthly Servicing Fee and (b) the Servicing Fee allocable to the Transferor Amount and the B/F Amount. The portion of the Servicing Fee allocable to the Class A Interest on each Distribution Date (the 'Class A Monthly Servicing Fee'), to the Class B Interest on each Distribution Date (the 'Class B Monthly Servicing Fee'), to the Collateral Interest on each Distribution Date (the 'Collateral Interest Monthly Servicing Fee') and to the Subordinated Transferor Interest on each Distribution Date (the 'Subordinated Transferor Monthly Servicing Fee') generally will be equal to one-twelfth of the product of 2.00% per annum and the amount of the Class A Invested Amount, the Class B Invested Amount, the Collateral Interest Invested Amount, or the Subordinated Transferor Amount, as the case may be, on the last day of the second preceding Collection Period (in the case of the first Distribution Date, the initial principal amount of the Class A Certificates, Class B Certificates or the Collateral Interest, as the case may be). Class A Monthly Principal with respect to any Distribution Date relating to the Controlled Amortization Period or any Rapid Amortization Period will equal the sum of (i) an amount equal to the Fixed Allocation Percentage of Principal Collections received during the Collection Period immediately preceding such Distribution Date (other than Reallocated Principal Collections used to pay the Class A Required Amount), (ii) the amount of Shared Principal Collections allocated to the Class A Certificates with respect to the preceding Collection Period equal to the product of (a) a fraction, the numerator of which is the Invested Amount and the denominator of which is the aggregate invested amounts of all Series then accumulating or amortizing principal and (b) the amount, if any, of Unallocated Principal Collections on deposit in the Collection Account on such Distribution Date and (iii) the amount, if any, of Finance Charge Collections and Excess Finance Charge Collections allocated and available on such Distribution Date to (A) fund the Class A Investor Default Amount, the Class B Investor Default Amount, the Collateral Interest Investor Default Amount and the Subordinated Transferor Default Amount with respect to such Distribution Date and (B) reimburse Class A Investor Charge-Offs and previous reductions in the Class B Invested Amount, the Collateral Interest Invested Amount and the Subordinated Transferor Invested Amount; provided, however, that for each Distribution Date with respect to the Controlled Amortization Period (unless and until an Amortization Event shall have occurred), Class A Monthly Principal may not exceed the Controlled Distribution Amount for such Distribution Date; and provided further, that with respect to any Termination Payment Date, Class A Monthly Principal will be an amount equal to the Class A Invested Amount. 67 Controlled Distribution Amount for any Distribution Date with respect to the Controlled Amortization Period shall mean an amount equal to the sum of the Controlled Amortization Amount and any existing Deficit Controlled Amortization Amount. Controlled Amortization Amount means $16,666,666.67. Deficit Controlled Amortization Amount shall mean, on the first Distribution Date with respect to the Controlled Amortization Period, the excess, if any, of the Controlled Amortization Amount over the amount distributed as Class A Monthly Principal for such Distribution Date and, on each subsequent Distribution Date with respect to the Controlled Amortization Period, the excess, if any, of the Controlled Amortization Amount and any then existing Deficit Controlled Amortization Amount over the aggregate Class A Monthly Principal distributed on such Distribution Date. Excess Finance Charge Collections shall mean, with respect to any Distribution Date, an amount equal to the sum of the amounts described in clause (a)(iv), clause (b)(iii) and clause (c)(iii) under '--Distributions from the Collection Account' above. Termination Payment Date shall mean the earlier of the first Distribution Date following the liquidation or sale of the Receivables as a result of an insolvency event as described under '--Amortization Events' or the occurrence of the Final Series 1996-1 Termination Date. EXCESS FINANCE CHARGE COLLECTIONS On each Distribution Date, the Servicer will apply or cause the Trustee to apply Excess Finance Charge Collections with respect to the Collection Period immediately preceding such Distribution Date, 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 Collection Period will be used to fund the Class A Required Amount; (b) an amount equal to the aggregate amount of Class A Investor Charge-Offs which have not been previously reimbursed (after giving effect to the allocation on such Distribution Date of certain other amounts applied for that purpose) will be distributed to the Transferor in respect of the Transferor Interest on Distribution Dates with respect to the Revolving Period, but not in an amount exceeding the Transferor Interest (after giving effect to any new Receivables transferred to the Trust on such date) and thereafter will be included in the funds available to make principal payments; (c) an amount equal to the Class B Required Amount, if any, with respect to such Collection Period will be used to fund the Class B Required Amount; (d) an amount equal to the aggregate Class B Investor Default Amount for such Distribution Date will be distributed to the Transferor in respect of the Transferor Interest on Distribution Dates with respect to the Revolving Period (unless such amount has been previously netted against deposits to the Collection Account), but not exceeding the Transferor Interest (after giving effect to any new Receivable transferred to the Trust on such date) and thereafter will be included in the funds available to make principal payments; (e) an amount equal to the amount by which the Class B Invested Amount has been reduced below the Initial Class B Invested Amount (for reasons other than the payment of principal to the Class B Certificateholders), if any, for such Distribution Date will be distributed to the Transferor in respect of the Transferor Interest on Distribution Dates with respect to the Revolving Period, but not in an amount exceeding the Transferor Interest (after giving effect to any new Receivables transferred to the Trust on such date) and thereafter will be included in the funds available to make principal payments; (f) an amount equal to the Collateral Interest Required Amount, if any, with respect to such Collection Period will be used to fund the Collateral Interest Required Amount; 68 (g) an amount equal to the aggregate Collateral Interest Investor Default Amount for such Distribution Date will be distributed to the Transferor in respect of the Transferor Interest on Distribution Dates with respect to the Revolving Period (unless such amount has been previously netted against deposits to the Collection Account), but not exceeding the Transferor Interest (after giving effect to any new Receivable transferred to the Trust on such date) and thereafter will be included in the funds available to make principal payments; (h) an amount equal to the amount by which the Collateral Interest Invested Amount has been reduced below the Initial Collateral Interest Invested Amount (for reasons other than the payment of principal to the Collateral Interest Holder) will be distributed to the Transferor on Distribution Dates with respect to the Revolving Period, but not in an amount exceeding the Transferor Interest in respect of the Transferor Interest on such day (after giving effect to any new Receivables transferred to the Trust on such date) and thereafter will be included in the funds available to make principal payments; (i) any additional amounts required to be paid on such Distribution Date pursuant to the terms of the Loan Agreement; (j) an amount equal to the Subordinated Transferor Default Amount will be distributed to the Transferor in respect of the Transferor Interest on Distribution Dates with respect to the Revolving Period, but not in an amount exceeding the Transferor Interest (after giving effect to any new Receivables transferred to the Trust on such date) and thereafter will be included in the funds available to make principal payments; (k) an amount equal to the amount by which the Subordinated Transferor Amount has been reduced below the initial Subordinated Transferor Amount (for reasons other than the payment of principal to the holder of the Subordinated Transferor Certificate) will be distributed to the Transferor in respect of the Transferor Interest on Distribution Dates with respect to the Revolving Period, but not in an amount exceeding the Transferor Interest on such day (after giving effect to any new Receivables transferred to the Trust on such date) and thereafter will be included in the funds available to make principal payments); (l) the balance, if any, will be treated as Shared Excess Finance Charge Collections to the extent necessary; and (m) any remaining amounts not treated as Shared Excess Finance Charge Collections will be treated as Shared Principal Collections. REALLOCATED PRINCIPAL COLLECTIONS If Excess Finance Charge Collections available with respect to such Collection Period are less than the remaining Required Amount, Principal Collections allocable to the Subordinated Transferor Interest, the Collateral Interest and the Class B Interest with respect to a Collection Period will be applied to the following Required Amounts, if any, in the following order of priority: (i) Subordinated Transferor Reallocated Principal Collections, first, to the remaining components of the Class A Required Amount, if any, then to the remaining components of the Class B Required Amount, if any, and then to the remaining components of the Collateral Interest Required Amount, if any; (ii) Collateral Interest Reallocated Principal Collections, first, to the remaining components of the Class A Required Amount, if any, then to the remaining components of the Class B Required Amount, if any; and (iii) Class B Reallocated Principal Collections, to the remaining components of the Class A Required Amount, if any. Subordinated Transferor Reallocated Principal Collections means, with respect to each Distribution Date, the Principal Collections allocable to the Subordinated Transferor Certificate with respect to such Distribution Date (equal to the Subordinated Transferor Floating Allocation Percentage of Principal Collections for the related Collection Period for any such Distribution Date during the Revolving Period or the Subordinated Transferor Fixed Allocation Percentage of Principal Collections for any such Distribution Date during the Controlled Amortization Period or Rapid Amortization Period) in an amount equal to the Class A, Class B and Collateral Interest Required Amounts, if any, with respect to such Distribution Date (after giving effect to any payment of the Class A, Class B and Collateral Interest Required Amounts from Excess Finance Charge Collections). 69 Collateral Interest Reallocated Principal Collections means, with respect to each Distribution Date, the Principal Collections allocable to the Collateral Interest with respect to such Distribution Date (equal to the Collateral Interest Floating Allocation Percentage of Principal Collections for the related Collection Period for any such Distribution Date during the Revolving Period or the Collateral Interest Fixed Allocation Percentage of Principal Collections for any such Distribution Date during the Controlled Amortization Period or Rapid Amortization Period) in an amount equal to the Class A and Class B Required Amounts, if any, with respect to such Distribution Date (after giving effect to any payment of the Class A and Class B Required Amounts from Excess Finance Charge Collections and Subordinated Transferor Reallocated Principal Collections). Class B Reallocated Principal Collections means with respect to each Distribution Date, the Principal Collections allocable to the Class B Certificates with respect to such Distribution Date (equal to the Class B Floating Allocation Percentage of Principal Collections for the related Collection Period for any such Distribution Date during the Revolving Period or the Class B Fixed Allocation Percentage of Principal Collections for any such Distribution Date during the Controlled Amortization Period or Rapid Amortization Period) in an amount equal to the Class A Required Amount, if any, with respect to such Distribution Date (after giving effect to any payment of the Class A Required Amount from Excess Finance Charge Collections, Subordinated Transferor Reallocated Principal Collections and Collateral Interest Reallocated Principal Collections). Reallocated Principal Collections will equal the sum of Subordinated Transferor Reallocated Principal Collections, Collateral Interest Reallocated Principal Collections and Class B Reallocated Principal Collections. Collections not applied in the foregoing manner (and therefore not constituting Reallocated Principal Collections) will during the Revolving Period, be applied as Shared Principal Collections and, during the Controlled Amortization Period or any Rapid Amortization Period, will be included in the funds available to make principal payments. ADDITIONAL AMOUNTS AVAILABLE TO CERTIFICATEHOLDERS Excess Finance Charge Collections will be applied to fund the Required Amount, if any. If Excess Finance Charge Collections available for such Collection Period are less than the remaining Required Amount, Principal Collections for such Collection Period will then be used to fund the remaining Required Amount. If Reallocated Principal Collections with respect to any Collection Period are insufficient to fund the remaining Class A Required Amount for such Collection Period, then a portion of the Subordinated Transferor Amount (after giving effect to reductions for any Subordinated Transferor Charge-Offs and Subordinated Transferor Reallocated Principal Collections for such Collection Period) equal to such insufficiency (but not in excess of the Class A Investor Default Amount for such Distribution Date) will be allocated to the Class A Certificates to avoid a charge-off with respect to the Class A Certificates, and the Subordinated Transferor Amount will be reduced by such amount. If such reduction would cause the Subordinated Transferor Amount to be negative, the Subordinated Transferor Amount will be reduced to zero. If the Subordinated Transferor Amount is reduced to zero, the Collateral Interest Invested Amount (after giving effect to reductions for any Collateral Interest Investor Charge-Offs and any Collateral Interest Reallocated Principal Collections for such Collection Period for which the Subordinated Transferor Amount was not reduced) will be reduced by the amount by which the Subordinated Transferor Amount would have been reduced below zero (but not by more than the excess of the Class A Investor Default Amount for such Distribution Date over the amount of such reduction, if any, of the Subordinated Transferor Amount for such Distribution Date) and such amount will be allocated to the Class A Certificates to avoid a charge-off with respect to the Class A Certificates. If such reduction would cause the Collateral Interest Invested Amount to be negative, the Collateral Interest Invested Amount will be reduced to zero. If the Collateral Interest Invested Amount is reduced to zero, the Class B Invested Amount (after giving effect to reductions for any Class B Investor Charge-Offs and any Class B Reallocated Principal Collections for such Collection Period for which the Subordinated Transferor Amount and the Collateral Interest Invested Amount were not reduced) will be reduced by the amount by which the Collateral Interest Invested Amount would have been reduced below zero (but not by more than the excess of the Class A Investor Default Amount 70 for such Distribution Date over the amount of such reduction, if any, of the Subordinated Transferor Amount and the Collateral Interest Invested Amount for such Distribution Date) and such amount will be allocated to the Class A Certificates to avoid a charge-off with respect to the Class A Certificates. If such reduction would cause the Class B Invested Amount to be negative, the Class B Invested Amount will be reduced to zero. If the Class B Invested Amount is reduced to zero, 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 of the Class A Investor Default Amount for such Distribution Date over the reduction in the Subordinated Transferor Amount, the Collateral Interest Invested Amount and the Class B Invested Amount for such Collection Period (a 'Class A Investor Charge-Off'); and the Class A Certificateholders will bear directly the credit and other risks associated with their undivided interest in the Trust. After payment of the Class A Required Amount, if Collateral Interest Reallocated Principal Collections and Subordinated Transferor Reallocated Principal Collections not required to fund the Class A Required Amount with respect to any Collection Period are insufficient to fund the remaining Class B Required Amount for such Collection Period, then a portion of the Subordinated Transferor Amount (after giving effect to reductions for any Subordinated Transferor Charge-Offs, Subordinated Transferor Reallocated Principal Collections and any adjustments made thereto for the benefit of the Class A Certificateholders) equal to such insufficiency (but not in excess of the Class B Investor Default Amount for such Distribution Date) will be allocated to the Class B Certificates to avoid a charge-off with respect to the Class B Certificates, and the Subordinated Transferor Amount will be reduced by such amount. If the Subordinated Transferor Amount is reduced to zero, the Collateral Interest Invested Amount (after giving effect to reductions for any Collateral Interest Investor Charge-Offs, Collateral Interest Reallocated Principal Collections and any adjustments made thereto for the benefit of the Class A Certificateholders) will be reduced by the amount by which the Subordinated Transferor Amount would have been reduced below zero (but not by more than the excess of the Class B Investor Default Amount for such Distribution Date over the amount of such reduction, if any, of the Subordinated Transferor Amount for such Distribution Date) and such amount will be allocated to the Class B Certificates to avoid a charge-off with respect to the Class B Certificates. If the Collateral Interest Invested Amount is reduced to zero, the Class B Invested Amount will be reduced by the amount by which the Collateral Interest Invested Amount would have been reduced below zero, but not by more than the excess of the Class B Investor Default Amount for such Distribution Date over the reduction in the Subordinated Transferor Amount and the Collateral Interest Invested Amount (a 'Class B Investor Charge-Off'); and the Class B Certificateholders will bear directly the credit and other risks associated with their undivided interest in the Trust. After payment of the Class B Required Amount, if Subordinated Transferor Reallocated Principal Collections with respect to any Collection Period are insufficient to fund the remaining Collateral Interest Required Amount for such Collection Period, then a portion of the Subordinated Transferor Amount (after giving effect to reductions for any Subordinated Transferor Charge-Offs, Subordinated Transferor Reallocated Principal Collections and any adjustments made thereto for the benefit of the Class A and Class B Certificateholders) equal to such insufficiency (but not in excess of the Collateral Interest Investor Default Amount for such Distribution Date) will be allocated to the Collateral Interest to avoid a charge-off with respect to the Collateral Interest, and the Subordinated Transferor Amount will be reduced by such amount. If the Subordinated Transferor Amount is reduced to zero, the Collateral Interest Invested Amount will be reduced by the amount by which the Subordinated Transferor Amount would have been reduced below zero, but not by more than the excess of the Collateral Interest Investor Default Amount for such Distribution Date over the reduction in the Subordinated Transferor Amount (a 'Collateral Interest Investor Charge-Off'), and the Collateral Interest Holder will bear directly the credit and other risks associated with their undivided interest in the Trust. On each Distribution Date, if the Subordinated Transferor Default Amount for such Distribution Date exceeds the amount of Excess Finance Charge Collections which is allocated and available to fund such amount as described under 'Excess Finance Charge Collections', the Subordinated Transferor Amount (after giving effect to reductions for Subordinated Transferor Reallocated Principal Collections and the amount of any 71 adjustments made thereto for the benefit of the Class A or Class B Certificateholders or the Collateral Interest Holder) will be reduced but not in excess of the Subordinated Transferor Default Amount (the 'Subordinated Transferor Charge-Off'). In the event that any of the Subordinated Transferor Amount, the Collateral Interest Invested Amount, the Class B Invested Amount or the Class A Invested Amount is reduced, such amount will thereafter be increased (but not in excess of the unpaid principal balance of the Subordinated Transferor Certificate, Collateral Interest, the Class B Certificates or the Class A Certificates, as applicable) on any Distribution Date by the amount of Excess Finance Charge Collections allocated and available for that purpose as described under '--Excess Finance Charge Collections.' The 'Initial Subordinated Transferor Amount' will be equal to $18,205,129 and the 'Initial Collateral Interest Invested Amount' will be equal to $10,000,000. SHARED PRINCIPAL COLLECTIONS To the extent that Principal Collections and other amounts that are allocated to the interest of the holders of any class of any series (other than the Transferor Interest) are not needed to make payments to the certificateholders of such class, they may be applied to cover principal payments due to or for the benefit of certificateholders of another Series ('Shared Principal Collections'). Any such reallocation will not result in a reduction in the interest of the holders of the Series to which such Principal Collections were initially allocated. In addition, Principal Collections and certain other amounts otherwise allocable to other Series, to the extent such collections are not needed to make payments to the certificateholders of such other Series, may be applied to cover principal payments due to or for the benefit of the holders of the Series 1996-1 Interests. SHARING OF EXCESS FINANCE CHARGE COLLECTIONS Finance Charge Collections on any business day in excess of the amounts necessary to make required payments on such business day with respect to the Series 1996-1 Interests will be applied to cover any shortfalls with respect to amounts payable from Finance Charge Collections allocable to any other Series then outstanding, pro rata based upon the amount of the shortfall, if any, with respect to such other Series. In addition, Finance Charge Collections in excess of the amounts necessary to make required payments on such business day with respect to certificates of other outstanding Series will be applied to cover any shortfalls with respect to Finance Charge Collections allocable to the Series 1996-1 Interests. Any Excess Finance Charge Collections remaining after covering shortfalls with respect to all outstanding Series will be paid to the Transferor in respect of the Transferor Interest. DISTRIBUTIONS TO THE CERTIFICATEHOLDERS Payments to the Certificateholders will be made from the Collection Account. In addition to the amounts deposited in the Collection Account as described above, the proceeds of any optional repurchase of the Series 1996-1 Interests by the Transferor will be deposited in the Collection Account on the Distribution Date on which such repurchase occurs. The Servicer shall instruct the Trustee or the Paying Agent to distribute from the Collection Account on each Distribution Date the amounts described under '--Distributions from the Collection Account' above. The paying agent (the 'Paying Agent') shall initially be the Trustee. The Paying Agent shall have the revocable power to withdraw funds from the Collection Account for the purpose of making distributions to the Certificateholders. On each Distribution Date, the Servicer will pay to the Transferor any investment earnings (net of losses and investment expenses) with respect to the Collection Account. Distribution Date shall mean December 2, 1996, and the first day of each calendar month thereafter, or, if such first day is not a business day, the next succeeding business day. 72 DEFAULTED RECEIVABLES; RECOVERIES; REBATES AND FRAUDULENT CHARGES 'Defaulted Receivables' for any Collection Period are Receivables in any Account which were written off as uncollectible in such Collection Period in accordance with Servicer Guidelines. Receivables in any Account will be considered charged off for the purposes of the Agreement on the earlier of (i) the last day of the Collection Period immediately following the Collection Period in which such Receivable becomes 180 days delinquent and (ii) the cycle billing date on which such Account is charged off in accordance with the customary and usual servicing procedures of the Servicer. The amount of Defaulted Receivables for any Collection Period will be an amount equal to the principal amount of the Receivables that became Defaulted Receivables in such Collection Period less the full amount of any Defaulted Receivables for which the Transferor or the Servicer becomes obligated to accept reassignment for such Collection Period unless certain events of bankruptcy, insolvency or receivership have occurred with respect to the Transferor or the Servicer. A portion of all Defaulted Receivables will be allocated to the Class A Certificateholders, the Class B Certificateholders, the Collateral Interest Holder and the Subordinated Transferor Certificateholder. See '--Distributions from the Collection Account.' The term 'Recoveries,' with respect to any Collection Period, shall mean all amounts or payments received by the Servicer with respect to Receivables which have previously become Defaulted Receivables in a prior Collection Period, net of reasonable expenses of the Servicer incurred and deducted from such amounts or payments. If the Servicer makes a downward adjustment of the amount of any Receivable because of a rebate, refund, unauthorized charge, billing error or certain other noncash items to a cardholder, or if the Servicer otherwise adjusts downward the amount of any Receivable without receiving Collections therefor or without charging off such amount as uncollectible, or any Receivable is discovered as having been created through a fraudulent or counterfeit action the Transferor will be obligated to make a deposit into the Collection Account in immediately available funds in an amount equal to any such adjustment or principal amount of the fraudulent or counterfeit Receivable. If the Transferor fails to make any such deposit the Trustee shall make a drawing under the Transferor Letter of Credit (any such payment or proceeds of a drawing under the Transferor Letter of Credit, 'Adjustment Payments'). If funds are not available under the Transferor Letter of Credit, the Transferor Amount will be reduced by the amount of the adjustment or the principal amount of the fraudulent or counterfeit Receivable; provided, however, that if such deduction would reduce the Transferor Amount below zero or would otherwise not be permitted by law, the B/F Amount will be reduced by the amount of any such adjustment or the principal amount of the fraudulent or counterfeit Receivable. Any Adjustment Payments so paid by the Transferor or the proceeds of any drawing under the Transferor Letter of Credit in respect thereof shall be allocated in respect of Finance Charge Collections and Principal Collections as provided in the Agreement. DISCOUNT OPTION The Agreement provides that the Transferor may at any time and from time to time, but without any obligation to do so, designate a fixed percentage or a variable percentage based on a formula (the 'Discount Percentage'), but in either case not to exceed 6%, of Receivables giving rise to Principal Collections ('Principal Receivables') that are charges for goods or services or obligations for repayment of cash advances, part of which have not previously been sold as Discount Option Receivables, arising from then on to be treated as Receivables giving rise to Finance Charge Collections ('Finance Charge Receivables'). Such Receivables will be designated 'Discount Option Receivables.' After any such designation, pursuant to the Agreement, the Transferor may, without notice to or consent of the Certificateholders, from time to time increase, reduce or withdraw the Discount Percentage. Such increase, reduction or withdrawal will become effective upon satisfaction of the conditions in the Agreement, including written confirmation by each Rating Agency. On each Distribution Date on or after the date the exercise of the discount option takes effect, the lower of (a) the product of the Discount Percentage then in effect and Collections received during such Collection Period and (b) the Discount Option Receivables outstanding at the end of such Collection Period that otherwise would be Principal Receivables will be deemed collections of Finance Charge Receivables and will be applied accordingly. Such feature is intended to permit the Transferor to increase the Portfolio Yield and thereby decrease the risk of the occurrence of an Amortization Event. 73 On the Closing Date, the Transferor will designate an initial Discount Percentage equal to 2.0%. Any increase, reduction or withdrawal of such Discount Percentage will be made in accordance with the conditions described in the Agreement. FINAL PAYMENT OF PRINCIPAL; TERMINATION OF TRUST The Series 1996-1 Interests will be subject to optional repurchase by the Transferor on any Distribution Date on or after which the Class A, Class B and Collateral Interest Invested Amount is reduced to an amount less than or equal to $11,910,257 (5% of the Initial Class A, Initial Class B and Initial Collateral Interest Invested Amount), unless certain events of bankruptcy, insolvency or receivership have occurred with respect to the Transferor. The repurchase price will be equal to the Invested Amount plus accrued and unpaid interest on the Series 1996-1 Interests through the day preceding the Distribution Date on which the repurchase occurs. After such date, neither the Trust nor the Transferor will have any further obligation to pay principal or interest of the Series 1996-1 Interests. Subject to prior termination as provided above, the Agreement provides that the final distribution of principal and interest on the Class A Certificates will be made no later than the July, 2003 Distribution Date (the 'Final Class A Termination Date') and the final payment of principal and interest on the Class B Certificates will be made no later than the July, 2003 Distribution Date (the 'Final Class B Termination Date'). The final payment of principal and interest with respect to the Other Interests will be no later than July, 2003 (the 'Final Series 1996-1 Termination Date'). In the event that the Invested Amount of the Series 1996-1 Interests is greater than zero on the Final Series 1996-1 Termination Date, the Trustee will sell or cause to be sold, and apply the proceeds to the extent necessary to pay such remaining amounts to all Certificateholders pro rata as final payment of the Series 1996-1 Interests, an amount of Receivables at the close of business on such date, as provided in the Agreement. The proceeds of any such sale will be treated as Collections on the Receivables allocable to the Series 1996-1 Interests and applied as provided above in '--Application of Collections.' Such proceeds will be allocated first to pay amounts due to the Class A Certificateholders and then to pay amounts due to the Class B Certificateholders. Subject to laws of general applicability regarding trusts, unless the Transferor instructs the Trustee otherwise, the Trust will only terminate on the earlier to occur of: (a) the day after the Distribution Date following the date on which funds shall have been deposited in the Collection Account for the payment to certificateholders outstanding sufficient to pay in full the aggregate investor interest of all Series outstanding plus interest thereon at the applicable certificate rates to the next Distribution Date and (b) September 15, 2092 (the 'Final Trust Termination Date'). Upon the termination of the Trust and the surrender of the Exchangeable Transferor Certificate, the Trustee shall convey to the Transferor all right, title and interest of the Trust in and to the Receivables and other funds of the Trust (other than amounts in the accounts maintained by the Trust for the final payment of principal and interest to Certificateholders). AMORTIZATION EVENTS The Revolving Period will continue through the end of the Collection Period related to the November, 1999 Distribution Date and the Controlled Amortization Period will begin at such time, unless an Amortization Event occurs. The Rapid Amortization Period will commence on the day on which an Amortization Event occurs or is deemed to occur. An 'Amortization Event' occurs, either automatically, after specified notice or within a designated cure period, as specified in the Agreement and refers to any of the following events: (i) failure on the part of the Servicer or the Transferor to make any payment or deposit required by the terms of the Agreement or before five business days after the date such payment or deposit is required to be made thereunder; (ii) the failure on the part of the Servicer, the Originator or the Transferor duly to observe or perform in any material respect certain covenants or agreements set forth in the Agreement or the Purchase and Sale Agreement which, in the case of certain of such covenants or agreements, 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 Servicer, the Originator or the Transferor, as applicable, provided, however, that an Amortization Event shall not be deemed to occur if the Transferor has accepted the transfer of the related 74 Receivable (or all of such Receivables, if applicable) during such period (or such longer period as the Trustee may specify not to exceed an additional 60 days) in accordance with the provisions of the Agreement or the Purchase and Sale Agreement; (iii) any representation or warranty made by the Servicer, the Originator or the Transferor in the Agreement or the Purchase and Sale Agreement or any information required to be delivered by the Transferor 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 Servicer, the Originator or the Transferor, as applicable, and as a result of which the interests of the certificateholders are materially and adversely affected; provided, however, that such an Amortization Event shall not be deemed to have occurred if the Transferor has accepted the transfer 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 of the Agreement; (iv) certain events of insolvency, conservatorship, receivership or bankruptcy with respect to the Originator, Bridgestone/Firestone or the Transferor; (v) the Portfolio Yield averaged over any three consecutive Collection Periods is less than the Base Rate; (vi) the Trust shall become an 'investment company' within the meaning of the Investment Company Act of 1940, as amended; (vii) the Transferor Amount (plus the amount available under the Transferor Letter of Credit and the B/F Amount) is less than 7% of the aggregate invested amount of all outstanding Series of certificates issued by the Trust as of the last day of any Collection Period; (viii) the sum of the Transferor Amount plus the B/F Amount plus the Subordinated Transferor Amount (plus any subordinated class of certificates of additional Series which, when issued, is retained by the Transferor and with respect to which no legal opinion is delivered characterizing such certificates as indebtedness) is less than 7% of the Aggregate Receivables as of the last day of any Collection Period; (ix) the Class A Invested Amount is not paid in full on the Class A Expected Final Payment Date or the Class B Invested Amount is not paid in full on the Class B Expected Final Payment Date; (x) the Transferor becomes unable for any reason to transfer Receivables to the Trust in accordance with the provisions of the Agreement; (xi) the Aggregate Receivables as of the last day of any Collection Period are less than the sum of (a) the Transferor Amount (plus the amount available under the Transferor Letter of Credit and the B/F Amount) and (b) the aggregate initial invested amount of Series 1996-1; and (xii) any Servicer Event of Default shall occur which would have a material adverse effect on the Certificateholders. The Rapid Amortization Period will commence on the day on which an Amortization Event occurs or is deemed to occur. Monthly distributions of principal to the Class A Certificateholders will begin (if they have not already) on the Distribution Date with respect to the Collection Period in which an Amortization Event occurs or is deemed to have occurred. Following the final principal payment to the Class A Certificateholders, the Class B Certificateholders will begin to receive monthly distributions of principal. Thus, Class A and Class B Certificateholders may begin receiving distributions of principal earlier than they otherwise would have, which may shorten the final maturity of the Class A Certificates and Class B Certificates. If the only Amortization Event to occur is either the insolvency of the Transferor or the appointment of a receiver or bankruptcy trustee for the Transferor, the receiver or bankruptcy trustee for the Transferor may have the power to delay or prevent commencement of the Rapid Amortization Period. In addition to the consequences of an Amortization Event discussed above, if the Transferor or Bridgestone/Firestone voluntarily files a bankruptcy petition or goes into liquidation or any person is appointed a receiver or bankruptcy trustee of the Transferor or Bridgestone/Firestone, on the day of such appointment the 75 Transferor will immediately cease transferring Receivables to the Trust and promptly give notice to the Trustee of such appointment. Within 15 days, the Trustee will publish a notice of the liquidation or the appointment stating that the Trustee intends to sell, dispose of or otherwise liquidate the Receivables in a commercially reasonable manner and to the best of its ability. Unless otherwise instructed within a specified period by the certificateholders representing undivided interests aggregating more than 50% of the aggregate principal amount of each Series (or in the case of a series having more than one class of investor certificates, each class of such Series), the Trustee will sell, dispose of or otherwise liquidate the Receivables in a commercially reasonable manner and on commercially reasonable terms. The proceeds from the sale, disposition or liquidation of the Receivables will be treated as Collections and such proceeds will be distributed to certificateholders. If the portion of such proceeds allocable to the Certificateholders' Interest and the proceeds of any Collections in the Collection Account are not sufficient to pay in full the remaining amount due on the Class A and Class B Certificates, the Class A and Class B Certificateholders will suffer a corresponding loss. See 'Certain Legal Aspects of the Receivables--Certain Matters Relating to Bankruptcy.' INDEMNIFICATION The Agreement will provide that, subject to certain exceptions specified therein, the Servicer will indemnify the Trust, for the benefit of certificateholders, and the Trustee, including its officers, directors and employees, from and against any loss (excluding any investment loss), liability, expense, damage or injury suffered or sustained and arising out of activities of the Trust or the Trustee (or such other Person) pursuant to the Agreement on any supplement, including those arising out of the Servicer's actions or omissions with respect to the Trust pursuant to the Agreement or any Supplement. Under the Agreement, the Transferor and Bridgestone/Firestone will indemnify an injured party for the entire amount of any losses, claims, damages or liabilities arising out of or based on the Agreement or the actions of the Servicer taken pursuant to the Agreement as though the Agreement created a partnership under the Uniform Partnership Act. The Transferor and Bridgestone/Firestone will also indemnify each certificateholder for any such losses, claims, damages or liabilities (other than those incurred by a certificateholder as a result of defaults on the Receivables) except to the extent that they arise from any action by any certificateholder. In the event of a Service Transfer (defined below), the successor Servicer will indemnify the Transferor for any losses, claims, damages and liabilities of the Transferor as described in this paragraph arising from the grossly negligent actions or omissions of such successor Servicer. The Agreement provides that none of the Transferor, the Servicer or any of their directors, officers, employees or agents will be under any other liability to the Trust, the Trustee, the certificateholders, any Enhancement provider or any other person for any action taken, or for refraining from taking any action, in good faith pursuant to the Agreement. However, none of the Transferor, the Servicer or any of their directors, officers, employees or agents will be protected against any liability which would otherwise be imposed by reason of willful misfeasance, bad faith or gross negligence of any such person in the performance of their duties or by reason of reckless disregard of their obligations and duties thereunder. In addition, the Agreement provides that the Servicer is not under any obligation to appear in, prosecute or defend any legal action which is not incidental to its servicing responsibilities under the Agreement. The Servicer may, in its sole discretion, undertake any such legal action which it may deem necessary or desirable for the benefit of certificateholders with respect to the Agreement and the rights and duties of the parties thereto and the interest of the certificateholders thereunder. COLLECTION AND OTHER SERVICING PROCEDURES Pursuant to the Agreement, the Servicer will be responsible for servicing, collecting, enforcing and administering the Receivables in accordance with the policies and procedures and the degree of skill and care applied or exercised with respect to revolving credit receivables owned or serviced by the Servicer. The Servicer will be required to maintain fidelity bond coverage insuring against losses through wrongdoing of its officers and employees who are involved in the servicing of receivables covering such actions and in such amounts as the Servicer believes to be reasonable from time to time. 76 Servicing activities performed by the Servicer with respect to the Accounts include collecting and recording payments, communicating with cardholders, investigating payment delinquencies, providing billing records to cardholders and maintaining internal records. Managerial and custodial services performed by the Servicer on behalf of the Trust include providing assistance in any inspections of the documents and records relating to the Accounts and Receivables by the Trustee pursuant to the Agreement, maintaining the agreements, documents and files relating to the Accounts and Receivables as custodian for the Trust and providing related data processing and reporting services for Certificateholders and on behalf of the Trustee. The Agreement provides that the Servicer may delegate its duties under that agreement to any entity (a 'Subservicer') that agrees to conduct such duties in accordance with the Agreement and the credit account guidelines set forth therein. CFNA shall initially act as a Subservicer. Notwithstanding any such delegation the Servicer will continue to be liable for all of its obligations under the Agreement. SERVICER COVENANTS In the Agreement, the Servicer will covenant to the Certificateholders and the Trustee as to each Receivable and related Account that: (i) it will duly fulfill all obligations on its part to be fulfilled under or in connection with the Receivable or Account, and will maintain in effect all qualifications required in order to service the Receivable or Account and will comply with all requirements of law in connection with servicing the Receivable and the Account the failure to comply with which would have a material adverse effect on Certificateholders; (ii) it will not permit any rescission or cancellation of the Receivable, except as ordered by a court of competent jurisdiction and (iii) it will do nothing to impair the rights of the Certificateholders in the Receivables and will not reschedule, revise or defer payments due on any Receivable, except in accordance with the Servicer's usual and customary servicing practices. Under the terms of the Agreement, the Servicer is obligated to accept the transfer of any Receivable if it discovers, or receives written notice from the Trustee, that (i) any covenant of the Servicer set forth above has not been complied with, with respect to such Receivable or (ii) the Servicer has not complied in all material respects with all requirements of law applicable to the Receivable or Account, and in either case such noncompliance has not been cured within 60 days thereafter and the Receivable has been charged off as uncollectible or the proceeds of the Receivable are not available to the Trust. Such assignment and transfer will be made when the Servicer deposits an amount equal to the amount of such Receivable (including monthly finance charges thereon through the end of the related Collection Period) in the Collection Account on the business day preceding the Distribution Date following the Collection Period during which such obligation arises. The amount of such deposit shall be deemed a payment in respect of the related Receivable and will be treated under the Agreement in the same manner as are payments received by the Servicer from cardholders under the Accounts. Any amounts so paid by the Servicer shall be allocated in respect of Finance Charge Collections and Principal Collections as provided in the Agreement. SERVICING COMPENSATION AND PAYMENT OF EXPENSES The Servicer's compensation for its servicing activities is a monthly servicing fee (the 'Servicing Fee') in an amount, on any Distribution Date, equal to the sum of, with respect to all Series, one-twelfth of the sum for each Series of the product of (a) the applicable servicing fee percentages with respect to each Series and (b) the sum of an allocable portion of the amount of the Transferor Amount and the B/F Amount and the aggregate invested amount with respect to each Series on the last day of the second preceding Collection Period. The Servicing Fee will be allocated among the Transferor Amount, the B/F Amount, the Certificateholders and certificateholders of all of the other Series. The portion of the Servicing Fee allocable to the Class A Interest on each Distribution Date (the 'Class A Monthly Servicing Fee') to the Class B Interest on each Distribution Date (the 'Class B Monthly Servicing Fee'), to the Collateral Interest on each Distribution Date (the 'Collateral Interest Monthly Servicing Fee') and to the Subordinated Transferor Interest on each Distribution Date (the 'Subordinated Transferor Monthly Servicing Fee') generally will be equal to one-twelfth of the product of 2.00% per annum and the amount of the Class A Invested Amount, the Class B Invested Amount, the Collateral Interest Invested Amount on the Subordinated Transferor Invested Amount, as the case may be, on the last day of the second preceding Collection Period (in the case of the first Distribution Date, the initial principal amount of the Class A Certificates, Class B Certificates, the Collateral Interest or the Subordinated Transferor Certificate, as 77 the case may be). The remaining portion of the Servicing Fee will be allocable to the Transferor Amount and the B/F Amount. The Class A Monthly Servicing Fee, Class B Monthly Servicing Fee, the Collateral Interest Monthly Servicing Fee and the Subordinated Transferor Monthly Servicing Fee will be paid with respect to each Collection Period from the Collection Account (unless such amount has been netted against deposits to the Collection Account) as described under 'Distributions from the Collection Account' above. The Servicer may perform any of its obligations under the Agreement through one or more subservicers. The Servicer shall remain liable for its servicing duties and obligations as if the Servicer alone were servicing the Receivables. The Servicer shall be responsible for the fees and expenses of any such subservicer. The Servicer will pay from its servicing compensation certain expenses incurred in connection with servicing the Accounts and the Receivables including, without limitation, expenses related to enforcement of the Receivables, payment of fees and disbursements of the Trustee and independent accountants, payment of fees and expenses of any subservicer and all other fees and expenses which are not expressly stated in the Agreement to be payable by the Trust or the Certificateholders other than Federal, state and local income and franchise taxes, if any, of the Trust. CERTAIN MATTERS REGARDING THE SERVICER The Servicer may not resign from its obligations and duties under the Agreement, except upon determination that such duties are no longer permissible under applicable law or upon the appointment of a successor Servicer in the business of servicing credit card receivables with a net worth of at least $100,000,000 and delivery of written confirmation that the ratings of the Series 1996-1 Interests will not be withdrawn or reduced as a result of such Service Transfer (defined below) and that there will not be a material adverse impact on the Federal income tax characteristics of the Series 1996-1 Interests. No such resignation will become effective until the Trustee or a successor to the Servicer has assumed the Servicer's responsibilities and obligations under the Agreement. Under circumstances described in '--Conveyance of Accounts' below, the obligation of the Servicer may be transferred to a new servicer. Any person into which, in accordance with the Agreement, the Transferor or the Servicer may be merged or consolidated or any person resulting from any merger or consolidation to which the Transferor or the Servicer is a party, or any person succeeding to the business of the Transferor or the Servicer, will be the successor to the Transferor or the Servicer, as the case may be, under the Agreement. SERVICER EVENTS OF DEFAULT Pursuant to the terms of the Agreement, a 'Servicer Event of Default' refers to any of the following events: (i) failure by the Servicer to make any payment, transfer or deposit, or to give instructions to the Trustee to make any withdrawal, on the date the Servicer is required to do so under the Agreement or any Supplement (or within a five business day grace period); (ii) failure on the part of the Servicer to observe or perform any other term, covenant, condition or agreement provided for in the Agreement or any Supplement or breach by the Servicer of any representation or warranty in the Agreement if such failure or breach has a material adverse effect on the certificateholders, which continues unremedied for a period of 60 days after the earlier of discovery by the Servicer or the date on which written notice has been given and which continues to materially adversely affect the rights of the certificateholders of any Series then outstanding for such period, or the Servicer assigns its duties under the Agreement, except as specifically permitted thereunder; (iii) any representation, warranty or certification made by the Servicer in the Agreement or any Supplement or in any certificate delivered pursuant to the Agreement or any Supplement proves to have been incorrect when made, which has a material adverse effect on the rights of the certificateholders, and which material adverse effect continues for the certificateholders for a period of 60 days after written notice and which continues to materially adversely affect the rights of the certificateholders of any Series then outstanding for such period; and (iv) the occurrence of certain events of bankruptcy, insolvency or receivership of the Servicer. 78 In the event of any Servicer Event of Default, either the Trustee or certificateholders evidencing undivided interests aggregating more than 50% of the aggregate invested amount of all Series, by written notice to the Servicer (and to the Trustee, if given by the certificateholders), may terminate all of the rights and obligations of the Servicer, in its capacity as servicer under the Agreement, to all of the Receivables held by the Trust with respect to all Series, and the proceeds thereof, and appoint a new Servicer (a 'Service Transfer'). The Transferor may grant to any Enhancement provider the right to exercise such rights on behalf of any related Series. The Trustee shall as promptly as possible appoint (with the consent of the Originator) a successor Servicer and if no successor Servicer has been appointed by the Trustee and has accepted such appointment by the time the Servicer ceases to act as Servicer, all authority, power and obligations of the Servicer under the Agreement will pass to, and be vested in, the Trustee. Prior to any Service Transfer, the Trustee will seek to obtain bids from potential Servicers meeting certain eligibility requirements set forth in the Agreement to serve as a successor Servicer for servicing compensation not in excess of the Servicing Fee. In the event that a successor Servicer has not been appointed and has not accepted its appointment at the time when the Servicer ceases to act as Servicer, the Trustee without further action will automatically be appointed the successor Servicer. Notwithstanding the above, the Trustee will, if it is legally unable so to act, petition a court of competent jurisdiction to appoint any established financial institution having a net worth of not less than $100,000,000 and whose regular business includes the servicing of credit card receivables as the successor Servicer. Upon its appointment, the successor Servicer shall be the successor in all respects to the Servicer with respect to servicing functions under the Agreement and shall be subject to all the responsibilities, duties and liabilities relating thereto placed on the Servicer by the terms and provisions thereof, and all references in the Agreement to the Servicer will be deemed to refer to the successor Servicer. The successor Servicer shall expressly be authorized to delegate any of its duties under the Agreement to the Servicer on and after the date of any transfer of servicing pursuant to the Agreement. In connection with such appointment and assumption, the successor Servicer shall be entitled to servicing compensation not in excess of the Servicing Fee. The Transferor and Bridgestone/Firestone have agreed that if a successor Servicer shall be appointed, such successor Servicer may withhold from amounts otherwise payable to the Transferor or Bridgestone/Firestone an amount equal to the Monthly Servicing Fee with respect to the Transferor Interest and the B/F Interest for such related Collection Period. REPORTS TO CERTIFICATEHOLDERS No later than the second business day prior to each Distribution Date, the Servicer will forward to the Trustee a statement (the 'Monthly Servicer's Certificate') prepared by the Servicer setting forth certain information with respect to the Trust and the Series 1996-1 Interests, including, among other things: (a) the aggregate amount of Collections, the aggregate amount of Finance Charge Collections and the aggregate amount of Principal Collections processed during the immediately preceding Collection Period; (b) the Class A Floating Allocation Percentage, the Class B Floating Allocation Percentage, the Collateral Interest Floating Allocation Percentage and the Subordinated Transferor Floating Allocation Percentage for such Collection Period and, during the Controlled Amortization Period and any Rapid Amortization Period, the Fixed Allocation Percentage; (c) the aggregate outstanding balance of the Accounts which were delinquent by 30 days to 60 days and by 61 days or more as of the end of the immediately preceding Collection Period; (d) the Class A Investor Default Amount, Class B Investor Default Amount, the Collateral Interest Investor Default Amount and the Subordinated Transferor Investor Default Amount for such Distribution Date; (e) the amount of Class A Investor Charge-Offs, Class B Investor Charge-Offs, Collateral Interest Investor Charge-Offs and Subordinated Transferor Investor Charge-Offs and the amount of reimbursements of each for such Distribution Date; (f) the amount of the Class A Monthly Servicing Fee, Class B Monthly Servicing Fee, Collateral Interest Monthly Servicing Fee and Subordinated Transferor Monthly Servicing Fee for such Distribution Date; (g) the existing Deficit Controlled Amortization Amount; (h) the Aggregate Receivables at the close of business on the last day of the Collection Period preceding such Distribution Date; (i) the Class A Invested Amount, the Class B Invested Amount, the Collateral Interest Invested Amount and the Subordinated Transferor Amount at the close of business on the last day of the Collection Period immediately preceding such Distribution Date; and (j) the amount of Class B Reallocated Principal Collections, Collateral Interest Reallocated Principal Collections and Subordinated 79 Transferor Reallocated Principal Collections for such Distribution Date. The Trustee will make such statement available to the Certificateholders upon request. On each Distribution Date, the Paying Agent, on behalf of the Trustee, will forward to each Class A Certificateholder and Class B Certificateholder of record a statement (the 'Payment Date Statement') prepared by the Servicer setting forth the information with respect to the Offered Certificates set forth in the Monthly Servicer's Certificate supplied to the Trustee as described in the preceding paragraph since the immediately preceding Distribution Date and the following additional information (which, in the case of (a), (b) and (c) below, will be stated on the basis of an original principal amount of $1,000 per Class A Certificate or Class B Certificate, as applicable): (a) the total amount distributed; (b) the amount of such distribution allocable to principal on the Offered Certificates; (c) the amount of such distribution allocable to interest on the Offered Certificates; (d) the amount, if any, by which the principal balance of the Class A Certificates exceeds the Class A Invested Amount and the Class B Certificates exceed the Class B Invested Amount as of the Record Date with respect to such Distribution Date, as the case may be; and (e) the 'Class A Pool Factor' and 'Class B Pool Factor' as of the end of the Record Date with respect to such Distribution Date (consisting of an eight-digit decimal expressing the Class A Invested Amount or Class B Invested Amount, as applicable, as of such Record Date (determined after taking into account any increase or decrease in the Class A Invested Amount or Class B Invested Amount, as applicable, which will occur on the following Distribution Date) as a proportion of the Class A Initial Invested Amount or Class B Initial Invested Amount). The Payment Date Statement and the Monthly Servicer's Certificate will be available to Certificate Owners, as described under 'Special Considerations--Book Entry Registration' and 'Available Information.' On or before January 31 of each calendar year, the Paying Agent, on behalf of the Trustee, will furnish or cause to be furnished to each person who at any time during the preceding calendar year was a Certificateholder of record (or, if so provided in applicable Treasury regulations, made available to Certificate Owners) a statement prepared by the Trustee containing the information required to be provided by an issuer of indebtedness under the Code for such calendar year or the applicable portion thereof during which such person was a Certificateholder, together with such other customary information as the Servicer deems necessary or desirable to enable the Certificateholders to prepare their tax returns. See 'Federal Income Tax Consequences.' EVIDENCE AS TO COMPLIANCE The Agreement provides that on or before March 31 of each calendar year, the Servicer will cause a firm of independent public accountants to furnish a report to the effect that such firm has applied certain agreed-upon procedures to certain documents and records relating to the servicing of the Receivables and that, based upon such agreed-upon procedures, no matters came to their attention that caused them to believe that such servicing was not conducted in compliance with certain applicable terms and conditions set forth in the Agreement except for such exceptions or errors as such firm shall believe to be immaterial and such other exceptions as shall be set forth in such statement. In addition, on or before March 31 of each calendar year such accountants will compare the mathematical calculations of the amounts contained in the Monthly Servicer's Certificates and other certificates delivered during such year with the computer reports of the Servicer and statements of any agents engaged by the Servicer to perform servicing activities which were the source of such amounts and deliver a certificate to the Trustee confirming that such amounts are in agreement except for such exceptions as they believe to be immaterial and such other exceptions which shall be set forth in such report. The Agreement provides for delivery to the Trustee on or before March 31 of each calendar year, of a statement signed by an 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 Agreement throughout the preceding year or, if there has been a default in the performance of any such obligation, 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. 80 CONVEYANCE OF ACCOUNTS Subject to the conditions set forth in the succeeding sentence, the Originator may transfer or otherwise convey its interest in the Accounts, including the Receivables in such Accounts (subject to the interest of the Transferor and the Trustee on behalf of the certificateholders), in whole or in part. The Originator will be permitted to convey Accounts only upon satisfaction of the following conditions: (i) the acquiring person will (a) be organized and existing under the laws of the United States of America or any state or the District of Columbia, and be a bank or other entity that is not subject to the Bankruptcy Code of 1978 which may be established by and owned by Bridgestone/Firestone, and (b) expressly assume by an agreement supplemental to the Purchase and Sale Agreement the performance of the Originator's obligations with respect to such Accounts; (ii) the Transferor will deliver to the Trustee opinions of counsel (a) stating that all conditions precedent to the conveyance have been complied with and (b) to the effect that the conveyance will not adversely affect the treatment of the Series 1996-1 Interests as debt for Federal and applicable state income tax purposes or materially adversely impact the Federal income tax consequences that affect any certificateholder and generally to the effect that the transfer would not affect the Federal income tax ownership of the Receivables; and (iii) the Transferor will obtain from each Rating Agency a letter confirming that the rating of all outstanding Series of certificates, after such conveyance, will not be lowered or withdrawn. AMENDMENTS The Agreement and any Supplement may be amended by the Transferor, the Servicer and the Trustee, without certificateholder consent, to cure any ambiguity, to correct or supplement any provision therein which may be inconsistent with any other provision therein or to add any other provisions with respect to matters or questions arising under the Agreement or any Supplement which are not inconsistent with the provisions of the Agreement or any Supplement; provided, however, that such action shall not, as evidenced by an opinion of counsel, adversely affect in any material respect the interests of any of the holders of certificates. The Agreement and any Supplement may also be amended from time to time by the Servicer, the Transferor and the Trustee, without the consent of any of the certificateholders, for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of the Agreement, or of modifying, in any manner the rights of the holders of certificates; provided that (i) the Servicer will have provided an officer's certificate to the Trustee and any Enhancement provider to the effect that such amendment will not materially and adversely affect the interests of the certificateholders, (ii) such amendment will not, as evidenced by an opinion of counsel, cause the Trust to be characterized for Federal income tax purposes as an association taxable as a corporation or otherwise have any material adverse impact on the Federal income taxation of any outstanding Series of certificates or any Certificate Owner and (iii) the Rating Agencies shall confirm that such amendment will not cause a reduction or withdrawal of the rating of any outstanding Series of certificates; provided, further, that such amendment will not reduce in any manner the amount of, or delay the timing of, distributions which are required to be made on any certificate of such Series without the consent of the related certificateholder, change the definition of or the manner of calculating the interest of any certificateholder of such Series without the consent of the related certificateholder or reduce the percentage pursuant to the next paragraph required to consent to any such amendment, in each case without the consent of all such certificateholders; provided, further, that (x) the transfer of the Accounts and/or the servicing functions with respect thereto as described above under '--Conveyance of Accounts' and the appointment of an entity as Servicer under the Agreement in connection with such transfer, (y) any transaction effected in accordance with the merger and consolidations provisions of the Agreement relating to the Servicer, (z) any other transactions related, supplemental or incidental thereto will be deemed not to materially and adversely affect the interests of the certificateholders and will not require the delivery of an officer's certificate pursuant to clause (i) above. The Agreement and any Supplement may be amended by the Transferor, the Servicer and the Trustee with the consent of the holders of certificates evidencing undivided interests aggregating not less than 66 2/3% of the principal amount of all Series adversely affected, for the purpose of adding any provisions to, changing in any manner or eliminating any of the provisions of the Agreement or any Supplement or of modifying in any manner the rights of certificateholders of any Series then issued and outstanding. No such amendment, however, may (i) reduce in any manner the amount of, or delay the timing of, distributions required to be made on such Series, (ii) change the definition or the manner of calculating the interest of any certificateholder of such Series, or 81 (iii) reduce the aforesaid percentage of undivided interests the certificateholders of which are required to consent to any such amendment, in each case without the consent of all certificateholders of all Series adversely affected. Promptly following the execution of any amendment to the Agreement or any Supplement, the Trustee will furnish written notice of the substance of such amendment to each certificateholder of all Series (or with respect to an amendment of a Supplement, to the applicable Series). Pursuant to the Series Supplement providing for the issuance of the Series 1992-B Certificates, the enhancement providers with respect to the Series 1992-B Certificates (of which there are two providing unequal amounts of enhancement) shall be entitled to vote as if such enhancement providers were Certificateholders under the Agreement to the exclusion of the holders of the Series 1992-B Certificates. LIST OF CLASS A AND CLASS B CERTIFICATEHOLDERS Upon written request of three or more Class A Certificateholders of record or any Class A Certificateholder or group of Class A Certificateholders of record representing undivided interests in the Trust aggregating not less than 5% of the Class A Invested Amount, the Trustee will afford such Class A Certificateholders access during business hours to the current list of Class A Certificateholders of the Trust for purposes of communicating with other Class A Certificateholders with respect to their rights under the Agreement. Upon written request of three or more Class B Certificateholders of record or any Class B Certificateholder or group of Class B Certificateholders of record representing undivided interests in the Trust aggregating not less than 5% of the Class B Invested Amount, the Trustee will afford such Class B Certificateholders access during business hours to the current list of Class B Certificateholders of the Trust for purposes of communicating with other Class B Certificateholders with respect to their rights under the Agreement. The Agreement does not provide for any annual or other meetings of Class A and Class B Certificateholders. THE TRUSTEE The Fuji Bank and Trust Company is Trustee under the Agreement. The Transferor, 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 Transferor, the Servicer and any of their respective affiliates may hold Certificates in their own names; however, any Certificates so held shall not be entitled to participate in any decisions made or instructions given to the Trustee by the Certificateholders as a group. The Trustee's address is Two World Trade Center, 81st Floor, New York, New York 10048, Attention: Trust Administration Department. For purposes of meeting the legal requirements of certain local jurisdictions, the Trustee will have the power to appoint a co-trustee or separate trustees of all or any part of the Trust. In the event of such appointment, all rights, powers, duties and obligations conferred or imposed upon the Trustee will be conferred or imposed upon and exercised or performed by the Trustee and such separate trustee or co-trustee jointly, or, in any jurisdiction in which the Trustee will be incompetent or unqualified to perform certain acts, singly upon such separate trustee or co-trustee who shall exercise and perform such rights, powers, duties and obligations solely at the direction of the Trustee. The Trustee may resign at any time, in which event the Transferor 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 such under the Agreement or if the Trustee becomes insolvent. In such 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. 82 DESCRIPTION OF THE PURCHASE AND SALE AGREEMENT The Receivables originated under the Accounts established under the Credit Card Program transferred to the Trust by the Transferor and existing as of the Cut-off Date and Receivables originated under the Accounts established under the Credit Card Program transferred to the Trust by the Transferor and originated after the Cut-off Date have or will be purchased by the Transferor from the Originator pursuant to the Purchase and Sale Agreement. Receivables originated under Eligible Alternative Accounts will also be purchased by the Transferor from the Originator pursuant to the Purchase and Sale Agreement. The following summary describes certain terms of the Purchase and Sale Agreement. SALE OF RECEIVABLES Under the Purchase and Sale Agreement, the Originator has sold Receivables originated on and before the Cut-off Date and, provided that the Transferor is not in default thereunder and that no Servicer Event of Default shall have occurred, for so long as any Series of certificates is outstanding, the Originator will sell, as applicable, to the Transferor all its right, title and interest in and to the Receivables originated under the Accounts existing on and originated after the Cut-off Date. Pursuant to the Agreement, all such Receivables will be transferred by the Transferor to the Trust, and the Transferor will assign its rights in, to and under the Purchase and Sale Agreement with respect to such Receivables to the Trust. The purchase price of the purchased Receivables will be payable by the Transferor in cash. Pursuant to the Purchase and Sale Agreement, on the first Transfer Date after the Closing Date, CFNA shall transfer Merchant Fees in amount equal to $350,000. On each Transfer Date thereafter, CFNA shall transfer Merchant Fees collected during the calendar month preceding the related Transfer Date in an amount equal to the lesser of (a) $350,000 and (b) the amount of Merchant Fees actually collected by CFNA during such calendar month, to the Transferor. The Transferor will transfer such Merchant Fees to the Trust. The Purchase and Sale Agreement provides that the Originator may convey its interest in the Accounts (subject to the interest of the Transferor and the Trustee on behalf of certificateholders). See 'Description of the Offered Certificates and the Agreement--Conveyance of Accounts' above. In connection with the Purchase and Sale Agreement, the Originator has indicated and will indicate in its records, including any computer files, that the Receivables arising under the Accounts have been or will be sold to the Transferor by the Originator and that such Receivables have been transferred by the Transferor to the Trust. The records and agreements relating to such Accounts and Receivables will not be segregated by Bridgestone/Firestone from other documents and agreements relating to other charge accounts and receivables and will not be stamped or marked to reflect the sale thereof to the Transferor. The Originator has filed UCC financing statements meeting the requirements of state law in Ohio with respect to such Receivables. See 'Risk Factors--Potential Priority of Certain Liens' and 'Certain Legal Aspects of the Receivables.' REPRESENTATIONS AND WARRANTIES The Originator represents and warrants to the Transferor to the effect, among other things, that as of the Closing Date: (a) the Originator is duly organized and validly existing in good standing under the laws of the United States as a national banking association, (b) the Purchase and Sale Agreement constitutes a legal, valid and binding obligation of the Originator and (c) the sale by the Originator of Receivables pursuant to the Purchase and Sale Agreement and the performance of its obligations has been duly authorized by all requisite corporate action. The Originator has also agreed to indemnify the Transferor and to hold the Transferor harmless from and against any and all losses, damages and expenses (including reasonable attorneys' fees) suffered or incurred by the Transferor as a result of the breach by the Originator of any representation, warranty, covenant or agreement set forth in the Purchase and Sale Agreement. In addition, the Originator expressly acknowledges and consents to the Transferor's assignment of its rights relating to the interests sold by the Originator under the Purchase and Sale Agreement to the Trustee for the benefit of the Certificateholders. 83 TERMINATION If pursuant to certain provisions of Federal law, the Originator becomes party to any insolvency or similar proceeding (other than as a claimant) and, if such proceeding is not voluntary and it is not dismissed within 90 days of its institution, or if a receiver is appointed for the Originator, the Originator will immediately cease selling Receivables to the Transferor. CERTAIN LEGAL ASPECTS OF THE RECEIVABLES TRANSFER OF RECEIVABLES At the time of the formation of the Trust, pursuant to the Purchase and Sale Agreement, the Originator sold to the Transferor all its right, title and interest in and to those Receivables existing under the Eligible Accounts as of the Cut-off Date and, provided that the Transferor is not in default thereunder and no Servicer Event of Default shall have occurred, its right, title and interest to those Receivables arising under the Eligible Accounts from time to time thereafter. The Transferor conveyed to the Trust, without recourse, all Receivables existing under the Eligible Accounts, as of the Cut-off Date and thereafter created. The Transferor has covenanted and warranted that such transfer constitutes either a valid transfer and assignment to the Trust of all right, title and interest of the Transferor in and to the Receivables, except for the interest of the Transferor as holder of the Exchangeable Transferor Certificate, or a grant of a security interest to the Trust in and to the Receivables. The Transferor also covenanted and warranted to the Trust in the Agreement that, in the event the transfer of Receivables by the Transferor to the Trust is deemed to create a security interest under the UCC and assuming that the Transferor is not at the time the subject of any insolvency proceedings, there exists a valid, subsisting and enforceable first priority perfected security interest in the Receivables in existence since the time of the formation of the Trust in favor of the Trust and a valid, subsisting and enforceable first priority perfected security interest in the Receivables created thereafter and, with certain exceptions, and for certain limited time periods, the proceeds thereof, in favor of the Trust on and after their creation. For a discussion of the Trust's rights arising from these covenants and warranties not being satisfied, see 'Description of the Offered Certificates and the Agreement-- Covenants, Representations and Warranties.' The Receivables are 'accounts' or 'general intangibles' as defined in Article 9 of the UCC. To the extent the Receivables constitute accounts, both the absolute transfer of such Receivables and the transfer of such Receivables as security for an obligation are treated under Article 9 of the UCC as creating a security interest therein and are subject to its provisions, including the filing of financing statements to perfect the Trust's security interest. To the extent Receivables constitute general intangibles and the transfer of such Receivables is deemed to be a transfer as security for an obligation, Article 9 of the UCC is applicable to the same extent as it is applicable to Receivables constituting accounts. Financing statements covering the Receivables will be filed under the UCC as in effect in Massachusetts to protect the Transferor and the Trust. In the event the transfer by the Transferor to the Trust of any general intangibles is deemed to be an absolute transfer, then the UCC is not applicable, and no further action is required to perfect the Trustee's interest in such Receivables from third-party claims. There are certain limited circumstances under the UCC in which prior or subsequent transferees of Receivables coming into existence after the Closing Date could have an interest in such Receivables with priority over the Trust's interest. A tax or other government lien on property of the Transferor arising prior to the time a Receivable comes into existence may also have priority over the interest of the Trust in such Receivables. In addition, under the Agreement, the Transferor will covenant to accept the reassignment of the Receivables in any Account containing a Receivable transferred to the Trust that is not free and clear of the lien of any third-party, except certain permitted tax liens. Furthermore, the Transferor covenants that it will not sell, pledge, assign, transfer or grant any lien on any Receivable (or any interest therein) other than to the Trust. Unless continuation statements are filed within five years of the original filings the time specified in the UCC in respect of the security interest of either the Transferor or the Trust in the Receivables, the perfection of such security interest will lapse. Pursuant to the Agreement, the Servicer will be required to cause such statements to be filed. 84 Because the Trust's interest in certain of the Receivables is dependent upon the Transferor's interest in such Receivables, any adverse change in the priority or perfection of the Transferor's security interest would correspondingly affect the Trust's interest in the affected Receivables. Collections of Receivables will, except in certain circumstances, be available for use by the Servicer until deposited into the Collection Account on the business day preceding each Distribution Date. In the event of insolvency or receivership of the Servicer or, in certain circumstances, the lapse of certain time periods, the Trust may not have a perfected interest in such cash Collections. CERTAIN MATTERS RELATING TO BANKRUPTCY The Originator and the Transferor have treated and will treat the transfer of Receivables under the Purchase and Sale Agreement as a sale. A court could treat such transactions as assignments of collateral as security. To the extent that the Originator has granted or will grant a security interest in the Receivables to the Transferor and that security interest was validly perfected before any insolvency of the Originator and was not granted or taken in or will not be granted or taken in contemplation of insolvency or with the intent to hinder, delay or defraud the Originator or its creditors, that security interest should not be subject to avoidance in the event of the insolvency and receivership of the Originator, and payments to the Transferor with respect to the Receivables should not be subject to recovery by a conservator or receiver for the Originator. If, however, the conservator or receiver were to assert a contrary position, or were to require the Transferor to establish its rights to those payments by submitting to and completing the administrative claims procedure established under the Financial Institutions Reform, Recovery and Enforcement Act of 1989 ('FIRREA'), or the conservator or receiver were to request a stay of proceedings with respect to the Originator as provided under FIRREA, delays in payments on the Offered Certificates and possible reductions in the amount of such payments could occur. If a conservator or receiver is appointed for the Originator, pursuant to the Purchase and Sale Agreement, new Receivables would not be sold to the Transferor and an Amortization Event would occur. Upon the occurrence of an Amortization Event, if a conservator or receiver is appointed for the Originator and no other Amortization Event other than such conservatorship, receivership or insolvency of the Originator exists, the conservator or receiver may have the power to prevent the commencement of the Rapid Amortization Period. The Agreement provides that, upon the appointment of a receiver or bankruptcy trustee for the Transferor or Bridgestone/Firestone, the Transferor or Bridgestone/Firestone, respectively, will promptly give notice thereof to the Trustee, and an Amortization Event with respect to all Series will occur. Under the Agreement no new Receivables will be transferred to the Trust and, unless otherwise instructed within a specified period by the holders of certificates representing undivided interests aggregating more than 50% of the aggregate principal amount of each Series or unless otherwise required by the receiver or bankruptcy trustee for the Transferor, the Trustee will proceed to sell, dispose of or otherwise liquidate the Receivables in a commercially reasonable manner and on commercially reasonable terms. The proceeds from the sale of the Receivables would then be treated by the Trustee as Collections on the Receivables. If the only Amortization Event to occur is the appointment of a receiver or bankruptcy trustee for the Transferor, such receiver or bankruptcy trustee may have the power to continue to require the Transferor to continue to transfer new Receivables to the Trust, as applicable, and to prevent the early sale, liquidation or disposition of the Receivables and the commencement of a Rapid Amortization Period. See 'Description of the Offered Certificates and the Agreement--Amortization Events.' CONSUMER PROTECTION AND BANKING LAWS The relationship between the consumer and the provider of consumer credit is extensively regulated by Federal and state consumer protection laws. With respect to the credit cards issued under the Credit Card Program the most significant Federal laws include the Federal Truth-In-Lending, Equal Credit Opportunity Acts, Fair Credit Billing, Fair Credit Reporting, Fair Credit and Charge Card Disclosure and Fair Debt Collection Practices Acts and state consumer protection and retail installment sales laws. Such statutes may also apply to the credit cards issued under Alternative Programs. These statutes impose disclosure requirements before and when an Account is opened and at the end of monthly billing cycles. In addition, cardholders are entitled under these laws to have payments and credits applied to the account promptly and to require billing errors to be resolved promptly. The Trust may be liable for certain violations of consumer protection laws that apply to the Receivables, either as assignee from the Transferor with respect to obligations arising before transfer of the 85 Receivables to the Trust or as the party directly responsible for obligations arising after the transfer. In addition, cardholders may be entitled to assert such violations by way of set off against the obligation to pay the amount of Receivables owing. The Transferor has agreed to accept the transfer of all Receivables that were not created in compliance in all material respects with the requirements of such laws. The Servicer has also agreed in the Agreement to indemnify the Trust, among other things, for any liability arising from such violations. For a discussion of the Trust's rights if the Receivables were not created in compliance in all material respects with applicable laws, see 'Description of the Offered Certificates and the Agreement--Covenants, Representations and Warranties.' Application of Federal and state bankruptcy and debtor relief laws would affect the interests of the Certificateholders, if such laws result in any Receivables being charged off as uncollectible in excess of the Class B Invested Amount available to be allocated to the Class A Certificates and in excess of the Collateral Interest Invested Amount available to be allocated to the Class B Certificates. See 'Description of the Offered Certificates and the Agreement--Defaulted Receivables; Recoveries; Rebates and Fraudulent Charges.' The Originator, and the Originator's extension of credit under the Credit Card Program, is extensively regulated under Federal law. Any change in such laws, or in the rules, regulations and decisions (both judicial and administrative) thereunder, could affect the Servicer's ability to collect the Receivables or maintain previous levels of monthly finance and other charges. PROPOSED LEGISLATION Congress and the states may enact new laws and amendments to existing laws to regulate further the consumer revolving credit industry or to reduce finance charges or other fees or charges applicable to consumer revolving credit accounts. The potential effect of any such legislation could be to reduce the yield on the Accounts. If such yield is reduced, an Amortization Event could occur, and the Rapid Amortization Period would commence. See 'Description of the Offered Certificates--Amortization Events.' LEGAL MATTERS AND LITIGATION Pursuant to the Pooling and Servicing Agreement, if the interest of the Certificateholders in a Receivable is materially adversely affected by the failure of the Receivable to comply in all material respects with applicable requirements of law, the interest of such Certificateholders in all Receivables in the affected Account will be reassigned to the Transferor. On each Series Closing Date, the Transferor will make certain other representations and warranties relating to the validity and enforceability of the Accounts and the Receivables. The sole remedy, if any such representation or warranty is breached and such breach has a material adverse effect on the interest of Certificateholders in any Receivable and continues beyond the applicable cure period, is that the interest of the Certificateholders in the Receivables affected thereby will be reassigned to the Transferor or assigned to the Servicer, as the case may be. In addition, in the event of the breach of certain representations and warranties, the Transferor may be obligated to accept the reassignment of all of the Receivables in the Accounts in the Trust portfolio. CLAIMS AND DEFENSES OF CARDHOLDERS AGAINST TRUST The UCC provides that (a) unless an obligor has made an enforceable agreement not to assert defenses or claims arising out of a sale, the rights of the Trust, as assignee, are subject to all the terms of the contract between the Originator and the obligor and any defense or claim arising therefrom and to any other defense or claim of the obligor against the Originator which accrues before the obligor receives notification of the assignment and (b) any obligor is authorized to continue to pay the Originator until (i) the obligor receives notification, reasonably identifying the rights assigned, that the amount due or to become due has been assigned and that payment is to be made to the Trustee and (ii) if requested by the obligor, the Trustee has furnished reasonable proof of the assignment. 86 FEDERAL INCOME TAX CONSEQUENCES GENERAL Set forth below is a discussion of material income tax consequences to Certificate Owners who are original owners of the Offered Certificates and hold the Offered Certificates as capital assets under the Internal Revenue Code of 1986, as amended (the 'Code'). This discussion does not purport to be complete or to deal with all aspects of Federal income taxation that may be relevant to Certificate Owners in light of their particular circumstances, nor to certain types of Certificate Owners subject to special treatment under the Federal income tax laws (for example, banks and life insurance companies). This discussion is based upon present provisions of the Code, the regulations promulgated thereunder and judicial and ruling authorities, all of which are subject to change, which change may be retroactive. PROSPECTIVE INVESTORS ARE ADVISED TO CONSULT THEIR OWN TAX ADVISORS WITH REGARD TO THE FEDERAL TAX CONSEQUENCES TO SPECIAL CATEGORIES OF INVESTORS IN THE OFFERED CERTIFICATES WITH RESPECT TO THE PURCHASE, OWNERSHIP OR DISPOSITION OF INTERESTS IN THE OFFERED CERTIFICATES, AS WELL AS THE TAX CONSEQUENCES ARISING UNDER THE LAWS OF ANY STATE, FOREIGN COUNTRY OR OTHER TAXING JURISDICTION. Characterization of the Offered Certificates as Indebtedness. The Transferor, the Trustee, the Class A Certificateholders and the Class B Certificateholders express in the Agreement their intent that, for tax purposes the Offered Certificates will be indebtedness secured by the Receivables. The Transferor, the Class A Certificateholders and the Class B Certificateholders, by acquiring an interest in an Offered Certificate, agree to treat the Offered Certificates as indebtedness for Federal, state and local tax purposes. However, because different criteria are used to determine the non-tax accounting characterization of the transaction, the Transferor will treat the transaction, for financial accounting purposes, as a sale of an ownership interest in the Receivables and not as the issuance of a debt obligation. Based upon the application of existing law to the facts of the transaction as set forth in the Agreement and other relevant documents, Brown & Wood LLP, special tax counsel to the Transferor ('Tax Counsel'), has advised the Transferor that, in its opinion, (i) the Offered Certificates will be treated for Federal income tax purposes as indebtedness and (ii) the Trust will not be treated as either an association or a publicly traded partnership taxable as a corporation for Federal income tax purposes. However, opinions of counsel are not binding on the Internal Revenue Service (the 'IRS'), and there can be no assurance that the IRS could not successfully challenge this conclusion. In general, the characterization of a transaction for Federal income tax purposes is based upon economic substance, and the substance of the transaction in which the Offered Certificates are issued is consistent with the treatment of the Offered Certificates as debt for Federal income tax purposes. Although there are certain judicial precedents holding that under appropriate circumstances a taxpayer should be required to treat a transaction in accordance with the form chosen by the taxpayer, regardless of the transaction's substance, the operative provisions of the transaction and the Agreement are not inconsistent with treating the Offered Certificates as debt and, accordingly, these authorities would not be applied to require sale characterization. Based on the foregoing, Tax Counsel has concluded that the characterization of the Offered Certificates, for Federal income tax purposes, would be governed by the substance of the transaction, which is the issuance of debt. Other Characterizations of the Offered Certificates. If the Agreement does not create a debt obligation for Federal income tax purposes, the arrangement among the Transferor, the Class A Certificateholders and the Class B Certificateholders could be classified, for Federal income tax purposes, alternatively as a partnership, a publicly traded partnership taxable as a corporation, or as an association taxable as a corporation. Because, in the opinion of Tax Counsel, the Offered Certificates will be characterized as debt for Federal income tax purposes, no attempt will be made to comply with any reporting or tax payment requirements which might be applicable if the arrangement between the Transferor and the Certificate Owners were treated as creating a partnership or a corporation. No IRS ruling on the Federal income tax characterization of the arrangement among the Transferor, the Class A Certificateholders and the Class B Certificateholders will be sought. 87 If the arrangement created by the Agreement were characterized as a partnership among the Transferor and the Certificate Owners, such a partnership would not be subject to Federal income tax, but each item of income, gain, loss, deduction and credit generated through the ownership of the Receivables by such a partnership would generally be passed through to the Transferor and the Certificate Owners as partners in such a partnership according to their respective interests therein. The amount, timing, and character of income reportable by the Certificate Owners as partners could differ materially from the income reportable by the Certificate Owners if the Offered Certificates are characterized as debt. If the arrangement were treated as a publicly traded partnership taxable as a corporation or as an association taxable as a corporation, it would be subject to Federal income tax at corporate tax rates on its taxable income generated by ownership of the Receivables. Such a tax could result in reduced distributions to Certificate Owners. Distributions to the Transferor and, unless the Offered Certificates were treated as debt of the corporation if the arrangement were treated as an association taxable as a corporation, to the Certificate Owners, would not be deductible in computing the taxable income of the corporation. In addition, if the Offered Certificates were not treated as debt of the corporation, all or a portion of any such distributions would, to the extent of the current and accumulated earnings and profits of such corporation, be treated as dividend income to the Certificate Owners. In addition, if the arrangement were treated as a publicly traded partnership, any income allocated to a Certificate Owner that is a tax-exempt entity will constitute 'unrelated business taxable income', at least where the publicly traded partnership is taxed as a partnership. TAXATION OF INTEREST AND DISCOUNT INCOME OF CERTIFICATE OWNERS Assuming that the Certificate Owners are owners of debt obligations for Federal income tax purposes, in the opinion of Tax Counsel, interest generally will be taxable as ordinary income for Federal income tax purposes when received by the Certificate Owners utilizing the cash method of accounting and when accrued by Certificate Owners utilizing the accrual method of accounting. Interest received on the Offered Certificates may also constitute 'investment income' for purposes of certain limitations of the Code concerning the deductibility of investment interest expense. While it is not anticipated that the Offered Certificates will be issued at a greater than de minimis discount, in the opinion of Tax Counsel, under the Treasury regulations (the 'OID Regulations'), it is possible that the Offered Certificates could nevertheless be deemed to have been issued with original issue discount ('OID'). This could be the case, for example, if interest payments were not deemed to be 'qualified stated interest payments.' If such regulations were to apply, in general, all of the taxable income to be recognized with respect to the Offered Certificates would be includible in income of Certificate Owners as OID, but would not be includible again when the interest is actually received. If the Offered Certificates are in fact issued at a greater than de minimis discount or are treated as having been issued with OID under the OID Regulations, the following general rules will apply. The excess of the 'stated redemption price at maturity' of the Class A Certificates or Class B Certificates, as applicable, (generally equal to their principal amount as of the date of original issuance plus all interest other than 'qualified stated interest payments' payable prior to or at maturity) over the applicable original issue price (in this case, the initial offering price at which a substantial amount of the Class A or Class B Certificates, as applicable, are sold to the public) will constitute OID. A Certificate Owner must include OID in income over the term of the Offered Certificates under a constant yield method. In general, OID must be included in income in advance of the receipt of cash representing that income. In the case of a debt instrument as to which the repayment of principal may be accelerated as a result of the prepayment of other obligations securing the debt instrument, the periodic accrual of OID is determined by taking into account both the prepayment assumptions used in pricing the debt instrument and the prepayment experience. If this provision applies to the Offered Certificates, the amount of OID which will accrue in any given 'accrual period' may either increase or decrease depending upon the actual prepayment rate. Certificate Owners should be aware that the resale of an Offered Certificate may be affected by the market discount rules of the Code. These rules generally provide that, subject to a de minimis exception, if a holder of an Offered Certificate acquires it at a market discount (i.e., at a price below its stated redemption price at maturity or 88 its 'revised issue price' if it was issued with OID) and thereafter recognizes gain upon a disposition of the Offered Certificate, the lesser of such gain or the portion of the market discount that accrued while the Offered Certificate was held by such holder will be treated as ordinary interest income realized at the time of the disposition. Each Certificate Owner should consult his own tax advisor regarding the impact of the original issue discount and market discount rules. SALES OR DEEMED SALES OF OFFERED CERTIFICATES In the opinion of Tax Counsel, in general, a Certificate Owner will recognize gain or loss upon the sale, exchange, redemption or other taxable disposition of an Offered Certificate measured by the difference between (i) the amount of cash and the fair market value of any property received (other than amounts attributable to, and taxable as, accrued stated interest) and (ii) the owner's tax basis in the Class A Certificate or Class B Certificate, as applicable (as increased by any OID or market discount previously included in income by the holder and decreased by any deductions previously allowed for amortizable bond premium and by any payments reflecting principal or OID received with respect to such Class A Certificate or Class B Certificate, as applicable). Subject to the market discount rules discussed above and to the one-year holding requirement for long-term capital gain treatment, any such gain or loss generally will be long-term capital gain or loss, provided that the Class A Certificate or Class B Certificate, as applicable was held as a capital asset. The Federal income tax rates applicable to capital gains for taxpayers other than individuals, estates and trusts are currently the same as those applicable to ordinary income; however, the maximum ordinary income rate for individuals, estates and trusts has increased to 39.6%, whereas the maximum long-term capital gains rate for such taxpayers remains at 28%. Moreover, capital losses generally may be used only to offset capital gains. BACKUP WITHHOLDING In the opinion of Tax Counsel, a Certificate Owner may be subject to backup withholding at the rate of 31% with respect to interest paid on the Offered Certificates if the Certificate Owner, upon issuance, fails to supply the Trustee or his broker with his taxpayer identification number, fails to report interest, dividends, or other 'reportable payments' (as defined in the Code) properly, or under certain circumstances, fails to provide the Trustee or his broker with a certified statement, under penalty of perjury, that he is not subject to backup withholding. Information returns will be sent annually to the IRS and to each Class A and Class B Certificateholder setting forth the amount of interest paid on the Offered Certificates and the amount of tax withheld thereon. STATE, LOCAL AND FOREIGN TAXATION The discussion above does not address the tax treatment of the Trust, the Offered Certificates or the Certificate Owners under state and local tax laws or foreign tax laws. Prospective investors are urged to consult their own tax advisors regarding the state and local tax treatment of the Trust and the Offered Certificates, and the consequences of purchase, ownership or disposition of the Offered Certificates under any state or local tax law or any foreign tax law, if applicable. ERISA CONSIDERATIONS The Employee Retirement Income Security Act of 1974, as amended ('ERISA') imposes certain restrictions on employee benefit plans ('Plans') subject to ERISA and persons who have certain specified relationships to such plans ('Parties-in-Interest'). ERISA also imposes certain duties on persons who are fiduciaries of Plans subject to ERISA and prohibits certain transactions between a plan and Parties-in-Interest with respect to such Plans. Under ERISA, any person who exercises any authority or control respecting the management or disposition of the assets of a Plan is considered to be a fiduciary of such Plan (subject to certain exceptions not here relevant). In accordance with ERISA's fiduciary standards, before purchasing the Offered Certificates a fiduciary should determine whether such an investment is permitted under the documents and instruments governing the plan and is appropriate for the plan in view of its overall investment policy and the composition and diversification of its investment portfolio. 89 Section 406 of ERISA and Section 4975 of the Code prohibit a pension, profit sharing or other employee benefit plan that is subject to such provisions from engaging in certain transactions involving 'plan assets' with persons that are 'parties in interest' under ERISA or 'disqualified persons' under the Code with respect to the plan. A violation of these 'prohibited transaction' rules may generate excise tax and other liabilities under ERISA and the Code for such persons. In addition, investments by Benefit Plans (as defined below) are subject to ERISA's general fiduciary requirements, including the requirements of investment prudence and diversification and the requirement that a Benefit Plan's investments be made in accordance with the documents governing the Benefit Plan. On November 13, 1986, the Department of Labor ('DOL') issued a final regulation (the 'Final Regulation') concerning the definition of what constitutes the 'plan assets' of an employee benefit plan subject to ERISA or the Code or an individual retirement account (collectively referred to as 'Benefit Plans'). Under the Final Regulation the assets and properties of certain entities in which a Benefit Plan makes an equity investment could be deemed to be assets of the Benefit Plan in certain circumstances. Accordingly, if Benefit Plans purchase the Offered Certificates, the Trust could be deemed to hold Benefit Plan assets unless one of the exceptions under the Final Regulation (or another statutory or administrative exemption) is applicable to the Trust. The operations of the Trust could result in prohibited transactions if Benefit Plans that purchase the Offered Certificates are deemed to own an interest in the underlying assets of the Trust. There may also be an improper delegation of the responsibility to manage plan assets if Benefit Plans that purchase the Offered Certificates are deemed to own an interest in the underlying assets of the Trust. The Final Regulation only applies to the purchase by a Benefit Plan of an 'equity interest' in an entity. Assuming that the Offered Certificates are equity interests, the Final Regulation contains an exception that provides that if a Benefit Plan acquires a 'publicly-offered security' the issuer of the security is not deemed to hold Benefit Plan assets. A 'publicly-offered security' is a security that is (i) freely transferable, (ii) part of a class of securities that is owned by 100 or more investors independent of the issuer and of one another and (iii) either is (A) a part of a class of securities registered under section 12(b) or 12(g) of the Securities Exchange Act of 1934, 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 of 1933 and the class of securities of which such security is a part is registered under the Securities Exchange Act of 1934 within 120 days (or such later time as may be allowed by the Commission) after the end of the fiscal year of the issuer during which the offering of such securities to the public occurred. It is anticipated that the Class A Certificates will meet the criteria of publicly-offered securities as set forth above. The Underwriters (defined below) expect (although no assurance can be given) that the Class A Certificates will be held by at least 100 independent persons at the conclusion of the offering, there are no restrictions imposed on the transfer of the Class A Certificates, and the Class A 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 Exchange Act of 1934. If the Class A Certificates fail to meet the criteria of publicly-offered securities and the Trust's assets are deemed to include assets of Benefit Plans that are Class A Certificateholders, transactions involving the Trust and 'parties in interest' or 'disqualified persons' with respect to such plans might be prohibited under Section 406 of ERISA and Section 4975 of the Code unless an exemption is applicable. Thus, for example, if a participant in any Benefit Plan is a credit cardholder under the Credit Card Program, under DOL interpretations the purchase of the Class A Certificates by such plan could constitute a prohibited transaction. There are certain class exemptions issued by the DOL that could apply in such event including DOL Prohibited Transaction Exemption 84-14 (Class Exemption for Plan Asset Transactions Determined by Independent Qualified Professional Asset Managers), 96-23 (Class Exemption for Plan Asset Transactions Determined by In-house Asset Managers), 91-38 (Class Exemption for Certain Transactions Involving Bank Collective Investment Funds) and 90-1 (Class Exemption for Certain Transactions Involving Insurance Company Pooled Separate Accounts). There is no assurance that these exemptions, even if all of the conditions specified therein are satisfied, will apply to all transactions involving the Trust's assets. In addition, the Transferor may be considered to be a party in interest or a fiduciary with respect to some Benefit Plans. Accordingly, an investment by a Benefit Plan in the Class A Certificates may be a prohibited 90 transaction under ERISA and the Code unless such investment is subject to a statutory or administrative exemption. In light of the foregoing, fiduciaries of a Benefit Plan considering the purchase of the Class A Certificates should consult their own counsel as to whether the assets of the Trust which are represented by the Class A Certificates would be considered plan assets, the consequences that would apply if the Trust's assets were considered plan assets and the applicability of exemptive relief from the prohibited transaction rules. Moreover, each Benefit Plan fiduciary should determine whether, under the general fiduciary standards of investment prudence and diversification, an investment in the Class A Certificates is appropriate for the Benefit Plan, taking into account the overall investment policy of the Benefit Plan and the composition of the Benefit Plan's investment portfolio. The Class B Certificates may not be purchased by any employee benefit plan subject to the requirements of the fiduciary responsibility provisions of ERISA, or the provisions of Section 4975 of the Internal Revenue Code of 1986, as amended (the 'Code'), including any individual retirement accounts. UNDERWRITING Subject to the terms and conditions set forth in the Underwriting Agreement, the Transferor has agreed to sell to Citicorp Securities, Inc. and Chase Securities Inc. (the 'Underwriters') and the Underwriters have agreed to purchase the principal amount of Offered Certificates set forth opposite its name:
AMOUNT AMOUNT OF CLASS A OF CLASS B UNDERWRITER CERTIFICATES CERTIFICATES - ------------------------------------------------------------------------ ------------ ------------ Citicorp Securities, Inc................................................ $ $ Chase Securities Inc.................................................... $ $ ------------ ------------ Total.............................................................. $200,000,000 $ 28,205,129 ------------ ------------ ------------ ------------
In the Underwriting Agreement, the Underwriters have agreed, subject to the terms and conditions set forth therein, to purchase all of the Offered Certificates if any of the Offered Certificates are purchased. The Underwriters propose initially to offer the Class A Certificates to the public at the price set forth on the cover page hereof and to certain dealers at such price less concessions not in excess of % of the principal amount of the Class A Certificates. The Underwriters may allow, and such dealers may reallow, concessions not in excess of % of the principal amount of the Class A Certificates to certain brokers and dealers. After the initial public offering, the public offering price and other selling terms may be changed by the Underwriters. The Underwriters named above propose initially to offer the Class B Certificates to the public at the price set forth on the cover page hereof and to certain dealers at such price less concessions not in excess of % of the principal amount of the Class B Certificates. The Underwriters may allow, and such dealers may reallow, concessions not in excess of % of the principal amount of the Class B Certificates to certain brokers and dealers. After the initial public offering, the public offering price and other selling terms may be changed by the Underwriters. The Underwriting Agreement provides that the Transferor and Bridgestone/Firestone will indemnify the Underwriters against certain liabilities, including liabilities under applicable securities laws, or contribute to payments the Underwriters may be required to make in respect thereof. Each Underwriter has represented and agreed that: (a) it has not offered or sold, and will not offer or sell any Offered Certificates 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 do not constitute an offer to the public in the United Kingdom for the purposes of the Public Offers Securities Regulations 1995, (b) it has complied and will comply with all applicable provisions of the Financial Services Act 1986 of Great Britain with respect to anything done by it in 91 connection with the Offered Certificates in, from or otherwise involving the United Kingdom and (c) it has only issued or passed on and will only issue or pass on in the United Kingdom any document in connection with the issue of the Offered Certificates to a person who is of a kind described in Article 11(3) of the Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order 1995 or to whom the document may otherwise be lawfully issued or be passed on. LEGAL MATTERS Certain legal matters relating to the issuance of the Offered Certificates for the Transferor will be passed upon by Stroock & Stroock & Lavan, New York, New York, special New York counsel to the Transferor. Certain legal matters relating to the issuance of the Offered Certificates for the Underwriters will be passed upon by Brown & Wood LLP, New York, New York. Certain legal matters relating to the Federal income tax consequences of the issuance of the Certificates will be passed upon for the Transferor by Brown & Wood LLP, New York, New York. 92 INDEX OF TERMS
PAGE ----------- 30/360 Basis........................................................................................ 14 Accounts............................................................................................ 5 Act................................................................................................. 3 Active Account...................................................................................... 46 Aggregate Certificateholders' Interest.............................................................. 9 Aggregate Receivables............................................................................... 7 Agreement........................................................................................... 4 Alternative Programs................................................................................ 1 Amortization Event.................................................................................. 29 Amortization Period................................................................................. 38 Average Delinquencies............................................................................... 45 Average Start-of-Month Receivables.................................................................. 45 Bank................................................................................................ 49 Bankrupt............................................................................................ 44 Base Rate........................................................................................... 31 Benefit Plans....................................................................................... 90 B/F Amount.......................................................................................... 9 B/F Interest........................................................................................ 9 B/F Percentage...................................................................................... 60 Bridgestone/Firestone............................................................................... 1 Bridgestone/Firestone Certificate................................................................... 2 Cede................................................................................................ 3 CEDEL............................................................................................... 13 Cedel Participants.................................................................................. 51 Certificateholders' Interest........................................................................ 9 Certificate Owners.................................................................................. 13 CFNA................................................................................................ 4 Chase............................................................................................... 13 Citibank............................................................................................ 13 Class A Certificateholders.......................................................................... 13 Class A Certificate Rate............................................................................ 2 Class A Certificates................................................................................ 1 Class A Expected Final Payment Date................................................................. 15 Class A Fixed Allocation Percentage................................................................. 16 Class A Floating Allocation Percentage.............................................................. 11 Class A Interest.................................................................................... 8 Class A Invested Amount............................................................................. 20 Class A Investor Charge-Off......................................................................... 26 Class A Investor Default Amount..................................................................... 19 Class A Monthly Interest............................................................................ 19 Class A Monthly Servicing Fee....................................................................... 20 Class A Pool Factor................................................................................. 80 Class A Required Amount............................................................................. 23 Class B Certificate Rate............................................................................ 2 Class B Certificateholders.......................................................................... 13 Class B Certificates................................................................................ 1 Class B Expected Final Payment Date................................................................. 16 Class B Fixed Allocation Percentage................................................................. 16 Class B Floating Allocation Percentage.............................................................. 11 Class B Interest.................................................................................... 8 Class B Invested Amount............................................................................. 21 Class B Investor Charge-Off......................................................................... 26 Class B Investor Default Amount..................................................................... 20
93
PAGE ----------- Class B Monthly Interest............................................................................ 19 Class B Monthly Servicing Fee....................................................................... 20 Class B Pool Factor................................................................................. 80 Class B Reallocated Principal Collections........................................................... 24 Class B Required Amount............................................................................. 23 Closing Date........................................................................................ 1 Collateral Interest Floating Allocation Percentage.................................................. 11 Collateral Interest................................................................................. 2 Collateral Interest Accrual Period.................................................................. 19 Collateral Interest Fixed Allocation Percentage..................................................... 16 Collateral Interest Holder.......................................................................... 10 Collateral Interest Investor Default Amount......................................................... 20 Collateral Interest Invested Amount................................................................. 21 Collateral Interest Investor Charge-Off............................................................. 27 Collateral Interest Monthly Interest................................................................ 19 Collateral Interest Monthly Servicing Fee........................................................... 20 Collateral Interest Rate............................................................................ 10 Collateral Interest Reallocated Principal Collections............................................... 24 Collateral Interest Required Amount................................................................. 23 Code................................................................................................ 34 Collection Account.................................................................................. 32 Collection Period................................................................................... 7 Collections......................................................................................... 7 Commission.......................................................................................... 1 Contractual Past-Due Aging.......................................................................... 44 Controlled Amortization Amount...................................................................... 15 Controlled Amortization Period...................................................................... 15 Cooperative......................................................................................... 52 Credit Authorization................................................................................ 42 Credit Card Program................................................................................. 1 Credit Services..................................................................................... 41 Creditworthy account................................................................................ 46 Cut-off Date........................................................................................ 5 DTC................................................................................................. 13 Defaulted Receivables............................................................................... 6 Definitive Certificates............................................................................. 53 Depositaries........................................................................................ 51 Depository.......................................................................................... 50 Determination Date.................................................................................. 32 Disclosure Document................................................................................. 12 Discount Option Receivables......................................................................... 29 Discount Percentage................................................................................. 29 Distribution Date................................................................................... 2 DOL................................................................................................. 90 Eligible Account(s)................................................................................. 6 Eligible Alternative Account(s)..................................................................... 7 Eligible Receivable................................................................................. 57 Enhancement......................................................................................... 6 ERISA............................................................................................... 34 Euroclear........................................................................................... 13 Euroclear Operator.................................................................................. 52 Euroclear Participants.............................................................................. 52 European Depositories............................................................................... 13 Excess Finance Charge Collections................................................................... 21 Exchange............................................................................................ 12
94
PAGE ----------- Exchange Act........................................................................................ 3 Exchangeable Transferor Certificate................................................................. 9 Final Class A Termination Date...................................................................... 32 Final Class B Termination Date...................................................................... 32 Final Regulation.................................................................................... 90 Final Series 1996-1 Termination Date................................................................ 15 Final Trust Termination Date........................................................................ 74 Finance Charge Collections.......................................................................... 7 Finance Charge Receivables.......................................................................... 29 FIRREA.............................................................................................. 36 Fitch............................................................................................... 58 Fixed Allocation Percentage......................................................................... 16 Holders............................................................................................. 53 Ineligible Receivable............................................................................... 56 Initial Class A Invested Amount..................................................................... 13 Initial Class B Invested Amount..................................................................... 13 Initial Collateral Interest Invested Amount......................................................... 10 Initial Subordinated Transferor Amount.............................................................. 11 Invested Amount..................................................................................... 16 Invested Percentage................................................................................. 12 Investor Default Amount............................................................................. 20 IRS................................................................................................. 87 Loan Agreement...................................................................................... 10 Letter of Credit Bank............................................................................... 32 LIBOR............................................................................................... 10 Merchant Fees....................................................................................... 1 Monthly Payment Rates............................................................................... 48 Monthly Servicer's Certificate...................................................................... 79 Monthly Servicing Fee............................................................................... 20 Moody's............................................................................................. 34 No Payment for 90 Days.............................................................................. 43 Offered Certificateholders.......................................................................... 2 Offered Certificates................................................................................ 1 OID................................................................................................. 88 OID Regulations..................................................................................... 88 Originator.......................................................................................... 1 Other Interests..................................................................................... 4 Participants........................................................................................ 51 Participation Agreement............................................................................. 12 Parties-in-Interest................................................................................. 89 Paying Agent........................................................................................ 72 Payment Date Statement.............................................................................. 80 Permitted Investments............................................................................... 58 Plans............................................................................................... 89 Portfolio Yield..................................................................................... 30 Principal Collections............................................................................... 7 Principal Receivables............................................................................... 29 Principal Terms..................................................................................... 55 Purchase and Sale Agreement......................................................................... 6 Rapid Amortization Period........................................................................... 17 Rating Agency....................................................................................... 39 Reallocated Principal Collections................................................................... 24 Receivables......................................................................................... 1 Record Date......................................................................................... 50 Recoveries.......................................................................................... 6
95
PAGE ----------- Registration Statement.............................................................................. 3 Removed Accounts.................................................................................... 54 Required Amount..................................................................................... 23 Required Ratings.................................................................................... 33 Revolving Period.................................................................................... 15 Retail Establishments............................................................................... 41 S&P................................................................................................. 34 Series.............................................................................................. 2 Series 1992 Certificates............................................................................ 11 Series 1995-A Certificates.......................................................................... 11 Series 1996-1 Interests............................................................................. 2 Service Transfer.................................................................................... 79 Servicer............................................................................................ 1 Servicer Letter of Credit........................................................................... 32 Servicing Fee....................................................................................... 77 SNB................................................................................................. 41 Shared Principal Collections........................................................................ 28 Subordinated Floating Allocation Percentage......................................................... 11 Subordinated Transferor Certificate................................................................. 2 Subordinated Transferor Fixed Allocation Percentage................................................. 16 Subordinated Transferor Default Amount.............................................................. 20 Subordinated Transferor Monthly Servicing Fee....................................................... 20 Subordinated Transferor Amount...................................................................... 21 Subordinated Transferor Reallocated Principal Collections........................................... 23 Subordinated Transferor Charge-Off.................................................................. 27 Subservicer......................................................................................... 77 Substitute Servicer Letter of Credit................................................................ 62 Substitute Transferor Letter of Credit.............................................................. 63 Supplement.......................................................................................... 12 Tax Counsel......................................................................................... 87 Ten Percent Aggregate Test.......................................................................... 8 Ten Percent Number Test............................................................................. 8 Terms and Conditions................................................................................ 52 Transfer Date....................................................................................... 32 Transfer Deposit Amount............................................................................. 56 Transferor.......................................................................................... 1 Transferor Amount................................................................................... 9 Transferor Interest................................................................................. 9 Transferor Letter of Credit......................................................................... 33 Transferor Percentage............................................................................... 60 Trust............................................................................................... 1 Trust Assets........................................................................................ 1 Trustee............................................................................................. 1 UCC................................................................................................. 36 Unallocated Principal Collections................................................................... 62 Underwriters........................................................................................ 91 Union............................................................................................... 37 Weighted Average Certificate Rate................................................................... 31
96 ANNEX I OUTSTANDING SERIES The table below sets forth the principal characteristics of the other Series previously issued by the Trust and currently outstanding as of September 30, 1996. 1. Series 1995-A Asset Backed Certificates* Class A Invested Amount........................................................... $ 199,200,000 Class B Invested Amount**......................................................... $ 38,095,238 Servicing Fee Percentage.......................................................... 2.00% Series Issuance Date.............................................................. June 5, 1995 2. Series 1992-B Certificates Class A REMARCS................................................................... $ 149,695,000 Class B REMARCS................................................................... $ 29,157,394.14 Servicing Fee Percentage.......................................................... 2.00% Series Issuance Date.............................................................. January 4, 1993
- ------------------ * The proceeds from the issuance of the Series 1996-1 Asset Backed Certificates will be used to retire the Series 1995-A Asset Backed Certificates. ** Issued pursuant to Series 1992-A Asset Backed Certificates. AI-1 ANNEX II GLOBAL CLEARANCE, SETTLEMENT AND TAX DOCUMENTATION PROCEDURES Except in certain limited circumstances, the globally Offered Certificates (the 'Global Securities') will be available only in book-entry form. Investors in the Global Securities may hold such Global Securities through any of DTC, CEDEL or Euroclear. The Global Securities will be traceable 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 CEDEL 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 CEDEL or Euroclear and DTC Participants holding Offered Certificates will be effected on a delivery-against-payment basis through the respective Depositaries of CEDEL and Euroclear (in such capacity) and 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, CEDEL 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 will follow the settlement practices applicable to prior debt issues. Investors 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 CEDEL or Euroclear accounts will follow the settlement procedures applicable to conventional eurobonds, except that there will be no temporary global security and no 'lock-up' or restricted period. Global Securities will be credited to the securities custody accounts on the settlement date against payments in same-day funds. SECONDARY MARKET TRADING Since the purchaser determines the place of delivery, it is important to establish at the time of the trade 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 will be settled using the procedures applicable to book-entry securities in same-day funds. Trading between CEDEL and/or Euroclear Participants. Secondary market trading between CEDEL Participants or Euroclear Participants will be settled using the procedures applicable to conventional eurobonds in same-day funds. Trading between DTC seller and CEDEL or Euroclear purchaser. When Global Securities are to be transferred from the account of a DTC Participant to the account of a CEDEL Participant or a Euroclear Participant, the purchaser will send instructions to CEDEL or Euroclear through a CEDEL Participant or Euroclear Participant at least one business day prior to settlement. CEDEL or Euroclear, as applicable, will instruct its Depositary to receive the Global Securities against payment. Payment will include interest accrued on AII-1 the Global Securities from and including the last coupon payment date to and excluding the settlement date. Payment will then be made by such Depositary 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 applicable clearing system and by the clearing system, in accordance with its usual procedures, to the CEDEL Participant's or Euroclear Participant's account. The Global Securities credit will appear the next day (European time) and the 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 CEDEL or Euroclear cash debit will be valued instead as of the actual settlement date. CEDEL Participants 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 CEDEL or Euroclear. Under this approach, they may take on credit exposure to CEDEL or Euroclear until the Global Securities are credited to their accounts one day later. As an alternative, if CEDEL or Euroclear has extended a line of credit to them, CEDEL Participants 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, CEDEL Participants 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 CEDEL Participant'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 the respective Depositary for the benefit of CEDEL Participants 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 than a trade between two DTC Participants. Trading between CEDEL or Euroclear seller and DTC purchaser. Due to time zone differences in their favor, CEDEL Participants and Euroclear Participants may employ their customary procedures for transactions in which Global Securities are to be transferred by the respective clearing systems, through their respective Depositaries, to a DTC Participant. The seller will send instructions to CEDEL or Euroclear through a CEDEL Participant or Euroclear Participant at least one business day prior to settlement. In these cases, CEDEL or Euroclear will instruct their respective Depositaries, as appropriate, to deliver the bonds to the DTC Participant's account against payment. Payment will include interest accrued on the Global Securities from and including the last coupon payment date to and excluding the settlement date. The payment will then be reflected in the account of the CEDEL Participant or Euroclear Participant the following day, and receipt of the cash proceeds in the CEDEL Participant'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). Should the CEDEL Participant or Euroclear Participant have a line of credit with its clearing system and elect to be in debit in anticipation of receipt of the sale proceeds in its account, the back-valuation will extinguish any overdraft charges incurred over that one-day period. If settlement is not completed on the intended value date (i.e., the trade fails), receipt of the cash proceeds in the CEDEL Participant's or Euroclear Participant's account would instead be valued as of the actual settlement date. Finally, day traders that use CEDEL or Euroclear and that purchase Global Securities from DTC Participants for delivery to CEDEL Participants or Euroclear Participants should note that these trades would automatically fail on the sale side unless affirmative action were taken. At least three techniques should be readily available to eliminate this potential problem: (a) borrowing through CEDEL or Euroclear for one day (until the purchase side of the day trade is reflected in their CEDEL or Euroclear accounts) in accordance with the clearing system's customary procedures; AII-2 (b) borrowing the Global Securities in the U.S. from a DTC Participant no later than one day prior to settlement, which would give the Global Securities sufficient time to be reflected in their CEDEL or Euroclear account in order to settle the sale side of the trade; or (c) staggering the value dates for the buy and sell sides of the trade so that the value date for the purchase from the DTC Participant is at least one day prior to the value date for the sale to the CEDEL Participant or Euroclear Participant. CERTAIN U.S. FEDERAL INCOME TAX DOCUMENTATION REQUIREMENTS A beneficial owner of Global Securities holding securities through CEDEL 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 (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 of non-U.S. Persons (Form W-8). Beneficial owners of Offered 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. Person 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 beneficial owners of Offered Certificates 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 beneficial owner of Offered Certificates or such owner's 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 (Payer's Request for Taxpayer Identification Number and Certification). U.S. Federal Income Tax Reporting Procedure. The beneficial owner of a Global Security or, in the case of a Form 1001 or a Form 4224 filer, such owner's agent, files by submitting the appropriate form to the person through whom it holds the security (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 or any political subdivision thereof or (ii) 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. AII-3 - ------------------------------------------------------ - ------------------------------------------------------ No dealer, salesperson or other individual has been authorized to give any information or to make any representations other than those contained or incorporated by reference in this Prospectus in connection with this offer made by this Prospectus and, if given or made, such information or representations must not be relied upon as having been authorized by Bridgestone/Firestone, Inc., Firestone Retail Credit Corporation or the Underwriter. Neither the delivery of this Prospectus nor any sale made hereunder shall under any circumstance create an implication that there has been no change in the affairs of Bridgestone/Firestone, Inc., Firestone Retail Credit Corporation, or the Receivables since the date thereof. This Prospectus does not constitute an offer or solicitation by anyone in any state in which such offer or solicitation is not authorized or in which the person making such offer or solicitation is not qualified to do so or to anyone to whom it is unlawful to make such offer or solicitation. ------------------------ TABLE OF CONTENTS
PAGE ---- Reports to Certificateholders.................. 3 Available Information.......................... 3 Summary of Terms............................... 4 Risk Factors................................... 35 Use of Proceeds................................ 40 The Transferor and Bridgestone/Firestone....... 40 The Credit Card Program........................ 41 Maturity Assumptions........................... 48 The Letter of Credit Bank...................... 49 Description of the Offered Certificates and the Agreement.................................... 49 Description of the Purchase and Sale Agreement.................................... 83 Certain Legal Aspects of the Receivables....... 84 Federal Income Tax Consequences................ 87 ERISA Considerations........................... 89 Underwriting................................... 91 Legal Matters.................................. 92 Index of Terms................................. 93 Annex I: Outstanding Series.................... AI-1 Annex II: Global Clearance, Settlement and Tax Documentation Procedures..................... AII-1
Until (90 days after the date of this Prospectus), all dealers effecting transactions in the Offered Certificates, whether or not participating in this distribution, may be required to deliver a Prospectus. This delivery requirement is in addition to the obligation of dealers to deliver a Prospectus when acting as an underwriter and with respect to their unsold allotments or subscriptions. ------------------------------------------------------ ------------------------------------------------------ $228,205,129 BRIDGESTONE/FIRESTONE MASTER TRUST $200,000,000 CLASS A ASSET BACKED CERTIFICATES, SERIES 1996-1 $28,205,129 CLASS B ASSET BACKED CERTIFICATES, SERIES 1996-1 FIRESTONE RETAIL CREDIT CORPORATION TRANSFEROR BRIDGESTONE/FIRESTONE, INC. SERVICER ------------------------ PROSPECTUS CITICORP SECURITIES, INC. CHASE SECURITIES INC. DATED , 1996 ------------------------------------------------------ ------------------------------------------------------ PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 13. Other Expenses of Issuance and Distribution. The following table sets forth the estimated expenses in connection with the offering of the Securities being registered under this Registration Statement, other than underwriting discounts and commissions: Registration Fee $ 69,153.08* Printing and Engraving $ 12,000 Trustee's Fees $ 3,000 Legal Fees and Expenses $ 220,000 Blue Sky Fees and Expenses $ 15,000 Accountants' Fees and Expenses $ 55,000 Rating Agency Fees $ 131,000 Miscellaneous Fees $ 4,846.92 ------- Total $ 510,000 - ------------- *Actual ITEM 14. Indemnification of Directors and Officers. Chapter 156B Section 67 of the Business Corporations Law of Massachusetts provides that: "Indemnification of directors, officers, employees and other agents of a corporation, and persons who serve at its request as directors, officers, employees or other agents of another organization, or who serve at its request in any capacity with respect to any employee benefit plan, may be provided by it to whatever extent shall be specified in or authorized by (i) the articles of organization or (ii) a by-law adopted by the stockholders or (iii) a vote adopted by the holders of a majority of the shares of stock entitled to vote on the election of directors. Except as the articles of organization or by-laws otherwise require, indemnification of any persons referred to in the preceding sentence who are not directors of the corporation may be provided by it to the extent authorized by the directors. Such indemnification may include payment by the corporation of expenses incurred in defending a civil or criminal action or proceeding in advance of the final disposition of such action or proceeding, upon receipt of an undertaking by the person indemnified to repay such payment if he shall be adjudicated to be not entitled to indemnification under this section which undertaking may be accepted without reference to the financial ability of such person to make repayment. Any such indemnification may be provided although the person to be indemnified is no longer an officer, director, employee or agent of the corporation or of such other organization or no longer serves with respect to any such employee benefit plan. No indemnification shall be provided for any person with respect to any matter as to which he shall have been adjudicated in any proceeding not to have acted in good faith in the reasonable belief that his action was in the best interest of the corporation or to the extent that such matter relates to service with respect to any employee benefit plan, in the best interests of the participants or beneficiaries of such employee benefit plan. The absence of any express provision for indemnification shall not limit any right of indemnification existing independently of this section. A corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or other agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or other agent of another organization or with respect to any employee benefit plan, against any liability incurred by him in any such capacity, or arising out of his status as such, whether or not the corporation would have the power to indemnify him against such liability." Section 8a of the Amended and Restated By-Laws of the Registrant provides that: "The corporation shall, to the extent legally possible, indemnify each of its directors and officers (including persons who serve at its request as directors, officers or trustees of another organization, or in any capacity with respect to any employee benefit plan) against all liabilities and expenses, including amounts paid in satisfaction of judgments, in compromise or as fines and penalties, and counsel fees, reasonably incurred by him in connection with the defense or disposition of any action, suit or other proceeding, whether civil or criminal, in which he may be involved or with which he may be threatened, while in office or thereafter, by reason of his being or having been such a director or officer, except with respect to any matter as to which he shall have been adjudicated in any proceeding not to have acted in good faith in the reasonable belief that his action was in the best interest of the corporation (any person serving another organization in one or more of the indicated capacities at the request of the corporation who shall have acted in good faith in the reasonable belief that his action was in the best interest of such organization to be deemed as having acted in such manner with respect II-1 to the organization) or, to the extent that such matter relates to service with respect to any employee benefit plan, in the best interest of the participants or beneficiaries of such employee benefit plan; provided, however, that as to any matter disposed of by a compromise payment by such director or officer, pursuant to a consent decree or otherwise, no indemnification either for said payment or for any other expenses shall be provided unless such compromise shall be approved as in the best interest of the corporation, after notice that it involves such indemnification: (a) by a disinterested majority of the directors then in office; or (b) by a majority of the disinterested directors then in office, provided that there has been obtained an opinion in writing of independent legal counsel to the effect that such director or officer appears to have acted in good faith in the reasonable belief that his action was in the best interest of the corporation; or (c) by the holders of a majority of the outstanding stock at the time entitled to vote for directors, voting as a single class, exclusive of any stock owned by any interested director or officer. Expenses, including counsel fees, reasonably incurred by any director or officer in connection with the defense or disposition of any such action, suit or other proceeding may be paid from time to time by the corporation in advance of the final disposition thereof upon receipt of an undertaking by such director or officer to repay the amounts so paid to the corporation if it is ultimately determined that indemnification for such expenses is not authorized under this section. The right of indemnification hereby provided shall not be exclusive of or affect any other rights to which any director or officer may be entitled. As used in this section, the terms "director" and "officer" include the relevant individual's heirs, executors and administrators, and an "interested" director or officer is one against whom in such capacity the proceedings in question or another proceeding on the same or similar grounds is then pending. Nothing contained in this section shall affect any rights to indemnification to which corporate personnel other than directors and officers may be entitled by contract or otherwise under law." Bridgestone/Firestone, Inc. has agreed to indemnity the officers and directors of the Registrant with respect to certain liabilities, including liabilities under the Securities Act of 1933, as amended. The Underwriter has agreed to indemnify the Registrant and its officers and directors against liabilities under the Securities Act of 1933, as amended, in respect of written material provided by the Underwriter to the Registrant specifically for use in the prospectus filed as part of this Registration Statement. ITEM 15. Recent Sales of Unregistered Securities. Series 1995-A Asset Backed Certificates - Series Issuance Date: June 5, 1995 - Class A Invested Amount: $199,200,000 - Class B Invested Amount: $38,095,238 - Proceeds from issuance of Series 1996-1 Asset Backed Certificates will be used to retire Series 1995-A Asset Backed Certificates. ITEM 16. Exhibits and Financial Statements. (a) Exhibits 1.1 - Form of Underwriting Agreement. 3.1 - Certificate of Incorporation of the Registrant, as currently in effect. 3.2 - Amended and Restated By-Laws of the Registrant, as currently in effect. 4.1 - Form of Pooling and Servicing Agreement. 4.2 - Form of Series 1996-1 Supplement, including form of Series 1996-1 Certificates. 4.3 - Form of Amended Purchase and Sale Agreement. 4.4 - Form of Amended and Restated Participation Agreement. 4.5 - Form of Servicer Letter of Credit, as amended. 4.6 - Form of Transferor Letter of Credit, as amended. 5.1 - Opinion of Stroock & Stroock & Lavan with respect to legality. 8.1 - Opinion of Brown & Wood with respect to tax matters. 23.1 - Consent of Stroock & Stroock & Lavan (included in its opinion filed as Exhibit 5.1). 23.3 - Consent of Brown & Wood (included in its opinion filed as Exhibit 8.1). --------------------- (b) Financial Statements Inapplicable. ITEM 17. Undertakings. The undersigned registrant hereby undertakes that: (1) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4), or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective. II-2 (2) 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 thereof. (3) 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 foregoing provisions or otherwise, the Registrant has been advised in the opinion of the Commission such indemnification is against public policy as expressed in the Act 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 questions whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. (4) The undersigned registrant hereby undertakes to provide to the underwriter at the closing specified in the underwriting agreements, certificates in such denominations and registered in such names as required by the underwriter to permit prompt delivery to each purchaser. The undersigned registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to the 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 to such information in the registration statement; (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change in the information set forth in the 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 thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. II-3 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, Firestone Retail Credit Corporation has duly caused this Amendment No. 4 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Boston, the Commonwealth of Massachusetts on October 30, 1996. FIRESTONE RETAIL CREDIT CORPORATION /s/ Nancy D. Smith ----------------------------------- Nancy D. Smith, President Pursuant to the requirements of the Securities Act of 1933, as amended, this Amendment No. 4 has been signed below by the following persons in the capacities indicated on October 30, 1996. /s/ Nancy D. Smith President and Director October 30, 1996 - -------------------------------------------- Nancy D. Smith (principal executive officer) /s/ R. Douglas Donaldson Treasurer October 30, 1996 - -------------------------------------------- R. Douglas Donaldson (principal financial officer and principal accounting officer) /s/ Louise E. Colby Director and Secretary October 30, 1996 - -------------------------------------------- Louise E. Colby
INDEX TO EXHIBITS
EXHIBITS - -------- 1.1 - Form of Underwriting Agreement. 3.1 - Certificate of Incorporation of the Registrant. 3.2 - Amended and Restated By-Laws of the Registrant. 4.1 - Form of Pooling and Servicing Agreement. 4.2 - Form of Series 1996-1 Supplement, including form of Series 1996-1 Certificates. 4.3 - Form of Amended and Restated Purchase and Sale Agreement. 4.4 - Form of Amended and Restated Participation Agreement. 4.5 - Form of Servicer Letter of Credit, as amended. 4.6 - Form of Transferor Letter of Credit, as amended. 5.1 - Opinion of Stroock & Stroock & Lavan with respect to legality. 8.1 - Opinion of Brown & Wood with respect to tax matters. 23.1 - Consent of Stroock & Stroock & Lavan (included in its opinion filed as Exhibit 5.1). 23.3 - Consent of Brown & Wood (included in its opinion filed as Exhibit 8.1).
EX-1.1 2 FORM OF UNDERWRITING AGREEMENT EXHIBIT 1.1 DRAFT 10/26/96 CITICORP SECURITIES, INC. CHASE SECURITIES INC. BRIDGESTONE/FIRESTONE MASTER TRUST $200,000,000 CLASS A ASSET BACKED CERTIFICATES, SERIES 1996-1 $ 28,205,129 CLASS B ASSET BACKED CERTIFICATES, SERIES 1996-1 UNDERWRITING AGREEMENT November __, 1996 Citicorp Securities, Inc., as Underwriter 399 Park Avenue New York, New York 10043 Chase Securities Inc., as Underwriter 270 Park Avenue New York, New York 10017-2070 Ladies and Gentlemen: Firestone Retail Credit Corporation (the "Transferor"), on behalf of Bridgestone/Firestone Master Trust (the "Trust"), has filed a Registration Statement relating to the issuance and sale of Bridgestone/Firestone Master Trust Asset Backed Certificates, Series 1996-1, Class A and Class B (the "Offered Certificates"), having the principal amounts set forth above. The Bridgestone/ Firestone Master Trust, Series 1996-1, Collateral Interest (the "Collateral Interest") and Subordinated Transferor Certificate (the "Other Interests") will also be issued but will not be offered hereby. The Offered Certificates and the Other Interests are collectively known as the Series 1996-1 Certificates. The Transferor, as purchaser, and Credit First National Association ("CFNA"), as originator and seller, entered into a Purchase and Sale Agreement and several amendments thereto (the "Original Purchase Agreement") with Bridgestone/Firestone, Inc. ("Bridgestone/Firestone"). Pursuant to the Original Purchase Agreement, CFNA sold to the Transferor all of its right, title and interest in and to all Receivables existing as of the date of such Original Purchase Agreement and agreed to sell all of its right, title and interest in and to all future Receivables created from time to time until the Final Trust Termination Date. The Transferor in turn transferred the Receivables to the Trust pursuant to a Pooling and Servicing Agreement, dated November 1, 1992 (the "Original Pooling Agreement"), by and among the Transferor, Bridgestone/Firestone, as servicer, and The Fuji Bank and Trust Company, as trustee (the "Trustee"). In connection with the issuance of the Series 1996-1 Certificates, the Transferor, CFNA and Bridgestone/Firestone will enter into a Restated Purchase and Sale Agreement, dated as of October ___, 1996 (the "Purchase Agreement"). The Series 1996-1 Certificates will be issued pursuant to a Restated and Amended Pooling and Servicing Agreement, dated October ___, 1996 (the "PSA") and a Series 1996-1 Series Supplement, dated as of October ___, 1996 (the "Supplement"), each by and among the Transferor, Bridgestone/Firestone and the Trustee. The PSA and the Supplement are collectively referred to as the "Pooling and Servicing Agreement." The Series 1996-1 Certificates are entitled to the benefit of two letters of credit for the benefit of the holders of the Series 1996-1 Certificates and of other series of certificates issued by the Trust (an "Enhancement"). With respect to such Enhancement, the Transferor and Bridgestone/Firestone has entered into an agreement, as amended (the "Enhancement Agreement") by and between the Transferor, Bridgestone/Firestone and The Sumitomo Bank, Limited acting through its New York Branch (the "Enhancement Provider"). In connection with the issuance of the Series 1996-1 Certificates, the Collateral Interest will be sold to the Collateral Interest Holder pursuant to a Loan Agreement, dated as of the Closing Date (the "Loan Agreement"), by and among the Transferor, the Servicer, the Trustee and the Collateral Interest Holder. Upon the issuance of the Series 1996-1 Certificates, the Trust will transfer the Series 1996-1 Certificates to the Transferor. The Transferor proposes to sell the Offered Certificates to Citicorp Securities, Inc. and Chase Securities Inc. (the "Underwriters"). The Series 1996-1 Certificates will represent an undivided interest in certain assets of the Trust and the Offered Certificates will be sold pursuant to this Agreement. Capitalized terms used herein without definition shall have the meanings set forth in the Pooling and Servicing Agreement. Section 1. Representations and Warranties of the Transferor and ---------------------------------------------------- Bridgestone/Firestone. (a) The Transferor represents and warrants to, and - --------------------- agrees with, the Underwriters as set forth in this Section 1(a). Certain terms used in this Section 1 are defined in paragraph (i) below. (i) The Transferor has filed with the Securities and Exchange Commission (the "Commission") a registration statement (Registration No. 333-07185) on Form S-1 under the Securities Act of 1933, as amended (the "Act"), including a related preliminary prospectus, for registration under the Act of the Offered Certificates. The Transferor may have filed one or more amendments to such registration statement, including the related preliminary prospectus, each of which amendments has previously been furnished to you. The Transferor will next file with the Commission either (A) prior to the effectiveness of such registration statement, a further amendment thereto (including the form of final prospectus) or (B) after the effectiveness of such registration statement, a final prospectus in accordance with Rules 430A and 424(b)(1) or (4) under the Act. In the case of clause (B), the Transferor has included in such registration statement, as amended at the Effective Date, all information (other than Rule 430A Information) required by the Act and the rules thereunder to be included in the Prospectus with respect to issuance, offering and sale of the Offered Certificates. As filed, such amendment and form of final prospectus shall include all Rule 430A Information, together with all other such required information with respect to the issuance, offering and sale of the Offered Certificates and, except to the extent the Underwriters shall agree in writing to a modification, shall be in all substantive respects in the form furnished to you prior to the Execution Time or, to the extent not completed at the Execution Time, shall contain only such specific additional information and other changes (beyond that contained in the latest preliminary prospectus that has previously been furnished to you) as the Transferor has advised you, prior to the Execution Time, will be included or made therein. The terms that follow, when used in this Agreement, shall have the meanings indicated. The term "Effective Date" shall mean each date that the Registration Statement and any post-effective amendment or amendments thereto became or become effective. "Execution Time" shall mean the date and time that this Agreement is executed and delivered by the parties hereto. "Preliminary Prospectus" shall mean any preliminary prospectus referred to in the preceding paragraph and any preliminary prospectus included in the Registration Statement at the Effective Date that omits Rule 430A Information. "Prospectus" shall mean the prospectus relating to the Offered Certificates that is first filed pursuant to Rule 424(b) after the Execution Time or, if no filing pursuant to Rule 424(b) is required, shall mean the prospectus relating to the Offered Certificates included in the Registration Statement at the Effective Date. "Registration Statement" shall mean the registration statement referred to in the preceding paragraph and any registration statement required to be filed under the Act or rules thereunder, including incorporated documents, exhibits and financial statements, in the form in which it has or shall become effective and, in the event any post-effective amendment thereto becomes effective prior to the Closing Date, shall also mean such registration statement as so amended. Such term shall include Rule 430A Information deemed to be included therein at the Effective Date as provided by Rule 430A. "Rule 424", "Rule 430A" and "Regulation S-K" refer to such rules or regulations under the Act. "Rule 430A Information" means information with respect to the Offered Certificates and the offering thereof permitted to be omitted from the Registration Statement when it becomes effective pursuant to Rule 430A. (ii) On the Effective Date, the Registration Statement did or will comply in all material respects with the applicable requirements of the Act and the rules thereunder; on the Effective Date and when the Prospectus is first filed (if required) in accordance with Rule 424(b) and on the Closing Date, the Prospectus (as amended and together with any supplements thereto) will comply in all material respects with the applicable requirements of the Act and the rules thereunder; on the Effective Date, the Registration Statement did not or will not contain any untrue statement of a material fact and did not and will not omit to state any material fact therein not misleading; and, on the Effective Date, the Prospectus, if not filed pursuant to Rule 424(b), did not or will not, and on the date of any filing pursuant to Rule 424(b) and on the Closing Date, the Prospectus (as amended and together with any supplements thereto) will not, include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the Transferor makes no representations or warranties as to the information contained in or omitted from the Registration Statement or the Prospectus (or any supplements thereto) in reliance upon and in conformity with information furnished in writing to the Transferor by or on behalf of the Underwriters specifically for use in connection with the preparation of the Registration Statement or the Prospectus (or any supplements thereto). (iii) As of the Closing Date, the representations and warranties of the Transferor in the Pooling and Servicing Agreement will be true and correct in all material respects. (iv) The Transferor is duly organized and validly existing as a corporation in good standing under the laws of the State of Massachusetts, has all requisite power and authority (corporate and other) to own its properties and conduct its business as presently conducted and to execute, deliver and perform this Agreement and to consummate the transactions contemplated hereby. (v) The execution, delivery and performance by the Transferor of the Pooling and Servicing Agreement, the Purchase Agreement, the Participation Agreement, the Loan Agreement and the issuance of the Series 1996-1 Certificates and the consummation of the transactions contemplated hereby and thereby have been duly and validly authorized by all necessary actions or proceedings and are legal, valid and binding obligations of the Transferor, enforceable against the Transferor except (y) the enforceability thereof may be subject to bankruptcy, fraudulent transfer, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect related to creditors' rights generally and (z) as to enforceability, to general principles of equity (whether considered in a suit at law or in equity). (vi) This Agreement has been duly authorized, executed and delivered by the Transferor and constitutes a legal, valid and binding agreement of the Transferor, enforceable against the Transferor in accordance with its terms, subject (x) to applicable bankruptcy, reorganization, insolvency, fraudulent transfer, moratorium or other similar laws now and hereafter in effect affecting creditors' rights generally, (y) as to enforceability, to general principles of equity (whether considered in a suit at law or in equity), and (z) as to enforceability may be limited under certain circumstances with respect to provisions indemnifying a party against liability where such indemnification is contrary to public policy under applicable securities laws. (vii) The performance by the Transferor of all of the provisions of its obligations under the Pooling and Servicing Agreement, the Purchase Agreement, the Participation Agreement, the Loan Agreement, the Enhancement Agreement and this Agreement and the consummation of the transactions herein and therein contemplated will not conflict with or result in a breach of any terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other material agreement or instrument to which it is a party or by which it is bound or any order, decree or regulation applicable to the Transferor of any Federal or state court, regulatory board or body or administrative agency having jurisdiction over the Transferor or its property, nor will any such action result in any violation of the provisions of the certificate of incorporation or by-laws of the Transferor. (viii) On the Closing Date, with respect to Receivables created on or prior to, and outstanding on, such date the Transferor (i) had good and marketable title to the Receivables transferred by it to the Trustee pursuant to the Original Pooling Agreement, free and clear of any Lien, except to the extent permitted in the Original Pooling Agreement, (ii) did not assign to any person any of its right, title or interest in such Receivables or in the Original Pooling Agreement, except (x) for its right, title and interest heretofore transferred to the Trustee pursuant to the Original Pooling Agreement and (y) for the rights transferred to Bridgestone/Firestone pursuant to the Participation Agreement and (iii) had the power and authority to transfer the Receivables to the Trust, and upon execution and delivery of the Original Pooling Agreement by the Trustee, the Trust obtained good and marketable title to, or a perfected first priority security interest in, the Receivables, free of Liens other than any Lien permitted under the Original Pooling Agreement. On any date on which any Receivables are created and transferred to the Transferor and transferred by the Transferor to the Trustee after the Closing Date, the Transferor shall be deemed to represent and warrant that it (i) will have good and marketable title to the Receivables being transferred by it to the Trustee pursuant to the Pooling and Servicing Agreement, free and clear of any Lien, except to the extent permitted in the Pooling and Servicing Agreement, (ii) will not have assigned to any person any of its right, title or interest in such Receivables or in the Pooling and Servicing Agreement, except for its right, title and interest heretofore transferred to the Trustee pursuant to the Pooling and Servicing Agreement and except for the rights transferred to Bridgestone/Firestone pursuant to the Participation Agreement and (iii) will have the power and authority to transfer such Receivables to the Trust, and the Trust will have good and marketable title to, or a perfected first priority security interest in, the Receivables, free of Liens other than any Lien permitted under the Pooling and Servicing Agreement. (ix) No consent, approval, authorization, order, registration or qualification of or with any court or governmental agency or body is required for the execution, delivery or performance of this Agreement, the Pooling and Servicing Agreement, the Purchase Agreement, the Loan Agreement and the Series 1996-1 Certificates by the Transferor or the consummation by the Transferor of the transactions contemplated hereby and thereby, except such as have been obtained under the Act and such as may be required under the Securities Exchange Act of 1934 ("Exchange Act") and state securities or blue sky laws in connection with the purchase and distribution of the Offered Certificates by the Underwriters. (x) There is no action, suit or proceeding pending against or, to the knowledge of the Transferor, threatened against or affecting, the Transferor before any governmental body, agency or official in which there is a reasonable possibility of an adverse decision which (a) is reasonably likely to materially adversely affect the business, financial position or results of operations of the Transferor, or (b) which is reasonably likely to result in any material provisions of this Agreement, the Pooling and Servicing Agreement, the Purchase Agreement, the Loan Agreement, the Enhancement Agreement or the Series 1996-1 Certificates becoming invalid. (xi) The Transferor has authorized the purchase and conveyance of the Receivables to the Trust, and the Transferor has authorized the sale of the Offered Certificates to the Underwriters. (xii) Any taxes, fees and other governmental charges owed by the Transferor in connection with the execution, delivery and performance of this Agreement, the Pooling and Servicing Agreement, the Enhancement Agreement, the Purchase Agreement and the Loan Agreement and the Series 1996-1 Certificates shall have been paid or will be paid by the Transferor (or by Bridgestone/Firestone on behalf of the Transferor) at or prior to the Closing Date to the extent then due. (xiii) The direction of the Transferor to the Trustee to authenticate the Series 1996-1 Certificates has been duly authorized by the Transferor, and when the Series 1996-1 Certificates have been duly and validly executed, authenticated and delivered by the Trustee in accordance with the Pooling and Servicing Agreement and when the Offered Certificates have been sold to the Underwriters as provided herein, the Series 1996-1 Certificates will conform in all material respects to the descriptions thereof contained in the Prospectus and will be validly issued and outstanding and entitled to the benefits and security provided by the Pooling and Servicing Agreement. (xiv) This Agreement, the Pooling and Servicing Agreement, the Purchase Agreement, the Loan Agreement, the Enhancement Agreement and the Series 1996-1 Certificates will conform in all material respects to the descriptions thereof in the Prospectus. (xv) Neither the Transferor nor the Trust will be subject to registration as an "investment company" under the Investment Company Act of 1940, as amended (the "1940 Act"). (xvi) Except as described in or contemplated by the Prospectus, subsequent to October __, 1996, there has not been any change in the capital stock of the Transferor, or any material adverse change, or any development involving a prospective material adverse change, which is reasonably likely to materially adversely affect the ability of the Transferor to perform its obligations under the Pooling and Servicing Agreement, the Purchase Agreement, the Loan Agreement or this Agreement. (b) Bridgestone/Firestone represents and warrants to, and agrees with, the Underwriters as set forth in this Section 1(b). (i) Bridgestone/Firestone is duly organized and validly existing as a corporation in good standing under the laws of the State of Ohio, and has all requisite power and authority to own its properties and conduct its business as presently conducted and to execute, deliver and perform this Agreement and to consummate the transactions contemplated hereby and is duly qualified to transact business as a foreign corporation in good standing under the laws of each jurisdiction where the ownership or leasing of its properties or the conduct of its business requires such qualification and where the failure to be so qualified is reasonably likely to have a material adverse effect on the ability of Bridgestone/Firestone to perform its obligations under this Agreement, the Pooling and Servicing Agreement, the Participation Agreement or the Loan Agreement. (ii) As of the Closing Date, the representations and warranties of Bridgestone/Firestone in the Pooling and Servicing Agreement will be true and correct. (iii) The execution, delivery and performance by Bridgestone/Firestone of the Pooling and Servicing Agreement, the Purchase Agreement and the Loan Agreement and the issuance of the Series 1996-1 Certificates and the consummation of the transactions contemplated hereby and thereby have been duly and validly authorized by all necessary action or proceedings and are legal, valid and binding obligations of Bridgestone/Firestone, enforceable against Bridgestone/Firestone except (y) the enforceability thereof may be subject to bankruptcy, fraudulent transfer, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect related to creditors' rights generally and (z) as to enforceability, to general principles of equity (whether considered in a suit at law or equity). (iv) This Agreement has been duly authorized, executed and delivered by Bridgestone/Firestone and constitutes a legal, valid and binding agreement of Bridgestone/Firestone, enforceable against Bridgestone/Firestone in accordance with its terms, subject (x) to applicable bankruptcy, reorganization, insolvency, fraudulent transfer, moratorium or other similar laws now and hereafter in effect affecting creditors' rights generally, (y) as to enforceability, to general principles of equity (whether considered in a suit at law or in equity), and (z) as to enforceability may be limited under certain circumstances with respect to provisions indemnifying a party against liability where such indemnification is contrary to public policy under applicable securities laws. (v) The performance by Bridgestone/Firestone of all of the provisions of its obligations under the Pooling and Servicing Agreement, the Purchase Agreement, the Loan Agreement, the Enhancement Agreement and this Agreement and the consummation of the transactions herein and therein contemplated will not conflict with or result in a breach of any terms or provisions of, or constitute a default under, any material indenture, mortgage, deed of trust, loan agreement or other material agreement or instrument to which Bridgestone/Firestone is a party or by which Bridgestone/Firestone is bound or to which any of its property or assets is subject, or any order, decree or regulation applicable to Bridgestone/Firestone of any Federal or state court, regulatory board or body or administrative agency having jurisdiction over Bridgestone/Firestone or its property, nor will any such action result in any violation of the provisions of the certificate of incorporation or by-laws of Bridgestone/Firestone. (vi) No consent, approval, authorization, order, registration or qualification of or with any court or governmental agency or body is required for the execution, delivery or performance of this Agreement, the Pooling and Servicing Agreement, the Participation Agreement, the Loan Agreement, the Enhancement Agreement and the Certificates by Bridgestone/Firestone or the consummation by Bridgestone/Firestone of the transactions contemplated hereby and thereby, except such as have been obtained under the Act and such as may be required under the Exchange Act and state securities or blue sky laws in connection with the purchase and distribution of the Offered Certificates by the Underwriters. (vii) Except as described or referred to in the Prospectus, there is no action, suit or proceeding pending against or, to the knowledge of Bridgestone/Firestone, threatened against or affecting, Bridgestone/ Firestone before any governmental body, agency or official in which there is a reasonable possibility of an adverse decision which (a) is reasonably likely to materially adversely affect the business, financial position or results of operations of Bridgestone/ Firestone, or (b) is reasonably likely to result in any material provisions of this Agreement, the Pooling and Servicing Agreement, the Purchase Agreement, the Participation Agreement, the Loan Agreement, the Enhancement Agreement or the Series 1996-1 Certificates becoming invalid. (viii) Any taxes, fees and other governmental charges owed by Bridgestone/Firestone in connection with the execution, delivery and performance of this Agreement, the Pooling and Servicing Agreement, the Purchase Agreement, the Participation Agreement, the Loan Agreement and the Enhancement Agreement shall have been paid or will be paid by Bridgestone/Firestone at or prior to the Closing Date to the extent then due. (ix) The Series 1996-1 Certificates will be duly and validly authorized, and when duly and validly executed, authenticated and delivered in accordance with the Pooling and Servicing Agreement, will conform in all material respects to the descriptions thereof contained in the Prospectus and will be validly issued and outstanding and entitled to the benefits and security provided by the Pooling and Servicing Agreement. (x) This Agreement, the Pooling and Servicing Agreement, the Purchase Agreement, the Loan Agreement, the Enhancement Agreement and the Series 1996-1 Certificates will conform in all material respects to the descriptions thereof in the Prospectus. (xi) The Trust will not be subject to registration as an "investment company" under the 1940 Act. (xiv) Except as described in or contemplated by the Prospectus, subsequent to October __, 1996, there has not been any material adverse change, or any development involving a prospective material adverse change, which is reasonably likely to materially adversely affect the business, management, financial position, net worth, results of operations or prospects of Bridgestone/Firestone. Section 2. Purchase and Sale. Subject to the terms and conditions and ----------------- in reliance upon the covenants, representations and warranties herein set forth, the Transferor agrees to sell to the Underwriters, and each of the Underwriters, severally and not jointly, agree to purchase from the Transferor, at the purchase price described herein, the respective principal amount of the Offered Certificates set forth opposite the name of each Underwriter on Schedule A hereto. The purchase price for the Class A Certificates shall be equal to _______% of the aggregate initial principal amount thereof. The purchase price for the Class B Certificates shall be equal to ______% of the aggregate initial principal amount thereof. There will be added to the purchase price of the Offered Certificates an amount equal to interest accrued thereon pursuant to the terms thereof from _______, 1996. Section 3. Delivery and Payment. Delivery of and payment for the -------------------- Offered Certificates shall be made at the offices of Brown & Wood LLP on November __, 1996, or at such later date as the Underwriters shall designate, which date and time may be postponed by agreement between the Underwriters, the Transferor and Bridgestone/Firestone (such date and time of delivery and payment for the Offered Certificates being hereinafter referred to as the "Closing Date"). Delivery of the Offered Certificates shall be made against payment by the Underwriters of the purchase price therefor to or upon the order of the Transferor by one or more wire transfers or checks in Federal (same day) Funds. The Offered Certificates to be so delivered will initially be represented by one or more Offered Certificates registered in the name of Cede & Co., as nominee for The Depository Trust Company ("DTC"). The interests of beneficial owners of the Offered Certificates will be represented by book entries on the records of DTC and participating members thereof. Definitive Certificates representing the Offered Certificates will be available only under limited circumstances. Section 4. Offering by Underwriters. It is understood that you propose ------------------------ to offer the Offered Certificates for sale to the public as set forth in the Prospectus. Section 5. Agreements. (a) The Transferor covenants and agrees with ---------- the Underwriters that: (i) The Transferor will use its best efforts to cause the Registration Statement, and any amendment thereto, if not effective at the Execution Time, to become effective. If the Registration Statement has become or becomes effective pursuant to Rule 430A, or filing of the Prospectus is otherwise required under Rule 424(b), the Transferor will file the Prospectus, properly completed, pursuant to Rule 424(b) within the time period prescribed and will promptly notify the Underwriters of such timely filing. The Transferor will promptly advise the Underwriters (A) when the Registration Statement, and any amendment thereto, shall have become effective, (B) when the Prospectus, and any supplement thereto, shall have been filed with the Commission pursuant to Rule 424(b), (C) of any request by the Commission for any amendment of or supplement to the Registration Statement or the Prospectus or for any additional information and (D) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the institution or threat of any proceeding for that purpose. The Transferor will not file any amendment of the Registration Statement or supplement to the Prospectus unless a copy of the proposed amendment or supplement has been furnished to you a reasonable time in advance of such filing, and it will not file any such amendment or supplement to which the Underwriters or their counsel shall reasonably object. The Transferor will promptly advise the Underwriters of the institution by the Commission of any stop order proceeding with respect to the Registration Statement and will use its reasonable efforts to prevent the issuance of any such stop order and, if issued, to obtain as soon as possible the withdrawal thereof. (ii) If, at any time when a Prospectus relating to the Offered Certificates is required to be delivered under the Act, any event occurs as a result of which such Prospectus as then supplemented would include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, or if it shall be necessary to supplement such Prospectus to comply with the Act or the rules thereunder, the Transferor promptly will prepare and file with the Commission, subject to paragraph (i) of this Section 5, a supplement that will correct such statement or omission or an amendment that will effect such compliance. Consent by the Underwriters to any such supplement or amendment shall not constitute a waiver of any of the conditions set forth in Section 6 hereof. (iii) As soon as practicable, the Transferor will make generally available to Certificateholders and to you all financial reports and information required to be provided to Certificateholders pursuant to the terms of the Pooling and Servicing Agreement. (iv) The Transferor will furnish to the Underwriters and counsel for the Underwriters, without charge, a signed copy of the Registration Statement (including exhibits thereto) and, so long as delivery of a prospectus by the Underwriters may be required by the Act, as many copies of each Preliminary Prospectus and the Prospectus and any supplement thereto as the Underwriters may reasonably request. If necessary, the Transferor will furnish or cause to be furnished to you copies of all reports on Form SR required by Rule 463 under the Act. (v) The Transferor will arrange or cooperate in the arrangements for the qualification of the Offered Certificates for sale under the blue sky laws of such jurisdictions as you may designate, will maintain such qualifications in effect so long as the Prospectus is required to be delivered under the Act; provided that the Transferor shall not be required to qualify as a foreign corporation in any jurisdiction or shall not be required to consent to service of process in any jurisdiction other than with respect to a claim arising out of or in connection with the offering or sale of the Offered Certificates. (vi) For so long as the Offered Certificates are outstanding, the Transferor will furnish to you (A) as soon as practicable after the end of each fiscal year, all documents required to be distributed to Certificateholders or filed with the Commission and (B) as soon as practicable after filing, such other publicly available document concerning the Transferor filed by the Transferor with any government or regulatory authority, as you may reasonably request. If required by Section 12(g) of the Securities Exchange Act of 1934, the Transferor will register the Offered Certificates under the Exchange Act within 120 days after the end of the fiscal year of the Trust during which the offering of the Offered Certificates to the public occurred. (vii) To the extent, if any, that any rating provided with respect to the Offered Certificates set forth in Section 6(p) hereof is conditional upon the furnishing of documents reasonably available to the Transferor, the Transferor shall furnish such documents. (b) Bridgestone/Firestone covenant and agree with the Underwriters, with respect to the Series 1996-1 Certificates, that: (i) Bridgestone/Firestone will use its best efforts to cause the Registration Statement, and any amendment thereto, if not effective at the Execution Time, to become effective. If the Registration Statement has become or becomes effective pursuant to Rule 430A, or filing of the Prospectus is otherwise required under Rule 424(b), Bridgestone/ Firestone will cause the Prospectus to be filed, properly completed, pursuant to Rule 424(b) within the time period prescribed and will promptly notify the Underwriters of such timely filing. Bridgestone/Firestone will promptly advise the Underwriters (A) when the Registration Statement, and any amendment thereto, shall have become effective, (B) when the Prospectus, and any supplement thereto, shall have been filed with the Commission pursuant to Rule 424(b), (C) of any request by the Commission for any amendment of or supplement to the Registration Statement or the Prospectus or for any additional information and (D) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the institution or threat of any proceeding for that purpose. Bridgestone/Firestone will not cause any amendment of the Registration Statement or supplement to the Prospectus to be filed unless a copy has been furnished to you a reasonable time in advance of such filing, and will not file any such amendment or supplement to which the Underwriters or their counsel shall reasonably object. Bridgestone/Firestone will promptly advise the Underwriters of the institution by the Commission of any stop order proceeding with respect to the Registration Statement of which it has knowledge and use its reasonable efforts to prevent the issuance of any such stop order and, if issued, to obtain as soon as possible the withdrawal thereof. (ii) If, at any time when a Prospectus relating to the Offered Certificates is required to be delivered under the Act, any event occurs with respect to the Series 1996-1 Certificates, as a result of which such Prospectus as then supplemented would include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein in the light of the circumstances under which they were made not misleading, or if it shall be necessary to supplement such Prospectus to comply with the Act or the rules thereunder, Bridgestone/Firestone promptly will prepare and use its best efforts to cause to be filed with the Commission, subject to paragraph (i) of this Section 5(b), a supplement that will correct such statement or omission or an amendment that will effect such compliance. (iii) If the Transferor has not done so, Bridgestone/Firestone will furnish to the Underwriters and counsel for the Underwriters, without charge, a signed copy of the Registration Statement (including exhibits thereto) and, so long as delivery of a prospectus by the Underwriters may be required by the Act, as many copies of each Preliminary Prospectus and the Prospectus and any supplement thereto as the Underwriters may reasonably request. If necessary, Bridgestone/Firestone will furnish or cause to be furnished to you copies of all reports on Form SR required by Rule 463 under the Act. (iv) To the extent, if any, that any rating provided with respect to the Offered Certificates set forth in Section 6(p) hereof is conditional upon the furnishing of documents reasonably available to Bridgestone/Firestone, Bridgestone/Firestone shall furnish such documents. Section 6. Conditions of Underwriters' Obligation. The obligation of -------------------------------------- the Underwriters to purchase and pay for the Offered Certificates on the Closing Date shall be subject to the accuracy of the representations and warranties of the Transferor and Bridgestone/Firestone contained herein as of the Execution Time and the Closing Date, to the performance by the Transferor and Bridgestone/Firestone of their obligations hereunder and to the following additional conditions: (a) If the Registration Statement has not become effective prior to the Execution Time, unless the Underwriters agree in writing to a later time, the Registration Statement shall have become effective not later than (i) 6:00 p.m., New York City time, on the date of determination of the public offering price, if such determination occurs at or prior to 3:00 p.m., New York City time, on such date or (ii) 12:00 noon on the business day following the day on which the public offering price was determined, if such determination occurs after 3:00 p.m., New York City time, on such date; if filing of the Prospectus, or any supplements thereto, is required pursuant to Rule 424(b), the Prospectus, and any supplements thereto, shall have been filed in the manner and within the time period required by Rule 424(b); and 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 Transferor or Bridgestone/Firestone, threatened by the Commission. (b) The Transferor shall have delivered to you a certificate, dated the Closing Date, signed by an authorized signatory to the effect that the signer of such certificate has carefully examined the Underwriting Agreement, the Pooling and Servicing Agreement, the Purchase Agreement, the Participation Agreement, the Loan Agreement, the Enhancement Agreement and any other documents to which the Transferor is a party, the Prospectus (and any supplements thereto) and the Registration Statement and that: (i) the representations and warranties of the Transferor in this Agreement are true and correct at and as of the Closing Date as if made on and as of the Closing Date (except to the extent they expressly relate to an earlier date, in which case the representations and warranties of the Transferor are true and correct as of such earlier date); (ii) the Transferor has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied under this Agreement at or prior to the Closing Date; and (iii) no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or, to the knowledge of the signer, threatened by the Commission. (c) Bridgestone/Firestone shall have delivered to you a certificate, dated the Closing Date, signed by an authorized signatory to the effect that the signer of such certificate has carefully examined the Underwriting Agreement, the Pooling and Servicing Agreement, the Purchase Agreement, the Loan Agreement, the Enhancement Agreement and any other documents to which it is a party, the Prospectus (and any supplements thereto) and the Registration Statement and that: (i) the representations and warranties of Bridgestone/Firestone in this Agreement are true and correct at and as of the Closing Date as if made on and as of the Closing Date (except to the extent they expressly relate to an earlier date, in which case the representations and warranties of Bridgestone/Firestone are true and correct as of such earlier date); (ii) Bridgestone/Firestone has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied under this Agreement at or prior to the Closing Date; and (iii) no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or, to the knowledge of the signer, threatened by the Commission. (d) CFNA shall have delivered to you a certificate, dated the Closing Date, signed by an authorized signatory to the effect that the signer of such certificate has carefully examined the Underwriting Agreement and the Purchase Agreement and any other documents to which it is a party, the Prospectus (and any supplements thereto) and the Registration Statement and that the representations and warranties of CFNA in the Purchase Agreement are true and correct at and as of the Closing Date as if made on and as of the Closing Date (except to the extent they expressly relate to an earlier date, in which case the representations and warranties of CFNA are true and correct as of such earlier date); (e) The Underwriters shall have received an opinion of Stroock & Stroock & Lavan, special counsel to Bridgestone/Firestone, dated the Closing Date and satisfactory in form and substance to the Underwriters and counsel for the Underwriters, substantially to the effect that: (i) Each of the Pooling and Servicing Agreement, the Purchase Agreement, the Participation Agreement, the Loan Agreement and this Agreement is a valid and binding obligation of the Transferor and Bridgestone/Firestone enforceable against each of the Transferor and Bridgestone/Firestone in accordance with its terms, subject to (I) bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors' rights generally and court decisions with respect thereto; (II) to the understanding that no opinion is expressed as to the application of equitable principles in any proceeding, whether at law or in equity; (III) to limitations or public policy under applicable securities laws as to rights of indemnity and contributions thereunder. (ii) The Series 1996-1 Certificates, when executed and authenticated as specified in the Pooling and Servicing Agreement and delivered and paid for pursuant to this Agreement, will be validly issued and entitled to the benefits of the Pooling and Servicing Agreement. (iii) The Pooling and Servicing Agreement creates a valid security interest in favor of the Trustee in the Receivables and other property included in the Trust on the date hereof, which security interest of the Trustee in the Receivables and the Trust will be perfected and will constitute a first perfected security interest upon the filing of the UCC-1 financing statement (the "Financing Statement") in respect of the Receivables in the offices of the (Secretary of State) of Massachusetts (and the timely filing of continuation statements with respect to such Financing Statement); provided, however, that such counsel may take customary exceptions acceptable to you. (iv) No consent, approval, authorization or order of, or filing with, any New York (or Massachusetts) governmental agency or body having jurisdiction over the Transferor is required for the valid authorization, issuance and sale of the Series 1996-1 Certificates, except for (a) filings of Uniform Commercial Code financing statements with respect to the transfer of the Receivables from the Transferor to the Trust pursuant to the Pooling and Servicing Agreement; (b) such other consents, approvals, authorizations, order or filings as have been obtained, and (c) such consents, approvals, authorizations, order or filings as may be required under the securities or blue sky laws of any jurisdiction, as to which no opinion need be expressed. (v) The Registration Statement has become effective under the Act. To the best of our knowledge, no stop order suspending the effectiveness of the Registration Statement has been issued under the Act and no proceedings therefore have been initiated or threatened by the Commission. (vi) The Pooling and Servicing Agreement is not required to be qualified under the Trust Indenture Act of 1939, as amended. (vii) The Trust created by the Pooling and Servicing Agreement is not, and will not solely as a result of the offer and sale of the Offered Certificates as contemplated in the Prospectus and in this Agreement become, an "investment company" as such term is defined in the 1940 Act. (viii) The statements in the Prospectus under the caption "Description of the Offered Certificates and the Agreement," insofar as such statements purport to summarize certain provisions of the Offered Certificates and the Pooling and Servicing Agreement, fairly summarize such provisions. (ix) The Registration Statement and the Prospectus (other than the financial statements and other financial, statistical and numerical information included or incorporated by reference therein, in each case as to which no opinion need be rendered) as of their respective effective or issue dates, complied as to form in all material respects with the requirements of the Act and the Regulations thereunder. Such counsel shall deliver to you such additional opinions addressing the transfer of the Receivables by the Transferor to the Trustee of its right, title and interest in and to the Receivables and other property included in the Trust on the Closing Date as may be required by each Rating Agency rating the Series 1996-1 Certificates. Such counsel shall state that it has participated in conferences with representatives of Bridgestone/Firestone, CFNA and with your representatives, at which the contents of the Registration Statement, the Prospectus and related matters were discussed and, although it is no passing upon and do not assume any responsibility for the accuracy, completeness or fairness of the statements contained in the Registration Statement and the Prospectus (except to the extent set forth in paragraph (viii) above), on the basis of the foregoing (relying as to materiality to a large extent upon the opinions of officers and other representatives of Bridgestone/Firestone and CFNA), no facts have come to its attention which would lead it to believe that the Registration Statement at the time it became effective, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading or that the Prospectus, on the date hereof, contains any untrue statement of a material fact necessary or omitted or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that such counsel need express no view with respect to the financial statements and other financial and statistical information contained in or incorporated by reference into the Registration Statement or the Prospectus. (f) the Underwriters shall receive an opinion of Saul Solomon, General Counsel to Bridgestone/Firestone dated the Closing Date and satisfactory in form and in substance to the Underwriters and counsel to the Underwriters substantially to the effect that: (i) Bridgestone/Firestone has been duly organized and is validly existing as a corporation in good standing under the laws of the state of Ohio. (ii) Bridgestone/Firestone has the corporate power and corporate authority to carry on its business as described in the Prospectus and to own and operate its properties in connection therewith, and had at all relevant times and now has, the power, authority and legal right to service the Receivables. (iii) Bridgestone/Firestone is qualified to do business, and is in good standing, as a foreign corporation in the State of Tennessee. (iv) Each of the Pooling and Servicing Agreement, the Participation Agreement, the Purchase Agreement and the Loan Agreement has been duly authorized, executed and delivered by Bridgestone/ Firestone. (v) The execution and delivery by Bridgestone/Firestone of the Pooling and Servicing Agreement, the Participation Agreement, the Purchase Agreement and the Loan Agreement and the signing of the Registration Statement are within the corporate power of Bridgestone/Firestone and have been duly authorized by all necessary corporate action on the part of Bridgestone/Firestone; neither the issue and sale of the Series 1996- 1 Certificates nor the consummation of the transactions contemplated herein nor the fulfillment of the terms hereof will, to the best of my knowledge, conflict with or constitute a breach of, or default under, or, other than the security interest created by the Purchase Agreement or the Pooling and Servicing Agreement, result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of Bridgestone/ Firestone pursuant to any material contract, indenture, mortgage, loan agreement, note, lease or other instruments to which Bridgestone/Firestone is a party or by which it is bound or to which the property or assets of Bridgestone/ Firestone are subject (which contracts, indentures, mortgages, loan agreements, notes, leases and other such instruments have been identified by Bridgestone/ Firestone to such counsel), nor will such action result in any violation of the provisions of the certificate of incorporation or by-laws of Bridgestone/Firestone or, to the best of such counsel's knowledge, any administrative or court decree. Such counsel shall also state that in connection with the preparation of Registration Statement No. 33-07185 (the "Registration Statement") and the Prospectus (the "Prospectus") contained therein, he has participated in conferences with representatives of CFNA, the Underwriter and counsel to the Underwriter at which the contents of the Registration Statement and the Prospectus were discussed. In such discussion, nothing has come to my attention which would lead me to believe that either the Registration Statement, as of its effective date or the Prospectus, as of the date hereof, contained an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they have made, not misleading. In making the above statements, I assume no responsibility for factual accuracy, completeness or fairness of the statements contained in the Registration Statement or in the Prospectus and I have made no independent check or verification for the purpose of expressing such statements. Furthermore, I am not expressing any view whatsoever with respect to the financial and statistical data included in the Registration Statement and Prospectus. (g) The Underwriters shall receive an opinion of Ropes & Grey, counsel to the Transferor dated the Closing Date and satisfactory in form an in substances to the Underwriters and counsel to the Underwriters substantially to the effect that: (i) The Transferor has been duly organized and is validly existing as a corporation in good standing under the laws of the State of Massachusetts. (ii) The Transferor has all the requisite corporate power and authority to carry on its business as described in the Prospectus and to own and operate its properties in connection therewith, and had at all relevant times and now has, the power and authority to acquire and own the Receivables. (iii) Each of the Pooling and Servicing Agreement, the Purchase Agreement, the Participation Agreement, the Loan Agreement and this Agreement has been duly authorized, executed and delivered by the Transferor. (iv) The execution and delivery by the Transferor of this Agreement, the Pooling and Servicing Agreement, the Participation Agreement, the Purchase Agreement and the Loan Agreement and the signing of the Registration Statement by the Transferor are within the corporate power of the Transferor and have been duly authorized by all necessary corporate action on the part of the Transferor; and neither the issue and sale of the Series 1996-1 Certificates, nor the consummation of the transactions contemplated herein nor the fulfillment of the terms hereof will, to the best of such counsel's knowledge, conflict with or constitute a breach of, or default under, or other than the security interest created by the Purchase Agreement or the Pooling and Servicing Agreement, result in the crease or imposition of any lien, charge or encumbrance upon any property or assets of the Transferor pursuant to any contract, indenture, mortgage, loan agreement, note, lease or other instrument to which the Transferor is bound or to which the property or assets of the Transferor are subject (which contracts, indentures, mortgages, loan agreements, notes, leases and other such instruments have been identified by the Transferor to such counsel), nor will such action result in any violation of the provisions of the certificate of incorporation or by-laws of the Transferor or, to the best of such counsel's knowledge, any administrative or court decree. (v) The Series 1996-1 Certificates have been duly authorized by the Transferor. (h) The Underwriters shall receive an opinion of (counsel to CFNA), dated the Closing Date and satisfactory in form and in substance to the Underwriters and counsel to the Underwriters, substantially to the effect that: (i) CFNA has been duly organized and is validly existing as a (national banking association). (ii) CFNA has the corporate power and corporate authority to carry on its business as described in the Prospectus and to own and operate its properties in connection therewith, and had at all relevant times and now has, the power, authority and legal right to create and own the Receivables. (iii) The Purchase Agreement has been duly authorized, executed and delivered by CFNA, and is a valid and binding obligation of CFNA enforceable against CFNA in accordance with its terms, except for (a) filings of Uniform Commercial Code financing statements with respect to the transfer of the Receivables from CFNA to the Transferor pursuant to the Purchase Agreement; (b) such other consents, approvals, authorizations, order or filings as have been obtained, and (c) such consents, approvals, authorizations, order or filings as may be required under the securities or blue sky laws of any jurisdiction, as to which no opinion need be expressed. (iv) The execution and delivery by CFNA of the Purchase Agreement is within the corporate power of CFNA and have been duly authorized by all necessary corporate action on the part of CFNA; will not, to the best of our knowledge, conflict with or constitute a breach of, or default under, or, other than the security interest created by the Purchase Agreement result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of CFNA pursuant to any material contract, indenture, mortgage, loan agreement, note, lease or other instruments to which CFNA is a party or by which it is bound or to which the property or assets of CFNA are subject (which such contracts, indentures, mortgages, loan agreements, notes, leases and other such instruments have been identified by CFNA to us), nor will such action result in any violation of the provisions of the certificate of incorporation or by-laws of CFNA or, to the best of such counsel's knowledge, any administrative or court decree. Such counsel shall deliver to you such additional opinions addressing the transfers of the Receivables by CFNA to the Transferor of its right, title and interest and to the Receivables and other property transferred to the Transferor on the Closing Date as may be required by each Rating Agency rating the Series 1996-1 Certificates. (i) The Underwriters shall have received from Brown & Wood LLP, in its capacity as counsel for the Underwriters, a favorable opinion dated the Closing Date, with respect to the issuance and sale of the Offered Certificates, the Pooling and Servicing Agreement, the Registration Statement, the Prospectus and such other related matters as the Underwriters may reasonably require, including: (i) The Registration Statement has become effective under the Act and, to the best knowledge of such counsel, no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or threatened; and the Registration Statement and the Prospectus (other than financial, numerical and statistical information contained therein as to which such counsel need express no opinion), at the time the Registration Statement became effective, complied as to form in all material respects with the applicable requirements of the Act and the rules thereunder. (ii) The Pooling and Servicing Agreement is not required to be qualified under the Trust Indenture Act of 1939, as amended. (iii) The Trust is not now, and following the sale of the Series 1996-1 Certificates to the Underwriters will not be, required to be registered under the Investment Company Act of 1940, as amended. In giving its opinion, Brown & Wood LLP may rely as to matters involving the application of laws of any jurisdiction other than the State of New York, the United States or the General Corporation Law of the State of Delaware, to the extent deemed proper and specified in such opinion, upon the opinion of other counsel of good standing believed to be reliable, and as to matters of fact, to the extent deemed proper and as stated therein on certificates of responsible officers of the Trust, Transferor, Bridgestone/Firestone, Citicorp and public officials. References to the Prospectus in this paragraph (h) include any supplements thereto. (j) The Underwriters shall have received an opinion or opinions of _________________, special counsel for the Transferor, dated the Closing Date, in form and substance satisfactory to the Underwriters and their counsel, 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 certain other matters relating to the applicable Enhancement, if any, in a form previously approved by you and your counsel. In addition, the Underwriters shall have received a reliance letter with respect to any opinion that the Transferor is required to deliver to the Rating Agency. (k) The Underwriters shall have received an opinion from Brown & Wood LLP, special tax counsel to the Transferor, with respect to the Federal income tax treatment of the Certificates in form and substance satisfactory to the Underwriters. The Underwriters shall have also received an opinion of Jones, Day, Reavis & Pogue, special Ohio tax counsel to the Transferor, with respect to treatment of the Certificates under the Ohio corporation franchise tax measured by net income in form and substance satisfactory to the Underwriters. (l) The Underwriters, Transferor and Bridgestone/Firestone shall have received an opinion of Shearman and Sterling, counsel to the Trustee, dated the Closing Date and satisfactory in form and substance to the Underwriters and counsel for the Underwriters and to the Transferor and Bridgestone/Firestone and their counsel, to the effect that: (i) The Trustee has been duly incorporated and is validly existing as a banking corporation under the laws of the State of New York, and has the power and authority (corporate and other) to enter into, and to take all action 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 each of the documents comprising the Pooling and Servicing Agreement constitutes a legal, valid and binding agreement of the Trustee, enforceable in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, fraudulent transfer, liquidation, reorganization, moratorium or other similar laws affecting the enforce- ment of rights of creditors against the Trustee generally, as such laws would apply in the event of bankruptcy, insolvency, fraudulent transfer, liquidation or reorganization or any moratorium or similar occurrence affecting the Trustee, and the application of general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). (iii) The Series 1996-1 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 the terms of each do not conflict with or result in a violation of (A) any law of the United States of America or the State of New York or any regulation governing the banking or trust powers of the Trustee, or (B) the Organization Certificate or by-laws of the Trustee. (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 its execution and delivery of the Pooling and Servicing Agreement or the performance by the Trustee of the terms of the Pooling and Servicing Agreement. (m) The applicable rating agencies shall have affirmed the rating of the Bridgestone/Firestone Master Trust, Series 1992-B Certificates. (n) The Class A Certificates shall be rated at least "AAA" by Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc. ("S&P") and "Aaa" by Moody's Investors Service, Inc. ("Moody's"). The Class B Certificates shall be rated at least "A" by S&P and "A3" by Moody's. Neither S&P nor Moody's shall have placed the Offered Certificates under review with possible negative implications. (o) You shall have received from Deloitte & Touche or other independent certified public accountants acceptable to you, a letter, dated as of the date hereof and as of the applicable Closing Date, delivered at such times, in the form heretofore agreed to. (p) Subsequent to the respective dates as of which information is given in the Registration Statement and the Prospectus, there shall not have been any change, or any development involving a prospective change, in or affecting the business or properties of the Trust, the Transferor or Bridgestone/Firestone, the effect of which, in any case referred to above, taken as a whole from that set forth in or contemplated by the Registration Statement or the Prospectus (as amended to the date hereof), which is, in the reasonable judgment of the Underwriters (after consultation with the Transferor and Bridgestone/Firestone), so material and adverse as to make it impractical or inadvisable to proceed with the offering or the delivery of the Offered Certificates as contemplated by the Registration Statement and the Prospectus (and any supplements thereto). (q) The Underwriters and counsel for the Underwriters shall have received such information, opinions, certificates and documents as the Underwriters or counsel for the Underwriters may reasonably request. If any of the conditions specified in this Section 6 shall not have been fulfilled in all material respects when and as provided in this Agreement, or if any of the opinions or certificates mentioned above or elsewhere in this Agreement shall not be in all material respects reasonably satisfactory in form and substance to the Underwriters and counsel for the Underwriters, this Agreement and all your obligations hereunder may be canceled at, or at any time prior to, the Closing Date by you. Notice of such cancellation shall be given to the Trust, the Transferor and Bridgestone/Firestone in writing or by telephone or telegraph confirmed in writing. Section 7. Expenses; Reimbursement of Expenses. (a) The Transferor ----------------------------------- will pay all expenses incidental to the performance of the obligations under this Agreement, including, without limitation, (i) the filing of the Registration Statement and all amendments thereto, (ii) the printing and delivery to the Underwriters, in such quantities as you may reasonably request, of copies of this Agreement, (iii) any fees charged by any rating agency for the rating of the Series 1996-1 Certificates, (iv) any expenses (not including fees and disbursements of counsel) incurred by the Underwriters in connection with qualification of the Series 1996-1 Certificates for sale under the laws of such jurisdictions as the Underwriters designates, (v) the fees and expenses of the Trustee and its counsel and (vi) the fees and expenses of Brown & Wood LLP, as special federal income tax counsel to the Transferor (it being understood that, except as provided in Sections 7 and 8 hereof, the Underwriters will pay its own expenses, the fees and expenses of Brown & Wood LLP in its role as counsel for the Underwriters). (b) If the sale of the Offered Certificates provided for herein is not consummated because any condition to your obligations set forth in Section 6 hereof is not satisfied, or because of any refusal, inability or failure on the part of the Transferor or Bridgestone/Firestone to perform any agreement herein or to comply with any provision hereof other than by reason of a default by any of the Underwriters, the Transferor and Bridgestone/Firestone, jointly and severally, will reimburse the Underwriters upon demand for all out-of-pocket expenses (including reasonable fees and disbursements of counsel) that shall have been incurred by it in connection with the proposed purchase and sale of the Series 1996-1 Certificates. Section 8. Indemnification and Contribution. (a) The Transferor and -------------------------------- Bridgestone/Firestone, jointly and severally, agree to indemnify and hold harmless the Underwriters and each person who controls the Underwriters within the meaning of the Act against any and all losses, claims, damages or liabilities to which it may become subject under the Act, the Exchange Act or other Federal or state statutory law or regulation, at common law 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 a material fact, with respect to the Transferor and Bridgestone/Firestone contained in the Registration Statement for the registration of the Offered Certificates as originally filed or in any amendment thereof, or in any Preliminary Prospectus or the Prospectus, or in any amendment thereof 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 agree to reimburse each such indemnified party, as incurred, for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that (i) neither the Transferor, nor -------- ------- Bridgestone/Firestone will be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon any such untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon and in conformity with written information furnished to the Transferor or Bridgestone/Firestone by or on behalf of the Underwriters specifically for use in connection with the preparation thereof, and (ii) such indemnity with respect to any untrue statement or omission in any Preliminary Prospectus or the Prospectus shall not inure to the benefit of the Underwriters (or any person controlling any of the Underwriters) from whom the person asserting any such loss, claim, damage or liability purchased the Offered Certificates which is the subject thereof if such person did not receive a copy of the Prospectus (or the Prospectus as supplemented), excluding documents incorporated therein by reference at or prior to the confirmation of the sale of the Offered Certificates to such person in any case where such delivery is required by the Act and the untrue statement or omission of a material fact contained in any Preliminary Prospectus was corrected in the Prospectus (or the Prospectus as supplemented). This indemnity agreement is independent of any liability which the Transferor or Bridgestone/Firestone may otherwise have. (b) Each Underwriter severally agrees to indemnify and hold harmless the Transferor or Bridgestone/Firestone, each of their respective directors, each of the officers who signs the Registration Statement, and each person who controls either the Transferor or Bridgestone/Firestone within the meaning of the Act, to the same extent as the foregoing indemnities from the Transferor and Bridgestone/Firestone to the Underwriters, including the reimbursement of each indemnified party, as incurred, for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action, but only with reference to written information relating to such Underwriter furnished to the Transferor or Bridgestone/Firestone by or on behalf of such Underwriter specifically for use in the preparation of the documents referred to in the foregoing indemnity. This indemnity agreement will be in addition to any liability which the Underwriters may otherwise have. The Transferor and Bridgestone/Firestone each acknowledge that the statements relating to the Underwriters and this Agreement set forth in the (last paragraph of the cover page), and the statements under the heading "Underwriting" in any Preliminary Prospectus and the Prospectus constitute the only information furnished in writing by or on behalf of any Underwriters for inclusion in any Preliminary Prospectus or the Prospectus, and the Underwriters confirm that such statements are correct. (c) Promptly after receipt by an indemnified party under this Section 8 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 this Section 8, notify the indemnifying party in writing 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 this Section 8. 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, jointly with any other indemnifying party similarly notified, to appoint counsel reasonably satisfactory to such indemnified party to represent the indemnified party in such action; provided, however, that if the defendants -------- ------- in any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that there may be legal defenses available to it and/or other indemnified parties which are different from or additional in any material respect to those available to the indemnifying party, the indemnified party or parties shall have the right to select separate counsel to assert such legal defenses and to otherwise participate in the defense of such action on behalf of such indemnified party or parties. After notice from the indemnifying party to such indemnified party of its election so to appoint counsel to defend such action and approval by the indemnified party of such counsel, the indemnifying party will not be liable to such indemnified party under this Section 8 for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof unless (i) the indemnified party shall have employed separate counsel in connection with the assertion of legal defenses in accordance with the proviso to the next preceding sentence or (ii) the indemnifying party has authorized the employment of counsel for the indemnified party at the expense of the indemnifying party; and except that such liability shall be only in respect of the counsel referred to in such clause (i) or (ii). It is understood, however, that the indemnifying party shall not be liable for the expenses of more than one separate counsel, approved by the Underwriters in the case of paragraph (a) of this Section 8, representing the indemnified parties under such paragraph (a) who are parties to such action. (d) To provide for just and equitable contribution in circumstances in which the indemnification provided for in paragraphs (a) and (b) of this Section 8 is due in accordance with its terms but is for any reason held by a court to be unavailable on grounds of policy or otherwise, the Transferor and Bridgestone/Firestone, on the one hand, and the Underwriters, on the other, shall contribute to the losses, claims, damages and liabilities (including legal or other expenses reasonably incurred in connection with investigating or defending same) to which the Transferor and Bridgestone/Firestone and the Underwriters may be subject in such proportion so that the Underwriters are responsible for that portion represented by the percentage that the underwriting discount appearing on the cover page of the Prospectus bears to the public offering price appearing thereon and the Transferor and Bridgestone/Firestone are jointly and severally responsible for the balance; provided, however, that (i) in no case shall the Underwriters be responsible - -------- ------- for any amount in excess of the underwriting discount applicable to the Offered Certificates purchased by the Underwriters hereunder and (ii) 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. For purposes of this Section 8, each person who controls the Underwriters within the meaning of the Act shall have the same rights to contribution as the Underwriters, and each person who controls each of the Transferor and Bridgestone/Firestone within the meaning of the Act, each officer of each of the Transferor and Bridgestone/Firestone who shall have signed the Registration Statement and each director of each of the Transferor and Bridgestone/Firestone shall have the same rights to contribution as each of the Transferor and Bridgestone/Firestone, as the case may be, subject in each case to clauses (i) and (ii) of this paragraph (d). Any party entitled to contribution will, promptly after receipt of notice of commencement of any action, suit or proceeding against such party in respect of which a claim for contribution may be made against any other party or parties under this paragraph (d), notify such party or parties from whom contribution may be sought, but the omission to so notify such party or parties shall not relieve the party or parties from whom contribution may be sought from any other obligation it or they may have hereunder or otherwise than under this paragraph (d). Section 9. Termination. This Agreement shall be subject to termination ----------- in the absolute discretion of the Underwriters, by notice given to the Transferor and Bridgestone/Firestone prior to delivery of and payment for the Offered Certificates, if prior to such time (i) trading in securities generally on the New York Stock Exchange shall have been suspended or limited or minimum prices shall have been established on such Exchange, (ii) a banking moratorium shall have been declared by Federal or New York State authorities or (iii) there shall have occurred any outbreak or material escalation of hostilities or other calamity or crisis the effect of which on the financial markets of the United States of America is such as to make it, in the reasonable judgment of the Underwriters, impractical or inadvisable to market the Offered Certificates. Section 10. Default by One or More of the Underwriters. If one or more ------------------------------------------ of the Underwriters shall fail at the applicable Closing Time to purchase the Offered Certificates which it or they are obligated to purchase hereunder (the "Defaulted Certificates"), then such of you as are named herein shall have the right, within 24 hours thereafter, to make arrangements for one or more of the non-defaulting Underwriters, or any other underwriters, to purchase all, but not less than all, of the Defaulted Certificates in such amounts as may be agreed upon and upon the terms herein set forth. If, however, you have not completed such arrangements within such 24-hour period, then: (a) if the aggregate principal amount of Defaulted Certificates does not exceed 10% of the aggregate principal amount of the Offered Certificates to be purchased hereunder, the non-defaulting Underwriters named hereunder shall be obligated to purchase the full amount thereof in the proportions that their respective underwriting obligations hereunder bear to the underwriting obligations of all such non-defaulting Underwriters, or (b) if the aggregate principal amount of Defaulted Certificates exceeds 10% of the aggregate principal amount of the Offered Certificates to be purchased hereunder, this Agreement shall terminate, without any liability on the part of any non-defaulting Underwriters. No action taken pursuant to this Section shall relieve any defaulting Underwriters from liability with respect to any default of such Underwriters under this Agreement. In the event of a default by any Underwriters as set forth in this Section, either you or the Transferor shall have the right to postpone the applicable Closing Time for a period of time not exceeding seven days in order that any required changes in the Registration Statement or Prospectus or in any other documents or arrangements may be effected. Section 11. Representations and Indemnities To Survive. The respective ------------------------------------------ agreements, representations, warranties, indemnities and other statements of the Transferor and Bridgestone/Firestone or the officers of any of them and of the Underwriters set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation made by or on behalf of you or the Trust, the Transferor and Bridgestone/Firestone or any of the officers, directors or controlling persons referred to in Section 8 hereof, and will survive delivery of and payment for the Series 1996-1 Certificates. The provisions of Sections 7 and 8 hereof shall survive the termination or cancellation of this Agreement. Section 12. Notices. All communications hereunder shall be in writing ------- and effective only on receipt, and, if sent to the Underwriters, will be mailed, delivered or telegraphed and confirmed to it at: c/o Citibank, N.A., 399 Park Avenue, New York, New York 10043, Attention: __________; if sent to the Transferor, will be mailed, delivered or telegraphed and confirmed to it at: c/o JH Management Corporation, One International Place Suite 520, Boston, Massachusetts 02110; if sent to Bridgestone/Firestone, will be mailed, delivered or telegraphed and confirmed to it at: Bridgestone/Firestone, Inc., 50 Century Boulevard, Nashville, Tennessee 37214, Attention: Saul Soloman. Section 13. Applicable Law. This Agreement will be governed by and -------------- construed in accordance with the laws of the State of New York. This Agreement supersedes all prior agreements and understandings relating to the subject matter hereof. Section 14. Successors. This Agreement will inure to the benefit of ---------- and be binding upon the parties hereto and their respective successors and the officers, directors and controlling persons referred to in Section 8 hereof, and no other person will have any right or obligation hereunder. Section 15. Execution in Counterpart. 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 instrument. Section 16. No Bankruptcy Action Against the Transferor. The ------------------------------------------- Transferor hereby agrees not to take any voluntary action to seek bankruptcy protection unless there are no Series 1996-1 Certificates outstanding. Bridgestone/Firestone and each Underwriter hereby agree not to take any action to commence or participate in any involuntary bankruptcy action against the Transferor unless there are no Series 1996-1 Certificates outstanding. Section 17. Miscellaneous. Neither this Agreement nor any term hereof ------------- may be changed, waived, discharged or terminated orally, but only by an instrument in writing signed by the party against whom enforcement of the change, waiver, discharge or termination is sought. The headings in this Agreement are for purposes of reference only and shall not limit or otherwise affect the meaning hereof. If you are in agreement with the foregoing, please sign and return a counterpart hereof to the Transferor and Bridgestone/Firestone, whereupon this letter along with all counterparts shall become a binding agreement among the Transferor, Bridgestone/Firestone and the Underwriters in accordance with its terms. Very truly yours, FIRESTONE RETAIL CREDIT CORPORATION by ____________________________________________ Name: Title: BRIDGESTONE/FIRESTONE, INC. by ___________________________________________ Name: Title: ACCEPTED AND AGREED AS OF THE DATE FIRST ABOVE WRITTEN: CITICORP SECURITIES, INC. by _________________________ Name: Title: CHASE SECURITIES INC. by _________________________ Name: Title: SCHEDULE A ----------
Purchase Price as a Percentage of the Aggregate Principal Aggregate Original Amount Class A Principal Amount of the Certificates to be Class A Underwriter Purchased Certificates - ----------- ---------------------- ----------------------- Citicorp Securities, Inc. . . . . . . . . . . . . . $__________ _____% Chase Securities Inc.. . . . . . . . . . . . . . . $__________ _____% Total . . . . . . . . . . . . . . . . . . $200,000,000
Purchase Price as a Percentage of the Aggregate Principal Aggregate Original Amount Class B Principal Amount of the Certificates to be Class B Underwriter Purchased Certificates - ----------- -------------------- ------------------------ Citicorp Securities, Inc. . . . . . . . . . . . . . $_________ _________% Chase Securities Inc.. . . . . . . . . . . . . . . $_________ _________% Total . . . . . . . . . . . . . . . . . . $28,205,129
EX-3.1 3 CERTIFICATE OF INCORPORATION OF THE REGISTRANT EXHIBIT 3.1 The Commonwealth of Massachusetts OFFICE OF THE MASSACHUSETTS SECRETARY OF STATE MICHAEL JOSEPH CONNOLLY, SECRETARY ONE ASHBURTON PLACE, BOSTON, MASS. 02108 ARTICLES OF ORGANIZATION (UNDER G.L. CH. 156B) INCORPORATORS NAME POST OFFICE ADDRESS ----- ------------------- Include given name in full in case of natural persons; in case of a corporation, give state of incorporation. Louise E. Colby Suite 2300 225 Franklin Street Boston, MA 02110 The above-named incorporator(s) do hereby associate (themselves) with the intention of forming a corporation under the provisions of General Laws, Chapter 156B and hereby state(s): 1. The name by which the corporation shall be known is: 1200 Capital Corporation 2. The purpose for which the corporation is formed is as follows: (a) To purchase and sell accounts receivable, commercial paper and other securities. (b) To carry on any manufacturing, mercantile, selling, management, service or other business, operation or activity which may be lawfully carried on by a corporation organized under the Business Corporation Law of The Commonwealth of Massachusetts, whether or not related to those referred to in the foregoing paragraph. Note: If the space provided under any article or item on this form is insufficient, additions shall be set forth on separate 8 1/2 x 11 sheets of paper leaving a left hand margin of at least 1 inch for binding. Additions to more than one article may be continued on a single sheet so long as each article requiring each such addition is clearly indicated. 3. The total number of shares and the par value, if any, of each class of stock within the corporation is authorized as follows:
WITHOUT PAR VALUE WITH PAR VALUE CLASS OF STOCK NUMBER OF SHARES NUMBER OF SHARES PAR VALUE AMOUNT -------------- ---------------- ---------------- --------- ------ PREFERRED $ COMMON 250,000 1.00 $250,000
*4. If more than one class is authorized, a description of each of the different classes of stock with, if any, the preferences, voting powers, qualifications, special or relative rights or privileges as to each class thereof and any series now established: Not Applicable *5. The restrictions, if any, imposed by the Articles of Organization upon the transfer of shares of stock of any class are as follows: None *6. Other lawful provisions, if any, for the conduct and regulation of business and affairs of the corporation, for its voluntary dissolution, or for limiting, defining, or regulating the powers of the corporation, or of its directors or stockholders, or of any class of stockholders: See Attached *If there are no provisions state "None". Article 6 - ----------------------- Other Lawful Provisions (a) The corporation may carry on any business, operation or activity referred to in Article 2 to the same extent as might an individual, whether as principal, agent, contractor or otherwise, and either alone or in conjunction or a joint venture or other arrangement with any corporation, association, trust, firm or individual. (b) The corporation may carry on any business, operation or activity through a wholly or partly owned subsidiary. (c) The corporation may be a partner in any business enterprise which it would have power to conduct by itself. (d) The directors may make, amend or repeal the bylaws in whole or in part, except with respect to any provision thereof which by law or the bylaws requires action by the stockholders. (e) Meetings of the stockholders may be held anywhere in the United States. (f) No stockholder shall have any right to examine any property or any books, accounts or other writings of the corporation if there is reasonable ground for belief that such examination will for any reason be adverse to the interests of the corporation, and a vote of the directors refusing permission to make such examination and setting forth that in the opinion of the directors such examination would be adverse to the interests of the corporation shall be prima facie evidence that such examination would be adverse to the interests of the corporation. Every such examination shall be subject to such reasonable regulations as the directors may establish in regard thereto. (g) The directors may specify the manner in which the accounts of the corporation shall be kept and may determine what constitutes net earnings, profits and surplus, what amounts, if any, shall be reserved for any corporate purpose, and what amounts, if any, shall be declared as dividends. Unless the board of directors otherwise specifies, the excess of the consideration for any share of its capital stock with par value issued by it over such par value shall be paid-in surplus. The board of directors may allocate to capital stock less than all of the consideration for any share of its capital stock without par value issued by it, in which case the balance of such consideration shall be paid-in surplus. All surplus shall be available for any corporate purpose, including the payment of dividends. (h) The purchase or other acquisition or retention by the corporation of shares of its own capital stock shall not be deemed a reduction of its capital stock. Upon any reduction of capital or capital stock, no stock- holder shall have any right to demand any distribution from the corporation, except as and to the extent that the stockholders shall have provided at the time of authorizing such reduction. (i) The directors shall have the power to fix from time to time their compensation. No person shall be disqualified from holding any office by reason of any interest. In the absence of fraud, any director, officer or stockholder of this corporation individually, or any individual having any interest in any concern which is a stockholder of this corporation, or any concern in which any of such directors, officers, stockholders or individuals has any interest, may be a party to, or may be pecuniarily or otherwise interested in, any contract, transaction or other act of this corporation, and (1) such contract, transaction or act shall not be in any way invalidated or otherwise affected by that fact; (2) no such director, officer, stockholder or individual shall be liable to account to this corporation for any profit or benefit realized through any such contract, transaction or act; and (3) any such director of this corporation may be counted in determining the existence of a quorum at any meeting of the directors or of any committee thereof which shall authorize any such contract, transaction or act, and may vote to authorize the same; provided, however, that any contract, transaction or act in which any director or officer of this corporation is so interested individually or as a director, officer, trustee or member of any concern which is not a subsidiary or affiliate of this corporation, or in which any directors or officers are so interested as holders, collectively, of a majority of shares of capital stock or other beneficial interest at the time outstanding in any concern which is not a subsidiary or affiliate of this corporation, shall be duly authorized or ratified by a majority of the directors who are not so interested, to whom the nature of such interest has been disclosed and who have made any findings required by law; the term "interest" including personal interest and interest as a director, officer, stockholder, shareholder, trustee, member or beneficiary of any concern; the term "concern" meaning any corporation, association, trust, partnership, firm, person or other entity other than this corporation; and the phrase "subsidiary or affiliate" meaning a concern in which a majority of the directors, trustees, partners or controlling persons is elected or appointed by the directors of this corporation, or is constituted of the directors or officers of this corporation. To the extent permitted by law, the authorizing or ratifying vote of the holders of a majority of the shares of each class of the capital stock of this corporation outstanding and entitled to vote for directors at any annual meeting or a special meeting duly called for the purpose (whether such vote is passed before or after judgment rendered in a suit with respect to such contract, transaction or act) shall validate any contract, transaction or act of this corporation, or of the board of directors or any committee thereof, with regard to all stockholders of this corporation, whether or not of record at the time of such vote, and with regard to all creditors and other claimants under this corporation; provided, however, that A. with respect to the authorization or ratification of contracts, transactions or acts in which any of the directors, officers or stockholders of this corporation have an interest, the nature of such contracts, transactions or acts and the interest of any director, officer or stockholder therein shall be summarized in the notice of any such annual or special meeting, or in a state- ment or letter accompanying such notice, and shall be fully disclosed at any such meeting; B. the stockholders so voting shall have made any findings required by law; C. stockholders so interested may vote at any such meeting except to the extent otherwise provided by law; and D. any failure of the stockholders to authorize or ratify such contract, transaction or act shall not be deemed in any way to invalidate the same or to deprive this corporation, its directors, officers or employees of its or their right to proceed with such contract, transaction or act. No contract, transaction or act shall be avoided by reason of any provision of this paragraph (i) which would be valid but for such provision or provisions. (j) The corporation shall have all powers granted to corporations by the laws of The Commonwealth of Massachusetts, provided that no such power shall include any activity inconsistent with the Business Corporation Law or the general laws of said Commonwealth. 7. By-laws of the corporation have been duly adopted and the initial directors, president, treasurer and clerk, whose names are set out below, have been duly elected. 8. The effective date of organization of the corporation shall be the date of filing with the Secretary of the Commonwealth or if later date is desired, specify date (not more than 30 days after the date of filing.) 9. The following information shall not for any purpose be treated as a permanent part of the Articles of Organization of the corporation. a. The post office address of the initial principal office of the corporation of Massachusetts is: Suite 230, 225 Franklin Street, Boston, MA 02110 b. The name, residence, and post office address of each of the initial directors and following officers of the corporation are as follows: NAME RESIDENCE POST OFFICE ADDRESS PRESIDENT: Louise E. Colby 11 Cazenove Street Suite 2300, 225 Franklin St. Boston, MA 02116 Boston, MA 02110 TREASURER: Judith L Stevens 19 St. Germain Street Suite 2300, 225 Franklin St. Quincy, MA 02169 Boston, MA 02110 CLERK: Judith L. Stevens Above Above DIRECTORS: Louise E. Colby Above Above Judith L. Stevens Above Above c. The date initially adopted on which the corporation's fiscal year ends is: September 30 d. The date initially fixed in the by-laws for the annual meeting of stockholders of the corporation is: first Tuesday of March e. The name and business address of the resident agent, if any, of the corporation is: Not Applicable IN WITNESS WHEREOF and under the penalties of perjury and INCORPORATOR(S) sign(s) these Articles of Organization this 20th day of October 1983. /s/ Louise E. Colby ------------------------------------------------------------- ------------------------------------------------------------- ------------------------------------------------------------- The signature of each incorporator which is not a natural person must be an individual who shall show the capacity in which he acts and by signing shall represent under the penalties of perjury that he is duly authorized on its behalf to sign these Articles of Organization. THE COMMONWEALTH OF MASSACHUSETTS ARTICLES OF ORGANIZATION GENERAL LAWS, CHAPTER 156B, SECTION 12 -------------------------------------- -------------------------------------- I hereby certify that, upon an examination of the within-written articles of organization, duly submitted to me, it appears that the provisions of the General Laws relative to the organization of corporations have been complied with, and I hereby approve said articles; and the filing fee in the amount of $150.00 having been paid, said articles are deemed to have been filed with me this 24th day of October 1983. Effective date /s/ Michael Joseph Conolly MICHAEL JOSEPH CONNOLLY Secretary of State PHOTO COPY OF ARTICLES OF ORGANIZATION TO BE SENT TO BE FILLED IN BY CORPORATION TO: David M. Donaldson, Esq. Ropes & Gray 225 Franklin Street Boston, MA 02110 Telephone:(617) 423-6100 FILING FEE: 1/20 of 1% of the total amount of the authorized capital stock with par value, and one cent a share for all authorized shares without par value, but not less than $125. General Laws, Chapter 156B. Shares of stock with a par value less than one dollar shall be deemed to have par value of one dollar per share. Copy Mailed THE COMMONWEALTH OF MASSACHUSETTS OFFICE OF THE MASSACHUSETTS SECRETARY OF STATE MICHAEL JOSEPH CONNOLLY, SECRETARY ONE ASHBURTON PLACE, BOSTON, MASS. 02108 FEDERAL IDENTIFICATION NO. 04-2804883 ------------------ ARTICLES OF AMENDMENT General Laws, Chapter 156B, Section 72 This certificate must be submitted to the Secretary of the Commonwealth within sixty days after the date of the vote of stockholders adopting the amendment. The fee for filing this certificate is prescribed by General Laws, Chapter 156B, Section 114. Make check payable to the Commonwealth of Massachusetts. -------------------- We, Louise E. Colby , President and Alice Rettagliati , Clerk of 1200 Capital Corporation - ------------------------------------------------------------------------------ (Name of Corporation) located at Suite 2300, 225 Franklin Street, Boston, MA 02110 do hereby certify that the following amendment to the articles of organization of the corporation was duly adopted at a meeting held on July 24, 1986, by a vote of 1000 shares of Common Stock out of 1000 shares outstanding, - ---------- ---------------- ----------- (Class of Stock) shares of out of shares outstanding, and - ------- ---------------- ----- (Class of Stock) shares of out of shares outstanding, - ---------- ---------------- ----------- (Class of Stock) being at least a majority of each class outstanding and entitled to vote thereon:1 1 For amendments adopted pursuant to Chapter 156B, Section 70. Note: if the space provided under any Amendment or item on this form is insufficient, additions shall be set forth on separate 8 1/2 x 11 sheets of paper leaving a left hand margin of at least 1 inch for binding. Additions to more than one Amendment may be continued on a single sheet so long as each Amendment requiring each such addition is clearly indicated. TO CHANGE the number of shares and the par value, if any, of each class of stock within the corporation fill in the following: The total presently authorized is:
NO PAR VALUE WITH PAR VALUE PAR KIND OF STOCK NUMBER OF SHARES NUMBER OF SHARES VALUE COMMON PREFERRED
CHANGE the total to:
NO PAR VALUE WITH PAR VALUE PAR KIND OF STOCK NUMBER OF SHARES NUMBER OF SHARES VALUE COMMON PREFERRED
Article I of the Articles of Organization of 1200 Capital Corporation is hereby amended so that it reads in its entirety as follows: "The name by which the corporation shall be known is Firestone Consumer Funding Corporation." The foregoing amendment will become effective when these articles of amendment are filed in accordance with Chapter 156B, Section 6 of The General Laws unless these articles specify, in accordance with the vote adopting the amendment, a later effective date not more than thirty days after such filing, in which event the amendment will become effective on such later date. IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we have hereto signed our names this 24th day of July, in the year 1986 /s/ Louise E. Colby President - --------------------------------------------------- /s/ Alice Rettagletti Clerk - --------------------------------------------------- THE COMMONWEALTH OF MASSACHUSETTS ARTICLES OF AMENDMENT (General Laws, Chapter 156B, Section 72) I hereby approve the within articles of amendment and, the filing fee in the amount of $75.00 having been paid, said articles are deemed to have been filed with me this 24th day of July, 1986. /s/ Michael Joseph Conolly MICHAEL JOSEPH CONNOLLY Secretary of State TO BE FILLED IN BY CORPORATION PHOTO COPY OF AMENDMENT TO BE SENT TO: David M. Donaldson, Esq. Ropes & Gray 225 Franklin Street Boston, MA 02110 Telephone:(617) 423-6100 COPY MAILED THE COMMONWEALTH OF MASSACHUSETTS FEDERAL IDENTIFICATION NO. ------------------ MICHAEL JOSEPH CONNOLLY Secretary of State ONE ASHBURTON PLACE BOSTON, MASS. 02108 FEDERAL IDENTIFICATION NO. ------------------ ARTICLES OF MERGER Pursuant to General Laws, Chapter 156B, Section 79 The fee for filing this certificate is prescribed by General Laws, Chapter 156B, Section 114. Make checks payable to the Commonwealth of Massachusetts. * * * * MERGER OF #042804883 Firestone Consumer Funding Corporation #133205598 Firestone Retail Credit Corporation the constituent corporations into Firestone Consumer Funding Corporation the surviving corporation organized under the laws of Massachusetts as specified in the agreement referred to in Paragraph 1 below. The undersigned officers of each of the constituent corporations certify under the penalties of perjury as follows: 1. An agreement of merger has been duly adopted in compliance with the requirements of subsections (b) and (c) of General Laws, Chapter 156B, Section 79, and will be kept as provided by subsection (c) thereof. The surviving corporation will furnish a copy of said agreement to any of its stockholders, or to any person who was a stockholder of any constituent corporation, upon written request and without charge. 2. The effective date of the merger determined pursuant to the agreement referred to in paragraph 1 shall be October 3, 1989 (12:05 EDST) 3. (For a merger) * The following amendments to the articles of organization of the SURVIVING corporation to be effected pursuant to the agreement of merger referred to in paragraph 1 are as follows: Article I of the Articles of Organization of the SURVIVING corporation is hereby amended so that it reads in its entirety as follows: "The name by which the corporation shall be known is "Firestone Retail Credit Corporation". * If there are no provisions state "NONE". Note: If the space provided under article 3 is insufficient, additions shall be set forth on separate 8 1/2 x 11 inch sheets of paper, leaving a left hand margin of at least 1 inch for binding. Additions to more than one article may be continued on a single sheet so long as each article requiring each such addition is clearly indicated. (b) The total number of shares and the par value, if any, of each class of stock which the resulting corporation is authorized is as follows:
WITHOUT PAR VALUE WITH PAR VALUE CLASS OF STOCK NUMBER OF SHARES NUMBER OF SHARES PAR VALUE AMOUNT Preferred $ Common
*(c) If more than one class is authorized, a description of each of the different classes of stock with, if any, the preferences, voting powers, qualifications, special or relative rights or privileges as to each class thereof and any series now established. None *(d) Other lawful provisions, if any, for the conduct and regulation of the business and affairs of the corporation, for its voluntary dissolution, for restrictions upon the transfer of shares of stock of any class, or for limiting, defining, or regulating the powers of the corporation, or of its directors or stockholders, or of any class of stockholders: None 4. (This paragraph 4 may be deleted if the surviving corporation is organized under the laws of a state other than Massachusetts.) The following information shall not for any purpose be treated as a permanent part of the articles of organization of the surviving corporation. (a) The post office address of the principal office of the surviving corporation in Massachusetts is: Room 3434, One International Place, Boston, MA 02110-2624 (b) The name, residence and post office address of each of the directors and President, Treasurer and Clerk of the surviving corporation is as follows:
Name Residence Post Office Address President Steven M. Loring 151 Tremont St., Boston, MA Same Treasurer Ilene T. Johnson 8 Milford St., Boston, MA Same Clerk Ilene T. Johnson 8 Milford St., Boston, MA Same Directors Steven M. Loring 151 Tremont St., Boston, MA Same Ilene T. Johnson 8 Milford St., Boston, MA Same Nancy I. DePasquale 0 Buttonwood Lane, Peabody, MA Same (Smith)
(c) The date adopted on which the fiscal year of the surviving corporation ends is: September 30 ------------ (d) The date fixed in the by-laws for the Annual Meeting of stockholders of the surviving corporation is: first Tuesday in March *If there are no provisions state "None." Note: If the space provided under article 3 is insufficient, additions shall be set forth on separate 8 1/2 x 11 inch sheets of paper, leaving a left hand margin of at least 1 inch for binding. Additions to more than one article may be continued on a single sheet so long as each article requiring each such addition is clearly indicated. 5. DELETED (This paragraph 5 may be deleted if the surviving corporation is organized under the laws of Massachusetts) FOR MASSACHUSETTS CORPORATIONS The undersigned President and Clerk of Firestone Consumer Funding Corporation a corporation organized under the laws of Massachusetts further state under the penalties of perjury that the agreement of merger referred to in paragraph 1 has been duly executed on behalf of such corporation and duly approved in the manner required by General Laws, Chapter 156B, Section 79. /s/ Steven M. Laring --------------------------------------------------- President (signature of officer) --------------------------------------------------- Clerk FOR CORPORATIONS ORGANIZED OTHER THAN IN MASSACHUSETTS The undersigned Vice President + and Secretary ++ of ---------------------- ----------------- Firestone Retail Credit Corporation a corporation organized under the - --------------------------------------- laws of Delaware further state under the penalties of perjury that ---------------- the agreement of merger referred to in paragraph 1, has been duly adopted by such corporation in the manner required by the laws of Delaware -------- (signature of officer) Vice President ---------------------------------------- ( ) Secretary ---------------------------------------- + Specify the officer having powers and duties corresponding to those of the President or Vice President of a Massachusetts corporation organized under General Laws, Chapter 156B. ++ Specify the officer having power and duties corresponding to the Clerk or Assistant Clerk of such a Massachusetts corporation. THE COMMONWEALTH OF MASSACHUSETTS ARTICLES OF MERGER (General Laws, Chapter 156B, Section 79) I hereby approve the within articles of merger and, the filing fee in the amount of $250.00 having been paid, said articles are deemed to have been filed with me this 2nd day of October, 1989. Effective Date October 3rd, 1989 MICHAEL JOSEPH CONNOLLY Secretary of State TO BE FILLED IN BY CORPORATION Photocopy of Articles of Merger To Be Sent TO: Thomas B. Draper, Esq. Ropes & Gray One International Place Boston, MA 02110-2624 Telephone:(617) 951-7000 COPY MAILED EX-3.2 4 AMENDED AND RESTATED BY-LAWS OF THE REGISTRANT EXHIBIT 3.2 AMENDED AND RESTATED BY-LAWS OF FIRESTONE RETAIL CREDIT CORPORATION ------------------------------- Section 1. LAW, CERTIFICATE OF INCORPORATION AND BY-LAWS 1.1. These by-laws are subject to the certificate of incorporation of the corporation. In these by-laws, references to law, the certificate of incorporation and by-laws mean the law, the provisions of the certificate of incorporation and the by-laws as from time to time in effect. Section 2. STOCKHOLDERS 2.1. Annual Meeting. The annual meeting of stockholders shall be held -------------- at five o'clock in the afternoon on the first Tuesday in May in each year, unless that day be a legal holiday at the place where the meeting is to be held, in which case the meeting shall be held at the same hour on the next succeeding day not a legal holiday, or at such other date and time as shall be designated from time to time by the board of directors and stated in the notice of the meeting, at which they shall elect a board of directors and transact such other business as may be required by law or these by-laws or as may properly come before the meeting. 2.2. Special Meetings. A special meeting of the stockholders may be ---------------- called at any time by the chairman of the board, if any, the president or the board of directors. A special meeting of the stockholders shall be called by the secretary, or in the case of the death, absence, incapacity or refusal of the secretary, by an assistant secretary or some other officer, upon application of a majority of the directors. Any such application shall state the purpose or purposes of the proposed meeting. Any such call shall state the place, date, hour, and purposes of the meeting. 2.3. Place of Meeting. All meetings of the stockholders for the ---------------- election of directors or for any other purpose shall be held at such place within or without the State of Delaware as may be determined from time to time by the chairman of the board, if any, the president or the board of directors. Any adjourned session of any meeting of the stockholders shall be held at the place designated in the vote of adjournment. 2.4. Notice of Meetings. Except as otherwise provided by law, a ------------------ written notice of each meeting of stockholders stating the place, day and hour thereof and, in the case of a special meeting, the purposes for which the meeting is called, shall be given not less than ten nor more than sixty days before the meeting, to each stockholder entitled to vote thereat, and to each stockholder who, by law, by the certificate of incorporation or by these by-laws, is entitled to notice, by leaving such notice with him or at his residence or usual place of business, or by depositing it in the United States mail, postage prepaid, and addressed to such stockholder at his address as it appears in the records of the corporation. Such notice shall be given by the secretary, or by an officer or person designated by the board of directors, or in the case of a special meeting by the officer calling the meeting. As to any adjourned session of any meeting of stockholders, notice of the adjourned meeting need not be given if the time and place thereof are announced at the meeting at which the adjournment was taken except that if the adjournment is for more than thirty days or if after the adjournment a new record date is set for the adjourned session, notice of any such adjourned session of the meeting shall be given in the manner heretofore described. No notice of any meeting of stockholders or any adjourned session thereof need be given to a stockholder if a written waiver of notice, executed before or after the meeting or such adjourned session by such stockholder, is filed with the records of the meeting or if the stockholder attends such meeting without objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any meeting of the stockholders or any adjourned session thereof need be specified in any written waiver of notice. 2.5. Quorum of Stockholders. At any meeting of the stockholders a ---------------------- quorum as to any matter shall consist of a majority of the votes entitled to be cast on the matter, except where a larger quorum is required by law, by the certificate of incorporation or by these by-laws. Any meeting may be adjourned from time to time by a majority of the votes properly cast upon the question, whether or not a quorum is present. If a quorum is present at an original meeting, a quorum need not be present at an adjourned session of that meeting. Shares of its own stock belonging to the corporation or to another corporation, if a majority of the shares entitled to vote in the election of directors of such other corporation is held, directly or indirectly, by the corporation, shall neither be entitled to vote nor be counted for quorum purposes; provided, however, that the foregoing shall not limit the right of any corporation to vote stock, including but not limited to its own stock, held by it in a fiduciary capacity. 2.6. Action by Vote. When a quorum is present at any meeting, a -------------- plurality of the votes properly cast for election to any office shall elect to such office and a majority of the votes properly cast upon any question other than an election to an office shall decide the question, except when a larger vote is required by law, by the certificate of incorporation or by these by-laws. No ballot shall be required for any election unless requested by a stockholder present or represented at the meeting and entitled to vote in the election. 2.7. Action without Meetings. Unless otherwise provided in the ----------------------- certificate of incorporation, any action required or permitted to be taken by stockholders for or in connection with any corporate action may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to the corporation by delivery to its registered office in Delaware by hand or certified or registered mail, return receipt requested, to its principal place of business or to an officer or agent of the corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Each such written consent shall bear the date of signature of each stockholder who signs the consent. No written consent shall be effective to take the corporate action referred to therein unless written consents signed by a number of stockholders sufficient to take such action are delivered to the corporation in the manner specified in this paragraph within sixty days of the earliest dated consent so delivered. If action is taken by consent of stockholders and in accordance with the foregoing, there shall be filed with the records of the meetings of stockholders the writing or writings comprising such consent. If action is taken by less than unanimous consent of stockholders, prompt notice of the taking of such action without a meeting shall be given to those who have not consented in writing and a certificate signed and attested to by the secretary that such notice was given shall be filed with the records of the meetings of stockholders. In the event that the action which is consented to is such as would have required the filing of a certificate under any provision of the General Corporation Law of the State of Delaware, if such action had been voted upon by the stockholders at a meeting thereof, the certificate filed under such provision shall state, in lieu of any statement required by such provision concerning a vote of stockholders, that written consent has been given under Section 228 of said General Corporation Law and that written notice has been given as provided in such Section 228. 2.8. Proxy Representation. Every stockholder may authorize another -------------------- person or persons to act for him by proxy in all matters in which a stockholder is entitled to participate, whether by waiving notice of any meeting, objecting to or voting or participating at a meeting, or expressing consent or dissent without a meeting. Every proxy must be signed by the stockholder or by his attorney-in-fact. No proxy shall be voted or acted upon after three years from its date unless such proxy provides for a longer period. A duly executed proxy shall be irrevocable if it states that it is irrevocable and, if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. A proxy may be made irrevocable regardless of whether the interest with which it is coupled is an interest in the stock itself or an interest in the corporation generally. The authorization of a proxy may but need not be limited to specified action, provided, however, that if a proxy limits its authorization to a meeting or meetings of stockholders, unless otherwise specifically provided such proxy shall entitle the holder thereof to vote at any adjourned session but shall not be valid after the final adjournment thereof. 2.9. Inspectors. The directors or the person presiding at the meeting ---------- may, but need not, appoint one or more inspectors of election and any substitute inspectors to act at the meeting or any adjournment thereof. Each inspector, before entering upon the discharge of his duties, shall take and sign an oath faithfully to execute the duties of inspector at such meeting with strict impartiality and according to the best of his ability. The inspectors, if any, shall determine the number of shares of stock outstanding and the voting power of each, the shares of stock represented at the meeting, the existence of a quorum, the validity and effect of proxies, and shall receive votes, ballots or consents, hear and determine all challenges and questions arising in connection with the right to vote, count and tabulate all votes, ballots or consents, determine the result, and do such acts as are proper to conduct the election or vote with fairness to all stockholders. On request of the person presiding at the meeting, the inspectors shall make a report in writing of any challenge, question or matter determined by them and execute a certificate of any fact found by them. 2.10. List of Stockholders. The secretary shall prepare and make, at -------------------- least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at such meeting, arranged in alphabetical order and showing the address of each stockholder and the number of shares registered in his name. The stock ledger shall be the only evidence as to who are stockholders entitled to examine such list or to vote in person or by proxy at such meeting. Section 3. BOARD OF DIRECTORS 3.1. Number. The number of directors which shall constitute the whole ------ board shall not be less than two nor more than six in number. Thereafter, within the foregoing limits, the stockholders at the annual meeting shall determine the number of directors and shall elect the number of directors as determined. Within the foregoing limits, the number of directors may be increased at any time or from time to time by the stockholders or by the directors by vote of a majority of the directors then in office. The number of directors may be decreased to any number permitted by the foregoing at any time either by the stockholders or by the directors by vote of a majority of the directors then in office, but only to eliminate vacancies existing by reason of the death, resignation or removal of one or more directors. Directors need not be stockholders. 3.2. Tenure. Except as otherwise provided by law, by the certificate ------ of incorporation or by these by-laws, each director shall hold office until the next annual meeting and until his successor is elected and qualified, or until he sooner dies, resigns, is removed or becomes disqualified. 3.3. Powers. The business and affairs of the corporation shall be ------ managed by or under the direction of the board of directors who shall have and may exercise all the powers of the corporation and do all such lawful acts and things as are not by law, the certificate of incorporation or these by-laws directed or required to be exercised or done by the stockholders. 3.4. Vacancies. Vacancies and any newly created directorships --------- resulting from any increase in the number of directors may be filled by vote of the stockholders at a meeting called for the purpose, or by a majority of the directors then in office, although less than a quorum, or by a sole remaining director. When one or more directors shall resign from the board, effective at a future date, a majority of the directors then in office, including those who have resigned, shall have power to fill such vacancy or vacancies, the vote or action by writing thereon to take effect when such resignation or resignations shall become effective. The directors shall have and may exercise all their powers notwithstanding the existence of one or more vacancies in their number, subject to any requirements of law or of the certificate of incorporation or of these by-laws as to the number of directors required for a quorum or for any vote or other actions. 3.5. Committees. The board of directors may, by vote of a majority of ---------- the whole board, (a) designate, change the membership of or terminate the existence of any committee or committees, each committee to consist of one or more of the directors; (b) designate one or more directors as alternate members of any such committee who may replace any absent or disqualified member at any meeting of the committee; and (c) determine the extent to which each such committee shall have and may exercise the powers of the board of directors in the management of the business and affairs of the corporation, including the power to authorize the seal of the corporation to be affixed to all papers which require it and the power and authority to declare dividends or to authorize the issuance of stock; excepting, however, such powers which by law, by the certificate of incorporation or by these by-laws they are prohibited from so delegating. In the absence or disqualification of any member of such committee and his alternate, if any, the member or members thereof present at any meeting and not disqualified from voting, whether or not constituting a quorum, may unanimously appoint another member of the board of directors to act at the meeting in the place of any such absent or disqualified member. Except as the board of directors may otherwise determine, any committee may make rules for the conduct of its business, but unless otherwise provided by the board or such rules, its business shall be conducted as nearly as may be in the same manner as is provided by these by-laws for the conduct of business by the board of directors. Each committee shall keep regular minutes of its meetings and report the same to the board of directors upon request. 3.6. Regular Meetings. Regular meetings of the board of directors may ---------------- be held without call or notice at such places within or without the State of Delaware and at such times as the board may from time to time determine, provided that notice of the first regular meeting following any such determination shall be given to absent directors. A regular meeting of the directors may be held without call or notice immediately after and at the same place as the annual meeting of stockholders. 3.7. Special Meetings. Special meetings of the board of directors may ---------------- be held at any time and at any place within or without the State of Delaware designated in the notice of the meeting, when called by the chairman of the board, if any, the president, or by one-third or more in number of the directors, reasonable notice thereof being given to each director by the secretary or by the chairman of the board, if any, the president or any one of the directors calling the meeting. 3.8. Notice. It shall be reasonable and sufficient notice to a ------ director to send notice by mail at least forty-eight hours or by telegram at least twenty-four hours before the meeting addressed to him at his usual or last known business or residence address or to give notice to him in person or by telephone at least twenty-four hours before the meeting. Notice of a meeting need not be given to any director if a written waiver of notice, executed by him before or after the meeting, is filed with the records of the meeting, or to any director who attends the meeting without protesting prior thereto or at its commencement the lack of notice to him. Neither notice of a meeting nor a waiver of a notice need specify the purposes of the meeting. 3.9. Quorum. Except as may be otherwise provided by law, by the ------ certificate of incorporation or by these by-laws, at any meeting of the directors a majority of the directors then in office shall constitute a quorum; a quorum shall not in any case be less than one-third of the total number of directors constituting the whole board. Any meeting may be adjourned from time to time by a majority of the votes cast upon the question, whether or not a quorum is present, and the meeting may be held as adjourned without further notice. 3.10. Action by Vote. Except as may be otherwise provided by law, by -------------- the certificate of incorporation or by these by-laws, when a quorum is present at any meeting the vote of a majority of the directors present shall be the act of the board of directors. 3.11. Action Without a Meeting. Any action required or permitted to ------------------------ be taken at any meeting of the board of directors or a committee thereof may be taken without a meeting if all the members of the board or of such committee, as the case may be, consent thereto in writing, and such writing or writings are filed with the records of the meetings of the board or of such committee. Such consent shall be treated for all purposes as the act of the board or of such committee, as the case may be. 3.12. Participation in Meetings by Conference Telephone. Members of ------------------------------------------------- the board of directors, or any committee designated by such board, may participate in a meeting of such board or committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other or by any other means permitted by law. Such participation shall constitute presence in person at such meeting. 3.13. Interested Directors and Officers. --------------------------------- (a) No contract or transaction between the corporation and one or more of its directors or officers, or between the corporation and any other corporation, partnership, association, or other organization in which one or more of the corporation's directors or officers are directors or officers, or have a financial interest, shall be void or voidable solely for this reason, or solely because the director or officer is present at or participates in the meeting of the board or committee thereof which authorizes the contract or transaction, or solely because his or their votes are counted for such purpose, if: (1) The material facts as to his relationship or interest and as to the contract or transaction are disclosed or are known to the board of directors or the committee, and the board or committee in good faith authorizes the contract or transaction by the affirmative votes of a majority of the disinterested directors, even though the disinterested directors be less than a quorum; or (2) The material facts as to his relationship or interest and as to the contract or transaction are disclosed or are known to the stockholders entitled to vote thereon, and the contract or transaction is specifically approved in good faith by vote of the stockholders; or (3) The contract or transaction is fair as to the corporation as of the time it is authorized, approved or ratified, by the board of directors, a committee thereof, or the stockholders. (b) Common or interested directors may be counted in determining the presence of a quorum at a meeting of the board of directors or of a committee which authorizes the contract or transaction. Section 4. OFFICERS AND AGENTS 4.1. Enumeration; Qualification. The officers of the corporation shall -------------------------- be a president, a treasurer, a secretary and such other officers, if any, as the board of directors from time to time may in its discretion elect or appoint including without limitation a chairman of the board, one or more vice presidents and a controller. The corporation may also have such agents, if any, as the board of directors from time to time may in its discretion choose. Any officer may be but none need be a director or stockholder. Any two or more offices may be held by the same person. Any officer may be required by the board of directors to secure the faithful performance of his duties to the corporation by giving bond in such amount and with sureties or otherwise as the board of directors may determine. 4.2. Powers. Subject to law, to the certificate of incorporation and ------ to the other provisions of these by-laws, each officer shall have, in addition to the duties and powers herein set forth, such duties and powers as are commonly incident to his office and such additional duties and powers as the board of directors may from time to time designate. 4.3. Election. The officers may be elected by the board of directors -------- at their first meeting following the annual meeting of the stockholders or at any other time. At any time or from time to time the directors may delegate to any officer their power to elect or appoint any other officer or any agents. 4.4. Tenure. Each officer shall hold office until the first meeting ------ of the board of directors following the next annual meeting of the stockholders and until his respective successor is chosen and qualified unless a shorter period shall have been specified by the terms of his election or appointment, or in each case until he sooner dies, resigns, is removed or becomes disqualified. Each agent shall retain his authority at the pleasure of the directors, or the officer by whom he was appointed or by the officer who then holds agent appointive power. 4.5. Chairman of the Board of Directors, President and Vice President. ---------------------------------------------------------------- The chairman of the board, if any, shall have such duties and powers as shall be designated from time to time by the board of directors. Unless the board of directors otherwise specifies, the chairman of the board, or if there is none the chief executive officer, shall preside, or designate the person who shall preside, at all meetings of the stockholders and of the board of directors. Unless the board of directors otherwise specifies, the president shall be the chief executive officer and shall have direct charge of all business operations of the corporation and, subject to the control of the directors, shall have general charge and supervision of the business of the corporation. Any vice presidents shall have such duties and powers as shall be set forth in these by-laws or as shall be designated from time to time by the board of directors or by the president. 4.6. Treasurer and Assistant Treasurers. Unless the board of directors ---------------------------------- otherwise specifies, the treasurer shall be the chief financial officer of the corporation and shall be in charge of its funds and valuable papers, and shall have such other duties and powers as may be designated from time to time by the board of directors or by the president. If no controller is elected, the treasurer shall, unless the board of directors otherwise specifies, also have the duties and powers of the controller. Any assistant treasurers shall have such duties and powers as shall be designated from time to time by the board of directors, the president or the treasurer. 4.7. Controller and Assistant Controllers. If a controller is elected, ------------------------------------ he shall, unless the board of directors otherwise specifies, be the chief accounting officer of the corporation and be in charge of its books of account and accounting records, and of its accounting procedures. He shall have such other duties and powers as may be designated from time to time by the board of directors, the president or the treasurer. Any assistant controller shall have such duties and powers as shall be designated from time to time by the board of directors, the president, the treasurer or the controller. 4.8. Secretary and Assistant Secretaries. The secretary shall record ----------------------------------- all proceedings of the stockholders, of the board of directors and of committees of the board of directors in a book or series of books to be kept therefor and shall file therein all actions by written consent of stockholders or directors. In the absence of the secretary from any meeting, an assistant secretary, or if there be none or he is absent, a temporary secretary chosen at the meeting, shall record the proceedings thereof. Unless a transfer agent has been appointed the secretary shall keep or cause to be kept the stock and transfer records of the corporation, which shall contain the names and record addresses of all stockholders and the number of shares registered in the name of each stockholder. He shall have such other duties and powers as may from time to time be designated by the board of directors or the president. Any assistant secretaries shall have such duties and powers as shall be designated from time to time by the board of directors, the president or the secretary. Section 5. RESIGNATIONS AND REMOVALS 5.1. Any director or officer may resign at any time by delivering his resignation in writing to the chairman of the board, if any, the president, or the secretary or to a meeting of the board of directors. Such resignation shall be effective upon receipt unless specified to be effective at some other time, and without in either case the necessity of its being accepted unless the resignation shall so state. A director (including persons elected by directors to fill vacancies in the board) may be removed from office with or without cause by the vote of the holders of a majority of the shares issued and outstanding and entitled to vote in the election of directors. The board of directors may at any time remove any officer either with or without cause. The board of directors may at any time terminate or modify the authority of any agent. No director or officer resigning and (except where a right to receive compensation shall be expressly provided in a duly authorized written agreement with the corporation) no director or officer removed shall have any right to any compensation as such director or officer for any period following his resignation or removal, or any right to damages on account of such removal, whether his compensation be by the month or by the year or otherwise; unless, in the case of a resignation, the directors, or, in the case of removal, the body acting on the removal, shall in their or its discretion provide for compensation. Section 6. VACANCIES 6.1. If the office of the president or the treasurer or the secretary becomes vacant, the directors may elect a successor by vote of a majority of the directors then in office. If the office of any other officer becomes vacant, any person or body empowered to elect or appoint that officer may choose a successor. Each such successor shall hold office for the unexpired term, and in the case of the president, the treasurer and the secretary until his successor is chosen and qualified or in each case until he sooner dies, resigns, is removed or becomes disqualified. Any vacancy of a directorship shall be filled as specified in Section 3.4 of these by-laws. Section 7. CAPITAL STOCK 7.1. Stock Certificates. Each stockholder shall be entitled to a ------------------ certificate stating the number and the class and the designation of the series, if any, of the shares held by him, in such form as shall, in conformity to law, the certificate of incorporation and the by-laws, be prescribed from time to time by the board of directors. Such certificate shall be signed by the chairman or vice chairman of the board, if any, or the president or a vice president and by the treasurer or an assistant treasurer or by the secretary or an assistant secretary. Any of or all the signatures on the certificate may be a facsimile. In case an officer, transfer agent, or registrar who has signed or whose facsimile signature has been placed on such certificate shall have ceased to be such officer, transfer agent, or registrar before such certificate is issued, it may be issued by the corporation with the same effect as if he were such officer, transfer agent, or registrar at the time of its issue. 7.2. Loss of Certificates. In the case of the alleged theft, loss, -------------------- destruction or mutilation of a certificate of stock, a duplicate certificate may be issued in place thereof, upon such terms, including receipt of a bond sufficient to indemnify the corporation against any claim on account thereof, as the board of directors may prescribe. Section 8. TRANSFER OF SHARES OF STOCK 8.1. Transfer on Books. Subject to the restrictions, if any, stated ----------------- or noted on the stock certificate, shares of stock may be transferred on the books of the corporation by the surrender to the corporation or its transfer agent of the certificate therefor properly endorsed or accompanied by a written assignment and power of attorney properly executed, with necessary transfer stamps affixed, and with such proof of the authenticity of signature as the board of directors or the transfer agent of the corporation may reasonably require. Except as may be otherwise required by law, by the certificate of incorporation or by these by-laws, the corporation shall be entitled to treat the record holder of stock as shown on its books as the owner of such stock for all purposes, including the payment of dividends and the right to receive notice and to vote or to give any consent with respect thereto and to be held liable for such calls and assessments, if any, as may lawfully be made thereon, regardless of any transfer, pledge or other disposition of such stock until the shares have been properly transferred on the books of the corporation. It shall be the duty of each stockholder to notify the corporation of his post office address. 8.2. Record Date and Closing Transfer Books. In order that the -------------------------------------- corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, the board of directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the board of directors, and which record date shall not be more than sixty nor less than ten days before the date of such meeting. If no such record date is fixed by the board of directors, the record date for determining the stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the board of directors may fix a new record date for the adjourned meeting. In order that the corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the board of directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the board of directors, and which date shall not be more than ten days after the date upon which the resolution fixing the record date is adopted by the board of directors. If no such record date has been fixed by the board of directors, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the board of directors is required by the General Corporation Law of the State of Delaware, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the corporation by delivery to its registered office in Delaware by hand or certified or registered mail, return receipt requested, to its principal place of business or to an officer or agent of the corporation having custody of the book in which proceedings of meetings of stockholders are recorded. If no record date has been fixed by the board of directors and prior action by the board of directors is required by the General Corporation Law of the State of Delaware, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the day on which the board of directors adopts the resolution taking such prior action. In order that the corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights or to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the board of directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than sixty days prior to such payment, exercise or other action. If no such record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the board of directors adopts the resolution relating thereto. Section 8a. INDEMNIFICATION OF DIRECTORS AND OFFICERS 8.1. The corporation shall, to the extent legally possible, indemnify each of its directors and officers (including persons who serve at its request as directors, officers or trustees of another organization, or in any capacity with respect to any employee benefit plan) against all liabilities and expenses, including amounts paid in satisfaction of judgements, in compromise or as fines and penalties, and counsel fees, reasonably incurred by him in connection with the defense or disposition of any action, suit or other proceeding, whether civil or criminal, in which he may be involved or with which he may be threatened, while in office or thereafter, by reason of his being or having been such a director or officer, except with respect to any matter as to which he shall have been adjudicated in any proceeding not to have acted in good faith in the reasonable belief that his action was in the best interest of the corporation (any person serving another organization in one or more of the indicated capacities at the request of the corporation who shall have acted in good faith in the reasonable belief that his action was in the best interest of such organization to be deemed as having acted in such manner with respect to the organization) or, to the extent that such matter relates to service with respect to any employee benefit plan, in the best interest of the participants or beneficiaries of such employee benefit plan; provided, however, that as to any matter disposed of by a compromise payment by such director or officer, pursuant to a consent decree or otherwise, no indemnification either for said payment or for any other expenses shall be provided unless such compromise shall be approved as in the best interest of the corporation, after notice that it involves such indemnification: (a) by a disinterested majority of the directors then in office; or (b) by a majority of the disinterested directors then in office, provided that there has been obtained an opinion in writing of independent legal counsel to the effect that such director or officer appears to have acted in good faith in the reasonable belief that his action was in the best interest of the corporation; or (c) by the holders of a majority of the outstanding stock at the time entitled to vote for directors, voting as a single class, exclusive of any stock owned by any interested director or officer. Expenses, including counsel fees, reasonably incurred by any director or officer in connection with the defense or disposition of any such action, suit or other proceeding may be paid from time to time by the corporation in advance of the final disposition thereof upon receipt of an undertaking by such director or officer to repay the amounts so paid to the corporation if it is ultimately determined that indemnification for such expenses is not authorized under this section. The right of indemnification hereby provided shall not be exclusive of or affect any other rights to which any director or officer may be entitled. As used in this section, the terms "director" and "officer" include the relevant individual's heirs, executors and administrators, and an "interested" director or officer is one against whom in such capacity the proceedings in question or another proceeding on the same or similar grounds is then pending. Nothing contained in this section shall affect any rights to indemnification to which corporate personnel other than directors and officers may be entitled by contract or otherwise under law. Section 9. CORPORATE SEAL 9.1. Subject to alteration by the directors, the seal of the corporation shall consist of a flat-faced circular die with the word "Delaware" and the name of the corporation cut or engraved thereon, together with such other words, dates or images as may be approved from time to time by the directors. Section 10. EXECUTION OF PAPERS 10.1. Except as the board of directors may generally or in particular cases authorize the execution thereof in some other manner, all deeds, leases, transfers, contracts, bonds, notes, checks, drafts or other obligations made, accepted or endorsed by the corporation shall be signed by the chairman of the board, if any, the president, a vice president or the treasurer. Section 11. FISCAL YEAR 11.1. The fiscal year of the corporation shall end on September 30. Section 12. AMENDMENTS 12.1. These by-laws may be adopted, amended or repealed by vote of a majority of the directors then in office or by vote of a majority of the stock outstanding and entitled to vote. Any by-law, whether adopted, amended or repealed by the stockholders or directors, may be amended or reinstated by the stockholders or the directors. EX-4.1 5 FORM OF POOLING AND SERVICING AGREEMENT EXHIBIT 4.1 Brown & Wood Draft 10/14/96 - -------------------------------------------------------------------------- FIRESTONE RETAIL CREDIT CORPORATION, Transferor, BRIDGESTONE/FIRESTONE, INC. and THE FUJI BANK AND TRUST COMPANY, Trustee on behalf of the Certificateholders BRIDGESTONE/FIRESTONE MASTER TRUST AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT Dated as of __________, 1996 - -------------------------------------------------------------------------- TABLE OF CONTENTS Page ---- ARTICLE I DEFINITIONS Section 1.01 Definitions . . . . . . . . . . . . . . . . . . . . . . . 1 Section 1.02 Other Definitional Provisions . . . . . . . . . . . . . . 21 ARTICLE II CONVEYANCE; ISSUANCE OF CERTIFICATES Section 2.01 Conveyance . . . . . . . . . . . . . . . . . . . . . . . . 23 Section 2.02 Acceptance by Trustee . . . . . . . . . . . . . . . . . . 24 Section 2.03 Representations and Warranties of the Transferor Relating to the Transferor . . . . . . . . . 25 Section 2.04 Representations and Warranties Relating to the Agreement and the Receivables . . . . . . . . . . . 27 Section 2.05 Addition of Accounts . . . . . . . . . . . . . . . . . . . 29 Section 2.06 Transfer of Ineligible Receivables . . . . . . . . . . . . 31 Section 2.07 Purchase of Certificates . . . . . . . . . . . . . . . . . 33 Section 2.08 Covenants of the Transferor . . . . . . . . . . . . . . . 34 Section 2.09 Authentication of Certificates . . . . . . . . . . . . . . 37 Section 2.10 Removal of Accounts . . . . . . . . . . . . . . . . . . . 38 Section 2.11 Discount Option . . . . . . . . . . . . . . . . . . . . . 39 ARTICLE III ADMINISTRATION AND SERVICING OF RECEIVABLES Section 3.01 Acceptance of Appointment and Other Matters Relating to the Servicer . . . . . . . . . . . . . . . . 41 Section 3.02 Servicing Compensation . . . . . . . . . . . . . . . . . . 43 Section 3.03 Representations Warranties and Covenants of the Servicer . . . . . . . . . . . . . . . . . . . . . . 44 Section 3.04 Reports and Records for the Trustee: Bank Account Statements . . . . . . . . . . . . . . . . . . . 47 Section 3.05 Annual Servicer's Certificate . . . . . . . . . . . . . . 48 Section 3.06 Annual Independent Public Accountants' Servicing Report . . . . . . . . . . . . . . . . . . . . 48 Section 3.07 Tax Treatment . . . . . . . . . . . . . . . . . . . . . . 49 Section 3.08 Notices to Bridgestone/Firestone . . . . . . . . . . . . . 49 Section 3.09 Adjustments . . . . . . . . . . . . . . . . . . . . . . . 50 ARTICLE IV RIGHTS OF CERTIFICATEHOLDERS, ALLOCATION AND APPLICATION OF COLLECTIONS AND SERVICER AND TRANSFEROR LETTERS OF CREDIT Section 4.01 Establishment of Collection Account and Allocations with Respect to the Exchangeable Transferor Certificate . . . . . . . . . . . . . . . . . 52 Section 4.01A Servicer Letter of Credit . . . . . . . . . . . . . . . . 56 Section 4.01B Transferor Letter of Credit . . . . . . . . . . . . . . . 60 ARTICLE V (ARTICLE V IS RESERVED AND MAY BE SPECIFIED IN ANY SUPPLEMENT WITH RESPECT TO ANY SERIES) ARTICLE VI THE CERTIFICATES Section 6.01 The Certificates . . . . . . . . . . . . . . . . . . . . . 65 Section 6.02 Authentication of Certificates . . . . . . . . . . . . . . 65 Section 6.03 Registration of Transfer and Exchange of Certificates . . . . . . . . . . . . . . . . . . . . . . 66 Section 6.04 Mutilated, Destroyed, Lost or Stolen Certificates . . . . . . . . . . . . . . . . . . . . . . 68 Section 6.05 Persons Deemed Owners . . . . . . . . . . . . . . . . . . 69 Section 6.06 Appointment of Paying Agent . . . . . . . . . . . . . . . 69 Section 6.07 Access to List of Certificateholders' Names and Addresses . . . . . . . . . . . . . . . . . . . . . 70 Section 6.08 Authenticating Agent . . . . . . . . . . . . . . . . . . . 71 Section 6.09 Tender of Exchangeable Transferor Certificate . . . . . . . . . . . . . . . . . . . . . . 72 Section 6.10 (Reserved . . . . . . . . . . . . . . . . . . . . . . . . 74 Section 6.11 Book-Entry Certificates . . . . . . . . . . . . . . . . . 74 Section 6.12 Notice to Clearing Agency . . . . . . . . . . . . . . . . 75 Section 6.13 Definitive Certificates . . . . . . . . . . . . . . . . . 75 ARTICLE VII OTHER MATTERS RELATING TO THE TRANSFEROR Section 7.01 Liability of the Transferor . . . . . . . . . . . . . . . 77 Section 7.02 Merger or Consolidation of, or Assumption of the Obligations of, the Transferor . . . . . . . . . . . 77 Section 7.03 Limitation on Liability of the Transferor . . . . . . . . 78 Section 7.04 Indemnification of the Trust by the Transferor . . . . . . . . . . . . . . . . . . . . . . . 78 ARTICLE VIII OTHER MATTERS RELATING TO THE SERVICER Section 8.01 Liability of the Servicer . . . . . . . . . . . . . . . . 80 Section 8.02 Merger or Consolidation of, or Assumption of the Obligations of, the Servicer . . . . . . . . . . . . 80 Section 8.03 Limitation on Liability of the Servicer and Others . . . . . . . . . . . . . . . . . . . . . . . . . 81 Section 8.04 Servicer Indemnification of the Trust and the Trustee . . . . . . . . . . . . . . . . . . . . . . . . 81 Section 8.05 The Servicer Not to Resign . . . . . . . . . . . . . . . . 82 Section 8.06 Access to Certain Documentation and Information Regarding the Receivables . . . . . . . . . 82 Section 8.07 Delegation of Duties . . . . . . . . . . . . . . . . . . . 83 Section 8.08 Examination of Records . . . . . . . . . . . . . . . . . . 83 ARTICLE IX AMORTIZATION EVENTS Section 9.01 Amortization Events . . . . . . . . . . . . . . . . . . . 84 Section 9.02 Additional Rights Upon the Occurrence of Certain Events . . . . . . . . . . . . . . . . . . . . . 84 ARTICLE X SERVICER DEFAULTS Section 10.01 Servicer Defaults . . . . . . . . . . . . . . . . . . . . 86 Section 10.02 Trustee to Act; Appointment of Successor . . . . . . . . . 88 Section 10.03 Notification to Certificateholders . . . . . . . . . . . . 90 Section 10.04 Waiver of Past Defaults . . . . . . . . . . . . . . . . . 90 ARTICLE XI THE TRUSTEE Section 11.01 Duties of Trustee . . . . . . . . . . . . . . . . . . . . 91 Section 11.02 Rights of the Trustee . . . . . . . . . . . . . . . . . . 92 Section 11.03 Trustee Not Liable for Recitals in Certificates . . . . . . . . . . . . . . . . . . . . . . 94 Section 11.04 Trustee May Own Certificates . . . . . . . . . . . . . . . 94 Section 11.05 The Servicer to Pay Trustee's Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . 94 Section 11.06 Eligibility Requirements for Trustee . . . . . . . . . . . 94 Section 11.07 Resignation or Removal of Trustee . . . . . . . . . . . . 95 Section 11.08 Successor Trustee . . . . . . . . . . . . . . . . . . . . 95 Section 11.09 Merger or Consolidation of Trustee . . . . . . . . . . . . 96 Section 11.10 Appointment of Co-Trustee or Separate Trustee . . . . . . . . . . . . . . . . . . . . . . . . 96 Section 11.11 Tax Returns . . . . . . . . . . . . . . . . . . . . . . . 98 Section 11.12 Trustee May Enforce Claims Without Possession of Certificates . . . . . . . . . . . . . . . . . . . . 98 Section 11.13 Suits for Enforcement . . . . . . . . . . . . . . . . . . 99 Section 11.14 Rights of Certificateholders to Direct Trustee . . . . . . . . . . . . . . . . . . . . . . . . 99 Section 11.15 Representations and Warranties of Trustee . . . . . . . . 99 Section 11.16 Maintenance of Office or Agency . . . . . . . . . . . . . 100 ARTICLE XII TERMINATION Section 12.01 Termination of Trust . . . . . . . . . . . . . . . . . . . 101 Section 12.02 Optional Purchase and Final Termination Date of Investor Certificates of any Series . . . . . . . . . 101 Section 12.03 Final Payment with Respect to any Series . . . . . . . . . 102 Section 12.04 Transferor's Termination Rights . . . . . . . . . . . . . 104 ARTICLE XIII MISCELLANEOUS PROVISIONS Section 13.01 Amendment . . . . . . . . . . . . . . . . . . . . . . . . 105 Section 13.02 Protection of Right, Title and Interest to Trust . . . . . . . . . . . . . . . . . . . . . . . . . 107 Section 13.03 Limitation on Rights of Certificateholders . . . . . . . . 108 Section 13.04 Governing Law. . . . . . . . . . . . . . . . . . . . . . . 109 Section 13.05 Notices . . . . . . . . . . . . . . . . . . . . . . . . . 109 Section 13.06 Severability of Provisions . . . . . . . . . . . . . . . . 110 Section 13.07 Assignment . . . . . . . . . . . . . . . . . . . . . . . . 110 Section 13.08 Certificates Nonassessable and Fully Paid . . . . . . . . 110 Section 13.09 Further Assurances . . . . . . . . . . . . . . . . . . . . 110 Section 13.10 No Waiver; Cumulative Remedies . . . . . . . . . . . . . . 110 Section 13.11 Counterparts . . . . . . . . . . . . . . . . . . . . . . . 111 Section 13.12 Third Party Beneficiaries . . . . . . . . . . . . . . . . 111 Section 13.13 Actions by Certificateholders . . . . . . . . . . . . . . 111 Section 13.14 Merger and Integration . . . . . . . . . . . . . . . . . . 111 Section 13.15 Headings . . . . . . . . . . . . . . . . . . . . . . . . . 112 Section 13.16 Voting, Waiver and Consents . . . . . . . . . . . . . . . 112 EXHIBITS - -------- Exhibit A-1: Form of Exchangeable Transferor Certificate Exhibit A-2: Form of Bridgestone/Firestone Certificate Exhibit B: Form of Assignment of Receivables in Eligible Alternative Accounts Exhibit C: Form of Reassignment of Receivables in Removed Accounts Exhibit D: Irrevocable Servicer Letter of Credit Exhibit E: Form of Annual Servicer's Certificate Exhibit F: Form of Opinion of Counsel - Provisions to be Included in Opinion of Counsel Delivered Pursuant to Subsection 2.05(b)(vi) Exhibit G: Irrevocable Transferor Letter of Credit Exhibit H: Form of Depository Agreement Exhibit I: Irrevocable Transferor Letter of Credit Schedule 1: List of Accounts AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT, dated as of October ___, 1996 to the POOLING AND SERVICING AGREEMENT, dated as of November 1, 1992, by and among FIRESTONE RETAIL CREDIT CORPORATION, a corporation organized and existing under the laws of the Commonwealth of Massachusetts, as Transferor; BRIDGESTONE/FIRESTONE, INC., a corporation organized and existing under the laws of the State of Ohio, individually and as Servicer; and THE FUJI BANK AND TRUST COMPANY, a banking corporation organized and existing under the laws of the State of New York, as Trustee. In consideration of the mutual agreements herein contained, each party agrees as follows for the benefit of the other parties and for the benefit of the Certificateholders to the extent provided herein: ARTICLE I DEFINITIONS Section 1.01 Definitions. Whenever used in this Agreement, the ----------- following words and phrases shall have the following meanings: "Account" shall mean (a) each credit card account generated or to be ------- generated by the Originator in the ordinary course of its business and existing or arising under the Credit Card Program, and (b) subject to Section 2.05, as of each Addition Date, each Eligible Alternative Account identified in each list delivered to the Trustee by the Transferor pursuant to Section 2.05. The definition of Account shall include each Transferred Account into which an Account shall be transferred provided that such transfer was made in accordance with all objective criteria of the Credit Card Guidelines. The term "Account" shall be deemed to refer to an Eligible Alternative Account only from and after the Addition Date with respect thereto. "Accumulation Period" shall have, with respect to any Series, the ------------------- meaning, if any, specified in the applicable Supplement. "Addition Date" shall mean each date as of which Eligible Alternative ------------- Accounts will be included as Accounts pursuant to Section 2.05. "Addition Notice Date" shall mean, with respect to any Eligible -------------------- Alternative Account, the last day in the month preceding the month in which the Addition Date for such Eligible Alternative Account occurs. "Additional Accounts" shall mean each credit card account to be ------------------- generated by the Originator in the ordinary course of its business arising under the Credit Card Program after the Series 1996-1 Closing Date. "Adjustment Payment" shall have the meaning set forth in Section ------------------ 3.09(a). "Affiliate" of any Person shall mean any other Person controlling, --------- controlled by or under common control with such Person. "Aggregate Invested Amount" shall mean the sum of the Invested Amounts ------------------------- with respect to all Series then issued and outstanding. "Aggregate Invested Percentage" shall mean the sum of the applicable ----------------------------- Invested Percentages with respect to all Series then issued and outstanding. "Aggregate Receivables" shall mean, at any time, (a) the aggregate --------------------- amount of Eligible Receivables and Eligible Alternative Receivables as of the end of the prior Collection Period for each Account minus Defaulted Receivables, minus (b)(i) an amount equal to the finance charges billed in respect of such Eligible Receivables and Eligible Alternative Receivables in such prior Collection Period, minus (ii) finance charges credited as a rebate in respect of such Eligible Receivables and Eligible Alternative Receivables during such prior Collection Period minus (iii) amounts billed in item (i) above, net of rebates in item (ii) above, with respect to that portion of such Eligible Receivables and Eligible Alternative Receivables that are Discount Option Receivables. "Agreement" shall mean this Amended and Restated Pooling and Servicing --------- Agreement and all amendments hereof and supplements hereto, including any Supplement. "Alternative Account" shall mean an account arising from an Alternative ------------------- Program. "Alternative Programs" shall mean programs, other than the Credit Card -------------------- Program which exists as of the Series 1996-1 Closing Date, (for which CFNA underwrites and originates Accounts and Receivables) which may include, but are not limited to, the establishment of private label credit card programs and the offering of general purpose credit cards. "Amortization Event" shall have, with respect to each Series, the ------------------ meaning specified in Section 9.01 and in any Supplement for the related Series. "Amortization Period" shall mean, with respect to any Series, the period ------------------- following the Revolving Period which may be the Accumulation Period, Controlled Amortization Period, Early Amortization Period or Rapid Amortization Period (each as defined in any related Supplement). "Applicants" shall have the meaning specified in Section 6.07. ---------- "Appointment Date" shall have the meaning specified in Section 9.02. ---------------- "APR" shall mean the annual percentage rate or rates determined in the --- manner described in the Credit Card Agreement applicable to each Account. "Assignment" shall have the meaning set forth in Section 2.05(c). ---------- "Authorized Newspaper" shall mean any newspaper of general circulation -------------------- in the Borough of Manhattan, the City of New York, or in such other location as may be specified in a Supplement for a particular Series, printed in the English language, or the official language of the country of publication, and customarily published on each Business Day, whether or not published on Saturdays, Sundays and holidays. "Available Letter of Credit Amount" shall have, with respect to the --------------------------------- Servicer Letter of Credit, the meaning specified in the Servicer Letter of Credit and, with respect to the Transferor Letter of Credit, the meaning specified in the Transferor Letter of Credit. "Base Rate" shall mean, with respect to any Series, the amount stated --------- in the applicable Supplement. "B/F Amount" shall mean that portion of Aggregate Receivables ---------- represented by the B/F Percentage except as reduced pursuant to Section 2.06(c) or Section 3.09(a). "B/F Percentage" shall mean 1%. -------------- "Book-Entry Certificates" shall mean an Investor Certificate, ----------------------- registered in the name of a Clearing Agency or a nominee thereof as described in Section 6.11; provided that after the occurrence of a condition whereupon book-entry registration and transfer are no longer permitted and Definitive Certificates are to be issued to the Certificate Owners, such certificates shall no longer be "Book-Entry Certificates." "Bridgestone/Firestone" shall mean Bridgestone/Firestone, Inc., a --------------------- corporation organized and existing under the laws of the State of Ohio. "Bridgestone/Firestone Certificate" shall mean the certificate executed --------------------------------- by the Transferor and authenticated by the Trustee, substantially in the form of Exhibit A-2. ----------- "Business Day" shall mean any day other than (a) a Saturday or a Sunday, ------------ or (b) a day on which banking institutions or trust companies in the Cities of Cleveland, Ohio, Nashville, Tennessee, or New York, New York, or, as specified in a Supplement for a particular Series, any other place where payment on the Certificates is authorized for such Series, are authorized or obligated by law, executive order or governmental decree to be closed. "Certificate" shall mean one of any Series of Investor Certificates, the ----------- Bridgestone/Firestone Certificate, or the Exchangeable Transferor Certificate. "Certificate Owner" shall mean, with respect to a Book-Entry ----------------- Certificate, the Person who is the owner of a beneficial interest in such Book-Entry Certificate, as reflected on the books of the Clearing Agency, or on the books of a Person maintaining an account with such Clearing Agency. "Certificate Rate" shall mean, with respect to any Series, the ---------------- percentage (or formula on the basis of which such rate shall be determined) stated in the applicable Supplement. "Certificate Register" shall mean the register maintained pursuant to -------------------- Section 6.03, providing for the registration of the applicable Certificates and transfer and exchange thereof. "Certificateholder" or "Holder" shall mean the Person in whose name a ----------------- ------ Certificate is registered in the Certificate Register or, if applicable, the Clearing Agency in whose name are registered any Book-Entry Certificates. "Certificateholders' Interest" shall have the meaning specified in ---------------------------- Article IV of any Supplement for the related Series. "Class" shall mean, with respect to any Series, any one of the Classes ----- of Certificates of that Series as specified in the related Supplement. "Clearing Agency" shall mean an organization registered as a "clearing --------------- agency" pursuant to Section 17A of the Securities Exchange Act of 1934, as amended. "Clearing Agency Participant" shall mean a broker, dealer, bank, other --------------------------- financial institution or other Person for whom from time to time a Clearing Agency effects book-entry transfers and pledges of securities deposited with the Clearing Agency. "Closing Date" shall mean, with respect to any Series, the date of ------------ issuance of such Series, as specified in the related Supplement. "Collection Account" shall have the meaning specified in Section 4.01. ------------------ "Collection Period" shall mean, with respect to each Account, each ----------------- monthly billing cycle period ending in the period commencing on the 19th calendar day of each calendar month and ending on the 18th calendar day of the next succeeding calendar month during the term of the Trust. "Collections" shall mean all payments by or on behalf of Obligors ----------- (including Recoveries, Insurance Premiums and Insurance Proceeds) received by the Servicer, the Originator or the Transferor in respect of the Receivables, in the form of cash, checks or any other form of payment in accordance with the Credit Card Agreement in effect from time to time. "Controlled Amortization Period" shall have, with respect to any Series, ------------------------------ the meaning specified in the applicable Supplement. "Corporate Trust Office" shall mean the principal office of the Trustee ---------------------- at which at any particular time its corporate trust business shall be administered, which office at the date of the execution of this Agreement is located at Two World Trade Center, 81st Floor, New York, New York 10048 (Attn: Trust Administration Department). "Credit Card Agreement" shall mean, with respect to each Account, and --------------------- collectively with respect to all Accounts, the agreements between the Originator and each Obligor, governing the terms and conditions of the applicable revolving credit card account or any successor credit card account designations used by the Originator, Bridgestone/Firestone or the Transferor as such agreements may be amended, modified or otherwise changed from time to time and as distributed (including any amendments and revisions thereto) to holders of such consumer revolving credit card accounts. The form of agreement relating to Accounts generated by the Originator under the Credit Card Program is as set forth in Exhibit G (or in a form substantially similar to Exhibit G). "Credit Card Guidelines" shall mean the written policies and procedures ---------------------- relating to the operation of the credit card business applicable to the Credit Card Program or any Alternative Program, including, without limitation, the written policies and procedures for determining the creditworthiness of credit card customers, the extension of credit to credit card customers, and the maintenance of credit card accounts and collection of credit card receivables, as such policies and procedures may be amended from time to time in conformance with all Requirements of Law, the failure to comply with which would have a material adverse effect on Investor Certificateholders. "Credit Card Program" shall mean the private label credit card program ------------------- established for customers of Retail Establishments which may include certain credit features or enhancements including cash advances or convenience checks, existing as of the Series 1996-1 Closing Date. "Credit First" shall mean Credit First National Association, a national ------------ banking association organized and existing under the laws of the United States. "Cut-Off Date" shall mean, for each Account, the billing cycle closing ------------ date occurring during the period commencing on October 19, 1992 and ending on November 18, 1992. "Date of Processing" shall mean, with respect to any transaction, the ------------------ business day after such transaction is first output in written form, under the Servicer's customary and usual servicing practices, from the Servicer's computer file of consumer revolving credit card accounts (without regard to the effective date of such recordation). "Debtor Relief Laws" shall mean the Bankruptcy Code of the United States ------------------ of America and all other applicable liquidation, conservatorship, bankruptcy, moratorium, rearrangement, receivership, insolvency, reorganization, suspension of payment or similar debtor relief laws from time to time in effect affecting the rights of creditors generally. "Defaulted Amount" shall mean, with respect to any Distribution Date, ---------------- the sum for all the Accounts of the amount of Receivables which became Defaulted Receivables in the Collection Period for such Distribution Date, less the full amount of such Defaulted Receivables which are subject to a transfer obligation of the Transferor under Section 2.06(b) or of the Servicer under Section 3.03 with respect to such Distribution Date; provided, -------- however, that if any of the events described in Section 9.01(a) occurs with - ------- respect to the Transferor or Bridgestone/Firestone, the amount of such Defaulted Receivables which are subject to transfer pursuant to Section 2.06(b) shall not be so subtracted and if any of the events described in Section 10.01(d) occurs with respect to the Servicer, the amount of such Defaulted Receivables which are subject to transfer pursuant to Section 3.03 shall not be so subtracted. "Defaulted Receivables" shall mean, with respect to any Collection --------------------- Period, all Receivables (other than Ineligible Receivables) in any Account which are written off as uncollectible in such Collection Period, in accordance with the applicable Credit Card Guidelines. Notwithstanding the foregoing sentence, a Receivable (other than an Ineligible Receivable) shall become a Defaulted Receivable on the day on which such Receivable is recorded as written 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 last day of the Collection Period following the Collection Period in which it becomes 180 days delinquent (210 days after the date of the initial billing statement). "Definitive Certificates" shall have the meaning specified in Section ----------------------- 6.11. "Definitive Registered Certificates" shall mean Definitive Certificates ---------------------------------- issued in registered form. "Depository Agreement" shall mean the agreement among the Transferor, -------------------- the Trustee and the Clearing Agency, in the form attached hereto as Exhibit ------- H. - - "Designated Alternative Program" shall mean an Alternative Program ------------------------------ designated by the Transferor as a program for which the Transferor wants to include Eligible Alternative Receivables in excess of the Ten Percent Number Test and the Ten Percent Aggregate Test. "Determination Date" shall mean the 2nd Business Day preceding each ------------------ Distribution Date. "Discount Option Receivables" shall mean, as of the end of any --------------------------- Collection Period after the date on which the Transferor's exercise of its discount option pursuant to Section 2.11 takes effect, the sum of (a) the aggregate Discount Option Receivables at the end of the start of such Collection Period (which amount, prior to the date on which the Transferor's exercise of its discount option takes effect and with respect to Receivables generated prior to such date, shall be zero) plus (b) any New Discount Option ---- Receivables created during such Collection Period minus (c) any Discount ----- Option Receivables Collections received during such Collection Period. "Discount Option Receivable Collections" shall mean for any Collection -------------------------------------- Period ending on and after the date on which the Transferor's exercise of its discount option pursuant to Section 2.11 takes effect, the product of (a) a fraction the numerator of which is the amount of Discount Option Receivables and the denominator of which is the amount of Eligible Receivables and Eligible Alternative Receivables (including the Discount Option Receivables portion) in each case (for both numerator and denominator) at the start of the Collection Period and (b) Collections received during such Collection Period. "Discount Percentage" shall mean the fixed percentage or variable ------------------- percentage based on a formula, if any, designated by the Transferor pursuant to Section 2.11. "Distribution Date" shall mean unless otherwise specified in any ----------------- Supplement for the related Series, the 1st day of each calendar month or, if such 1st day is not a Business Day, the next succeeding Business Day, beginning on the date specified in such Supplement. "Dollars", "$" or "U.S.$" shall mean United States dollars. ------- - ----- "Early Amortization Period" shall mean, with respect to any Series, the ------------------------- period specified in the related Supplement. "Eligible Account" shall mean an Account (whether existing as of the ---------------- Series 1996-1 Closing Date or an Additional Account) (a) which has been established under the Credit Card Program; (b) which is denominated in Dollars; (c) the credit card or cards related to which have not been reported lost or stolen; (d) the Obligor on which has provided, as its most recent billing address, an address with a zip code in the United States or its territories or possessions; (e) which is not an account of an Obligor in bankruptcy or an account as to which the Servicer has any confirmed record of any fraud-related activity; and (f) the Receivables in which have not been charged-off or the account itself has not been closed prior to its billing cycle cut-off date. "Eligible Alternative Account" shall mean, as of the relevant Addition ---------------------------- Notice Date, an Account (a) which has been established under an Alternative Program and designated by the Transferor as an Eligible Alternative Account pursuant to Section 2.05; (b) which is denominated in Dollars; (c) the credit card or cards related to which have not been reported lost or stolen; (d) the Obligor on which has provided, as its most recent billing address, an address with a zip code in the United States or its territories or possessions; (e) which is not an account of an Obligor in bankruptcy or an account as to which the Servicer has any confirmed record of any fraud-related activity; and (f) the Receivables in which have not been charged-off or the account itself has not been closed prior to its billing cycle cut-off date. "Eligible Alternative Receivable" shall mean each Receivable which has ------------------------------- arisen under an Eligible Alternative Account and meets criteria set forth in subsections (b) through (k) of the definition of Eligible Receivable. "Eligible Institution" shall mean a depository institution (which may -------------------- be the Trustee or the Originator or an Affiliate of either) organized under the laws of the United States or any one of the states thereof, including the District of Columbia, which at all times has the highest short-term rating of at least two nationally recognized statistical rating agencies one at which is A-1+ from Standard & Poor's and P-1 by Moody's and which is a member of the FDIC; provided, however, that an -------- ------- institution which shall have corporate trust powers and which maintains the Collection Account, any principal funding account, any interest funding account or any other account maintained for the benefit of Certificateholders as a fully segregated trust account with the trust department of such institution shall not be required to meet the foregoing rating requirements. "Eligible Receivable" shall mean each Receivable: ------------------- (a) which has arisen under an Eligible Account; (b) which was created in compliance with all Requirements of Law applicable to the Originator and the Servicer, other than those with respect to which there is no reasonable likelihood that a failure to comply could have a material adverse effect upon Investor Certificateholders and pursuant to a Credit Card Agreement which complies with all Requirements of Law applicable to the Originator and the Servicer, other than those with respect to which there is no reasonable likelihood that a failure to comply could have a material adverse effect on Investor Certificateholders; (c) with respect to which all consents, licenses, approvals or authorizations of, or registrations or declarations with, any Governmental Authority required to be obtained, effected or given in connection with the creation of such Receivable or the execution, delivery and performance of the Credit Card Agreement pursuant to which such Receivable was created, have been duly obtained, effected or given and are in full force and effect as of such date of creation; (d) as to which at all times following the transfer of such Receivable to the Trust, the Trust will have good and marketable title thereto free and clear of all Liens arising prior to the transfer or arising at any time under or through the Originator, the Servicer or the Transferor or its Affiliates (which Affiliates shall not include the Trust) other than Liens permitted pursuant to Section 2.08(b); (e) which has been the subject of either a valid transfer and assignment from the Transferor to the Trust of all of the Transferor's right, title and interest therein or the grant to the Trust of a perfected security interest which is prior to any interest of all third parties therein (and in the proceeds thereof), effective until the termination of the Trust; (f) which will at all times be the legal, valid and binding payment obligation of the Obligor thereon enforceable against such Obligor in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws, now or hereafter in effect, affecting the enforcement of creditors' rights in general and except as such enforceability may be limited by general principles of equity (whether considered in a suit at law or in equity); (g) which constitutes either an "account" or a "general intangible" under and as defined in Article 9 of the UCC as then in effect in the Commonwealth of Massachusetts and the States of New York and Ohio; (h) which, at the time of transfer to the Trust, has not been waived or modified except as permitted in accordance with Section 3.03(i); (i) which is not subject to any right of rescission, setoff, counterclaim or any other defense (including defenses arising out of violations of usury laws) of the Obligor, 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 such enforceability may be limited by general principles of equity (whether considered in a suit at law or equity) or as to which the Servicer may, as described in Section 3.03(i), make an adjustment; (j) as to which, at the time of transfer of such Receivable by the Transferor to the Trust, or at the time of sale of such Receivable by the Originator to the Transferor, each of the Transferor and the Originator has satisfied all obligations on its part with respect to such Receivable required to be fulfilled pursuant to the Credit Card Agreement or in connection with the transfer and any applicable agreement pursuant to which such transfer occurs; and (k) as to which, at the time of transfer of such Receivable by the Transferor to the Trust, or at the time of sale of such Receivable by the Originator to the Transferor, each of the Transferor and the Originator has not taken any action which would impair or failed to take any action necessary to avoid impairing the rights of the Trust or the Certificateholders therein. "Eligible Servicer" shall mean the Trustee or a national banking ----------------- association formed by Bridgestone/Firestone to own credit card accounts and receivables or an entity which, at the time of its appointment as Servicer, (i) is servicing a portfolio of consumer revolving credit card accounts, (ii) is legally qualified and has the capacity to service the Accounts, (iii) has demonstrated the ability to service professionally and completely a portfolio of similar accounts in accordance with high standards of skill and care and (iv) is qualified to use the software that the Servicer is then currently using to service the Accounts or obtains the right to use or has its own software which is adequate to perform its duties under this Agreement. "Enhancement" shall mean, with respect to any Series, the letter of ----------- credit, liquidity facility, guaranteed rate agreement, maturity guaranty facility, tax protection agreement, interest rate swap or any other contract or agreement for the benefit of Certificateholders of such Series as designated in the applicable Supplement. "Enhancement Provider" shall mean, with respect to any Series, that -------------------- Person designated as such in the applicable Supplement. "ERISA" shall mean the Employee Retirement Income Security Act of 1974, ----- as amended. "Escrow Account" shall have the meaning specified in Section 4.01A(e). -------------- "Exchange" shall mean either of the procedures described under Section -------- 6.09. "Exchangeable Transferor Certificate" shall mean the certificate ----------------------------------- executed by the Transferor and authenticated by the Trustee, substantially in the form of Exhibit A-1 and exchangeable as provided in Section 6.09. ----------- "Exchange Date" shall have the meaning, with respect to any Series ------------- issued pursuant to an Exchange, specified in Section 6.09. "Exchange Notice" shall have the meaning, with respect to any Series --------------- issued pursuant to an Exchange, specified in Section 6.09. "FDIC" shall mean the Federal Deposit Insurance Corporation. ---- "Final Trust Termination Date" shall have the meaning specified in ---------------------------- Section 12.01. "Finance Charge Collections" shall mean, with respect to any Collection -------------------------- Period, the amount of Collections allocated as Finance Charge Collections pursuant to Section 4.01(e). "Fitch" shall mean Fitch Investors Service, Inc. ----- "Fifteen Percent Quarterly Cap" shall have the meaning specified in ----------------------------- Section 2.05(d). "Fixed Allocation Percentage" shall (i) have with respect to any Series, --------------------------- the meaning specified in the applicable Supplement and (ii) with respect to the Bridgestone/Firestone Certificate, mean 1%. "Floating Allocation Percentage" shall (i) have with respect to any ------------------------------ Series, the meaning specified in the applicable Supplement and (ii) with respect to the Bridgestone/Firestone Certificate, mean 1%. "Governmental Authority" shall mean the United States of America, any ---------------------- state or other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government. "Ineligible Receivable" shall have the meaning specified in Section --------------------- 2.06. "Initial Closing Date" shall mean December 2, 1992. -------------------- "Initial Invested Amount" shall mean, with respect to any Series, the ----------------------- amount stated in the applicable Supplement. "Insurance Agreement" shall mean any insurance policy for the benefit ------------------- of the Originator or Bridgestone/Firestone covering any Obligor with respect to Receivables under such Obligor's Account. "Insurance Premiums" shall mean the amounts specified in the Insurance ------------------ Agreement applicable to each Account for insurance on such Account which are retained by the Originator, the Servicer or Bridgestone/Firestone from payments by the applicable Obligor or remitted to the Originator, the Servicer or Bridgestone/Firestone by the applicable insurance provider. "Insurance Proceeds" shall mean any amounts received by the Servicer, ------------------ the Originator or the Transferor from the applicable insurance providers pursuant to any insurance policies covering any Obligor with respect to Receivables under such Obligor's Account. "Interest Accrual Period" shall mean, with respect to any Series, the ----------------------- period during which interest accrues on such Series as specified in the related Supplement. "Internal Revenue Code" shall mean the Internal Revenue Code of 1986, --------------------- as amended from time to time. "Invested Amount" shall have, with respect to any Series, the meaning --------------- specified in the applicable Supplement. "Invested Percentage" shall have, with respect to any Series, the ------------------- meaning specified in the applicable Supplement. "Investor Certificate" shall mean any one of the certificates -------------------- (including, without limitation, the Book-Entry Certificates or the Registered Certificates) executed by the Transferor and authenticated by or on behalf of the Trustee, substantially in the form attached to the applicable Supplement. "Investor Certificateholder" shall mean the holder of record of an -------------------------- Investor Certificate. "Investor Default Amount" shall have, with respect to any Series, the ----------------------- meaning specified in the applicable Supplement. "Investor Exchange" shall have the meaning specified in Section 6.09. ----------------- "Issuance Date" shall mean, with respect to any Series, the date of ------------- initial issuance of such Series as specified in the related Supplement. "Late Fees" shall have the meaning specified in the Credit Card --------- Agreement applicable to each Account for late fees or similar terms. "Letter of Credit Bank" shall mean The Sumitomo Bank, Limited, acting --------------------- through its New York Branch, and the issuer of any substitute Servicer Letter of Credit delivered pursuant to Section 4.01A(c) or substitute Transferor Letter of Credit delivered pursuant to Section 4.01B(c). "Letter of Credit Reimbursement Agreement" shall mean the Letter of ---------------------------------------- Credit Reimbursement Agreement, dated as of December 2, 1992, between Bridgestone/Firestone and the Letter of Credit Bank, as from time to time amended, or any similar agreement between Bridgestone/Firestone and the issuer of any substitute Servicer Letter of Credit delivered pursuant to Section 4.01A(c) or Transferor Letter of Credit delivered pursuant to Section 4.01B(c). "Lien" shall mean any mortgage, deed of trust, pledge, hypothecation, ---- assignment, deposit arrangement, encumbrance, lien (statutory or other), preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever, including, without limitation, any conditional sale or other title retention agreement, any financing lease having substantially the same economic effect as any of the foregoing and the filing of any financing statement under the UCC or comparable law of any jurisdiction to evidence any of the foregoing; provided, however, that any assignment permitted by Section 7.02 shall not - -------- ------- be deemed to constitute a Lien; provided, further, however, that the Lien -------- ------- ------- created by the Agreement shall not be deemed to constitute a Lien. "Merchant Fees" shall mean all fees paid to the Originator in its ------------- capacity as credit card issuer, by Retail Establishments in connection with the Credit Card Program or any Alternative Program which are transferred by the Originator to the Transferor pursuant to the Purchase and Sale Agreement. "Minimum Transferor Interest Percentage" shall mean, with respect to any -------------------------------------- Collection Period with respect to any Series, the percentage specified in the Supplement in respect of such Series of Certificates. "Monthly Periodic Rate" shall mean the APR divided by 12. --------------------- "Monthly Servicing Fee" shall have, with respect to each Series, the --------------------- meaning specified in Section 3.02. "Monthly Servicer's Certificate" shall have the meaning set forth in ------------------------------ Section 3.04(b). "Moody's" shall mean Moody's Investors Service, Inc. ------- "Net Losses" shall mean, with respect to any Collection Period, the ---------- annualized percentage equivalent of a fraction the numerator of which is the Defaulted Amount less the amount of Recoveries with respect to such Collection Period and the denominator of which is the Aggregate Receivables as of the end of the preceding Collection Period. "New Discount Option Receivables" shall mean, for any Collection Period ------------------------------- ending on and after the date on which the Transferor's exercise of its discount option pursuant to Section 2.11 takes effect, the product of (a) the amount of any Eligible Receivables and Eligible Alternative Receivables created during such Collection Period and (b) the Discount Percentage. "Non-Designated Alternative Program" shall mean an Alternative Program ---------------------------------- which the Transferor has not designated as a Designated Alternative Program. "Obligor" shall mean, with respect to any Account, the Person or Persons ------- obligated to make payments with respect to such Account, including any guarantor thereof, but excluding any merchants. "Officers' Certificate" shall mean, unless otherwise specified in the --------------------- Agreement, a certificate signed by a Chairman of the Board, President or any Vice President and a Treasurer, Secretary, Assistant Secretary, or Assistant Treasurer or, in the case of a Successor Servicer, a certificate signed by a Vice President and the financial controller (or an officer holding an office with equivalent or more senior responsibilities) of such Successor Servicer, and delivered to the Trustee. "Opinion of Counsel" shall mean a written opinion of counsel, who may ------------------ be counsel of the Transferor and who shall be reasonably acceptable to the Trustee; provided, however, that any opinion of counsel regarding federal -------- ------- income tax consequences shall be rendered by independent outside counsel. "Originator" shall mean Credit First (successor to Society National ---------- Bank) or any successor originator of Accounts as herein provided. "Participation Agreement" shall mean the Amended and Restated ----------------------- Participation Agreement, dated as of October ___, 1996, by and between Bridgestone/Firestone and the Transferor, as the same may be supplemented, modified, amended or amended and restated from time to time. "Paying Agent" shall mean any paying agent appointed pursuant to Section ------------ 6.06 and shall initially be the Trustee. "Payoff Date" shall have the meaning specified in Section 4.01A(e). ----------- "Periodic Finance Charges" shall have the meaning specified in the ------------------------ Credit Card Agreement applicable to each Account for finance charges (based on a periodic rate) or similar term. "Permitted Investments" shall mean (a) negotiable instruments or --------------------- securities represented by instruments in bearer or registered form which evidence (i) obligations fully guaranteed as to timely payment by the United States of America; (ii) certificates of deposit of, or bankers' acceptances issued by, any depository institution or trust company incorporated or licensed under the laws of the United States of America or any state thereof and subject to supervision and examination by federal or state banking or depository institution authorities (which may be the Trustee or the Originator or an Affiliate of either); provided, however, that at the time -------- ------- of the Trust's investment or reinvestment or contractual commitment to invest or reinvest therein, such depository institution or trust company shall have the highest short-term rating granted by each Standard & Poor's and Moody's; (iii) commercial paper having, at the time of the Trust's investment or reinvestment or contractual commitment to invest or reinvest therein, a rating from each Standard & Poor's and Moody's in the highest short-term category granted by Standard & Poor's or Moody's, as applicable; (iv) investments in money market funds having the highest long-term rating granted by each Standard & Poor's and Moody's and maintained by commercial banks having unimpaired capital and unimpaired surplus of at least $500,000,000; (v) eurodollar time deposits having the highest long-term rating granted by each Standard & Poor's and Moody's; (vi) repurchase agreements involving any of the Permitted Investments described in clauses (i) through (iv) above so long as the other party to the repurchase agreement has the rating described in clause (iii) above; and (vii) any other investment, if each Standard & Poor's and Moody's confirms in writing that such investment will not adversely affect any ratings with respect to any Series of Investor Certificates, and (b) demand deposits or time deposits in the name of the Trust or the Trustee in any depository institution or trust company referred to in (a)(ii) above. For the purpose of this definition, "highest short-term rating" when used in respect of Standard Poor's shall mean "A-1+" and in respect of Moody's shall mean "P-1". "Person" shall mean any legal person, including any individual, ------ corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization, governmental entity or other entity of similar nature. "Pool Factor" shall mean, unless any Series is issued in more than one ----------- Class as stated in any related Supplement, with respect to any Series and any Record Date, a number (carried out to eight decimal places) representing the quotient of (i) the applicable Invested Amount as of such Record Date (determined after taking into account any reduction in the applicable Invested Amount which will occur on the following Distribution Date) and (ii) the applicable Initial Invested Amount. "Portfolio Yield" shall mean, with respect to any Collection Period, the --------------- annualized percentage equivalent of a fraction the numerator of which is the amount of Finance Charge Collections for such Collection Period, calculated on (an accrual) basis after subtracting the Defaulted Amount, and the denominator of which is the Aggregate Receivables as of the end of the preceding Collection Period. "Principal Collections" shall mean that portion of Collections not --------------------- deemed to be Finance Charge Collections. "Principal Shortfalls" shall mean, with respect to any Collection Period -------------------- and any outstanding Series, the amount which the related Supplement specifies as the "Principal Shortfall" for such Business Day. "Principal Terms" shall have the meaning, with respect to any Series --------------- issued pursuant to an Exchange, specified in Section 6.09(c). "Purchase and Sale Agreement" shall mean the Amended and Restated --------------------------- Purchase and Sale Agreement by and among the Originator, Bridgestone/Firestone and the Transferor, dated as of October __, 1996, as the same has been and may be further supplemented, modified, amended or amended and restated from time to time. "Rapid Amortization Period" shall mean, with respect to any Series of ------------------------- Certificates, the period specified in the related Supplement. "Rating Agency" shall mean, with respect to each Series, the rating ------------- agency or rating agencies that rated such Series, including Fitch, Moody's and Standard & Poor's. "Reassignment" shall have the meaning specified in Section 2.10. ------------ "Receivables" shall mean, for both the Credit Card Program and any ----------- Alternative Program, all amounts transferred to the Transferor, payable by Obligors on any Account, from time to time as shown on the Servicer's records, including, without limitation, amounts payable for purchases of goods or services and, if applicable, amounts payable for Periodic Finance Charges, Late Fees, Returned Check Fees, returned convenience check fees, cash advance fees and credit related insurance. "Record Date" shall mean with respect to any Distribution Date, unless ----------- otherwise provided in any Supplement for the related Series, the fifteenth day of the preceding calendar month. "Recoveries" shall mean all amounts or payments received by the Servicer ---------- with respect to Receivables which have previously become Defaulted Receivables net of reasonable expenses. "Registered Certificates" shall have the meaning specified in Section ----------------------- 6.01. "REMARC Purchase Agreement" shall mean each purchase agreement with ------------------------- respect to the Series 1992-B Class A REMARCs, as such agreements may be amended or supplemented from time to time. "Removal Date" shall have the meaning specified in Section 2.10. ------------ "Removal Notice Date" shall mean, with respect to any Removed Account, ------------------- the last day in the month preceding the month in which the Removal Date for such Removed Account occurs. "Removed Accounts" shall have the meaning specified in Section 2.10. ---------------- "Repurchase Terms" shall mean, with respect to any Series issued ---------------- pursuant to an Exchange, the terms and conditions under which the Transferor may repurchase such Series pursuant to Section 12.02 as modified by the related Supplement. "Requirements of Law" for any Person shall mean the certificate of ------------------- incorporation and by-laws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation, or determination of an arbitrator or Governmental Authority, in each case applicable to or binding upon such Person or to which such Person is subject, whether Federal, state or local (including, without limitation, usury laws, the Federal Truth in Lending Act and Regulation Z and Regulation B of the Board of Governors of the Federal Reserve System). "Responsible Officer" when used with respect to the Trustee shall mean ------------------- any officer within the Corporate Trust Office (or any successor group of the Trustee) including any vice president, assistant vice president, assistant secretary or any other officer of the Trustee customarily performing functions similar to those performed by the persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of his knowledge of and familiarity with the particular subject. "Retail Establishments" shall mean Bridgestone/Firestone stores and --------------------- dealers and marketers of Bridgestone/Firestone products and certain other dealers and marketers of automotive products and services, which are unaffiliated with Bridgestone/Firestone. "Returned Check Fee" shall have the meaning specified in the Credit Card ------------------ Agreement applicable to each Account for returned check fees or similar terms. "Revolving Period" shall mean, with respect to any Series, the period ---------------- specified in the related Supplement. "Series" shall mean any series of Investor Certificates. ------ "Series Termination Date" shall mean, with respect to any Series, the ----------------------- date stated in the related Supplement. "Service Transfer" shall have the meaning specified in Section 10.01. ---------------- "Servicer" shall initially mean Bridgestone/Firestone and thereafter any -------- Person appointed as successor as herein provided to service the Receivables. "Servicer Default" shall have the meaning specified in Section 10.01. ---------------- "Servicer Letter of Credit" shall mean a letter of credit for the ------------------------- benefit of the Trustee issued by the Letter of Credit Bank in substantially the form of Exhibit D hereto. --------- "Servicing Fee" shall have the meaning specified in Section 3.02. ------------- "Servicing Fee Percentage" shall mean, with respect to any Series, the ------------------------ percentage specified in the related Supplement. "Servicing Officer" shall mean any officer of the Servicer involved in, ----------------- or responsible for, the administration and servicing of the Receivables whose name appears on a list of servicing officers furnished to the Trustee by the Servicer, as such list may from time to time be amended. "Series 1996-1 Closing Date" shall mean October 31, 1996. -------------------------- "Shared Excess Finance Charge Collections" shall mean, with respect to ---------------------------------------- any Determination Date, the aggregate amount of Excess Finance Charge Collections for all outstanding Series that the related Supplements specify are to be treated as "Shared Excess Finance Charge Collections" available to be allocated to other Series for the related Collection Period. "Shared Principal Collections" shall mean, with respect to any ---------------------------- Determination Date, the aggregate amount of Principal Collections for all outstanding Series that the related Supplements specify are to be treated as "Shared Principal Collections" available to be allocated to other Series for the related Collection Period. "Special Drawing" shall mean a drawing under the Servicer Letter of --------------- Credit or Transferor Letter of Credit, as the case may be, made pursuant to Section 4.01A or 4.01B hereof. "Standard & Poor's" shall mean Standard & Poor's Corporation. ----------------- "Stated Amount" shall have, with respect to the Servicer Letter of ------------- Credit, the meaning specified in the Servicer Letter of Credit and, with respect to the Transferor Letter of Credit, the meaning specified in the Transferor Letter of Credit. "Successor Servicer" shall have the meaning specified in Section 10.02. ------------------ "Supplement" shall mean, with respect to any Series, a supplement to ---------- this Agreement complying with the terms of Section 6.09, executed in conjunction with any issuance of any Series. "Ten Percent Number Test" shall have the meaning specified in Section ----------------------- 2.05(d). "Ten Percent Aggregate Test" shall have the meaning specified in Section -------------------------- 2.05(d). "Termination Date" shall have the meaning specified in the Servicer ---------------- Letter of Credit. "Termination Notice" shall have, with respect to any Series, the meaning ------------------ specified in Section 10.01. "Transfer" shall have the meanings specified in Section 2.01. -------- "Transfer Agent and Registrar" shall have the meaning specified in ---------------------------- Section 6.03 and shall initially be the Trustee. "Transfer Date" shall mean, with respect to any Distribution Date, the ------------- Business Day next preceding such Distribution Date. "Transfer Deposit Amount" shall mean, with respect to any Receivable for ----------------------- any Distribution Date, an amount equal to the amount of the Receivable at the end of the Collection Period for such Distribution Date, plus finance charges at the APR on the balance for such Receivable from the last date billed through the end of such Collection Period to the extent not included in the amount of the Receivable. "Transferor" shall mean Firestone Retail Credit Corporation, a ---------- corporation organized and existing under the laws of the Commonwealth of Massachusetts. "Transferor Amount" shall mean, with respect to any day, Aggregate ----------------- Receivables for such day minus the sum of (i) the Aggregate Invested Amount ----- (less the principal amount on deposit in any principal funding accounts) and (ii) the B/F Amount. "Transferor Escrow Account" shall have the meaning specified in Section ------------------------- 4.01B(d). "Transferor Exchange" shall have the meaning specified in Section 6.09. ------------------- "Transferor Interest" shall have the meaning specified in Section ------------------- 4.01(a). "Transferor Letter of Credit" shall mean a letter of credit for the --------------------------- benefit of the Trustee issued by the Letter of Credit Bank in substantially the form of Exhibit I hereto. --------- "Transferor Percentage" shall mean when used with respect to Finance --------------------- Charge Collections, Principal Collections and the amount of Defaulted Receivables, 100% minus the sum of the applicable Invested Percentages with ----- respect to all Series then issued and outstanding and the B/F Percentage. "Transferor Retained Certificates" shall mean Investor Certificates of -------------------------------- any Series which the Transferor is required to retain pursuant to the terms of any Supplement. "Transferred Account" shall mean a credit card account (including an ------------------- account arising from an Alternative Program) with respect to which a new credit card account number has been issued by the Servicer because (i) a credit card was lost or stolen, (ii) separate accounts were merged into a single joint account, (iii) multiple accounts for a single individual were merged into a single individual account, or (iv) a joint account was converted to an individual account as a result of divorce or the death of a spouse, each under circumstances not requiring standard application and credit evaluation procedures under the Credit Card Guidelines and which can be traced or identified by reference to or by way of the lists delivered to the Trustee in disc or tape format pursuant to Sections 2.01 and 2.05, as an account into which an Account has been transferred. "Trust" shall mean the trust created by this Agreement. ----- "Trust Assets" shall have the meaning specified in Section 2.01. ------------ "Trustee" shall mean The Fuji Bank and Trust Company, a banking ------- corporation organized and existing under the laws of the State of New York, and its successors and any corporation resulting from or surviving any consolidation or merger to which it or its successors may be a party and any successor Trustee at the time serving as successor Trustee hereunder. "Twenty Percent Yearly Cap" shall have the meaning specified in Section ------------------------- 2.05(d). "UCC" shall mean the Uniform Commercial Code, as amended from time to --- time, as in effect in any specified or applicable jurisdiction. "Unallocated Principal Collections" shall have the meaning described in --------------------------------- Section ( ) 4.01(f). "Undivided Interest" shall mean the undivided interest of any ------------------ Certificateholder in the Trust. "Vice President" when used with respect to the Originator, -------------- Bridgestone/Firestone or the Transferor shall mean any vice president whether or not designated by a word or number of words added before or after the title "vice president." Section 1.02 Other Definitional Provisions. ----------------------------- (a) All terms defined in any Supplement or this Agreement shall have the defined meanings when used in any certificate or other document made or delivered pursuant hereto unless otherwise defined therein. (b) As used herein and in any certificate or other document made or delivered pursuant hereto or thereto, accounting terms not defined in Section 1.01 of the Agreement, and accounting terms partly defined in Section 1.01 of the Agreement to the extent not defined, shall have the respective meanings given to them under generally accepted accounting principles. To the extent that the definitions of accounting terms herein are inconsistent with the meanings of such terms under generally accepted accounting principles, the definitions contained herein shall control. (c) The agreements, representations and warranties of the Transferor and the Servicer in this Agreement shall be deemed to be the agreements, representations and warranties of the Transferor and the Servicer, respectively, solely in each such capacity for so long as either of them acts in each such capacity under this Agreement. (d) The words "hereof", "herein" and "hereunder" and words of similar import when used in this Agreement shall refer to any Supplement or this Agreement as a whole and not to any particular provision of such Supplement or this Agreement, as the case may be; and Article, Section, Subsection, Schedule and Exhibit references contained in this Agreement or any Supplement are references to Articles, Sections, Subsections, Schedules and Exhibits in or to this Agreement or any Supplement unless otherwise specified. (END OF ARTICLE I) ARTICLE II CONVEYANCE; ISSUANCE OF CERTIFICATES Section 2.01 Conveyance. By execution of this Agreement, the ---------- Transferor does hereby transfer, assign, set over and otherwise convey to the Trust for the benefit of the Certificateholders, without recourse (except as specifically provided herein) (the making of such transfer, assignment, set- over and conveyance being a "Transfer," and so to transfer, assign, set over -------- and otherwise convey being to "Transfer"), all of its right, title and interest in, to and under the Eligible Receivables now existing and hereafter created in any Eligible Accounts whether now existing or hereafter created on or after the Cut-off Date, all amounts due or to become due on or after the Cut-Off Date and all amounts received with respect thereto, including all Recoveries relating thereto (net of related expenses), Insurance Proceeds (net of related expenses), all of its right, title and interest in, to and under the Participation Agreement, the Purchase and Sale Agreement and any Insurance Premiums paid under any Insurance Agreements and all proceeds of any Insurance Agreement. Such property, together with the Collection Account and all amounts on deposit in or credited to the Collection Account (excluding any investment earnings on any such deposited amount) and any other account or accounts maintained for the benefit of the Certificateholders and available under any Enhancement to be provided by an Enhancement Provider for any Series for payment to Certificateholders and all proceeds (as defined in Section 9-306 of the UCC as in effect in the State of New York and the Commonwealth of Massachusetts) of any of the foregoing shall constitute the assets of the Trust (the "Trust Assets"). The foregoing ------------ transfer, assignment, set-over and conveyance does not constitute and is not intended to result in a creation or an assumption by the Trust, the Trustee or any Investor Certificateholder of any obligation of the Transferor or the Servicer or any other Person in connection with the Accounts, the Receivables or under any agreement or instrument relating thereto, including, without limitation, any obligation to any merchants, Obligors or insurers. In connection with such conveyance, the Transferor agrees to record and file, at its own expense, any financing statements (and continuation statements with respect to such financing statements when applicable) with respect to the Receivables now existing and hereafter created for the transfer of accounts meeting the requirements of applicable state law in such manner and in such jurisdictions as are necessary to perfect the transfer and assignment of the Receivables to the Trust, and to deliver a file-stamped copy of such financing statements or other evidence of such filings to the Trustee on or prior to the date of issuance of the Certificates. The Trustee shall be under no obligation whatsoever to file such financing statements or make any other filings under the UCC in connection with such conveyance. The Trustee shall be entitled to rely upon the filings made by the Transferor. In connection with such conveyance, the Transferor further agrees, at its own expense, on or prior to the Series 1996-1 Closing Date (a) to indicate on its books and records that all Receivables created in connection with the Accounts have been conveyed to the Trust pursuant to this Agreement for the benefit of the Certificateholders and (b) to deliver to the Trustee a true and complete list of all such Accounts specifying for each such Account, as of the Cut-Off Date its account number. Such list shall be marked as Schedule 1 to this Agreement and is hereby incorporated into and ---------- made a part of this Agreement. The Transferor shall subsequently deliver to the Trustee on each Transfer Date a true and complete listing of all new Accounts and account numbers as of the last day of the Collection Period ending immediately prior to such date. Each such list shall be added as an addendum to this Agreement and is hereby incorporated by reference. Section 2.02 Acceptance by Trustee. --------------------- (a) The Trustee hereby acknowledges its acceptance on behalf of the Trust of all right, title and interest to the Trust Assets, now existing and hereafter created, conveyed to the Trust pursuant to Section 2.01, and declares that it shall maintain such right, title and interest, upon the trust herein set forth, for the benefit of all Certificateholders. The Trustee further acknowledges that, prior to or simultaneously with the execution and delivery of this Agreement, the Transferor delivered to the Trustee the list described in the last paragraph of Section 2.01. (b) The Trustee hereby agrees not to disclose to any Person any of the account numbers or other information, if any, contained in the lists marked as Schedule 1 delivered to the Trustee by the Transferor pursuant to ---------- Section 2.01 or Section 2.05, except as may be required by law, as is required in connection with the performance of its duties hereunder or in enforcing the rights of the Certificateholders or to a Successor Servicer appointed pursuant to Section 10.02. The Trustee agrees to take such measures as shall be reasonably requested by the Transferor to protect and maintain the security and confidentiality of such information, and, in connection therewith, shall allow the Transferor to inspect the Trustee's security and confidentiality arrangements from time to time during normal business hours. The Trustee shall make reasonable efforts to provide the Transferor with written notice five days prior to any disclosure pursuant to this Section 2.02(b). (c) The Trustee shall have no power to create, assume or incur indebtedness, beneficial interests or other liabilities in the name of the Trust other than as contemplated in this Agreement. (d) Without prejudice to Section 2.01, the parties hereto intend that this Agreement, which constitutes a security agreement under the UCC, is a grant of a "security interest" (as defined in the UCC as in effect in the State of New York) in the Receivables and the proceeds thereof to the Trust. Section 2.03 Representations and Warranties of the Transferor Relating --------------------------------------------------------- to the Transferor. The Transferor hereby represents and warrants to the - ----------------- Trustee, on behalf of the Trust, as of the Series 1996-1 Closing Date, and with respect to any Series, as of its Closing Date, unless otherwise stated in such Supplement, that: (a) Organization and Good Standing. The Transferor is a ------------------------------ corporation duly organized and validly existing in good standing under the laws of the Commonwealth of Massachusetts, and has the corporate power and authority to execute, deliver and perform its obligations under this Agreement and the transactions contemplated under this Agreement and to execute and deliver to the Trustee pursuant hereto the Certificates and, in all material respects, to own its property and conduct its business as such properties are presently owned and such business is presently conducted. (b) Due Qualification. The Transferor is duly qualified to do ----------------- business and is in good standing as a foreign corporation (or is exempt from such requirements), and has obtained all necessary licenses and approvals with respect to the Transferor, in each jurisdiction in which failure to so qualify or to obtain such licenses and approvals could reasonably be expected to render any Credit Card Agreement relating to an Account or any Receivable unenforceable by the Transferor or the Trust or could reasonably be expected to have a material adverse effect on the Certificateholders; provided that -------- no representation or warranty is made with respect to any qualifications, licenses or approvals which the Trustee would have to obtain to do business in any state in which the Trustee seeks to enforce any Account or any Receivable. (c) Due Authorization. The execution and delivery of the Purchase ----------------- and Sale Agreement, the Participation Agreement and this Agreement and the execution and delivery to the Trustee of the Certificates by the Transferor and the consummation of the transactions provided for in this Agreement have been duly authorized by the Transferor by all necessary corporate action on the part of the Transferor. (d) Binding Obligation. The Purchase and Sale Agreement, the ------------------ Participation Agreement and this Agreement each constitutes a legal, valid and binding obligation of the Transferor, enforceable in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereinafter in effect affecting the enforcement of creditors' rights in general and except as such enforceability may be limited by general principles of equity (whether considered in a proceeding at law or in equity). (e) No Violation. The execution and delivery of the Purchase and ------------ Sale Agreement, the Participation Agreement and this Agreement and the Certificates, the performance of the transactions contemplated by the Purchase and Sale Agreement, the Participation Agreement and this Agreement and the fulfillment of the terms hereof will not conflict with, violate, result in any breach of any of the material terms and provisions of, or constitute (with or without notice or lapse of time or both) a material default under, any Requirement of Law applicable to the Transferor or any indenture, contract, agreement, mortgage, deed of trust, or other instrument to which the Transferor is a party or by which it or its properties is bound. (f) No Proceedings. There are no proceedings or investigations -------------- pending or, to the best knowledge of the Transferor, threatened against the Transferor, before any court, regulatory body, administrative agency, or other tribunal or governmental instrumentality (i) asserting the invalidity of the Purchase and Sale Agreement, this Agreement, the Participation Agreement or the Certificates, (ii) seeking to prevent the issuance of the Certificates or the consummation of any of the transactions contemplated by the Purchase and Sale Agreement, this Agreement, the Participation Agreement or the Certificates, (iii) seeking any determination or ruling that, in the reasonable judgment of the Transferor, could materially and adversely affect the performance by the Transferor of its obligations under the Purchase and Sale Agreement, the Participation Agreement or this Agreement (other than a ruling or determination with respect to which there is no reasonable likelihood of such an effect), (iv) seeking any determination or ruling that could materially and adversely affect the validity or enforceability of this Agreement, the Participation Agreement or the Certificates (other than a ruling or determination with respect to which there is no reasonable likelihood of such an effect), or (v) seeking to affect adversely the income tax attributes of the Trust. (g) All Consents Required. All approvals, authorizations, --------------------- consents, orders or other actions of any Person or of any governmental body or official required in connection with the execution and delivery by the Transferor of the Purchase and Sale Agreement, the Participation Agreement, this Agreement and the Certificates, the performance by the Transferor of the transactions contemplated by the Purchase and Sale Agreement, this Agreement and the fulfillment by the Transferor of the terms hereof have been obtained. The representations and warranties set forth in this Section 2.03 shall survive the transfer and assignment of the Trust Assets to the Trust, and the termination of the rights and obligations of the Servicer pursuant to Section 10.01. Upon discovery by the Transferor, the Servicer or the Trustee of a breach of any of the foregoing representations and warranties, the party discovering such breach shall give prompt written notice to the other parties. Section 2.04 Representations and Warranties Relating to the Agreement -------------------------------------------------------- and the Receivables. - ------------------- (a) Representations and Warranties. The Transferor and ------------------------------ Bridgestone/Firestone hereby, jointly and severally represent and warrant to the Trustee, on behalf of the Trust, with respect to any Series, as of the date of its related Supplement and Closing Date, unless otherwise stated in such Supplement, and, with respect to any Series and matters involving Additional Accounts as of the date of the Transfer of such Additional Accounts and with respect to matters involving Eligible Alternative Accounts, as of the related Addition Date that: (i) the Purchase and Sale Agreement, the Participation Agreement, this Agreement and, in the case of Eligible Alternative Accounts, the related Assignment, each constitutes legal, valid and binding obligations of the Transferor enforceable against the Transferor in accordance with their terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect affecting the enforcement of creditors' rights in general and except as such enforceability may be limited by general principles of equity (whether considered in a suit at law or in equity); (ii) as of the Series 1996-1 Closing Date, Schedule 1 to this ---------- Agreement is and, as of the applicable Addition Date with respect to Eligible Alternative Accounts added pursuant to Sections 2.05(b), 2.05(c) and 2.05(d), will be, an accurate and complete listing of all the Accounts in all material respects as of the Cut-Off Date or the applicable Addition Notice Date, as the case may be, and the information contained therein with respect to the identity of such Accounts and the Receivables existing thereunder is and will be true and correct in all material respects as of such applicable Cut-Off Date or Addition Notice Date; as of the Series 1996-1 Closing Date, the amount of Aggregate Receivables was $____________; no selection procedures believed by the Transferor or Bridgestone/Firestone to be adverse to the interests of Certificateholders has or shall have been used in selecting the Accounts; (iii) each Receivable existing on the Series 1996-1 Closing Date or thereafter arising in an Eligible Account or, in the case of Eligible Alternative Accounts, on the Addition Date and thereafter arising, has been conveyed to the Trust free and clear of any Lien other than Liens permitted by Section 2.08(b); (iv) with respect to each Receivable existing on the Series 1996-1 Date or thereafter arising in an Eligible Account, in the case of Eligible Alternative Accounts, on the Addition Date, all consents, licenses, approvals or authorizations of or registrations or declarations with any Governmental Authority required to be obtained, effected or given by the Transferor in connection with the conveyance of such Receivable to the Trust have been duly obtained, effected or given and are in full force and effect; (v) this Agreement and, in the case of Eligible Alternative Accounts, the related Assignment, either constitutes a valid transfer and assignment to the Trust of all right, title and interest of the Transferor in the Receivables and the proceeds thereof, or, if this Agreement and, in the case of Eligible Alternative Accounts, the related Assignment, does not constitute a valid transfer and assignment of such property of the Transferor, it constitutes a grant of a "security interest" (as defined in the UCC as in effect in the State of New York and the Commonwealth of Massachusetts) in such property of the Transferor to the Trust, which, in the case of Receivables existing or thereafter arising in an Eligible Account and the proceeds thereof, is enforceable upon execution and delivery of this Agreement, and which will be enforceable with respect to such Eligible Alternative Receivables hereafter created and the proceeds thereof upon such creation and which will be enforceable with respect to Eligible Alternative Accounts upon execution and delivery of the related Assignment. Upon the filing of any financing statements described in Section 2.01 and, in the case of the Receivables hereafter created or transferred to the Trust and the proceeds thereof, upon the creation or transfer thereof, the Trust shall have a first priority perfected security or ownership interest in such property of the Transferor except for Liens permitted under Section 2.08(b); provided, however, that such -------- ------- security interest in proceeds shall remain perfected after 10 days from their receipt by the Transferor only to the extent that such proceeds are identifiable cash proceeds or come into the Trust's possession within the applicable 10-day period; and provided, further, that the Transferor makes no representation or -------- ------- warranty with respect to the effect of Section 9-306(4) of the UCC on the rights of the Trust to proceeds held by the Transferor at the time proceedings under any Debtor Relief Laws are instituted by or against the Transferor. Except as otherwise provided in this Agreement, neither the Transferor nor any Person claiming through or under the Transferor has any claim to or interest in the Collection Account; and (vi) as of the Series 1996-1 Closing Date, each Receivable existing on such date is (or if such Receivable comes into existence in the future, will be) an Eligible Receivable in all material respects and, in the case of Eligible Alternative Accounts, as of the Addition Date, each Receivable transferred to the Trust with respect to such Eligible Alternative Account is (or if such Receivable comes into existence in the future, will be) an Eligible Receivable. (b) Notice of Breach. The representations and warranties set ---------------- forth in this Section 2.04 shall survive the transfer and assignment of the Trust Assets to the Trust. Upon discovery by the Transferor, Bridgestone/Firestone, the Servicer or the Trustee of a breach of any of the representations and warranties set forth in this Section 2.04, the party discovering such breach shall give prompt written notice to the others. Section 2.05 Addition of Accounts. -------------------- (a) All accounts created after the Series 1996-1 Closing Date which meet the definition of Eligible Accounts shall be included as Accounts from and after the date upon which such Eligible Accounts are created and all Receivables in such Eligible Accounts, whether such Receivables are existing or thereafter created, shall be transferred automatically to the Trust upon purchase by the Transferor from the Originator. (b) Subject to Section 2.05(c) and (d), the Transferor may, but shall not be obligated to, designate from time to time additional credit card accounts with respect to receivables arising from Alternative Programs ("Eligible Alternative Accounts") to be included as Accounts and convey the Eligible Alternative Receivables arising from such Eligible Alternative Accounts to the Trust. (c) The Transferor shall be permitted to designate and assign Eligible Alternative Receivables from Eligible Alternative Accounts only upon satisfaction of the following conditions: (i) The Transferor shall designate only Eligible Alternative Accounts; (ii) On or prior to each Addition Date in respect of Eligible Alternative Accounts, the Transferor shall have executed and delivered to the Trustee a written assignment (including an acceptance by the Trustee for the benefit of the Certificateholders) in substantially the form of Exhibit B (the "Assignment") and a true and complete list --------- ---------- identifying all such Eligible Alternative Accounts specifying for each such Account, as of the Addition Notice Date, its account number. Such list shall be as of the Addition Date with respect to such Assignment and shall be incorporated into and made part of such Assignment and this Agreement; in the event that the Servicer is then required to make daily deposits into the Collection Account pursuant to Section 4.01(h), the Transferor on or prior to each Addition Date will deposit into the Collection Account an amount equal to the Collections which have been processed on the Eligible Alternative Accounts from their applicable Addition Notice Date through the Business Day preceding such Addition Date; (iii) The Transferor represents and warrants (x) as of each Addition Date with respect to Eligible Alternative Accounts added pursuant to Sections 2.05(b) and 2.05(c) that (a) the list of Eligible Alternative Accounts, as of the Addition Notice Date, complies in all material respects with the requirements of paragraph (ii) above and (b) no selection procedure was utilized by the Transferor in selecting the Eligible Alternative Accounts which is adverse to the interests of the Investor Certificateholders; and (y) as of the Addition Notice Date and as of the Addition Date, the Transferor is not insolvent; (iv) The Transferor shall have delivered to the Trustee written confirmation from each Rating Agency that such Rating Agency will not reduce or withdraw its rating on any outstanding Series as a result of such addition; (v) On or before each Addition Date, the Transferor shall deliver a certificate of a Vice President or more senior officer confirming the items set forth in paragraphs (ii), (iii) and (iv) above. The Trustee may conclusively rely on such certificate, shall have no duty to make inquiries with regard to matters set forth therein and shall incur no liability in so relying; and (vi) On or before each Addition Date, the Transferor shall deliver to the Trustee and each Rating Agency, an Opinion of Counsel (which, in this instance, shall be outside counsel to the Transferor) with respect to the Receivables in the Eligible Alternative Accounts substantially in the form of Exhibit F. Upon satisfaction of the above conditions, the Transferor shall execute and deliver the Assignment to the Trustee, and the Eligible Alternative Receivables from the Eligible Alternative Accounts shall be conveyed to the Trust as provided in the Assignment. (d) The Transferor shall be permitted to designate Eligible Alternative Accounts and convey such Eligible Alternative Accounts and the Eligible Alternative Receivables arising out of such Eligible Alternative Accounts pursuant to Sections 2.05(b) and (c) until either (i) the number of Eligible Alternative Accounts equal 10% of the number of Eligible Accounts and Eligible Alternative Accounts (the "Ten Percent Number Test") or (ii) the aggregate dollar amount of Eligible Alternative Accounts equals 10% of the aggregate dollar amount of Eligible Accounts and Eligible Alternative Accounts (the "Ten Percent Aggregate Test"); together with the Ten Percent Number Test, the "Ten Percent Tests"). When either Ten Percent Test has been met, the Transferor must request written confirmation from each Rating Agency that such Rating Agency will not reduce or withdraw its rating on any outstanding Series as a result of the inclusion of additional Eligible Alternative Accounts from a designated Alternative Program and the related Eligible Alternative Receivables. The Transferor is not required to obtain written confirmation from each Rating Agency if the Transferor elects to maintain (x) the number of Eligible Alternative Accounts below the Ten Percent Number Test and (y) the aggregate dollar amount of Eligible Alternative Receivables below the Ten Percent Aggregate Test. When each Rating Agency has rendered its written consent to the continued inclusion of Eligible Alternative Accounts from a Designated Alternative Program, the Transferor may continue to transfer Eligible Alternative Accounts from a designated Alternative Program to the Trust, provided that (i) the number of Eligible Alternative Accounts relating to a Designated Alternative Program does not exceed 20% of the number of Eligible Accounts and Eligible Alternative Accounts, calculated as of December 31, of each calendar year (the "Twenty Percent Yearly Cap") and (ii) the number of Eligible Alternative Accounts relating to a Designated Alternative Program does not exceed 15% of the number of Eligible Accounts and Eligible Alternative Accounts, calculated as of March 31, June 30, September 30 and December 31 of each year for the preceding three Collection Periods (the "Fifteen Percent Quarterly Cap"). In addition, the Transferor may continue to transfer Eligible Alternative Accounts from Non-Designated Alternative Programs, subject to the Ten Percent Number Test and the Ten Percent Aggregate Test. Section 2.06 Transfer of Ineligible Receivables. ---------------------------------- (a) In the event of a breach with respect to a Receivable of any representations and warranties set forth in Section 2.04(a)(iii) or in the event that a Receivable is not an Eligible Receivable or Eligible Alternative Receivable, as applicable, as a result of the failure to satisfy the conditions set forth in clause (d) of the definition of Eligible Receivable: (i) if the Lien of the subject Receivable is not of the type otherwise described in clause (ii) below, and as a result of such breach or event such Receivable becomes a Defaulted Receivable or the Trust's rights in, to or under such Receivable or its proceeds are impaired or the proceeds of such Receivable are not available for any reason to the Trust free and clear of any Lien, then each such Receivable shall be automatically removed from the Trust on the terms and conditions set forth below; or (ii) if such Lien meets any of the following conditions: (1) such Lien arises in favor of the United States of America or any state or any agency or instrumentality thereof and involves taxes or liens arising under Title IV of ERISA or (2) such Lien has been consented to by the Transferor, then in the case of clause (1) upon the earlier to occur of the discovery of such breach or event by the Transferor or the Servicer or receipt by the Transferor and the Servicer of written notice of such breach or event given by the Trustee or in the case of clause (2), immediately upon the occurrence of such breach, each such Receivable shall be automatically removed from the Trust on the terms and conditions set forth below. (b) In the event of a breach of any representations and warranties set forth in Section 2.04(a)(iv) or 2.04(a)(vi) or in the event any Receivable is not at any time an Eligible Receivable or Eligible Alternative Receivable, as applicable, for any reason other than the failure to satisfy the conditions set forth in clause (d) of the definition of Eligible Receivable then, upon the expiration of 60 days from the earlier to occur of the discovery of any such event by the Transferor or Bridgestone/Firestone, or receipt by the Transferor or Bridgestone/Firestone of written notice of any such event given by the Trustee, the Servicer or the Originator each such Receivable shall be removed from the Trust on the terms and conditions set forth below; provided, however, that no such removal shall be required to be -------- ------- made with respect to a Receivable which is not an Eligible Receivable or Eligible Alternative Receivable, as applicable, to be removed pursuant to this sentence if the event giving rise to the obligation to remove such Receivable from the Trust and any material adverse effect on the interests of Investor Certificateholders in such Receivable shall be cured by the Servicer. (c) When required with respect to a Receivable (an "Ineligible ---------- Receivable") by the provisions of Section 2.06(a) or 2.06(b), such Receivable - ---------- shall be automatically removed from the Trust by deducting the amount of each such Ineligible Receivable from the amount of Receivables in the Trust, and the Transferor shall immediately make a deposit in the Collection Account in immediately available funds in an amount equal to the Transfer Deposit Amount. Such deposit shall be considered a payment in full of the Ineligible Receivable and shall be applied as a Finance Charge Collection or Principal Collection, as applicable, in accordance with Article IV. On and after the date of such removal, each Ineligible Receivable so removed shall not be included in the calculation of any Invested Percentage, the Transferor Percentage or the Transferor Amount. In the event that the exclusion of an Ineligible Receivable from the calculation of the Transferor Amount would cause the Transferor Amount to be a negative number or would otherwise not be permitted by law, such Ineligible Receivable shall not be included in the calculation of the B/F Amount. In the event that such exclusion would cause the B/F Amount to be a negative number, such Ineligible Receivable shall not be removed from the Trust. Upon each removal of an Ineligible Receivable from the Trust, the Trust shall automatically and without further action be deemed to transfer, assign, set-over and otherwise convey to the Transferor, without recourse, representation or warranty, all the right, title and interest of the Trust in and to such Ineligible Receivable, all monies due or to become due with respect thereto and all proceeds thereof, provided that any Periodic Finance Charges relating to such Ineligible Receivable accrued through the date of removal of such Ineligible Receivable and not otherwise included in the Transfer Deposit Amount shall continue to be property of the Trust. The Trustee shall execute such documents and instruments of transfer or assignment and take such other actions as shall reasonably be requested by the Transferor to effect the conveyance of such Ineligible Receivable pursuant to this Section. In the event that on any day within 60 days of the date on which the removal of an Ineligible Receivable from the Trust pursuant to this Section is effected, the applicable representations and warranties shall be true and correct in all material respects on such date, the Transferor may, but shall not be required to, direct the Servicer to include such Receivable in the Trust by adding such Receivable to the Receivables in the Trust. Upon addition of a Receivable to the Trust pursuant to this Section, the Transferor and Bridgestone/Firestone shall have been deemed to have made the applicable representations and warranties in Section 2.04(a) as of the date of such addition, as if the Receivable had been created on such date, and shall execute all such necessary documents and instruments of transfer or assignment and take such other actions as shall be necessary to effect and perfect the reconveyance of such Receivable to the Trust. The obligation of the Transferor set forth in this Section, or the automatic removal of such Receivable from the Trust, as the case may be, shall constitute the sole remedy respecting any breach of the representations and warranties set forth in the above-referenced Sections with respect to such Receivable available to Certificateholders or the Trustee on behalf of Certificateholders. Section 2.07 Purchase of Certificates. In the event of any breach of ------------------------ any of the representations and warranties set forth in Sections 2.03(d) and (g) or 2.04(a)(i) through 2.04(a)(v) and such event could have a material adverse effect on Investor Certificateholders, either the Trustee, or the Holders of Investor Certificates evidencing Undivided Interests aggregating more than 50% of the Invested Amount of all Series, by notice then given in writing to the Transferor (and to the Trustee and the Servicer if given by the Investor Certificateholders), may direct the Transferor to purchase all Certificates of all Series outstanding within 60 days of such notice, or within such longer period as may be specified in such notice and the Transferor shall be obligated to make such purchase on a Distribution Date occurring within such period on the terms and conditions set forth below; provided, however, that no such purchase shall be required to be made if, - -------- ------- during such applicable period, the breached representations and warranties contained shall be satisfied in all material respects and any material adverse effect on the Investor Certificateholders caused thereby shall have been cured. The Transferor shall deposit in the Collection Account on a Transfer Date occurring within the applicable period an amount equal to the purchase price (as described in the next succeeding sentence) for the Investor Certificates. The purchase price for any such purchase will be equal to the sum of (a) the Invested Amount of such Series at the end of the day on the Record Date preceding the date such deposit is made, plus (b) an ---- amount equal to all monthly interest accrued but unpaid on the Investor Certificates of such Series for the related Interest Accrual Period for the Distribution Date on which the distribution of such deposit is scheduled to be made pursuant to Section 12.03 and all prior Distribution Dates. Notwithstanding anything to the contrary in this Agreement, the entire amount of the purchase price deposited in the Collection Account shall be distributed to the Investor Certificateholders of such Series on such Distribution Date pursuant to Section 12.03. Payment of such purchase price into the Collection Account in immediately available funds shall otherwise be considered a prepayment of Receivables. If the Trustee or the Investor Certificateholders give notice directing the Transferor to purchase the Investor Certificates of any Series as provided above, the obligation of the Transferor to purchase the Investor Certificates of such Series pursuant to this Section 2.07 shall constitute the sole remedy respecting an event of the type specified in the first sentence of this Section 2.07 available to such Investor Certificateholders (or the Trustee on behalf of such Investor Certificateholders). Section 2.08 Covenants of the Transferor. The Transferor hereby --------------------------- covenants that: (a) Receivables Not to be Evidenced by Promissory Notes or Chattel -------------------------------------------------------------- Paper. The Transferor will take no action to cause any Receivable to be - ----- evidenced by any instrument (as defined in the UCC as in effect in the States of New York and Ohio or the Commonwealth of Massachusetts). Each Receivable shall be payable pursuant to a contract which does not create a Lien on any goods purchased thereunder. (b) Security Interests. Except for the conveyances hereunder, the ------------------ Transferor will not sell, pledge, assign or transfer to any other Person, or grant, create, incur, assume or suffer to exist any Lien on any Receivable, whether now existing or hereafter created, or any interest therein, and the Transferor shall defend the right, title and interest of the Trust in, to and under the Receivables, whether now existing or hereafter created, against all claims of third parties claiming through or under the Transferor; provided, -------- however, that nothing in this Section 2.08(b) shall prevent or be deemed to - ------- prohibit the Transferor from suffering to exist upon any of the Receivables any Liens for municipal or other local taxes if such taxes shall not at the time be due and payable or if the Transferor shall currently be contesting the validity thereof in good faith by appropriate proceedings and shall have set aside on its books adequate reserves with respect thereto. (c) Periodic Finance Charges. The Transferor hereby agrees that, ------------------------ except as otherwise required by any Requirement of Law applicable to the Transferor or as is deemed by the Originator to be necessary in order for the Originator to maintain its business on a competitive basis based on a good faith assessment by the Originator of the nature of its competition in its business, it shall not at any time reduce the APR of the Periodic Finance Charges assessed on the Receivables and/or any fees charged on any of the Accounts, if as a result of any such reduction, the Transferor's reasonable expectation of the Portfolio Yield as of such date would be less than the Base Rate of any Series. (d) Credit Card Agreements and Guidelines. The Transferor shall ------------------------------------- ensure compliance with the obligations under the Credit Card Agreements relating to the Accounts and the Credit Card Guidelines except insofar as any failure so to comply or perform would not materially and adversely affect the rights of the Trust or the Certificateholders hereunder or under the Certificates. Subject to compliance with all Requirements of Law the failure to comply with which would have a material adverse effect on the Investor Certificateholders, the Transferor shall not agree to any change in the terms and provisions of the Credit Card Agreement or the Credit Card Guidelines in any respect (including, without limitation, the calculation of the amount, or the timing, of charge-offs and the periodic finance charge to be assessed thereon) unless in the reasonable judgment of the Transferor (a) if it owns a comparable segment of credit card accounts, then such change is made applicable to such comparable segment which has characteristics the same as, or substantially similar to, the Accounts which are the subject of such change and which were existing on the Cut-Off Date and (b) if it does not own such a comparable segment, it will not make any such change with the intent to materially benefit the Transferor over the Investor Certificateholders. (e) Account Allocations. In the event that the Transferor is ------------------- unable for any reason to transfer Receivables to the Trust in accordance with the provisions of this Agreement (including, without limitation, by reason of the application of the provisions of Section 9.02, any Governmental Authority having authority over the Transferor or any court of competent jurisdiction ordering that the Transferor not transfer any additional Receivables to the Trust) then, in any such event, (A) the Transferor agrees (except as prohibited by any such order) to allocate and pay to the Trust, after the date of such inability, all Principal Collections, and all amounts which would have constituted Collections, including Finance Charge Collections, with respect to such Receivables which would have been Receivables allocable to Principal Collections but for the Transferor's inability to transfer such Receivables (up to an aggregate amount equal to the amount of Receivables in the Trust on such date), (B) the Transferor agrees to have such amounts applied as Collections in accordance with Article IV and (C) for only so long as the allocation and application of all Collections and all amounts which would have constituted Collections are made in accordance with clauses (A) and (B) above, Receivables allocable to Principal Collections (and all amounts which would have constituted Receivables allocable to Principal Collections but for the Transferor's inability to transfer Receivables to the Trust) which are written off as uncollectible in accordance with this Agreement shall be allocated in accordance with the related Supplement and all amounts which would have constituted Receivables allocable to Principal Collections but for the Transferor's inability to transfer Receivables to the Trust shall be deemed to be Receivables allocable to Principal Collections for purposes of calculating the Invested Percentage thereunder. If the Transferor is unable pursuant to any Requirement of Law to allocate Collections as described above, the Transferor agrees that it shall, in any such event, allocate, after the date that the Transferor becomes unable to do so, payments on each Account with respect to the principal balance of such Account first to the oldest principal balance of such Account and to have such payments applied as Collections in accordance with Article IV. The parties hereto agree that Receivables allocable to Finance Charge Collections, whenever created, accrued in respect of Receivables which have been conveyed to the Trust shall continue to be a part of the Trust notwithstanding any cessation of the transfer of additional Receivables to the Trust and Collections with respect thereto shall continue to be allocated and paid in accordance with Article IV. (f) Delivery of Collections. In the event that the Transferor ----------------------- receives Collections, the Transferor agrees to pay the Servicer or any Successor Servicer all payments received by the Transferor in respect of the Receivables as soon as practicable after receipt thereof by the Transferor, but in no event later than two Business Days after the receipt by the Transferor thereof. (g) Notice of Liens. The Transferor shall notify the Trustee --------------- promptly after becoming aware of any Lien on any Receivable other than the conveyances hereunder. (h) Status of Accounts and Receivables. The Transferor hereby ---------------------------------- agrees to comply with all Requirements of Law applicable to the Transferor the failure to comply with which would have a material adverse effect on the Investor Certificateholders. (i) Other Debt; Receivables. The Transferor will not create, ----------------------- incur, assume or suffer to exist any indebtedness, whether current or funded, or any other liability except (i) indebtedness of the Transferor representing fees, expenses and indemnities payable pursuant to this Agreement, (ii) indebtedness of the Transferor representing fees, indemnities or expenses payable to J.H. Holdings, Inc., (iii) indebtedness of the Transferor representing fees, indemnities or expenses payable to any remarketing agent, the placement agent or the underwriter of any certificates issued by the Trust from time to time, (iv) indebtedness of the Transferor representing fees, indemnities or expenses payable pursuant to the REMARC Purchase Agreement, (v) indebtedness of the Transferor representing fees, expenses or other amounts payable to the Originator under the Purchase and Sale Agreement, (vi) indebtedness of the Transferor representing amounts payable in respect of SWAPs, (vii) fees of the Rating Agencies in connection with rating any Series of certificates issued by the Trust and (viii) indebtedness or other liability on account of incidentals or services supplied or furnished to the Transferor (including reasonable accountants' and attorneys' fees); provided that the aggregate amount of the indebtedness or -------- liabilities described in this subpart (viii) shall not exceed $4,750 at any one time outstanding. Section 2.09 Authentication of Certificates. Pursuant to the request ------------------------------ of the Transferor, the Trustee shall cause Certificates in authorized denominations evidencing the entire ownership of the Trust to be duly authenticated and delivered to or upon the order of the Transferor pursuant to Section 6.02. Section 2.10 Removal of Accounts. ------------------- (a) On each Determination Date that the Transferor Amount (plus the B/F Amount and any amount available under the Transferor Letter of Credit) for the related Collection Period exceeds 7% of the Aggregate Invested Amount with respect to such Determination Date, the Trustee shall be deemed to have offered to the Transferor automatically and without any notice to or action by or on behalf of the Trustee, as of such Determination Date, the right to remove from the Trust all of the Trust's right, title and interest in, to and under the Receivables now existing and hereafter created, all monies due or to become due and all amounts received with respect thereto and all proceeds thereof in or with respect to those Accounts designated by the Transferor (the "Removed Accounts") in an aggregate amount not greater ---------------- than the lesser of (a) the excess of the Transferor Amount (plus amounts available to be drawn under the Transferor Letter of Credit or the Transferor Escrow Account solely to cover obligations of the Transferor under Section 3.09(a) plus the B/F Amount) over the Minimum Transferor Interest Percentage of the Aggregate Invested Amount and (b) ____% of the aggregate amount of Aggregate Receivables on such Removal Date. To accept such offer, the Transferor is required to furnish to the Trustee and each Rating Agency written notice by the fifth Business Day after the Determination Date specifying the approximate aggregate amount of Receivables covered by the offer that the Transferor intends to accept. (b) In addition to the foregoing provisions, the Transferor shall be permitted to accept reassignment to it of the Receivables from Removed Accounts only upon satisfaction of the following conditions: (i) On each date specified by the Transferor for removal of the Removed Accounts (a "Removal Date"), the Trustee shall deliver to ------------ the Transferor a written reassignment in substantially the form of Exhibit ------- C (the "Reassignment") and the Transferor shall deliver to the Trustee a true - - ------------ and complete list identifying all Accounts the Receivables of which remain in the Trust, specifying for each such Account, as of the Removal Notice Date, its account number. Such list shall be incorporated into and made a part of this Agreement as of the date of such Reassignment; (ii) The Transferor represents and warrants as of each Removal Date that (a) the list of the Accounts not removed from the Trust, as of the Removal Notice Date, complies in all material respects with the requirements of paragraph (i) above; and (b) no selection procedure used by the Transferor which is adverse to the interests of the Investor Certificateholders was utilized in selecting the Removed Accounts; (iii) The removal of any Receivables in any Removed Accounts on any Removal Date shall not, in the reasonable belief of the Transferor, cause an Amortization Event to occur; ((iv) As of the Removal Date, either (a) the Receivables are not more than ____% delinquent by estimated principal amount and the weighted averaged delinquency of such Receivables is not more than 60 days, or (b) the Receivables are not more than ____% delinquent by estimated principal amount and the weighted average delinquency of such Receivables does not exceed 90 days.) (v) The Transferor shall have delivered 20 days' prior written notice (which may be given prior to the Determination Date in expectation that the Trustee will make the offer described in Section 2.10(a)) of such removal to each Rating Agency which has rated any outstanding Series and the Trustee shall have received written confirmation from each Rating Agency that such Rating Agency will not reduce or withdraw its rating on any outstanding Series as a result of such removal; and (vi) The Transferor shall have delivered to the Trustee a certificate of a Vice President or more senior officer confirming the items set forth in paragraphs (i) through (v) above. The Trustee may conclusively rely on such certificate, shall have no duty to make inquiries with regard to the matters set forth therein and shall incur no liability in so relying. Upon satisfaction of the above conditions, the Trustee shall execute and deliver the Reassignment to the Transferor, and the Receivables from the Removed Accounts shall no longer constitute a part of the Trust. Section 2.11 Discount Option. --------------- (a) The Transferor shall have the option to designate a percentage, which may be a fixed percentage or a variable percentage based on a formula (the "Discount Percentage"), of Eligible and Eligible Alternative Receivables, without giving effect to any discounting pursuant to this Section 2.11, arising on or after the date of such designation, to be treated as Receivables which give rise to Finance Charge Collections. The Transferor shall provide to the Servicer, the Trustee, any Enhancement Provider and any Rating Agency 15 days' prior written notice of such designation, and such designation shall become effective on the date designated therein (i) unless such designation in the reasonable belief of the Transferor would cause an Amortization Event to occur, or an event which, with notice or the lapse of time or both, would constitute an Amortization Event and (ii) only if each Rating Agency shall have delivered a letter to the Transferor and the Trustee confirming that its then current rating of the Investor Certificates of any Series then outstanding will not be reduced or withdrawn as a result of such designation. After any such designation of a Discount Percentage, the Transferor may from time to time increase, reduce or withdraw the Discount Percentage upon satisfaction of the conditions in this Section 2.11(a). (b) On each Distribution Date after the date on which the Transferor's exercise of its discount option takes effect, and with respect to Receivables generated on and after such date, the Transferor shall deposit into the Collection Account in immediately available funds an amount equal to the amount of the Discount Option Receivable Collections received during the Collection Period most recently ended. The deposit made by the Transferor into the Collection Account under the preceding sentence shall be considered a payment of such Discount Option Receivables and shall be applied as Finance Charge Collections in accordance with Article IV. (END OF ARTICLE II) ARTICLE III ADMINISTRATION AND SERVICING OF RECEIVABLES Section 3.01 Acceptance of Appointment and Other Matters Relating to ------------------------------------------------------- the Servicer. - ------------ (a) Bridgestone/Firestone agrees to act as the Servicer under this Agreement and any Investor Certificateholders and the Transferor by its acceptance of the Certificates consents to Bridgestone/Firestone acting as Servicer. (b) The Servicer shall service and administer the Receivables and shall collect payments due under the Receivables in accordance with its customary and usual servicing procedures for servicing the Receivables and in accordance with the Credit Card Guidelines and shall have full power and authority, acting alone or through any party properly designated by it hereunder, to do any and all things in connection with such servicing and administration which it may deem necessary or desirable. Without limiting the generality of the foregoing and subject to Section 10.01, the Servicer is hereby authorized and empowered, unless such power and authority is revoked by the Trustee (i) to make withdrawals and payments and to instruct the Trustee to make withdrawals and payments from the Collection Account or any other account or accounts maintained for the benefit of Certificate-holders as set forth in this Agreement, (ii) to instruct the Trustee to take any action permitted or required under any Enhancement at such time as set forth in this Agreement, (iii) to execute and deliver, on behalf of the Trust for the benefit of the Certificateholders, any and all instruments of satisfaction or cancellation, or of partial or full release or discharge, and all other comparable instruments, with respect to the Receivables and, after the delinquency of any Receivable and to the extent permitted under and in compliance with applicable law and regulations, to commence enforcement proceedings with respect to such Receivables and (iv) to make any filings, reports, notices, applications, registrations with, and to seek any consent or authorizations from the Securities and Exchange Commission and any state securities authority on behalf of the Trust as may be necessary or advisable to comply with any Federal or state securities or reporting requirements or laws. (c) In the event that the Transferor is unable for any reason to transfer Receivables to the Trust in accordance with the provisions (including, without limitation, by reason of the application of the provisions of Section 9.02 or any Governmental Authority having regulatory authority over the Transferor or any court of competent jurisdiction ordering that the Transferor not transfer any additional Receivables to the Trust) then, in any such event (except as prohibited by such order), (A) the Transferor agrees that the Servicer shall allocate, after such date, all Principal Collections and all amounts which would have constituted Collections (including Finance Charge Collections) with respect to such Receivables which would have been Receivables allocable to Principal Collections but for the Transferor's inability to transfer such Receivables (up to an aggregate amount equal to the amount of Receivables in the Trust as of such date) in accordance with Section 2.08(e), (B) the Transferor agrees to have such amounts applied as Collections in accordance with Article IV and (C) for only so long as all Collections and all amounts which would have constituted Collections are allocated and applied in accordance with clauses (A) and (B) above, Receivables allocable to Principal Collections and all amounts which would have constituted Receivables allocable to Principal Collections but for the Transferor's inability to transfer Receivables to the Trust which are written off as uncollectible in accordance with this Agreement shall continue to be allocated in accordance with the related Supplement and all amounts which would have constituted Receivables allocable to Principal Collections but for the Transferor's inability to transfer Receivables to the Trust shall be deemed to be Receivables allocable to Principal Collections for purposes of calculating the Invested Percentage thereunder. If the Servicer is unable pursuant to any Requirement of Law to allocate Collections, as described above, the Transferor agrees that the Servicer shall, in any such event, allocate, after the date that the Servicer becomes unable to do so, payments on each Account with respect to the principal balance of such Account first to the oldest principal balance of such Account and to have such payments applied as Collections in accordance with Article IV. The parties hereto agree that Receivables allocable to Finance Charge Collections, whenever created, accrued in respect of Receivables allocable to Principal Collections which have been conveyed to the Trust shall continue to be a part of the Trust notwithstanding any cessation of the transfer of additional Receivables allocable to Principal Collections to the Trust and Collections with respect thereto shall continue to be allocated and paid in accordance with Article IV. (d) If Transferor accepts reassignment of an Ineligible Receivable pursuant to subsection 2.06(c) then, in any such event, Servicer agrees to account for payments received with respect to such Ineligible Receivable separately from its accounting for Collections on Principal Receivables retained by the Trust. If payments received from or on behalf of an Obligor are not specifically applicable either to an Ineligible Receivable of such Obligor reassigned to Transferor or to receivables of such Obligor retained in the Trust, then Servicer agrees to allocate payments proportionately based on the total amount of Principal Receivables of such Obligor retained in the Trust and the total amount owing by such Obligor or any Ineligible receivables purchased by Transferor, and the portion allocable to any Principal Receivables retained in the Trust shall be treated as Collection and deposited in accordance with the provisions of Article IV. (e) The Servicer shall not be obligated to use separate servicing procedures, offices, employees or accounts for servicing the Receivables from the procedures, offices, employees and accounts used by the Servicer in connection with servicing other credit card receivables. (f) The Servicer shall maintain fidelity bond coverage insuring against losses through wrongdoing of its officers and employees who are involved in the servicing of credit card receivables covering such actions and in such amounts as the Servicer believes to be reasonable from time to time. (g) The Servicer shall comply with and perform its servicing obligations with respect to the Accounts and Receivables in accordance with the Credit Card Agreements relating to the Accounts and the Credit Card Guidelines. Section 3.02 Servicing Compensation. As compensation for its servicing ---------------------- activities hereunder and reimbursement for its expenses as set forth in the immediately following paragraph, the Servicer shall be entitled to receive a monthly servicing fee in respect of any Collection Period (or portion thereof) prior to the termination of the Trust pursuant to Section 12.01 (the "Servicing Fee"), payable in arrears on each Distribution Date, equal to the ------------- sum of, with respect to each Series, one-twelfth of the product of (a) the applicable Servicing Fee Percentage with respect to each Series, and (b) the sum of (x) an allocable portion (based on the relative percentages of the Invested Amounts) of the Transferor Amount and the B/F Amount and (y) the aggregate invested Amount with respect to each Series on the last day of the second preceding Collection Period after giving effect to any payment of principal on the related Distribution Date for such Collection Period (or, in the case of the first Distribution Date, the Initial Invested Amount). The share of the Servicing Fee allocable to each Series with respect to any Distribution Date shall be equal to one-twelfth of the product of (A) the related Servicing Fee Percentage and (B) the Invested Amount of such Series on the last day of the second preceding Collection Period after giving effect to any payment of principal on the related Distribution Date for such Collection Period (or, in the case of the first Distribution Date, the Initial Invested Amount) (with respect to any such Series, the "Monthly ------- Servicing Fee"). The remainder of the Servicing Fee shall be paid by the - ------------- Holder of the Exchangeable Transferor Certificate and by Bridgestone/ Firestone as holder of the Bridgestone/Firestone Certificate. Any such amount not paid by the Holders of the Exchangeable Transferor Certificate and the Bridgestone/ Firestone Certificate may be withheld by the Servicer from other amounts payable to the Holders of the Exchangeable Transferor Certificate and the Bridgestone/Firestone Certificate under this Agreement. In no event shall the Trustee or the Investor Certificateholders be liable for the share of the Servicing Fee to be paid by the Holders of the Exchangeable Transferor Certificate and the Bridgestone/Firestone Certificate. Any Monthly Servicing Fees shall be payable to the Servicer solely pursuant to the terms of, and to the extent amounts are available for payment under, Article IV. The Servicer's expenses include the amounts due to the Trustee pursuant to Section 11.05 and the reasonable fees and disbursements of independent accountants and all other expenses incurred by the Servicer in connection with its activities hereunder, and including all other fees and expenses of the Trust not expressly stated herein to be for the account of the Certificateholders; provided that in no event shall the Servicer be liable -------- for any Federal, state or local income or franchise tax, or any interest or penalties with respect thereto, assessed on the Trust, the Trustee or the Certificateholders except as expressly provided herein. So long as Bridgestone/Firestone is acting as Servicer hereunder, in the event that the Servicer fails to pay the amounts due to the Trustee pursuant to Section 11.05, the Trustee shall be entitled to receive such amounts from the Servicing Fee, prior to the payment thereof to the Servicer. The Servicer shall be required to pay expenses for its own account and shall not be entitled to any payment therefor other than the Servicing Fee. Section 3.03 Representations Warranties and Covenants of the Servicer. -------------------------------------------------------- Bridgestone/Firestone, as initial Servicer, hereby makes, and any Successor Servicer by its appointment hereunder shall make, the following representations, warranties and covenants with respect to any Series as of the date of the related Supplement and its Closing Date or, in the case of any Successor Servicer, the date of its appointment, unless otherwise stated in such Supplement, on which the Trustee shall be deemed to have relied in accepting the Receivables in trust and in authenticating the Certificates; (a) Organization and Good Standing. The Servicer is a corporation ------------------------------ duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation, and has the corporate power and authority to execute, deliver and perform its obligations under this Agreement and, in all material respects, to own its property and conduct its business as such properties are presently owned and as such business is presently conducted. (b) Due Qualification. The Servicer is duly qualified to do ----------------- business and is in good standing as a foreign corporation (or is exempt from such requirements) and has obtained all necessary licenses and approvals in each jurisdiction in which the failure to so qualify or to obtain such license or approval would have a material adverse effect upon the Certificateholders. (c) Due Authorization. The execution, delivery, and performance ----------------- of this Agreement, and the consummation of the transactions provided in this Agreement, have been duly authorized by the Servicer by all necessary corporate action on the part of the Servicer. (d) Binding Obligations. This Agreement constitutes the legal, ------------------- valid, and binding obligations of the Servicer, enforceable in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws nov or hereinafter in effect affecting the enforcement of creditors' rights in general and except as such enforceability may be limited by general principles of equity (whether considered in a proceeding at law or in equity). (e) No Violation. The execution and delivery of this Agreement ------------ by the Servicer, and the performance of the transactions contemplated by this Agreement and the fulfillment of the terms hereof applicable to the Servicer, will not conflict with, violate, result in any breach of any of the material terms and provisions of, or constitute (with or without notice or lapse of time or both) a material default under, any Requirement of Law applicable to the Servicer or any indenture, contract, agreement, mortgage, deed of trust, or other instrument to which the Servicer is a party or by which it is bound. (f) No Proceedings. There are no proceedings or investigations, -------------- pending or, to the best knowledge of the Servicer, threatened against the Servicer before any court, regulatory body, administrative agency or other tribunal or governmental instrumentality (i) seeking to prevent the issuance of the Certificates or the consummation of any of the transactions contemplated by this Agreement, (ii) seeking any determination or ruling that, in the reasonable judgment of the Servicer, would materially and adversely affect the performance by the Servicer of its obligations under this Agreement, or (iii) seeking any determination or ruling that would materially and adversely affect the validity or enforceability of this Agreement. (g) Compliance with Requirements of Law. The Servicer shall duly ----------------------------------- satisfy all obligations on its part to be fulfilled under or in connection with the Receivables or Accounts, will maintain in effect all qualifications required under Requirements of Law in order to properly service the Receivables and the Accounts and will comply in all material respects with all Requirements of Law in connection with servicing the Receivables and the Accounts the failure to comply with which would have a material adverse effect on Certificateholders. (h) No Rescission or Cancellation. Subject to the provision set ----------------------------- forth in Section 3.03(i), the Servicer shall not permit any rescission or cancellation of Receivable except as ordered by a court of competent jurisdiction or other Governmental Authority. (i) Protection of Certificateholders' Rights. The Servicer shall ---------------------------------------- not take any action which could reasonably be expected to impair or omit to take any action necessary to avoid impairment of the rights of Certificateholders in the Receivables, nor shall it reschedule, revise or defer Collections due on the Receivables, nor take any action to cause Receivables to be evidenced by a promissory note: provided, however, the -------- ------- Servicer may, in accordance with the Credit Card Guidelines and with prudent servicing practices, make customer service adjustments and adjustments in payment schedules in the ordinary course of business. (j) All Consents Required. All approvals, authorizations, --------------------- consents, orders or other actions of any Person or of any governmental body or official required in connection with the execution and delivery by the Servicer of this Agreement, the performance by the Servicer of the transactions contemplated by this Agreement and the fulfillment by the Servicer of the terms hereof, have been obtained. In the event (x) there is any breach of any of the representations, warranties or covenants of the Servicer contained in Section 3.03(g), (h) or (j) with respect to any Receivable or (y) the Servicer has failed to comply in all material respects with all Requirements of Law applicable to any Receivable or the Account relating to any Receivable, and as a result of such breach or failure such Receivable becomes a Defaulted Receivable or the rights of the Trust in, to or under such Receivable or its proceeds are impaired or the proceeds of such Receivable are not available to the Trust, then if in either case such noncompliance has not been cured within 60 days (or with the prior consent of a Responsible Officer of the Trustee, such longer period specified in such consent but not to exceed an additional 60 days) of the earlier to occur of the discovery of such event by the Servicer, or receipt by the Servicer of written notice of such event given by the Trustee, an Enhancement Provider or the Transferor, the Servicer shall accept the transfer of all the Receivables in each Account as to which such event relates on the terms and conditions set forth below; provided, however, that -------- ------- no such transfer shall be required to be made with respect to such Receivable if, within such 60-day period, the event giving rise to the obligation to accept the transfer of such Receivable and any material adverse effect on the interests of Certificateholders in such Receivable shall be cured by the Servicer. The Servicer shall accept the transfer of a Receivable by making a deposit into the Collection Account in immediately available funds by the Transfer Date following the expiration of the 60-day period set forth in this Section in an amount equal to the Transfer Deposit Amount for such Receivable. Upon each such transfer to the Servicer, the Trustee shall automatically and without further action be deemed to transfer, assign, and set over, and otherwise convey to the Servicer, without recourse, representation or warranty, all right, title and interest of the Trust in and to such Receivable, all monies due or to become due with respect thereto and all proceeds thereof; and such Receivable shall be treated by the Trustee as collected in full as of the Collection Period to which such Transfer Deposit Amount relates. The Trustee shall execute such documents and instruments of transfer or assignment prepared by the Servicer in form reasonably satisfactory to the Trustee and take such other actions as shall be reasonably requested by the Servicer to effect the conveyance of any Receivable pursuant to this Section. The obligation of the Servicer to accept the transfer of any such Receivables shall constitute the sole remedy respecting any breach of the representations, warranties and covenants set forth in Section 3.03(g), (h) or (j) with respect to such Receivables available to Certificateholders or the Trustee on behalf of Certificateholders. Section 3.04 Reports and Records for the Trustee: Bank Account ------------------------------------------------- Statements. - ---------- (a) Daily Records. Upon two Business Days prior notice by the ------------- Trustee, the Servicer shall make available at an office of the Servicer selected by the Servicer for inspection by the Trustee on a business day during the Servicer's normal business hours a record setting forth (i) the Collections processed by the Servicer on the preceding Business Day on each Account and (ii) the amount of Receivables as of the close of business on the second preceding Business Day in all Accounts. The Servicer shall, at all times, maintain its computer files with respect to the Accounts in such a manner so that the Accounts may be specifically identified and, upon prior request of the Trustee, shall make available to the Trustee at an office of the Servicer selected by the Servicer on any Business Day during the Servicer's normal business hours any computer programs necessary to make such identification. (b) Monthly Servicer's Certificate. Unless otherwise stated in ------------------------------ the relating Supplement with respect to any Series, no later than the Determination Date prior to each Distribution Date, the Servicer shall forward by facsimile (to be followed by original confirmation in writing) or overnight delivery service to the Trustee, the Paying Agent, any Enhancement Provider and each Rating Agency a certificate of a Servicing Officer substantially in the form attached as an exhibit to the applicable Supplement. Such certificate shall include a certification that to the best of such officer's knowledge, the Servicer has fully performed all of its obligations under the Agreement throughout such preceding month, or, if there has been a default in the performance of any such obligation, specifying each such default known to such officer and the nature and status thereof. (c) Rating Agency Requests for Information. The Servicer shall -------------------------------------- provide each Rating Agency such information with respect to the Trust as such Rating Agency shall reasonably request. Section 3.05 Annual Servicer's Certificate. The Servicer will deliver ----------------------------- to the Trustee, any Enhancement Provider and each Rating Agency on or before March 31 of each calendar year, beginning with March 31, 1993, an Officers' Certificate substantially in the form of Exhibit E stating that (a) a review --------- of the activities of the Servicer during the preceding calendar year (or portion thereof, as applicable) and of its performance under this Agreement was made under the supervision of the officers signing such certificate and (b) to the be t of such officers' knowledge, based on such review, the Servicer has fully performed all of its obligations under this Agreement throughout such period, or, if there has been a default in the performance of any such obligation, specifying each such default known to each such officer and the nature and status thereof. A copy of such certificate may be obtained by any Certificateholder by a request in writing to the Trustee addressed to the Corporate Trust Office. Section 3.06 Annual Independent Public Accountants' Servicing Report. ------------------------------------------------------- (a) On or before March 31 of each calendar year, beginning with March 31, 1994, the Servicer shall cause a firm of nationally recognized independent public accountants (who may also render other services to the Servicer or the Transferor) to furnish a report (which report shall cover the period from January 1 to and including December 31 of the prior calendar year or for the report due March 31, 1994 from the Initial Closing Date to December 31, 1993) to the Trustee, each Rating Agency and any Enhancement Provider to the effect that they have applied certain procedures agreed upon with the Servicer and examined certain documents and records relating to the servicing of Accounts under this Agreement, and that, based upon such agreed- upon procedures, nothing has come to the attention of such accountants that caused them to believe the servicing (including, without limitation, the allocation of Collections) has not been conducted in compliance with the terms and conditions set forth in Sections 3.01, 3.04, 3.05, 3.09 and 12.01 and Article IV and any Supplement, except for such exceptions as they believe to be immaterial and such other exceptions as shall be set forth in such statement. In addition, each report shall set forth the agreed upon procedures performed. A copy of such report may be obtained by any Certificateholder by a request in writing to the Trustee addressed to the Corporate Trust Office. (b) On or before March 31 of each calendar year, beginning with March 31, 1994, the Servicer shall cause a firm of nationally recognized independent public accountants (who may also render other services to the Servicer or the Transferor) to furnish a report to the Trustee, each Rating Agency and any Enhancement Provider to the effect that they have compared the mathematical calculations of each amount set forth in the monthly certificates forwarded by the Servicer pursuant to Section 3.04(b) during the period covered by such report (which shall be the period from January 1 to and including December 31 of the prior calendar year or for the calendar year ending December 31, 1993 from the Initial Closing Date to December 31, 1993) with the Servicer's computer reports which were the source of such amounts and that on the basis of such comparison, such accountants are of the opinion that such amounts are in agreement, except for such exceptions as they believe to be immaterial and such other exceptions as shall be set forth in such statement. A copy of such report may be obtained by any Certificateholder by a request in writing to the Trustee addressed to the Corporate Trust Office. Section 3.07 Tax Treatment. The Transferor has entered into this ------------- Agreement and the Investor Certificates (other than those held by the Transferor) have been (or will be) issued with the intention that such Investor Certificates will qualify under applicable tax law as indebtedness. The Transferor, the Trustee, each such Investor Certificateholder by acceptance of its Certificate and each Certificate Owner by acquiring an interest in such an Investor Certificate agree to treat the Investor Certificates as debt for purposes of Federal, state and local income or franchise taxes and other tax imposed on or measured by income. Furthermore, the Trustee shall treat the Trust as a security device only, and shall not file tax returns or obtain an employer identification number on behalf of the Trust. Section 3.08 Notices to Bridgestone/Firestone. In the event that -------------------------------- Bridgestone/Firestone is no longer acting as Servicer, any Successor Servicer appointed pursuant to Section 10.02 shall deliver or make available to Bridgestone/Firestone each certificate and report required to be prepared, forwarded or delivered thereafter pursuant to Sections 3.04, 3.05 and 3.06. Section 3.09 Adjustments. ----------- (a) If the Servicer adjusts downward the amount of any Receivable because of a rebate, refund, unauthorized charge or billing error to an Obligor, or because such Receivable was created in respect of merchandise which was refused or returned by an Obligor, or if the Servicer otherwise adjusts downward the amount of any Receivable without either receiving Collections therefor or charging off such amount as uncollectible or any Receivable is discovered as having been created through a fraudulent or counterfeit charge, then, in any such case, the Transferor shall make a deposit into the Collection Account in immediately available funds in an amount equal to the amount of any such adjustment or the amount of any such fraudulent or counterfeit charge on the Transfer Date following the Collection Period in which such adjustment obligation arises. In the event that the Transferor shall fail to deposit any amount required to be deposited in the Collection Account pursuant to the preceding sentence, the Trustee shall make a proper demand under the Transferor Letter of Credit pursuant to Section 4.01B hereof, up to the amount available thereunder, in the amount required to be so deposited by the Transferor which the Transferor failed to so deposit. Any deposit into the Collection Account in connection with the adjustment of a Receivable (including the proceeds of any drawing under the Transferor Letter of Credit) shall be considered an "Adjustment Payment," ------------------ shall be treated as Finance Charge Collections or Principal Collections, as applicable, and shall be applied in accordance with Article IV. If proceeds from the Transferor Letter of Credit are not available to pay such adjustment obligation in full, then the amount of Receivables used to calculate the Transferor Amount, any Invested Percentage, the B/F Amount and the Transferor Percentage will be reduced by the amount of the adjustment. Any adjustment required pursuant to the preceding sentence in the amount of Receivables used in the calculation of the Transferor Amount, any Invested Percentage, the B/F Amount and the Transferor Percentage shall be made on or prior to the end of the Collection Period in which such adjustment obligation arises. In the event that the exclusion of such Receivables from the calculation of the Transferor Amount would cause the Transferor Amount to be a negative number, the B/F Amount shall be reduced by the amount by which the Transferor Amount would be reduced below zero. (b) If (i) the Servicer makes a deposit into the Collection Account in respect of a Collection of a Receivable and such Collection was received by the Servicer in the form of a check which is not honored for any reason or (ii) the Servicer makes a mistake with respect to the amount of any Collection and deposits an amount that is less or more than the actual amount of such Collection, the Servicer shall appropriately adjust the amount subsequently deposited into the Collection Account to reflect such dishonored check or mistake. Any Receivable in respect of which a dishonored check is received shall be deemed not to have been paid. Nothing in this Section 3.09(b) shall be interpreted to require or permit the Servicer to recover any such adjustment from Certificateholders. (END OF ARTICLE III) ARTICLE IV RIGHTS OF CERTIFICATEHOLDERS, ALLOCATION AND APPLICATION OF COLLECTIONS AND SERVICER AND TRANSFEROR LETTERS OF CREDIT Section 4.01 Establishment of Collection Account and Allocations with -------------------------------------------------------- Respect to the Exchangeable Transferor Certificate. - -------------------------------------------------- (a) The Collection Account. The Trustee, for the benefit of the ---------------------- Certificateholders, shall establish and maintain or cause to be established and maintained in the name of the Trustee, on behalf of the Trust, with an Eligible Institution a segregated account (the "Collection Account"), bearing ------------------ a designation clearly indicating that the funds deposited therein are held in trust for the benefit of the Certificateholders. The Trustee shall possess all right, title and interest in all funds on deposit from time to time in the Collection Account and in all proceeds thereof. The Collection Account shall be under the sole dominion and control of the Trustee for the benefit of the Certificateholders. If, at any time, the institution holding the Collection Account ceases to be an Eligible Institution, the Trustee (or the Servicer on its behalf) shall within 10 Business Days establish a new Collection Account meeting the conditions specified above with an Eligible Institution, transfer any cash and/or any investments to such new Collection Account and from the date such new Collection Account is established, it shall be the Collection Account for all purposes hereof. Pursuant to the authority granted to the Servicer in Section 3.01(b), the Servicer shall have the power, revocable by the Trustee, to make withdrawals and payments from the Collection Account and to instruct the Trustee to make withdrawals and payments from the Collection Account for the purposes of carrying out the Servicer's or Trustee's duties hereunder. Each Series shall represent interests in the Trust including the benefits of any Enhancement to be provided by an Enhancement Provider issued with respect to such Series as indicated in the Supplement relating to such Series and the right to receive Collections and other amounts at the times and in the amounts specified in this Article IV to be deposited in the Collection Account and any other accounts maintained for the benefit of the Certificateholders or paid to the Investor Certificate Holders. The Exchangeable Transferor Certificate shall represent the interests in the Trust not represented by any Series then outstanding or the Bridgestone/ Firestone Certificate, including the right to receive Collections and other amounts at the times and in the amounts specified in this Article IV to be paid to the Transferor (the "Transferor Interest"), provided, however, that ------------------- -------- ------- such certificate shall not represent any interest in the Collection Account and any other accounts maintained for the benefit of the Certificateholders or the benefits of any Enhancement to be provided by an Enhancement Provider issued with respect to any Series, except as specifically provided in this Article IV. (b) Administration of the Collection Account. At the direction ---------------------------------------- of the Servicer, funds on deposit in the Collection Account to be so invested shall be invested by the Trustee in Permitted Investments. All such Permitted Investments shall be held by the Trustee for the benefit of the Certificateholders. Investments of funds representing Collections collected during any Collection Period shall be invested in Permitted Investments that will mature so that such funds will be available at the close of business on the Transfer Date following such Collection Period. Any funds on deposit in the Collection Account to be so invested shall be invested solely in Permitted Investments. All such Permitted Investments shall be held to maturity. Funds deposited in the Collection Account on a Transfer Date with respect to the next following Distribution Date are not required to be invested overnight. The Eligible Institution maintaining the Collection Account shall maintain possession of the negotiable instruments or securities, if any, evidencing the Permitted Investments described in clause (a) of the definition thereof from the time of purchase thereof until the time of maturity. On each Distribution Date, all interest and other investment earnings (net of losses and investment expenses) on funds on deposit in the Collection Account shall be paid to Transferor. (c) Identification of Account. Schedule 2, which is hereby ------------------------- ---------- incorporated into and made a part of this Agreement, identifies the Collection Account by setting forth the account number of such account, the account designation of such account and the name of the institution with which such account has been established. (d) Allocations For the Exchangeable Transferor Certificate and ----------------------------------------------------------- the Bridgestone/Firestone Certificate. Throughout the existence of the - ------------------------------------- Trust, the Servicer shall allocate on a daily basis to (x) the Holder of the Exchangeable Transferor Certificate an amount equal to the product (A) of the Transferor Percentage and (B) the aggregate amount of Principal Collections in respect of such Collection Period and (y) to Bridgestone/Firestone as Holder of the Bridgestone/Firestone Certificate an amount equal to the product of (A) the B/F Percentage and (B) the aggregate amount of Finance Charge Collections and Principal Collections in respect of such Collection Period. Unless specified in any Supplement, the Servicer need not deposit into the Collection Account any such amounts allocated to the Transferor or Bridgestone/Firestone and any other amounts allocated to the Exchangeable Transferor Certificate pursuant to any Supplement and shall pay such amounts allocated to Bridgestone/Firestone as collected and shall pay such amounts allocated to the Transferor as collected to the Transferor as long as the Transferor Amount is greater than or equal to zero. (e) Allocations of Collections. At all times prior to the -------------------------- delivery of an Officers Certificate to the Trustee certifying that the Servicer can allocate Finance Charge Collections and Principal Collections on an actual basis for all of the Receivables for all purposes of this Agreement the Servicer shall allocate Collections processed with respect to the Receivables for any day during a Collection Period to Finance Charge Collections to the extent of the amount of Periodic Finance Charges billed or accrued on the Accounts during the prior Collection Period minus the ----- amount of any finance charges being credited as a rebate during such prior Collection Period for which an allocation is being made divided by the number of days in such Collection Period. The balance of the Collections processed for any day during a Collection Period shall be allocated to Principal Collections. After delivery to the Trustee of the Officers' Certificate referred to above Finance Charge Collections and Principal Collections shall be allocated on an actual basis. The allocations provided for in this Section shall not apply to Recoveries and Merchant Fees, which shall be treated as Finance Charge Collections for all purposes of this Agreement. (f) Shared Principal Collections. On each Business Day, Shared ---------------------------- Principal Collections shall be allocated to each outstanding Series pro rata based on the Principal Shortfall, if any, for each such Series. The Servicer shall pay any remaining Shared Principal Collections on such Business Day to the Transferor; provided, that if an Amortization Period has commenced and -------- is continuing with respect to more than one outstanding Series, such remaining Shared Principal Collections shall be allocated to such Series pro rata based on the Invested Percentage for Aggregate Receivables applicable for such Series. (g) Collections. Bridgestone/Firestone, as Servicer, will apply ----------- all Collections with respect to the Receivables for each Collection Period as described in this Article IV. The Servicer shall pay Collections to the Holder of the Exchangeable Transferor Certificate and Bridgestone/Firestone as Holder of the Bridgestone/Firestone Certificate to the extent such Collections are allocated to the Exchangeable Transferor Certificate and the Bridgestone/Firestone Certificate, respectively, pursuant to Section 4.01(d) and as otherwise provided in Article IV. Subject to Section 4.01(h), the Servicer may deposit into the Collection Account on any Business Day, and shall deposit into the Collection Account on or prior to the Transfer Date Collections with respect to the prior Collection Period to the extent such Collections are allocated to any Series in accordance with Article IV, except that the Servicer may distribute any amount determined to be payable to the Holder of any subordinated Certificate (e.g. the Series 1992-A Class B Certificate and the Series 1992-B Class B Certificates) pursuant to any Supplement in respect of a Collection Period at any time after the related Determination Date. (h) Daily Collections. While Bridgestone/Firestone is the ----------------- Servicer, and subject to the availability of a Servicer Letter of Credit, it may hold for its own benefit all Collections, subject further, however, to this subsection 4.01(h). The Servicer shall deposit all Collections (including Collections then held by it) directly into the Collection Account as soon as possible after the Date of Processing thereof, but in no event later than two Business Days following such Date of Processing thereof, commencing in the event of any of the following: (i) the termination of Bridgestone/Firestone as Servicer; (ii) 35 days shall have passed from the date the Servicer received notice pursuant to Section 4.01A(b) of the downgrading of the short-term unsecured debt ratings of the Letter of Credit Bank below A-1+ by S&P, F-1+ by Fitch and P-1 by Moody's and either (A) there shall not have been delivered to the Trustee a substitute Servicer Letter of Credit in accordance with Section 4.01A(c) or (B) the Trustee shall not have made a demand for a Special Drawing under the Servicer Letter of Credit pursuant to Section 4.01A(e); (iii) the Servicer shall have received notice pursuant to Section 4.01A(b) of the downgrading of the short-term unsecured debt ratings of the Letter of Credit Bank to or below A-2 by S&P, F-2 by Fitch and P-1 by Moody's and either (A) there shall not have been delivered to the Trustee a substitute Servicer Letter of Credit in accordance with Section 4.01(c) or (B) the Servicer shall not have instructed the Trustee to make a demand for a Special Drawing under the Servicer Letter of Credit pursuant to Section 4.01A(e); or (iv) five Business Days remain to the expiry or termination of the Servicer Letter of Credit and there shall not have been delivered to the Trustee a substitute Servicer Letter of Credit in accordance with Section 4.01A(c). Should the Servicer be required to make daily deposits of Collections into the Collection Account pursuant to this Section, the Servicer may make an estimated allocation of Finance Charge Collections and Principal Collections for the purposes of determining the amount of Collections to be so deposited as long as the Trustee received confirmation from each Rating Agency that such method does not cause a downgrading or withdrawal of the then current rating of any Series; provided, however, that as soon as practical thereafter, the Servicer -------- ------- shall reconcile the estimated allocation of Collections with the actual allocation required under this Agreement. If at any time Bridgestone/Firestone is the Servicer, Collections held by Bridgestone/Firestone allocable to all Series and not previously used to purchase receivables exceed the Available Letter of Credit Amount under the Servicer Letter of Credit (for the avoidance of doubt, it is agreed that the Available Letter of Credit Amount shall be zero after the return of the funds on deposit in the Escrow Account pursuant to Section 4.01A(e) unless a substitute Servicer Letter of Credit is provided to the Trustee pursuant to Section 4.01A(c)) then the Servicer shall deposit all Collections directly into the Collection Account; provided, however, that Bridgestone/Firestone shall be required to deposit Collections directly into the Collection Account pursuant to this paragraph only for so long as Collections held by Bridgestone/Firestone exceed the Available Letter of Credit Amount. Section 4.01A Servicer Letter of Credit. In accordance with Section ------------------------- 4.01(h), the following provisions shall apply so long as Bridgestone /Firestone is the Servicer hereunder: (a) Servicer Letter of Credit. If with respect to any Collection ------------------------- Period the Servicer shall have failed to make in full the remittance of Collections or any other payment required to be made pursuant to Section 4.01(9), the Trustee shall draw on the Servicer Letter of Credit, in accordance with the terms thereof, in the amount of the shortfall between the amount of funds that are required to be remitted by the Servicer to the Collection Account as set forth in the Monthly Servicer's Certificate and the amount of funds actually so remitted. Any such draw on the Servicer Letter of Credit shall be made after receipt of the related Monthly Servicer's Certificate but on or before 1:00 P.M. (New York City time) on the Transfer Date for such Collection Period, provided the Trustee has received such Monthly Servicer's Certificate prior to such time. Upon receipt of the proceeds of any drawing under the Servicer Letter of Credit, the Trustee shall deposit such proceeds into the Collection Account. Amounts so deposited by the Trustee pursuant to this Section 4.01A(a) shall not be deemed to constitute amounts deposited pursuant to Section 2.06(c), 2.07 or 12.01(b). The Servicer shall include in each Monthly Servicer's Certificate, or in an Officer's Certificate provided to the Trustee with each Monthly Servicer's Certificate, the Stated Amount (as defined in the Servicer Letter of Credit) of the Servicer Letter of Credit as of the related Determination Date. (b) Downgrade of Letter of Credit Bank or Expiration of Term of ----------------------------------------------------------- Servicer Letter of Credit. - ------------------------- (i) On the fifth Business Day prior to the expiry date of the Servicer Letter of Credit (as such letter of credit may have been renewed or extended), the Trustee shall give written notice thereof to the Servicer. (ii) In the event that a Responsible Officer of the Trustee obtains actual knowledge that the short-term unsecured debt rating of the Letter of Credit Bank has been withdrawn or reduced below A-1+ by S&P, or F-1+ by Fitch or P-1 by Moody's, the Trustee shall promptly give written notice thereof to the Servicer. Within 35 (thirty-five) days (or immediately if the short-term debt rating of the Letter of Credit Bank has been reduced to or below A-2 or F-2 by the applicable Rating Agency) of receipt of such notice, the Servicer shall either (x) deliver to the Trustee a substitute Servicer Letter of Credit in accordance with Section 4.01A(c), (y) instruct the Trustee in writing to make a demand for a Special Drawing under the Servicer Letter of Credit pursuant to Section 4.01A(e) or (z) commence depositing Collections directly into the Collection Account pursuant to Section 4.01(h). (c) Substitute Servicer Letter of Credit. The Trustee shall ------------------------------------ accept delivery of a letter of credit in substitution for the Servicer Letter of Credit and shall deliver the Servicer Letter of Credit to the Letter of Credit Bank for cancellation upon the satisfaction of the following conditions: (i) The substitute letter of credit shall be irrevocable and shall be issued by a bank or other financial institution whose short term unsecured debt is rated A-1+ by S&P, F-1+ by Fitch or P-1 by Moody's, and the substitute letter of credit shall provide that drawings thereunder may be made on substantially the same terms and conditions as the initial Servicer Letter of Credit, and the substitute letter of credit shall have been delivered to the Trustee. (ii) The Trustee shall have received written confirmation from each Rating Agency with an outstanding rating on any Series to the effect that the delivery of the substitute letter of credit to the Trustee and the termination of the initial Servicer Letter of Credit will not result in the downgrade or withdrawal of any outstanding rating on any then outstanding Series. (iii) The amount available to be drawn under, and the Stated Amount of, the substitute letter of credit shall be at least equal to the amount which was available to be drawn under, and the Stated Amount of, the Servicer Letter of Credit being replaced. (iv) The Trustee shall have received written opinions of counsel (acceptable to the Trustee) (including domestic and foreign counsel, if applicable) to the issuer of the substitute letter of credit, which opinions shall be reasonably satisfactory to the Trustee and the Transferor and their respective counsel, substantially to the same effect as the opinions delivered to the Trustee on the date of issuance of the Servicer Letter of Credit with respect to the Servicer Letter of Credit. (v) The Servicer shall have delivered to the Trustee an Officer's Certificate confirming the items set forth in (i) through (iii) above. The Trustee may conclusively rely on such certificate, shall have no duty to make inquiries with regard to the matters set forth therein and shall incur no liability in so relying. Upon the delivery to the Trustee of a substitute letter of credit in accordance with this Section 4.01A(e), such substitute letter of credit shall be the Servicer Letter of Credit and the issuer thereof shall be a Letter of Credit Bank for all purposes hereof. (d) Daily Remittances. If the Servicer elects to begin daily ----------------- remittances of Collections to the Collection Account pursuant to Section 4.01A(b) above, the Servicer shall instruct the Trustee in writing to submit the Servicer Letter of Credit to the Letter of Credit Bank for cancellation and the Servicer shall begin such daily remittances in accordance with Section 4.01(h) hereof. (e) Special Drawing. If the Servicer elects to instruct the --------------- Trustee to make a Special Drawing pursuant to Section 4.01A(b) above, the Servicer shall provide two Business Days' notice to the Letter of Credit Bank and shall instruct the Trustee in writing to promptly draw upon the Servicer Letter of Credit to the full extent of the Available Letter of Credit Amount thereunder and deposit such amount into the Escrow Account (as defined below). On the Closing Date, the Trustee for the benefit of the Holders of the Investor Certificates shall establish or cause to be established with the Trustee in the name of the Trustee, on behalf of the Servicer, a segregated trust account (the "Escrow Account"), bearing a designation clearly -------------- indicating that the funds deposited therein are held for the benefit of such Certificateholders. Such account shall be maintained in the corporate trust department of the Trustee if the short-term unsecured debt rating of the Trustee is below A-1+ from Standard & Poor's or below P-1 from Moody's. All funds on deposit in the Escrow Account shall, at the direction of the Servicer, be invested by the Trustee in Permitted Investments which will be held to maturity and which will mature so that all funds on deposit therein will be available prior to the Distribution Date next following such investment. The Trustee shall maintain possession of the negotiable instruments or securities, if any, evidencing the Permitted Investments described in clause (a) of the definition thereof from the time of purchase thereof until maturity. Until the earlier of (a) the date on which all Series are paid in full and (b) the termination of the Trust (the "Payoff ------ Date"), if a drawing under the Servicer Letter of Credit is called for under - ---- Section 4.01 (a), a withdrawal in the same amount from the Escrow Account shall instead be made and the related funds applied as provided therein. Any reimbursement with respect to any drawing which would otherwise have been applied to reinstate the Servicer Letter of Credit shall be deposited in the Escrow Account. If, as evidenced by an Officers' Certificate of the Servicer, on any Distribution Date the amount on deposit in the Escrow Account (excluding any investment earnings on deposit therein) exceeds the unpaid balance of all Series plus interest accrued and unpaid thereon through the then current applicable interest accrual period, the Trustee shall withdraw such excess amount on such Distribution Date and pay such excess to the Letter of Credit Bank for application in accordance with the agreement pursuant to which the Letter of Credit was issued. From and after the date of such Special Drawing the term "Available Letter of Credit Amount" with --------------------------------- respect to the Servicer Letter of Credit shall be deemed to refer to the amount on deposit in the Escrow Account (excluding any investment earnings thereon). On the first Business Day after the earlier of the Payoff Date and the scheduled expiration date of the Servicer Letter of Credit, all funds in the Escrow Account shall be paid to the Letter of Credit Bank for application in accordance with the agreement pursuant to which the Servicer Letter of Credit was issued. Any investment earnings on the Escrow Account shall be remitted monthly on each Distribution Date to the Letter of Credit Bank for application by the Letter of Credit Bank in accordance with the agreement pursuant to which the Servicer Letter of Credit was issued. All funds on deposit in the Escrow Account shall be the sole and exclusive property of the Trustee for the benefit of the Holders of all Series, subject to the rights of the Letter of Credit Bank as provided herein. Neither the Transferor nor the Servicer shall at any time have any ownership or other interest in such funds or any right to withdraw or to receive such funds. In the event that, notwithstanding the intention of the parties hereto, such funds are deemed to be the property of the Servicer, the Servicer hereby grants to the Trustee, for the benefit of the Holders of the Investor Certificates, a first priority security interest in and to all of the Servicer's right, title and interest in such funds for the purpose of securing the rights of the Trustee for the benefit of the Holders of the Investor Certificates hereunder subject to the rights of the Letter of Credit Bank and the Trustee's obligations to remit funds on deposit in the Escrow Account to the Letter of Credit Bank as described herein. In the event that the Servicer delivers to the Trustee a substitute letter of credit meeting the requirements of Section 4.01A(c), the Trustee shall release to the initial Letter of Credit Bank any funds on deposit in the Escrow Account for application pursuant to the agreement pursuant to which the initial Servicer Letter of Credit was issued. Section 4.01B Transferor Letter of Credit. --------------------------- (a) Transferor Letter of Credit. If with respect to any --------------------------- Collection Period the Servicer adjusts downward the amount of any Receivable pursuant to Section 3.09(a) and the Transferor fails to make any deposit to the Collection Account in respect thereof as required pursuant to Section 3.09(a), the Trustee shall draw on the Transferor Letter of Credit, in accordance with the terms thereof, in the amount of the adjustment. Any such draw on the Transferor Letter of Credit shall be made after receipt of the related Monthly Servicer's Certificate but on or before 1:00 P.M. (New York City time) on the Transfer Date for such Collection Period provided such Monthly Servicer's Certificate is received by the Trustee prior to such time. Upon receipt of the proceeds of any drawing under the Transferor Letter of Credit, the Trustee shall deposit such proceeds into the Collection Account. The Servicer shall include in each Monthly Servicer's Certificate, or in an Officer's Certificate provided to the Trustee with each Monthly Servicer's Certificate, the Stated Amount (as defined in the Transferor Letter of Credit) of the Transferor Letter of Credit as of the related Determination Date. (b) Downgrade Credit of Transferor Letter of Credit Bank or ------------------------------------------------------- Expiration of Term of Transferor Letter of Credit. - ------------------------------------------------- (i) On the fifth Business Day prior to the expiry date of the Transferor Letter of Credit (as such letter of credit may have been renewed or extended), the Trustee shall give written notice thereof to the Transferor. (ii) In the event that a Responsible Officer of the Trustee obtains actual knowledge that the short-term unsecured debt rating of the Letter of Credit Bank has been withdrawn or reduced below A-1+ by S&P, F-1+ by Fitch or P-1 by Moody's by the applicable Rating Agency, the Trustee shall promptly give written notice thereof to the Transferor. Within 35 (thirty-five) days (or immediately if the short- term debt rating of the Letter of Credit Bank has been reduced to or below A-2 or F-2 by the applicable Rating Agency) of receipt of such notice, the Transferor shall either (x) deliver to the Trustee a substitute Transferor Letter of Credit in accordance with Section 4.01B(c) or (y) instruct the Trustee in writing to make a demand for a Special Drawing under the Transferor Letter of Credit pursuant to Section 4.01B(d). (c) Substitute Transferor Letter of Credit. The Trustee shall -------------------------------------- accept delivery of a letter of credit in substitution for the Transferor Letter of Credit and shall deliver the Transferor Letter of Credit to the Letter of Credit Bank for cancellation upon the satisfaction of the following conditions: (i) The substitute letter of credit shall be irrevocable and shall be issued by a bank or other financial institution whose short term unsecured debt is rated A-1+ and F-1+ by the applicable Rating Agency, and the substitute letter of credit shall provide that drawings thereunder may be made on substantially the same terms and conditions as the initial Transferor Letter of Credit, and the substitute letter of credit shall have been delivered to the Trustee. (ii) The Trustee shall have received written confirmation from each Rating Agency with an outstanding rating on any Series to the effect that the delivery of the substitute letter of credit to the Trustee and the termination of the initial Transferor Letter of Credit will not result in the downgrade or withdrawal of any outstanding rating on any then outstanding Series. (iii) The amount available to be drawn under, and the Stated Amount of, the substitute letter of credit shall be at least equal to the amount which was available to be drawn under, and the Stated Amount of, the Transferor Letter of Credit being replaced. (iv) The Transferor Amount (plus the B/F Amount and the Available Letter of Credit Amount) expressed as a percentage of the aggregate invested amount of all outstanding Series issued by the Trust with respect to the Transferor Letter of Credit shall be at least equal to the Minimum Transferor Interest Percentage. (v) The Trustee shall have received written opinions of counsel (acceptable to the Trustee) (including domestic and foreign counsel, if applicable) to the issuer of the substitute letter of credit, which opinions shall be reasonably satisfactory to the Trustee and the Transferor and their respective counsel, substantially to the same effect as the opinions delivered to the Trustee on the date of issuance of the Transferor Letter of Credit with respect to the Transferor Letter of Credit. (vi) The Transferor shall have delivered to the Trustee an Officer's Certificate confirming the items set forth in (i) through (iv) above. The Trustee may conclusively rely on such certificate, shall have no duty to make inquiries with regard to the matters set forth therein and shall incur no liability in so relying. Upon the delivery to the Trustee of a substitute letter of credit in accordance with this Section 4.01B(c), such substitute letter of credit shall be the Transferor Letter of Credit and the issuer thereof shall be a Letter of Credit Bank for all purposes hereof. (d) Special Drawing. If the Transferor elects to instruct the --------------- Trustee to make a Special Drawing pursuant to Section 4.01B(b) above, the Transferor shall provide two Business Days notice to the Letter of Credit Bank and shall instruct the Trustee in writing to promptly draw upon the Transferor Letter of Credit to the full extent of the Available Letter of Credit Amount thereunder and deposit such amount into the Transferor Escrow Account (as defined below). On the Closing Date, the Trustee for the benefit of the Holders of the Investor Certificates shall establish or cause to be established with the Trustee in the name of the Trustee, on behalf of the Transferor, a segregated trust account (the "Transferor Escrow Account"), ------------------------- bearing a designation clearly indicating that the funds deposited therein are held for the benefit of such Certificateholders. Such account shall be maintained in the corporate trust department of the Trustee if the short-term unsecured debt rating of the Trustee is below A-1+ from Standard & Poor's or P-1 from Moody's. All funds on deposit in the Transferor Escrow Account shall, at the direction of the Transferor, be invested by the Trustee in Permitted Investments which will be held to maturity and which will mature so that all funds on deposit therein will be available prior to the Distribution Date next following such investment. The Trustee shall maintain possession of the negotiable instruments or securities, if any, evidencing the Permitted Investments described in clause (a) of the definition thereof from the time of purchase thereof until maturity. Until the earlier of (a) the date on which all Series are paid in full and (b) the Payoff Date, if a drawing under the Transferor Letter of Credit is called for under Section 4.01B(a), a withdrawal in the same amount from the Transferor Escrow Account shall instead be made and the related funds applied as provided therein. Any reimbursement with respect to any drawing which would otherwise have been applied to reinstate the Transferor Letter of Credit shall be deposited in the Transferor Escrow Account. If, as evidenced by an Officers' Certificate of the Transferor, on any Distribution Date the amount on deposit in the Transferor Escrow Account (excluding any investment earnings on deposit therein) exceeds the unpaid balance of all Series plus interest accrued and unpaid thereon through the then current applicable interest accrual period, the Trustee shall withdraw such excess amount on such Distribution Date and pay such excess to the Letter of Credit Bank for application in accordance with the agreement pursuant to which the Transferor Letter of Credit was issued. From and after the date of such Special Drawing, the term "Available Letter of Credit Amount" with respect to the Transferor Letter of --------------------------------- Credit shall be deemed to refer to the amount on deposit in the Transferor Escrow Account (excluding any investment earnings thereon). On the first Business Day after the earlier of the Payoff Date and the scheduled expiration date of the Transferor Letter of Credit, all funds in the Transferor Escrow Account shall be paid to the Letter of Credit Bank for application in accordance with the agreement pursuant to which the Transferor Letter of Credit was issued. Any investment earnings on the Transferor Escrow Account shall be remitted monthly on each Distribution Date to the Letter of Credit Bank for application by the Letter of Credit Bank in accordance with the agreement pursuant to which the Transferor Letter of Credit was issued. All funds on deposit in the Transferor Escrow Account shall be the sole and exclusive property of the Trustee for the benefit of the Holders of all Series, subject to the rights of the Letter of Credit Bank as provided herein. Neither the Transferor nor the Servicer shall at any time have any ownership or other interest in such funds or any right to withdraw or to receive such funds. In the event that, notwithstanding the intention of the parties hereto, such funds are deemed to be the property of the Transferor, the Transferor hereby grants to the Trustee, for the benefit of the Holders of the Investor Certificates, a first priority security interest in and to all of the Transferor's right, title and interest in such funds for the purpose of securing the rights of the Trustee for the benefit of the Holders of the Investor Certificates hereunder subject to the rights of the Letter of Credit Bank and the Trustee's obligations to remit funds on deposit in the Transferor Escrow Account to the Letter of Credit Bank as described herein. In the event that the Transferor delivers to the Trustee a substitute letter of credit meeting the requirements of Section 4.01B(c), the Trustee shall release to the initial Letter of Credit Bank any funds on deposit in the Transferor Escrow Account for application pursuant to the agreement pursuant to which the initial Transferor Letter of Credit was issued. (THE REMAINDER OF ARTICLE IV IS RESERVED AND MAY BE SPECIFIED IN ANY SUPPLEMENT WITH RESPECT TO ANY SERIES) ARTICLE V (ARTICLE V IS RESERVED AND MAY BE SPECIFIED IN ANY SUPPLEMENT WITH RESPECT TO ANY SERIES) ARTICLE VI THE CERTIFICATES Section 6.01 The Certificates. Subject to Section 6.11 of the ---------------- Agreement, the Investor Certificates of each Series shall be issued in fully registered form (the "Registered Certificates"), and shall be substantially ----------------------- in the form of the exhibits with respect thereto attached to the applicable Supplement. The Exchangeable Transferor Certificate shall be substantially in the form of Exhibit A-1. The Investor Certificates and the Exchangeable ----------- Transferor Certificate shall, upon issuance pursuant hereto or to Section 6.09 or Section 6.11 of the Agreement, be executed and delivered by the Transferor to the Trustee for authentication and redelivery as provided in Sections 2.09 and 6.02 of the Agreement. Any Investor Certificates shall be issued in minimum denominations of $1,000 and in integral multiples of $1,000 in excess thereof, unless otherwise specified in any Supplement. If specified in the related Supplement for any Series, the Investor Certificates shall be issued upon initial issuance as a single certificate in an original principal amount equal to the Initial Invested Amount as described in Section 6.10 of the Agreement. The Exchangeable Transferor Certificate shall be issued to the Transferor as a single certificate. The Bridgestone/Firestone Certificate shall be issued to Bridgestone/Firestone as a single certificate in substantially the form of Exhibit A-2. Each Certificate shall be executed ----------- by manual or facsimile signature on behalf of the Transferor by its President or any Vice President. Certificates bearing the manual or facsimile (in the case of the Transferor) signature of the individual who has, at the time when such signature was affixed, authorized to sign on behalf of the Transferor or the Trustee shall not be rendered invalid, notwithstanding that such individual has ceased to be so authorized prior to the authentication and delivery of such Certificates or does not hold such office at the date of such Certificates. No Certificate shall be entitled to any benefit under this Agreement or any applicable Supplement, or be valid for any purpose, unless there appears on such Certificate a certificate of authentication substantially in the form provided for herein executed by or on behalf of the Trustee by the manual signature of a duly authorized signatory, and such certificate upon any Certificate shall be conclusive evidence, and the only evidence, that such Certificate has been duly authenticated and delivered hereunder. All Certificates shall be dated the date of their authentication. Section 6.02 Authentication of Certificates. Contemporaneously with ------------------------------ the assignment and transfer of the Receivables, whether now existing or hereafter created, and the other Trust Assets to the Trust, the Trustee shall authenticate and deliver the initial Series of Investor Certificates upon the order of the Transferor. The Trustee shall authenticate and deliver the Bridgestone/Firestone Certificates upon the order of the Transferor. The Trustee shall authenticate and deliver the Exchangeable Transferor Certificate, upon the order of the Transferor, to the Transferor simultaneously with the delivery of the initial Series of Investor Certificates. Upon an Exchange as provided in Section 6.09 of the Agreement and the satisfaction of certain other conditions specified therein, the Trustee shall authenticate and deliver the Investor Certificates of additional Series (with the designation provided in the applicable Supplement), upon the order of the Transferor, to the persons designated in such Supplement. Upon the order of the Transferor, the Certificates of any Series shall be duly authenticated by or on behalf of the Trustee, in authorized denominations equal to (in the aggregate) the Initial Invested Amount of such Series of Investor Certificates. If specified in the related Supplement for any Series, the Trustee shall authenticate Book-Entry Certificates or Certificates in physical form that are issued upon original issuance thereof, upon the written order of the Transferor, to a Clearing Agency or its nominee as provided in Section 6.11 of the Agreement against payment of the purchase price thereof. Section 6.03 Registration of Transfer and Exchange of Certificates. ----------------------------------------------------- (a) The Trustee shall cause to be kept at the office or agency to be maintained by a transfer agent and registrar (which may be the Trustee) (the "Transfer Agent and Registrar") in accordance with the provisions of ---------------------------- Section 6.03(c) of the Agreement a register (the "Certificate Register") in -------------------- which, subject to such reasonable regulations as it may prescribe, the Transfer Agent and Registrar shall provide for the registration of the Registered Certificates and of transfers and exchanges of the Registered Certificates as herein provided. The Trustee is hereby initially appointed Transfer Agent and Registrar for the purpose of registering the Registered Certificates and transfers and exchanges of the Registered Certificates as herein provided. The Trustee shall be permitted to resign as Transfer Agent and Registrar upon 30 days' written notice to the Transferor and the Servicer; provided, however, that such resignation shall not be effective and -------- ------- the Trustee shall continue to perform its duties as Transfer Agent and Registrar until the Transferor has appointed a successor Transfer Agent and Registrar acceptable to the Transferor and the Trustee. If specified in the related Supplement for any Series of Certificates, the Transferor shall appoint any co-transfer agent and co-registrar chosen by the Transferor, and acceptable to the Trustee. If specified in such related Supplement, so long as the Registered Certificates relating to such Supplement are outstanding, the Transferor shall maintain a co-transfer agent and co-registrar in New York City or any other city designated in such Supplement and any reference in this Agreement to the Transfer Agent and Registrar shall include any co-transfer agent and co-registrar unless the context requires otherwise. Upon surrender for registration of transfer of any Registered Certificate at any office or agency of the Transfer Agent and Registrar maintained for such purpose and compliance with applicable requirements of the Transfer Agent and Registrar, the Transferor shall execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Registered Certificates in authorized denominations of the same Series representing like aggregate Undivided Interests in the Trust. At the option of any Registered Certificateholder, Registered Certificates may be exchanged for other Registered Certificates of the same Series in authorized denominations of like aggregate Undivided Interests in the Trust, upon surrender of the Registered Certificates to be exchanged at any office or agency of the Transfer Agent and Registrar maintained for such purpose. The preceding provisions of this Section 6.03 notwithstanding, the Trustee or the Transfer Agent and Registrar, as the case may be, shall not be required to register the transfer of or exchange any Certificate of any Series for a period of 15 days preceding the due date for any payment with respect to the Certificates of such Series. Whenever any Investor Certificates of any Series are so surrendered for exchange the Transferor shall execute and the Trustee shall authenticate and (unless the Transfer Agent and Registrar is different from the Trustee in which case the Transfer Agent and Registrar shall) deliver the Investor Certificates of such Series which the Certificateholder making the exchange is entitled to receive. Every Investor Certificate presented or surrendered for registration of transfer or exchange shall be accompanied by a written instrument of transfer in a form satisfactory to the Trustee and the Transfer Agent and Registrar duly executed by the Certificateholder thereof or his attorney duly authorized in writing. No service charge shall be made for any registration of transfer or exchange of Investor Certificates but the Transfer Agent and Registrar and the Trustee or any co-transfer agent and co-registrar or co-trustee may require payment of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer or exchange of Investor Certificates. All Investor Certificates surrendered for registration of transfer or exchange shall be cancelled by the Transfer Agent and Registrar and destroyed by the Trustee. The Transferor shall execute and deliver to the Trustee or the Transfer Agent and Registrar, as applicable, and Registered Certificates in such amounts and at such times as are necessary to enable the Trustee to fulfill its responsibilities under this Agreement and the Certificates. Any Series Supplement may set forth additional restrictions on the transfer of Certificates. (b) Except as provided in any Supplement or in Sections 6.09 and 7.02 of the Agreement, the Transferor's interest in the Exchangeable Transferor Certificate shall not be sold, transferred, assigned, exchanged, pledged, participated or otherwise conveyed except that the Transferor Interest may be participated to Bridgestone/Firestone pursuant to the Participation Agreement. The Bridgestone/Firestone Certificate may not be sold, assigned, pledged or otherwise conveyed. (c) The Transfer Agent and Registrar will maintain at its expense in the Borough of Manhattan, the City of New York (or subject to Section 6.03(a) of the Agreement any other city designated in such Supplement), an office or offices or agency or agencies where Investor Certificates may be surrendered for registration of transfer or exchange. (d) Any Supplement may provide for restrictions applicable to the transfer of a particular Series of Certificates. Section 6.04 Mutilated, Destroyed, Lost or Stolen Certificates. ------------------------------------------------- If (a) any mutilated Certificate is surrendered to the Transfer Agent and Registrar, or the Transfer Agent and Registrar receives evidence to its satisfaction of the destruction, loss or theft of any Certificate and (b) there is delivered to the Transfer Agent and Registrar, the Trustee and the Transferor such security or indemnity as may be required by them to save each of them harmless, then, in the absence of notice to the Trustee that such Certificate has been acquired by a bona fide purchaser, the Transferor shall execute and the Trustee shall authenticate and (unless the Transfer Agent and Registrar is different from the Trustee, in which case the Transfer Agent and Registrar shall) deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Certificate, a new Certificate of like tenor and aggregate Undivided Interest, if applicable. In connection with the issuance of any new Certificate under this Section 6.04, the Trustee or the Transfer Agent and Registrar may require the payment by the Certificateholder of a sum sufficient to cover any tax or other governmental expenses (including the fees and expenses of the Trustee and Transfer Agent and Registrar) connected therewith. Any Certificate issued pursuant to this Section 6.04 shall constitute complete and indefeasible evidence of ownership in the Trust, as if originally issued, whether or not the lost, stolen or destroyed Certificate shall be found at any time. Section 6.05 Persons Deemed Owners. Prior to due presentation of a --------------------- Certificate for registration of transfer, the Trustee, the Paying Agent, the Transfer Agent and Registrar and any agent of any of them may treat the person in whose name any Certificate is registered as the owner of such Certificate for the purpose of receiving distributions pursuant to Article IV hereof and for all other purposes whatsoever, and neither the Trustee, the Paying Agent, the Transfer Agent and Registrar nor any agent of any of them shall be affected by any notice to the contrary. Notwithstanding the foregoing provisions of this Section 6.05, in determining whether the holders of the requisite Undivided Interests have given any request, demand, authorization, direction, notice, consent or waiver hereunder, Certificates owned by the Transferor, the Servicer or any affiliate thereof (as defined in Rule 405 under the Securities Act of 1933, as amended), shall be disregarded and deemed not to be outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Certificates which the Trustee knows to be so owned shall be so disregarded. Certificates so owned which have been pledged in good faith shall not be disregarded and may be regarded as outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee's right so to act with respect to such Certificates and that the pledgee is not the United States, the Servicer or an affiliate thereof (as defined above). Section 6.06 Appointment of Paying Agent. The Paying Agent shall make --------------------------- distributions to Investor Certificateholders from the Collection Account (or any other account or accounts maintained for the benefit of Certificateholders as specified in the related Supplement for any Series) pursuant to Articles IV and V hereof. Any Paying Agent shall have the revocable power to withdraw funds from the Collection Account (or any other account or accounts maintained for the benefit of Certificateholders as specified in the related Supplement for any Series for the purpose of making distributions referred to above. The Trustee may revoke such power and remove the Paying Agent if the Trustee determines in its sole discretion that the Paying Agent shall have failed to perform its obligations under this Agreement in any material respect. The Paying Agent shall initially be the Trustee and any co-paying agent chosen by the Transferor and acceptable to the Trustee. The Trustee shall be permitted to resign as Paying Agent upon 30 days' written notice to the Trustee and the Transferor. In the event that the Trustee shall no longer be the Paying Agent, the Transferor shall appoint a successor to act as Paying Agent and such successor shall be acceptable to the Trustee. The Trustee shall cause the initial Paying Agent and each successor Paying Agent or any additional Paying Agent appointed by the Transferor to execute and deliver to the Trustee an instrument in which such initial or successor Paying Agent or additional Paying Agent shall agree with the Trustee that, as Paying Agent, such initial or successor Paying Agent or additional Paying Agent will hold all sums, if any, held by it for payment to the Investor Certificateholders in trust for the benefit of the Investor Certificateholders entitled thereto until such sums shall be paid to such Certificateholders. The Paying Agent shall return all unclaimed funds to the Trustee and upon removal of a Paying Agent shall also return all funds in its possession to the Trustee. The provisions of Sections 11.01, 11.02 and 11.03 shall apply to the Trustee also in its role as Paying Agent, for so long as the Trustee shall act as Paying Agent. Any reference in this Agreement to the Paying Agent shall include any co-paying agent unless the context requires otherwise. Section 6.07 Access to List of Certificateholders' Names and ----------------------------------------------- Addresses. The Transfer Agent and Registrar shall furnish to the Servicer - --------- (or the Paying Agent or any agent thereof), within five Business Days after receipt by the Trustee of a request therefor from the Servicer or the Paying Agent, respectively, in writing, a list in such form as the Servicer or the Paying Agent may reasonably require, of the names and addresses of the Investor Certificateholders. If three or more Holders of Investor Certificates of any Class of any Series or holders representing Undivided Interests in the Trust aggregating not less than 5% of the Invested Amount of the Investor Certificates of any Class of any Series (the "Applicants") ---------- apply in writing to the Trustee, and such application states that the Applicants desire to communicate with other Investor Certificateholders of any Series with respect to their rights under this Agreement or under the Investor Certificates and is accompanied by a copy of the communication which such Applicants propose to transmit, then the Trustee, after having been adequately indemnified by such Applicants for its costs and expenses shall afford or shall cause the Transfer Agent and Registrar to afford such Applicants access during normal business hours to the most recent list of Certificateholders held by the Trustee, within five Business Days after the receipt of such application. Such list shall be as of a date no more than 30 days prior to the date of receipt of such Applicants' request. Every Certificateholder agrees with the Trustee that neither the Trustee, the Transfer Agent and Registrar, nor any of their respective agents shall be held accountable by reason of the disclosure of any such information as to the names and addresses of the Certificateholders hereunder, regardless of the sources from which such information was derived. Section 6.08 Authenticating Agent. -------------------- (a) The Trustee may appoint one or more authenticating agents with respect to the Certificates which shall be authorized to act on behalf of the Trustee in authenticating the Certificates in connection with the issuance, delivery, registration of transfer, exchange or repayment of the Certificates. Whenever reference is made in this Agreement to the authentication of Certificates by the Trustee or the Trustee's certificate of authentication, such reference shall be deemed to include authentication on behalf of the Trustee by an authenticating agent and a certificate of authentication executed on behalf of the Trustee by an authenticating agent. Each authenticating agent must be reasonably acceptable to the Transferor. (b) Any institution succeeding to the corporate agency business of an authenticating agent shall continue to be an authenticating agent without the execution or filing of any paper or any further act on the part of the Trustee or such authenticating agent. (c) An authenticating agent may at any time resign by giving written notice of resignation to the Trustee and to the Transferor. The Trustee may at any time terminate the agency of an authenticating agent by giving notice of termination to such authenticating agent and to the Transferor. Upon receiving such a notice of resignation or upon such a termination, or in case at any time an authenticating agent shall cease to be acceptable to the Trustee or the Transferor, the Trustee promptly may appoint a successor authenticating agent. Any successor authenticating agent upon acceptance of its appointment hereunder shall become agent ted with all the rights, powers and duties of its predecessor hereunder, with like effect as if originally named as an authenticating agent. No successor authenticating agent shall be appointed unless acceptable to the Trustee and the Transferor. (d) The Servicer agrees to pay, on behalf of the Trust, to each authenticating agent from time to time reasonable compensation for its services under this Section 6.08. (e) The provisions of Sections 11.01, 11.02 and 11.03 shall be applicable to any authenticating agent. (f) Pursuant to an appointment made under this Section 6.08, the Certificate, may have endorsed thereon, in lieu of the Trustee's certificate of authentication, an alternate certificate of authentication in substantially the following form: This is one of the Certificates described in the within mentioned Pooling and Servicing Agreement. _________________________ _________________________ as Authenticating Agent for the Trustee, By: _____________________ Authorized Officer Section 6.09 Tender of Exchangeable Transferor Certificate. --------------------------------------------- (a) Upon any Exchange, the Trustee shall issue to the Transferor under Section 6.01 for execution and redelivery to the Trustee for authentication under Section 6.02 one or more new Series of Investor Certificates. Any such Series of Investor Certificates shall be substantially in the form specified in the applicable Supplement and shall bear, upon its face, the designation for such Series to which it belongs so selected by the Transferor. Except as specified in any Supplement for a related Series, all Investor Certificates of any Series shall be equally and ratably entitled as provided herein to the benefits hereof without preference, priority or distinction on account of the actual time or times of authentication and delivery, all in accordance with the terms and provisions of this Agreement and the applicable Supplement. (b) The Transferor may tender the Exchangeable Transferor Certificate to the Trustee in exchange for (i) one or more newly issued Series of Investor Certificates and (ii) a reissued Exchangeable Transferor Certificate (any such tender a "Transferor Exchange"). In addition, to the ------------------- extent permitted for any Series of Investor Certificates as specified in the related Supplement, the Transferor may tender the Investor Certificates of any Series and the Exchangeable Transferor Certificate to the Trustee pursuant to the terms and conditions set forth in such Supplement in exchange for, respectively (i) one or more newly issued Series of Investor Certificates and (ii) a reissued Exchangeable Transferor Certificate (an "Investor Exchange"). The Transferor Exchange and Investor Exchange are ----------------- referred to collectively herein as an "Exchange." The Transferor may perform -------- an Exchange by notifying the Trustee, in writing, at least five days in advance (an "Exchange Notice") of the date upon which the Exchange is to --------------- occur (an "Exchange Date"). Any Exchange Notice shall state the designation ------------- of any Series to be newly issued on the Exchange Date and, with respect to each such Series: (a) its Initial Invested Amount (or the method for calculating such Initial Invested Amount), if any, which, in the aggregate, at any time, may not be greater than the current principal amount of the Exchangeable Transferor Certificate less the current required Transferor Amount, if any, at such time (or in the case of an Investor Exchange, the sum of the Invested Amount of the Series of Investor Certificates to be exchanged plus the current principal amount of the Exchangeable Transferor Certificate), and (b) its Certificate Rate (or the method for allocating interest payments or other cash flow to such newly issued Series), if any. On the Exchange Date, the Trustee shall only authenticate and deliver the Certificates of any such Series upon delivery to it of the following: (a) a Supplement in form satisfactory to the Trustee executed by the Transferor and specifying the Principal Terms of such Series, (b) the applicable Enhancement, if any, (c) an Opinion of Counsel to the effect that the newly issued Series of Investor Certificates will be characterized as either indebtedness or an interest in a partnership under existing law for Federal income tax purposes and that the issuance of the newly issued Series of Investor Certificates will not have any material adverse impact on the Federal income tax characterization of any outstanding Series of Investor Certificates that have been the subject of a previous opinion of tax counsel, (d) an agreement, if any, pursuant to which the Enhancement Provider agrees to provide Enhancement, (e) written confirmation from each Rating Agency that the Exchange will not result in the Rating Agency's reducing or withdrawing its rating or otherwise adversely affect any rating on any then outstanding Series rated by it and (f) the existing Exchangeable Transferor Certificate or applicable Investor Certificates, as the case may be. Upon satisfaction of such conditions, the Trustee shall cancel the existing Exchangeable Transferor Certificate or applicable Investor Certificates, as the case may be and issue, as provided above, such Series of Investor Certificates and a new Exchangeable Transferor Certificate, dated the Exchange Date. (c) In conjunction with an Exchange, the parties hereto shall execute a Supplement, which shall specify the relevant terms with respect to any Series of Investor Certificates, which may include, without limitation: (i) its name or designation, (ii) an Initial Invested Amount or the method of calculating the Initial Invested Amount, (iii) a Certificate Rate (or formula for the determination thereof), (iv) the rights of the Transferor as Holder of the Exchangeable Transferor Certificate that have been transferred to the Holders of such Series pursuant to such Exchange (including any rights to allocations of Collections), (v) the interest payment date or dates and the date or dates from which interest shall accrue, (vi) the method of allocating Principal Collections for such Series and, if applicable, with respect to other Series and the method by which the principal amount of Investor Certificates of such Series shall amortize or accrete and the method for allocating Finance Charge Collections and Defaulted Receivables, (vii) the names of any accounts to be used by such Series and the terms governing the operation of any such accounts, (viii) the Servicing Fee Percentage, (ix) the Minimum Transferor Interest Percentage, (x) Minimum Aggregate Receivables, (xi) the Series Termination Date, (xii) the terms of any Enhancement, (xiii) the Enhancement Provider, (xiv) the Base Rate, (xv) the Repurchase Terms or the terms on which the Certificates of such Series may be remarketed to other investors, (xvi) any deposit into any account provided for such Series, (xvii) the number of Classes of such Series, and if more than one Class, the rights and priorities of each such Class, (xviii) whether the Certificates may be issued in bearer form and any limitations imposed thereon, (xix) the priority of any Series with respect to any other Series, and (xx) any other relevant terms of such Series (all such terms, the "Principal Terms" of such Series). If on the date of the --------------- issuance of such Series there is issued and outstanding no Series of Investor Certificates which is currently rated by a Rating Agency, then as a condition to such Exchange a nationally recognized investment banking firm or commercial bank shall also deliver to the Trustee an officer's certificate stating, in substance, that the Exchange will not have an adverse effect on the timing or distribution of payments to such other Series of Investor Certificates then issued and outstanding. Section 6.10 (Reserved) -------- Section 6.11 Book-Entry Certificates. Unless otherwise provided in ----------------------- any related Supplement, the Investor Certificates, upon original issuance, will be issued in the form of the requisite number of typewritten Certificates representing the Book-Entry Certificates, to be delivered to The Depository Trust Company, the initial Clearing Agency, by, or on behalf of, the Transferor. The Investor Certificates shall initially be registered on the Certificate Register in the name of CEDE & Co., the nominee of the Depository Trust Company, and no Certificate Owner will receive a definitive certificate representing such Certificate Owner's interest in the Investor Certificates, except as provided in Section 6.13 of the Agreement. Unless and until definitive, fully registered Investor Certificates (the "Definitive ---------- Certificates") have been issued to Certificate Owners pursuant to Section - ------------ 6.13 of the Agreement: (i) the provision of this Section 6.11 shall be in full force and effect; (ii) all payments and notices to the Certificate Owners shall be made to the Clearing Agency; (iii) to the extent that the provisions of this Section 6.11 conflict with any other provisions of this Agreement, the provisions of this Section 6.11 shall control but shall be subject to the provisions of Section 6.05; (iv) the rights of Certificate Owners shall be exercised only through the Clearing Agency and the Clearing Agency Participants and shall be limited to those established by law and agreements between such Certificate Owners and the Clearing Agency and for the Clearing Agency Participants. Pursuant to the Depository Agreement, unless and until Definitive Certificates are issued pursuant to Section 6.13 of the Agreement, the initial Clearing Agency will make book-entry transfers among the Clearing Agency Participants and receive and transmit distributions of principal and interest on the Investor Certificates to such Clearing Agency Participants; and (v) whenever this Agreement requires or permits actions to be taken based upon instructions or directions of a specified percentage of the Invested Amount of any or all Series of Certificates outstanding, the Clearing Agency shall be deemed to represent such percentage only to the extent that it has received instructions to such effect from Certificate Owners and/or Clearing Agency Participants owning or representing, respectively, such required percentage of the beneficial interest in Investor Certificates. Section 6.12 Notice to Clearing Agency. Whenever notice or other ------------------------- communication to the Investor Certificateholders is required under this Agreement, unless and until Definitive Certificates shall have been issued to Certificate Owners pursuant to Section 6.13 of the Agreement, the Trustee, the Servicer and the Paying Agent shall give all such notices and communications specified herein to be given to Holders of the Investor Certificates to the Clearing Agency or Agencies. Section 6.13 Definitive Certificates. If Book-Entry Certificates have ----------------------- been issued pursuant to Section 6.11 and if (i)(A) the Transferor advises the Trustee in writing that the Clearing Agency is no longer willing or able to discharge properly its responsibilities under the Depository Agreement, and (B) the Trustee or the Transferor is unable to locate a qualified successor, (ii) the Transferor at its option, advises the Trustee in writing that it elects to terminate the book-entry system through the Clearing Agency or (iii) after the occurrence of a Servicer Default, Certificate Owners representing beneficial interests aggregating not less than 50% of the Invested Amount of any Series advise the Trustee and the Clearing Agency through the Clearing Agency Participants in writing that the continuation of a book-entry system through the Clearing Agency is no longer in the best interests of the Certificate Owners, the Trustee shall notify all Certificate Owners, through each applicable Clearing Agency, of the occurrence of any such event and of the availability of Definitive Certificates to Certificate Owners requesting the same. Upon surrender to the Trustee of the Investor Certificates by the Clearing Agency, accompanied by registration instructions from the Clearing Agency for registration, the Trustee shall issue the Definitive Certificates. Neither the Transferor, the Transfer Agent and Registrar nor the Trustee shall be liable for any delay in delivery of such instructions and may conclusively rely on, and shall be protected in relying on, such instructions. (END OF ARTICLE VI) ARTICLE VII OTHER MATTERS RELATING TO THE TRANSFEROR Section 7.01 Liability of the Transferor. The Transferor shall be --------------------------- liable for each obligation, covenant, representation and warranty of the Transferor, arising under or related to this Agreement or any Supplement. Except as provided in the preceding sentence, the Transferor shall be liable only to the extent of the obligations specifically undertaken by the Transferor in its capacity as Transferor hereunder. Section 7.02 Merger or Consolidation of, or Assumption of the ------------------------------------------------ Obligations of, the Transferor. - ------------------------------ (a) The Transferor shall not consolidate with or merge into any other corporation or convey or transfer its properties and assets substantially as an entirety to any Person unless: (i) the corporation formed by such consolidation or into which the Transferor is merged or the Person which acquires by conveyance or transfer the properties and assets of the Transferor substantially as an entirety shall be, if the Transferor is not the surviving entity, organized and existing under the laws of the United States of America or any state or the District of Columbia, and shall be a corporation, a savings and loan association, national association, a bank or other entity and, if the Transferor is not the surviving entity, shall expressly assume, by an agreement supplemental hereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, the performance of every covenant and obligation of the Transferor hereunder; and (ii) the Transferor has delivered to the Trustee an officers' certificate signed by a Vice President (or any more senior officer) of the Transferor and an Opinion of Counsel each stating that such consolidation, merger, conveyance or transfer and such supplemental agreement comply with this Section 7.02 and that all conditions precedent herein provided for relating to such transaction have been complied with; and (iii) the Transferor has delivered notice to each Rating Agency of such consolidation, merger, conveyance or transfer and shall have received written confirmation from each Rating Agency that such consolidation, merger, conveyance or transfer would not cause a reduction or withdrawal of the rating of any Series of Certificates then outstanding. (b) The obligations of the Transferor hereunder shall not be assignable nor shall any Person succeed to the obligations of the Transferor hereunder except in each case in accordance with the provisions of the foregoing paragraph. Section 7.03 Limitation on Liability of the Transferor. Subject to ----------------------------------------- Sections 7.01 and 7.04 of the Agreement, neither the Transferor nor any of its directors or officers or employees or agents in its capacity as Transferor shall be under any liability to the Trust, the Trustee, the Certificateholders or any other Person for any action taken or for refraining from the taking of any action in the capacity as Transferor pursuant to this Agreement whether arising from express or implied duties under this Agreement or any Supplement; provided, however, that this provision shall not protect -------- ------- the Transferor against any liability which would otherwise be imposed by reason of willful misfeasance, bad faith or gross negligence in the performance of duties or by reason of reckless disregard of obligations and duties hereunder. The Transferor and any director or officer or employee or agent of the Transferor may rely in good faith on any document of any kind prima facie properly executed and submitted by any Person respecting any - ----- ----- matters arising hereunder. Section 7.04 Indemnification of the Trust by the Transferor. ---------------------------------------------- Notwithstanding anything to the contrary contained herein, the Transferor (i) agrees to be liable directly to the injured party for the entire amount of any losses, claims, damages, liabilities and expenses of the Trust to the extent that the Transferor would be liable if the Trust were a partnership under the Delaware Revised Uniform Limited Partnership Act in which the Transferor was a general partner and (ii) shall indemnify and hold harmless the Trust and the Trustee from and against any loss, liability, expense, damage, claim or injury (other than those attributable to an Investor Certificateholder in the capacity as an investor in the Investor Certificates as a result of defaults on the Receivables) arising out of or based on this Agreement by reason of any acts, omissions, or alleged acts or omissions arising out of activities of the Trust or the Trustee, or the actions of the Servicer including, but not limited to, amounts payable to the Servicer pursuant to Section ____, any judgment, award, settlement, reasonable attorneys' fees and other costs or expenses incurred in connection with the defense of any actual or threatened action, proceeding or claim; provided -------- that the Transferor shall not indemnify the Trustee (but shall indemnify any other injured party) if such loss, liability, expense, damage or injury is due to the Trustee's willful malfeasance, bad faith or gross negligence or by reason of the Trustee's reckless disregard of its obligations hereunder. The provisions of this indemnity shall run directly to and be enforceable by an injured party subject to the limitations hereof. (END OF ARTICLE VII) ARTICLE VIII OTHER MATTERS RELATING TO THE SERVICER Section 8.01 Liability of the Servicer. The Servicer shall be liable ------------------------- under this Agreement only to the extent of the obligations specifically undertaken by the Servicer in its capacity as Servicer. Section 8.02 Merger or Consolidation of, or Assumption of the ------------------------------------------------ Obligations of, the Servicer. The Servicer shall not consolidate with or - ---------------------------- merge into any other corporation or convey or transfer its properties and assets substantially as an entirety to any Person, unless: (i) the corporation formed by such consolidation or into which the Servicer is merged or the Person which acquires by conveyance or transfer the properties and assets of the Servicer substantially as an entirety shall be a corporation organized and existing under the laws of the United States of America or any State or the District of Columbia, and shall be a corporation, a savings and loan association, a national association, a bank or other entity and, if the Servicer is not the surviving entity, such corporation shall expressly assume, by an agreement supplemental hereto executed and delivered to the Trustee in a form satisfactory to the Trustee, the performance of every covenant and obligation of the Servicer hereunder (provided that this Section 8.02(i) shall not be construed to extend to mergers of subsidiaries of the Servicer into the Servicer as long as the Servicer is the surviving entity); and (ii) the Servicer has delivered to the Trustee an officer's certificate signed by a Vice President (or more senior officer) of the Servicer stating that such consolidation, merger, conveyance or transfer comply with this Section 8.02 and that all conditions precedent herein provided for relating to such transaction have been complied with and if an agreement supplemental hereto has been executed as contemplated by clause (i) above, an Opinion of Counsel stating that such supplemental agreement is a legal, valid and standing obligation of the Servicer enforceable against the Servicer in accordance with its terms; and (iii) the Servicer has delivered notice to each Rating Agency of such consolidation, merger, conveyance or transfer and shall have received written confirmation from each Rating Agency that such consolidation, merger, conveyance or transfer would not cause a reduction or withdrawal of the rating of any Series of Certificates then outstanding. Section 8.03 Limitation on Liability of the Servicer and Others. -------------------------------------------------- Except as provided in Section 8.04 of the Agreement with respect to the Trust and the Trustee, neither the Servicer nor any of the directors or officers or employees or agents of the Servicer shall be under any liability to the Trust, the Trustee, the Certificateholders or any other person for any action taken or for refraining from the taking of any action in its capacity as Servicer pursuant to this Agreement or any Supplement; provided, however, -------- ------- that this provision shall not protect the Servicer against any liability which would otherwise be imposed by reason of willful misfeasance, bad faith or gross negligence in the performance of duties or by reason of reckless disregard of obligations and duties hereunder. The Servicer and any director or officer or employee or agent of the Servicer may rely in good faith on any document of any kind prima facie properly executed and submitted by any ----- ----- Person respecting any matters arising hereunder. The Servicer shall not be under any obligation to appear in, prosecute or defend any legal action which is not incidental to its duties to service the Receivables in accordance with this Agreement or any Supplement which in its reasonable opinion may involve it in any expense or liability. Section 8.04 Servicer Indemnification of the Trust and the Trustee. ----------------------------------------------------- The Servicer shall indemnify and hold harmless the Trust, for the benefit of the CertificatehoLders, and the Trustee, including its officers, directors and employees from and against any loss (excluding any investment loss), liability, expense, damage or injury suffered or sustained in connection with the acceptance of performance of the trusts and duties herein contained in any Supplement, including those arising from acts or omissions of the Servicer pursuant to this Agreement or any Supplement, including but not limited to any judgment, award, settlement, reasonable attorneys' fees and expenses and other costs or expenses incurred in connection with the defense of any actual or threatened action, proceeding or claim, provided that except in the case of any proceeding, action or claim which may involve a conflict between the interests on the Servicer and those of the Trustee, Trustee or Certificateholders, such attorneys to be reasonably acceptable to the Servicer provided, however, that the Servicer shall not indemnify the Trust -------- ------- or the Trustee or its officers, directors or employees for such loss, liability, expense, damage or injury to the extent such loss, liability, expense, damage or injury shall be due to the fraud, negligence or willful misconduct by the Trustee or its officers, directors or employees; provided, -------- further, that the Servicer shall not indemnify the Trust, the Trustee or its - ------- officers, directors or employees or the Investor Certificateholders for any liability, cost or expense of the Trust or the Trustee or its officers, directors or employees with respect to any action taken by the Trustee at the request of the Investor Certificateholders nor with respect to any Federal, state or local income or franchise taxes (or any interest or penalties with respect thereto) required to be paid by the Trust or the Investor Certificateholders in connection herewith to any taxing authority. Subject to Sections 7.01 and 7.04 and Section 10.02(b) of the Agreement, any indemnification pursuant to this Section shall be only from the assets of the Servicer. The provisions of this indemnity shall run directly to and be enforceable by an injured party subject to the limitations hereof and shall survive the termination of the Agreement and payment in full of the Certificates. Section 8.05 The Servicer Not to Resign. The Servicer shall not -------------------------- resign from the obligations and duties hereby imposed on it except (a) upon determination that (i) the performance of its duties hereunder is no longer permissible under applicable law and (ii) there is no reasonable action which the Servicer could take to make the performance of its duties hereunder permissible under applicable law or (b) upon the satisfaction of the following conditions, (i) upon the assumption, by an agreement supplemental hereto, executed by and delivered to the Trustee in form satisfactory to the Trustee, of the obligations and duties of the Servicer hereunder by the proposed Successor Servicer, (ii) the written confirmation by Rating Agencies that the then rating of the Certificates will not, solely as a result of such transfer, be reduced or withdrawn, (iii) the delivery to the Trustee of an Opinion of Counsel to the effect that such transfer will not have any material adverse impact on the Federal income tax characterization of any outstanding Series of Investor Certificates that have been the subject of a previous opinion of tax counsel and (iv) the proposed Successor Servicer has a net worth of not less than $100,000,000 and its regular business includes the servicing of credit card receivables. If the Trustee is unable within 120 days of the date of such determination to appoint a Successor Servicer pursuant to Section 10.02, the Trustee shall serve as Successor Servicer hereunder but shall have continued authority to appoint another Person as Successor Servicer. Any such determination permitting the resignation of the Servicer shall be evidenced as to clause (a) above by an Opinion of Counsel to such effect delivered to the Trustee. No such resignation shall become effective until the Trustee or a Successor Servicer shall have assumed the responsibilities and obligations of the Servicer in accordance with Section 10.02 of the Agreement as if a Termination Notice had been given. Section 8.06 Access to Certain Documentation and Information Regarding --------------------------------------------------------- the Receivables. The Servicer shall provide to the Trustee reasonable access - --------------- to the documentation regarding the Accounts and the Receivables in such cases where the Trustee is required in connection with the performance of its obligation under this Agreement or any Supplement, the enforcement of the rights of the Investor Certificateholders, or by applicable statutes or regulations to review such documentation, such access being afforded without charge but only (i) upon reasonable request, (ii) during normal business hours, (iii) subject to the Servicer's normal security and confidentiality procedures and (iv) at offices designated by the Servicer. Nothing in this Section 8.06 shall derogate from the obligation of the Transferor, the Trustee or the Servicer to observe any applicable law prohibiting disclosure of information regarding the Obligors and the failure of the Servicer to provide access as provided in this Section 8.06 as a result of such obligation shall not constitute a breach of this Section 8.06. Section 8.07 Delegation of Duties. In the ordinary course of -------------------- business, the Servicer may at any time delegate any duties hereunder to any Person who agrees to conduct such duties in accordance with the Credit Card Guidelines and this Agreement; however, if such delegation is not in the ordinary course of the Servicer's business, written notice shall be given to the Trustee and each Rating Agency of such delegation. Any delegation shall not relieve the Servicer of its liability and responsibility with respect to such duties, and shall not constitute a resignation within the meaning of Section 8.05 of the Agreement. Section 8.08 Examination of Records. Each of the Transferor and the ---------------------- Servicer shall indicate clearly and unambiguously in its computer files or other records that the Receivables arising in the Accounts have been transferred to the Trust pursuant to this Agreement for the benefit of the Investor Certificateholders. Each of the Transferor and the Servicer shall, prior to the sale or transfer to a third party of any receivable held in its custody, examine its computer and other records to determine that such receivable is not a Receivable. (END OF ARTICLE VIII) ARTICLE IX AMORTIZATION EVENTS Section 9.01 Amortization Events. Unless modified with respect to any ------------------- Series of Investor Certificates by any related Supplement, if any one of the following events shall occur: (a) the Originator, Bridgestone/Firestone or the Transferor voluntarily seeks, consents to or acquiesces in the benefit or benefits of any Debtor Relief Law or becomes a party to (or is made the subject of) any proceeding provided for by any Debtor Relief Law, other than as creditor or claimant, and in the event such proceeding is involuntary, the petition instituting same is not dismissed within 90 days of its filing or the Originator or the Transferor shall become unable for any reason to transfer Receivables to the Trust in accordance with the provisions of this Agreement; or (b) the Trust shall become an "investment company" within the meaning of the Investment Company Act of 1940, as amended; then an "Amortization Event" with respect to all Series of Certificates shall occur without any notice or other action on the part of the Trustee or Investor Certificateholders. Upon the occurrence and during the continuance of any involuntary proceeding under any Debtor Relief Law with respect to the Transferor or the Originator, the Transferor shall not transfer any Receivables hereunder to the Trust. Section 9.02 Additional Rights Upon the Occurrence of Certain Events. ------------------------------------------------------- (a)If either the Transferor or Bridgestone/Firestone (i) seeks, consents to or acquiesces in the benefit or benefits of any Debtor Relief Law or becomes a party to (or is made the subject of) any proceeding provided for by any Debtor Relief Law, other than as creditor or claimant, and in the event such proceeding is involuntary, the petition instituting the same is not dismissed within (90) days of its filing or (ii) goes into liquidation or any other Person shall be appointed as a bankruptcy trustee or receiver or conservator of the Transferor or Bridgestone/Firestone, the Transferor shall on the day of such appointment (the "Appointment Date") immediately ---------------- cease to transfer Receivables to the Trust and the Transferor or Bridgestone /Firestone as applicable, shall promptly give notice to the Trustee of such appointment. Notwithstanding any cessation of the transfer to the Trust of additional Receivables, Receivables transferred to the Trust prior to the occurrence of any such voluntary or involuntary event and all Collections thereof, including Finance Charge Collections (other than Discount Option Receivable Collections), whenever created or accrued in respect of such Receivables shall continue to be a part of the Trust. Within 15 days of the Appointment Date, the Trustee shall (i) publish a notice in an Authorized Newspaper that a bankruptcy trustee or receiver, as the case may be, of the Transferor has been appointed and that the Trustee intends to sell, dispose of or otherwise liquidate the Receivables or interest therein (as described below) on commercially reasonable terms and in a commercially reasonable manner and (ii) send written notice to the Investor Certificateholders describing the provisions of this Section 9.02 and requesting instructions from such Holders. Unless otherwise prohibited by law or unless within 60 days from the day notice pursuant to clause (i) above is first published, the Trustee shall have received written instructions of Holders of Investor Certificates representing Undivided Interests aggregating more than 50% of the Invested Amount of each Series (or, with respect to Series having more than one class, each class of such Series) to the effect that such Certificateholders disapprove of the liquidation of the Receivables or interest therein (as described below) and wish to continue receiving Receivables under the Trust as before such appointment, the Trustee shall proceed to sell, dispose of, or otherwise liquidate the Receivables, in a commercially reasonable manner and on commercially reasonable terms, which shall include the solicitation of competitive bids. The Trustee may obtain a prior determination from such bankruptcy trustee or receiver that the terms and manner of any proposed sale, disposition or liquidation are commercially reasonable. The provisions of Section 9.01 and this Section 9.02 are not mutually exclusive. (b) The proceeds from the sale, disposition or liquidation of the Receivables or interest therein pursuant to Section (a) above shall be treated as Collections on the Receivables and shall be allocated in accordance with the provisions of Article IV with respect to any Series as to which such sale, disposition or liquidation relates; provided that the -------- Trustee shall determine conclusively the amount of such proceeds which are allocable to Finance Charge Collections and the amount of such proceeds which are allocable to Principal Collections; provided, however, that any amounts -------- ------- payable to the Holder of the Exchangeable Transferor Certificate shall be payable to the Trustee to the extent of the reasonable costs, fees and expenses incurred by the Trustee in connection with such sale, liquidation or other disposition. On the day following the Distribution Date on which such proceeds are distributed to the Investor Certificateholders, the Trust shall terminate. (END OF ARTICLE IX) ARTICLE X SERVICER DEFAULTS Section 10.01 Servicer Defaults. If any one of the following events ----------------- (a "Servicer Default") shall occur and be continuing: ---------------- (a) failure by the Servicer to make any payment, transfer or deposit or to give instructions or to give notice to the Trustee to make such payment, transfer or deposit or any withdrawal or to give notice to the Trustee as to any required drawing or payment under any Enhancement on or before the date occurring five Business Days after the date such payment, transfer or deposit or such instruction or notice is required to be made or given, as the case may be, under the terms of this Agreement or any Supplement; (b) failure on the part of the Servicer duly to observe or perform any other covenants or agreements of the Servicer set forth in this Agreement or any Supplement which could reasonably have a material adverse effect on the Certificateholders (other than a failure with respect to which there is no reasonable likelihood of such an effect), which continues unremedied for a period of 60 days after the earlier of discovery by the Servicer or the date on which written notice of such 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 the Holders of Investor Certificates evidencing Undivided Interests in the Trust aggregating not less than 50% of the Invested Amount of any Series adversely affected thereby; or the Servicer shall assign its duties under this Agreement, except as permitted by Section 8.07; (c) any representation, warranty or certification made by the Servicer in this Agreement, any Supplement or in any certificate delivered pursuant to this Agreement or any Supplement shall prove to have been incorrect when made, which could reasonably have a material adverse effect on the rights of the Certificateholders and which material adverse effect continues for Certificateholders for a period of 60 days after the date on which written notice thereof, requiring the same to be remedied, shall have been given to the Servicer by the Trustee, or to the Servicer and the Trustee by the Holders of Investor Certificates evidencing Undivided Interests in the Trust aggregating not less than 50% of the Invested Amount of any Series adversely affected thereby; or (d) the Servicer voluntarily seeks, consents to or acquiesces in the benefit or benefits of any Debtor Relief Law or becomes a party to (or is made the subject of) any proceeding provided for by any Debtor Relief Law, other than as creditor or claimant, and in the event such proceeding is involuntary, the petition instituting the same is not dismissed within 90 days of its filing; then, in the event of any Servicer Default, so long as the Servicer Default shall not have been remedied, either the Trustee, or the Holders of Investor Certificates evidencing Undivided Interests aggregating more than 50% of the Aggregate Invested Amount, by notice then given in writing to the Servicer (and to the Trustee if given by the Investor Certificateholders) (a "Termination Notice"), may terminate all but not less than all of the rights ------------------ and obligations of the Servicer as Servicer under this Agreement and in and to the Receivables and the proceeds thereof. After receipt by the Servicer of a Termination Notice, and on the date that a Successor Servicer shall have been appointed by the Trustee pursuant to Section 10.02 of the Agreement, all authority and power of the Servicer under this Agreement shall pass to and be vested in a Successor Servicer (a "Service Transfer"); and, without ---------------- limitation, the Trustee is hereby authorized and empowered (upon the failure of the Servicer to cooperate) to execute and deliver, on behalf of the Servicer, as attorney-in-fact or otherwise, all documents and other instruments upon the failure of the Servicer to execute or deliver such documents or instruments, and to do and accomplish all other acts or things necessary or appropriate to effect the purposes of such Service Transfer. The Trustee shall, as soon as practicable, notify the Servicer Letter of Credit Bank of such Service Transfer and surrender the Servicer Letter of Credit to the Servicer Letter of Credit Bank for cancellation. The Servicer agrees to cooperate with the Trustee and such Successor Servicer in effecting the termination of the responsibilities and rights of the Servicer to conduct servicing hereunder, including, without limitation, the transfer to such Successor Servicer of all authority of the Servicer to service the Receivables provided for under this Agreement, including, without limitation, all authority over all Collections which shall on the date of transfer be held by the Servicer for deposit, or which have been deposited by the Servicer, in the Collection Account, or which shall thereafter be received with respect to the Receivables, and in assisting the Successor Servicer. The Servicer shall promptly transfer its electronic records relating to the Receivables to the Successor Servicer in such electronic form as the Successor Servicer may reasonably request and shall promptly transfer to the Successor Servicer all other records, correspondence and documents necessary for the continued servicing of the Receivables in the manner and at such times as the Successor Servicer shall reasonably request. To the extent that compliance with this Section 10.01 shall require the Servicer to disclose to the Successor Servicer information of any kind which the Servicer reasonably deems to be confidential, the Successor Servicer shall be required to enter into such customary licensing and confidentiality and nondisclosure agreements as the Servicer shall deem reasonably necessary to protect its interest. Notwithstanding the foregoing, a delay in or failure of performance under Section 10.01(a) of the Agreement for a period of 10 Business Days or under Section 10.01(b) or (c) of the Agreement for a period of 60 Business Days, shall not constitute a Servicer Default, if such delay or failure could not be prevented by the exercise of reasonable diligence by the Servicer and such delay or failure was caused by an Act of God or the public enemy, acts of declared or undeclared war, public disorder, rebellion or sabotage, epidemics, landslides, lightning, fire, hurricanes, earthquakes, floods or similar causes. The preceding sentence shall not relieve the Servicer from using its best efforts to perform its respective obligations in a timely manner in accordance with the terms of this Agreement and the Servicer shall provide the Trustee, any Enhancement Provider, the Transferor and the Investor Certificateholders with an Officers' Certificate giving prompt notice of such failure or delay by it, together with a description of its efforts to so perform its obligations. The Servicer shall immediately notify the Trustee in writing of any Servicer Default. Section 10.02 Trustee to Act; Appointment of Successor. ---------------------------------------- (a) On and after the receipt by the Servicer of a Termination Notice pursuant to Section 10.01, the Servicer shall continue to perform all servicing functions under this Agreement until the date specified in the Termination Notice or otherwise specified by the Trustee in writing or, if no such date is specified in such Termination Notice, or otherwise specified by the Trustee, until a date mutually agreed upon by the Servicer and Trustee. The Trustee shall as promptly as possible after the giving of a Termination Notice, and with the consent of any Enhancement Provider (unless the applicable Supplement specifies otherwise) and the Originator, which consent shall not be unreasonably withheld, appoint an Eligible Servicer a successor servicer (the "Successor Servicer"), and such Successor Servicer ------------------ shall accept its appointment by a written assumption in a form acceptable to the Trustee. In the event that a Successor Servicer has not been appointed or has not accepted its appointment at the time when the Servicer ceases to act as Servicer, the Trustee without further action shall automatically be appointed the Successor Servicer. The Trustee may delegate any of its servicing obligations to an affiliate or agent in accordance with Section 3.01(b) of the Agreement. Notwithstanding the above, the Trustee shall, if it is unable so to act, petition a court of competent jurisdiction to appoint any established institution having a net worth of not less than $100,000,000 and whose regular business includes the servicing of credit card receivables as the Successor Servicer hereunder. The Servicer shall immediately give notice to each Rating Agency upon the appointment of a Successor Servicer. (b) Upon its appointment, the Successor Servicer shall be the successor in all respects to the Servicer with respect to servicing functions under this Agreement and shall be subject to all the responsibilities, duties and liabilities relating thereto placed on the Servicer by the terms and provisions hereof, and all references in this Agreement to the Servicer shall be deemed to refer to the Successor Servicer except for the references in Sections 8.04 and 11.05 of the Agreement which shall continue to refer to Bridgestone/Firestone; provided, however, that (i) Bridgestone/Firestone -------- ------- shall not indemnify the Trust or the Trustee if the acts, omissions or alleged acts or omissions upon which a claim for indemnification arises pursuant to Section 8.04 of the Agreement constitute fraud, gross negligence, breach of fiduciary duty or willful misconduct by a Successor Servicer (which obligation shall be assumed by the Successor Servicer) and (ii) Bridgestone/Firestone shall not pay or reimburse the Trustee pursuant to Section 11.05 of the Agreement for any expense, disbursement or advance of the Trustee related to or arising as a result of the gross negligence or bad faith of the Successor Servicer (which obligation shall be assumed by the Successor Servicer). The Successor Servicer shall expressly be authorized, subject to Section 8.07 of the Agreement, to delegate any of its duties hereunder to Bridgestone/Firestone for a reasonable period on and after the date of any Servicer Transfer pursuant to this Article X. Any Successor Servicer, by its acceptance of its appointment, will automatically agree to be bound by the terms and provisions of any agreement under which an Enhancement Provider agrees to provide Enhancement for a Series. (c) In connection with any Termination Notice, the Trustee will review any bids which it obtains from Eligible Servicers and shall be permitted to appoint any Eligible Servicer submitting such a bid as a Successor Servicer for servicing compensation not in excess of the Servicing Fee; provided, however, that no such monthly compensation paid out of -------- ------- Collections shall be in excess of the Monthly Servicing Fee permitted to the Servicer pursuant to Section 3.02. (d) All authority and power granted to the Successor Servicer under this Agreement shall automatically cease and terminate upon termination of the Trust pursuant to Section 12.01, and shall pass to and be vested in the Transferor and, without limitation, the Transferor is hereby authorized and empowered to execute and deliver, on behalf of the Successor Servicer, as attorney-in-fact or otherwise, all documents and other instruments, and to do and accomplish all other acts or things necessary or appropriate to effect the purposes of such transfer of servicing rights. The Successor Servicer agrees to cooperate with the Transferor in effecting the termination of the responsibilities and rights of the Successor Servicer to conduct servicing on the Receivables. The Successor Servicer shall transfer its electronic records relating to the Receivables to the Transferor in such electronic form as the Transferor may reasonably request and shall transfer all other records, correspondence and documents to the Transferor in the manner and at such times as the Transferor shall reasonably request. To the extent that compliance with this Section 10.02 shall require the Successor Servicer to disclose to the Transferor information of any kind which the Successor Servicer deems to be confidential, the Transferor shall be required to enter into such customary licensing and confidentiality agreements as the Successor Servicer shall deem necessary to protect its interests. Section 10.03 Notification to Certificateholders. Upon the occurrence ---------------------------------- of any Servicer Default, the Servicer shall give prompt written notice thereof to the Trustee, any Enhancement Provider and each Rating Agency and the Trustee shall give notice to the Investor Certificateholders at their respective addresses appearing in the Certificate Register. Upon any termination or appointment of a Successor Servicer pursuant to this Article X, the Trustee shall give prompt written notice thereof to each Rating Agency, any Enhancement Provider and to Investor Certificateholders at their respective addresses appearing in the Certificate Register. Section 10.04 Waiver of Past Defaults. The Holders of Investor ----------------------- Certificates evidencing Undivided Interests aggregating more than 66-2/3% of the Invested Amount of each Series affected by any default by the Servicer may, on behalf of all Certificateholders, waive any default by the Servicer in the performance of its obligations hereunder and its consequences, except a default in the failure to make any required deposits or payments of interest or principal with respect to any Series of Certificates. Upon any such waiver of a past default, such default shall cease to exist, and any default arising therefrom shall be deemed to have been remedied for every purpose of this Agreement. No such waiver shall extend to any subsequent or other default or impair any right consequent thereon except to the extent expressly so waived. (END OF ARTICLE X) ARTICLE XI THE TRUSTEE Section 11.01 Duties of Trustee. ----------------- (a) The Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Agreement, and no implied covenants or obligations shall be read into this Agreement. If a Servicer Default to the actual knowledge of a Responsible Officer of the Trustee has occurred (which has not been cured or waived), the Trustee shall exercise such of the rights and powers vested in it by this Agreement or any Supplement, as the case may be, and use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs. (b) The Trustee, upon receipt of all resolutions, certificates, statements, opinions, reports, documents, orders or other instruments furnished to the Trustee which are specifically required to be furnished pursuant to any provision of this Agreement or any Supplement, shall examine them to determine whether they substantially conform to the requirements of this Agreement or any Supplement. (c) Subject to Section 11.01(a), no provision of this Agreement or any Supplement shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act or its own willful misconduct; provided, however, that: -------- ------- (i) The Trustee shall not be liable for an error of judgment made in good faith by a Responsible Officer or Responsible Officers of the Trustee, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts; (ii) The Trustee shall not be liable with respect to any action taken, suffered or omitted to be taken by it in good faith in accordance with the direction of the Holders of Investor Certificates evidencing Undivided Interests in the Trust aggregating more than 50% or such other amount as may be set forth in any Supplement for a Series of the Invested Amount of any Series pursuant to Section 11.14; and (iii) The Trustee shall not be charged with knowledge of any failure by the Servicer to comply with any of its obligations, including the obligations of the Servicer referred to in clauses (a), (b) and (c) of Section 10.01, unless a Responsible Officer of the Trustee obtains actual knowledge of such failure. (d) The Trustee shall not be required to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if there is reasonable ground for believing that the repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it, and none of the provisions contained in this Agreement or any Supplement shall in any event require the Trustee to perform, or be responsible for the manner of performance of, any obligations of the Servicer under this Agreement or any Supplement except during such time, if any, as the Trustee shall be the successor to, and be vested with the rights, duties, powers and privileges of, the Servicer in accordance with the terms of this Agreement or any Supplement. (e) Except for actions expressly authorized by this Agreement or any Supplement, the Trustee shall take no action reasonably likely to impair the interests of the Trust in any Receivable now existing or hereafter created or to impair the value of any Receivable now existing or hereafter created. (f) Except as specifically provided in this Agreement, the Trustee shall have no power to vary the corpus of the Trust. (g) In the event that the Paying Agent or the Transfer Agent and Registrar shall fail to perform any obligation, duty or agreement in the manner or on the day required to be performed by the Paying Agent or the Transfer Agent and Registrar, as the case may be, under this Agreement, the Trustee shall be obligated as soon as possible upon actual knowledge of a Responsible Officer thereof and receipt of appropriate records, if any, to perform such obligation, duty or agreement in the manner so required. (h) Any action, suit or proceeding brought in respect of one or more particular Series shall have no effect on the Trustee's rights, duties and obligations hereunder with respect to any one or more Series not the subject of such action, suit or proceeding. Section 11.02 Rights of the Trustee. Except as otherwise provided in --------------------- Section 11.01: (a) The Trustee may rely on and shall be protected in acting on, or in refraining from acting in accord with, any resolution, Officers' Certificate, Opinion of Counsel, certificate of auditors or any other certificate, statement, instrument, opinion, report, notice, request, consent, order, appraisal, bond or other paper or document believed by it to be genuine and to have been signed or presented to it pursuant to this Agreement or any Supplement by the proper party or parties; (b) The Trustee may reasonably consult with counsel and any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken or suffered or omitted by it hereunder in good faith and in accordance with such Opinion of Counsel; (c) Subject to Section 11.01(a), the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Agreement or any Supplement, or to institute, conduct or defend any litigation hereunder or in relation hereto, at the request, order or direction of any of the Certificateholders, pursuant to the provisions of this Agreement or any Supplement, unless such Certificateholders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities which may be incurred therein or thereby; (d) The Trustee shall not be liable for any action taken, suffered or omitted by it in good faith and believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Agreement or any Supplement; (e) The Trustee shall not be bound to make any investigation into the facts of matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval, bond or other paper or document, unless requested in writing so to do by Holders of Investor Certificates evidencing Undivided Interests aggregating more than 50% of the Invested Amount of any Series which could be adversely affected if the Trustee does not perform such acts; (f) The Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys or custodians, and the Trustee shall not be responsible for any misconduct or negligence on the part of any such agent, attorney or custodian appointed with due care by it hereunder; (g) Except as may be required by Section 11.01(a) of the Agreement, the Trustee shall not be required to make any initial or periodic examination of any documents or records related to the Receivables or the Accounts for the purpose of establishing the presence or absence of defects, the compliance by the Transferor and Servicer with their representations and warranties or for any other purpose; and (h) Whether or not therein expressly so provided, every provision of this Agreement relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section 11.02. Section 11.03 Trustee Not Liable for Recitals in Certificates. The ----------------------------------------------- Trustee assumes no responsibility for the correctness of the recitals contained herein and in the Certificates (other than the certificate of authentication on the Certificates). Except as set forth in Section 11.15 of the Agreement, the Trustee makes no representations as to the validity or sufficiency of this Agreement or any Supplement or of the Certificates (other than the certificate of authentication on the Certificates) or of any Receivable or related document. The Trustee shall not be accountable for the use or application by the Transferor of any of the Certificates or of the proceeds of such Certificates, or for the use or application of any funds paid to the Transferor in respect of the Receivables or deposited in the Collection Account or other Accounts now or hereafter established to effectuate the transactions contemplated herein and in accordance with the terms hereof. Section 11.04 Trustee May Own Certificates. The Trustee in its ---------------------------- individual or any other capacity may become the owner or pledgee of Investor Certificates with the same rights as it would have if it were not the Trustee. Section 11.05 The Servicer to Pay Trustee's Fees and Expenses. The ----------------------------------------------- Servicer covenants and agrees to pay to the Trustee from time to time, and the Trustee shall be entitled to receive, reasonable compensation (which shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust) for all services rendered by it in the execution of the trust hereby created and in the exercise and performance of any of the powers and duties hereunder of the Trustee, and, subject to Section 8.04, the Servicer will pay or reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any of the provisions of this Agreement or any Supplement (including the reasonable fees and expenses of its agents and counsel) except any such expense, disbursement or advance as may arise from its negligence or bad faith and except as provided in the following sentence. If the Trustee is appointed Successor Servicer pursuant to Section 10.02, the provision of this Section 11.05 shall not apply to expenses, disbursements and advances made or incurred by the Trustee in its capacity as Successor Servicer, which shall be covered out of the Servicing Fee. Section 11.06 Eligibility Requirements for Trustee. The Trustee ------------------------------------ hereunder shall at all times be a corporation organized and doing business under the laws of the United States of America or any state thereof authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least $50,000,000 and subject to supervision or examination by Federal or state authority. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of the aforesaid supervising or examining authority, then for the purpose of this Section 11.06, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. In case at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section 11.06, the Trustee shall resign immediately in the manner and with the effect specified in Section 11.07. Section 11.07 Resignation or Removal of Trustee. --------------------------------- (a) The Trustee may at any time resign and be discharged from the trust hereby created by giving written notice thereof to the Transferor and the Servicer. Upon receiving such notice of resignation, the Transferor shall promptly appoint a successor trustee by written instrument, in duplicate, one copy of which instrument shall be delivered to the resigning Trustee and one copy to the successor trustee. If no successor trustee shall have been so appointed and have accepted appointment within 30 days after the giving of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor trustee. (b) If at any time the Trustee shall cease to be eligible in accordance with the provisions of Section 11.06 of the Agreement and shall fail to resign after written request therefor by the Servicer, or if at any time the Trustee shall be legally unable to act, or shall be adjudged a bankrupt or insolvent, or if a receiver of the Trustee or of its property shall be appointed, or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then the Servicer may remove the Trustee and promptly appoint a successor trustee by written instrument, in duplicate, one copy of which instrument shall be delivered to the Trustee so removed and one copy to the successor trustee. (c) Any resignation or removal of the Trustee and appointment of a successor trustee pursuant to any of the provisions of this Section 11.07 shall not become effective until acceptance of appointment by the successor trustee as provided in Section 11.08. Section 11.08 Successor Trustee. ----------------- (a) Any successor trustee appointed as provided in Section 11.07 of the Agreement shall execute, acknowledge and deliver to the Transferor and to its predecessor Trustee an instrument accepting such appointment hereunder, and thereupon the resignation or removal of the predecessor Trustee shall become effective and such successor trustee, without any further act, deed or conveyance, shall become fully vested with all the rights, powers, duties and obligations of its predecessor hereunder and under any Supplement with like effect as if originally named as Trustee herein. The predecessor Trustee shall deliver to the successor trustee at the expense of the Servicer, all documents or copies thereof, and statements held by it hereunder; and the Transferor and the predecessor Trustee shall execute and deliver such instruments and do such other things as may reasonably be required for fully and certainly vesting and confirming in the successor trustee all such rights, power, duties and obligations. The Servicer shall immediately give notice to each Rating Agency upon the appointment of a successor trustee. (b) No successor trustee shall accept appointment as provided in this Section 11.08 unless at the time of such acceptance such successor trustee shall be eligible under the provisions of Section 11.06. (c) Upon acceptance of appointment by a successor trustee as provided in this Section 11.08, such successor trustee shall mail notice of such succession hereunder to all Certificateholders at their addresses as shown in the Certificate Register. Section 11.09 Merger or Consolidation of Trustee. Any Person into ---------------------------------- which the Trustee may be merged or converted or with which it may be consolidated, or any Person resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any Person succeeding to the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided such corporation shall be eligible under the provisions of Section 11.06, without the execution or filing of any paper or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding. The Trustee shall deliver notice to the Servicer, and each Rating Agency of any such merger, conversion, consolidation or succession. Section 11.10 Appointment of Co-Trustee or Separate Trustee. --------------------------------------------- (a) Notwithstanding any other provisions of this Agreement or any Supplement, at any time, for the purpose of meeting any legal requirements of any jurisdiction in which any part of the Trust may at the time be located, the Trustee shall have the power and may execute and deliver all instruments to appoint one or more persons to act as a co-trustee or co-trustees, or separate trustee or separate trustees, of all or any part of the Trust, and to vest in such Person or Persons, in such capacity and for the benefit of the Certificateholders, such title to the Trust, or any part thereof, and, subject to the other provisions of this Section 11.10, such powers, duties, obligations, rights and trusts as the Trustee may consider necessary or desirable. No co-trustee or separate trustee hereunder shall be required to meet the terms of eligibility as a successor trustee under Section 11.06 and no notice to Certificateholders of the appointment of any co-trustee or separate trustee shall be required under Section 11.08. (b) Every separate trustee and co-trustee shall, to the extent permitted by law, be appointed and act subject to the following provisions and conditions: (i) All rights, powers, duties and obligations conferred or imposed upon the Trustee shall be conferred or imposed upon and exercised or performed by the Trustee and such separate trustee or co-trustee jointly (it being understood that such separate trustee or co-trustee is not authorized to act separately without the Trustee joining in such act), except to the extent that under any law of any jurisdiction in which any particular act or acts are to be performed (whether as Trustee hereunder or as successor to the Servicer hereunder), the Trustee shall be incompetent or unqualified to perform such act or acts, in which event such rights, powers, duties and obligations (including the holding of title to the Trust Assets or any portion thereof in any such jurisdiction) shall be exercised and performed singly by such separate trustee or co-trustee, but solely at the direction of the Trustee; (ii) No trustee hereunder shall be personally liable by reason of any act or omission of any other trustee hereunder; and (iii) The Trustee may at any time accept the resignation of or remove any separate trustee or co-trustee. (c) Any notice, request or other writing given to the Trustee shall be deemed to have been given to each of the then separate trustees and co-trustees, as effectively as if given to each of them. Every instrument appointing any separate trustee or co-trustee shall refer to this Agreement and the conditions of this Article XI. Each separate trustee and co-trustee, upon its acceptance of the trusts conferred, shall be vested with the estates or property specified in its instrument of appointment, either jointly with the Trustee or separately, as may be provided therein, subject to all the provisions of this Agreement or any Supplement, specifically including every provision of this Agreement or any Supplement relating to the conduct of, affecting the liability of, or affording protection to, the Trustee. Every such instrument shall be filed with the Trustee and a copy thereof given to the Servicer. (d) Any separate trustee or co-trustee may at any time constitute the Trustee, its agent or attorney-in-fact with full power and authority, to the extent not prohibited by lay, to do any lawful act under or in respect to this Agreement or any Supplement on its behalf and in its name. If any separate trustee or co-trustee shall die, become incapable of acting, resign or be removed, all of its estates, properties, rights, remedies and trusts shall vest in and be exercised by the Trustee, to the extent permitted by law, without the appointment of a new or successor trustee. Section 11.11 Tax Returns. In accordance with Section 3.07 hereof, the ----------- Trustee shall not file any Federal income tax return for the Trust. In the event of any Special Drawing pursuant to Section 4.01A(e) or 4.01B(d), the Servicer shall report the investment earnings thereon as its income for federal income tax purposes. In the event the Trust shall be required to file state tax returns or pursuant to an audit or administrative proceeding or change in applicable regulations to file Federal tax returns, the Servicer shall prepare or shall cause to be prepared any tax returns required to be filed by the Trust and shall remit such returns to the Trustee for signature at least five days before such returns are due to be filed; the Trustee shall promptly sign such returns and deliver such returns after signature to the Servicer and such returns shall be filed by the Servicer. The Servicer in accordance with the provisions of any supplement of the Agreement shall also prepare or shall cause to be prepared all tax information required by law to be distributed to Investor Certificateholders. The Trustee, upon request, will furnish the Servicer with all such information known to the Trustee as may be reasonably required in connection with the preparation of all tax returns of the Trust, and shall, upon request, execute such returns. In no event shall the Trustee, the Servicer or the Transferor be liable for any liabilities, costs or expenses of the Trust, the Investor Certificateholders or the Certificate Owners arising under any tax law, including without limitation Federal, state or local income or excise taxes or any other tax imposed on or measured by income (or any interest or penalty with respect thereto or arising from a failure to comply therewith). Section 11.12 Trustee May Enforce Claims Without Possession of ------------------------------------------------ Certificates. All rights of act (i) on and claims under this Agreement or - ------------ any Supplement or the Certificates may be prosecuted and enforced by the Trustee without the possession of any of the Certificates or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee. Any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Certificateholders in respect of which such judgment has been obtained. Section 11.13 Suits for Enforcement. If a Servicer Default shall occur --------------------- and be continuing, the Trustee, in its discretion may, subject to the provisions of Section 10.01 of the Agreement, proceed to protect and enforce its rights and the rights of the Certificateholders under this Agreement or any Supplement by suit, action or proceeding in equity or at law or otherwise, whether for the specific performance of any covenant or agreement contained in this Agreement or any Supplement or in aid of the execution of any power granted in this Agreement or any Supplement or for the enforcement of any other legal, equitable or other remedy as the Trustee, being advised by counsel, shall deem most effectual to protect and enforce any of the rights of the Trustee or the Certificateholders. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Certificateholder any plan of reorganization, arrangement, adjustment or composition affecting the Certificates or the rights of any Holder thereof, or authorize the Trustee to vote in respect of the claim of any Certificateholder in any such proceeding. Section 11.14 Rights of Certificateholders to Direct Trustee. Except ---------------------------------------------- for those actions taken pursuant to Section 9.02, holders of Investor Certificates evidencing Undivided Interests in the Trust aggregating more than 50% of the Invested Amount of any Series or such other amount as may be set forth in any Supplement for a Series affected by the conduct of any proceeding or the exercise of any right conferred on the Trustee shall have the right to direct the time, method, and place of conducting such proceeding for any remedy available to the Trustee, or exercising any such trust or power; provided, however, that, subject to Section 11.01, the Trustee shall -------- ------- have the right to decline to follow any such direction if the Trustee being advised by counsel determines that the action so directed may not lawfully be taken, or if the Trustee in good faith shall, by a Responsible Officer or Responsible Officers of the Trustee, determine that the proceedings so directed would be illegal or involve it in personal liability or be unduly prejudicial to the rights of Certificateholders not parties to such direction; and provided further that nothing in this Agreement or any -------- Supplement shall impair the right of the Trustee to take any action deemed proper by the Trustee and which is not inconsistent with such direction of the Certificateholders. Section 11.15 Representations and Warranties of Trustee. The Trustee ----------------------------------------- represents and warrants that: (i) The Trustee is a banking corporation organized and existing under the laws. of the State of New York and authorized to conduct and engage in a banking and trust business under such laws; (ii) The Trustee has full power, authority and right to execute, deliver and perform this Agreement, and has taken all necessary action to authorize the execution, delivery and performance by it of this Agreement; and (iii) This Agreement has been duly executed and delivered by the Trustee. Section 11.16 Maintenance of Office or Agency. The Trustee will ------------------------------- maintain at its expense in the Borough of Manhattan, The City of New York, an office or offices or agency or agencies where notices and demands to or upon the Trustee in respect of the Certificates and this Agreement may be served. The Trustee initially appoints the Corporate Trust Office as its office for such purposes in New York. The Trustee will give prompt written notice to the Servicer and to Certificateholders of any change in the location of the Certificate Register or any such office or agency. (END OF ARTICLE XI) ARTICLE XII TERMINATION Section 12.01 Termination of Trust. -------------------- (a) The respective obligations and responsibilities of the Transferor, the Servicer and the Trustee created hereby (other than the obligation of the Trustee to make payments to Certificateholders as hereafter set forth) shall terminate, except with respect to the duties described in Section 12.03(b), upon the earlier of (i) the day after the day on which funds shall have been deposited in the Collection Account sufficient to pay the Aggregate Invested Amount plus interest accrued at the applicable Certificate Rates through the end of the applicable Interest Accrual Period in full on all Series of Investor Certificates and paid to the Holders of such Certificates and (ii) a day which is September 15, 2092 (the "Final ----- Trust Termination Date"); provided, however, that in no event shall the trust - ---------------------- -------- ------- created by the Agreement continue beyond the expiration of 21 years from the death of the last survivor of the descendants, living on the date of this Agreement, of Joseph P. Kennedy, of the Commonwealth of Massachusetts, formerly United States representative at the Court of St. James. The Servicer shall promptly notify the Trustee of any respective termination pursuant to this Section 12.01. (b) If on the Transfer Date in the month immediately preceding the month in which the Final Trust Termination Date occurs in the case of Subsection (a)(ii) above, (after giving effect to all transfers, withdrawals, deposits and drawings to occur on such date and the payment of principal on any Series of Certificates to be made on the related Distribution Date pursuant to Article IV) the Invested Amount of any Series would be greater than zero, the Servicer shall sell within 30 days of such Transfer Date all of the Receivables. The proceeds of such sale shall be treated as Collections on the Receivables and shall be allocated in accordance with Article IV; provided, however, that the Trustee in its sole discretion shall -------- ------- determine conclusively the amount of such proceeds which are allocable to Finance Charge Collections and the amount of such proceeds which are allocable to Principal Collections. During such 30-day period, the Servicer shall continue to collect Collections on the Receivables and allocate such payments in accordance with the provisions of Article IV. Section 12.02 Optional Purchase and Final Termination Date of Investor -------------------------------------------------------- Certificates of any Series. - -------------------------- (a) If provided in any Supplement on a Distribution Date the Transferor may, but shall not be obligated to, purchase any such Series of Investor Certificates by depositing into the Collection Account, on the preceding Transfer Date, an amount equal to the Invested Amount thereof plus interest accrued and unpaid thereon at the applicable Certificate Rate through the Interest Accrual Period related to such Distribution Date on which the purchase will be made; provided, however, -------- ------- that no such purchase of any Series of Investor Certificates shall occur unless the Transferor shall deliver an Opinion of Counsel reasonably acceptable to the Trustee, that such purchase of any Series of Investor Certificates would not constitute a fraudulent conveyance of the Transferor. (b) The amount deposited pursuant to Section 12.02(a) shall be paid to the Investor Certificateholders of the related Series pursuant to Article IV on the Distribution Date following the date of such deposit. All Certificates of a Series which are purchased by the Transferor pursuant to Section 12.02(a) shall be delivered by the Transferor upon such purchase to, and be cancelled by, the Transfer Agent and Registrar and be disposed of in a manner satisfactory to the Trustee and the Transferor. (c) All principal or interest with respect to any Series of Investor Certificates shall be due and payable no later than the Series Termination Date with respect to such Series. Unless otherwise provided in a Supplement, in the event that the Invested Amount of any Series of Certificates is greater than zero on its Series Termination Date (after giving effect to all transfers, withdrawals, deposits and drawings to occur on such date and the payment of principal to be made on such Series on such date), the Trustee will sell or cause to be sold, and pay the proceeds to all Certificateholders of such Series pro rata in final payment of all principal of and accrued interest on such Series of Certificates, an amount of Receivables or interests in Receivables up to 110% of the Invested Amount of such Series at the close of business on such date (but not more than an amount of Receivables equal to the sum of (1) the product of (A) the current Transferor Percentage, (B) Aggregate Receivables and (C) a fraction the numerator of which is the related Invested Percentage with respect to Finance Charge Collections and the denominator of which is the sum of all Invested Percentages with respect to Finance Charge Collections of all Series outstanding and (2) the Invested Amount of such Series). Any proceeds of such sale in excess of such principal and interest paid shall be paid to the Holder of the Exchangeable Transferor Certificate. Upon such Series Termination Date with respect to the applicable Series of Certificates, final payment of all amounts allocable to any Investor Certificates of such Series shall be made in the manner provided in Section 12.03. Section 12.03 Final Payment with Respect to any Series. ---------------------------------------- (a) Written notice of any termination, specifying the Distribution Date upon which the Investor Certificateholders of any Series may surrender their Certificates for payment of the final distribution with respect to such Series and cancellation, shall be given (subject to at least two days' prior notice from the Servicer to the Trustee) by the Trustee to Investor Certificateholders of such Series mailed not later than such final distribution specifying (a) the Distribution Date (which shall be the Distribution Date in the month in which the deposit is made pursuant to Section 2.07 or Section 12.02(a)) upon which final payment of such Investor Certificates will be made upon presentation and surrender of such Investor Certificates at the office or offices therein designated, (b) the amount of any such final payment and (c) that the Record Date otherwise applicable to such Distribution Date is not applicable, payments being made only upon presentation and surrender of the Investor Certificates at the office or offices therein specified. The Servicer's notice to the Trustee in accordance with the preceding sentence shall be accompanied by an Officers' Certificate setting forth the information specified in the applicable Supplement covering the period during the then current calendar year through the date of such notice and setting forth the date of such final distribution. The Trustee shall give such notice to the Transfer Agent and Registrar and the Paying Agent at the time such notice is given to such Investor Certificateholders. (b) Notwithstanding the termination of the Trust pursuant to Section 12.01(a) or the occurrence of the Series Termination Date with respect to any Series pursuant to Section 12.02 of the Agreement, all funds then on deposit in the Collection Account shall continue to be held in trust for the benefit of the Certificateholders and the Paying Agent or the Trustee shall pay such funds to the Certificateholders upon surrender of their Certificates. In the event that all of the Investor Certificateholders of such Series shall not surrender their Certificates for cancellation within six months after the date specified in the above-mentioned notice, the Trustee shall give a second written notice to the remaining Investor Certificateholders of such Series upon receipt of the appropriate records from the Transfer Agent and Registrar to surrender their Certificates for cancellation and receive the final distribution with respect thereto. If within one and one-half years after the second notice all the Investor Certificates of such Series shall not have been surrendered for cancellation, the Trustee may take appropriate steps, or may appoint an agent to take appropriate steps, to contact the remaining Investor Certificateholders of such Series concerning surrender of their Certificates, and the cost thereof shall be paid out of the funds in the Collection Account held for the benefit of such Investor Certificateholders. (c) All Certificates surrendered for payment of the final distribution with respect to such Certificates and cancellation shall be cancelled by the Transfer Agent and Registrar and be disposed of in a manner satisfactory to the Trustee and the Transferor. Section 12.04 Transferor's Termination Rights. Upon the termination ------------------------------- of the Trust pursuant to Section 12.01 and the surrender of the Exchangeable Transferor Certificate, the Trustee shall return to the Transferor (without recourse, representation or warranty) all right, title and interest of the Trust in the Receivables, then existing or thereafter created, all moneys due or to become due with respect thereto (including all accrued interest theretofore posted as Periodic Finance Charges), and all proceeds thereof, including all Recoveries relating thereto and all proceeds thereof and all right, title and interest of the Transferor in, to and under the Purchase and Sale Agreement, except for amounts held by the Trustee pursuant to Subsection 12.03(b). The Trustee shall execute and deliver such instruments of transfer and assignment, in each case without recourse, as shall be reasonably requested by the Transferor to vest in the Transferor all right, title and interest which the Trust had in the Receivables. (END OF ARTICLE XII) ARTICLE XIII MISCELLANEOUS PROVISIONS Section 13.01 Amendment. --------- (a) This Agreement and any Supplement may be amended from time to time by the Servicer, the Transferor and the Trustee, without the consent of any of the Certificateholders, to cure any ambiguity, to correct or supplement any provisions herein which may be inconsistent with any other provisions herein or to add any other provisions with respect to matters or questions raised under this Agreement which shall not be inconsistent with the provisions of this Agreement, provided, however, that such action shall -------- ------- not, as evidenced by an Opinion of Counsel, adversely affect in any material respect the interests of any of the Investor Certificateholders. The Trustee may, but shall not be obligated to, enter into any such amendment which affects the Trustee's rights, duties or immunities under this Agreement or otherwise. This Agreement and any Supplement may also be amended from time to time by the Servicer, the Transferor and the Trustee, without the consent of any of the Certificateholders, for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Agreement, or of modifying, in any manner the rights of the Holders of Certificates; provided that (i) the Servicer shall have provided an Officer's -------- Certificate to the Trustee and any Enhancement Provider to the effect that such amendment will not materially and adversely affect the interests of the Certificateholders, (ii) such amendment shall not, as evidenced by an Opinion of Counsel, cause the Trust to be characterized for Federal income tax purposes as an association taxable as a corporation or otherwise have any material adverse impact on the Federal income taxation of any outstanding Series of Investor Certificates or any Certificate Owner and (iii) the Rating Agencies shall confirm that such amendment shall not cause a reduction or withdrawal of the rating of any outstanding Series of Certificates; provided, -------- further, that such amendment shall not reduce in any manner the amount of, - ------- or delay the timing of, distributions which are required to be made on any Investor Certificate of such Series without the consent of the related Investor Certificateholder, change the definition of or the manner of calculating the interest of any Investor Certificateholder of such Series without the consent of the related Investor Certificateholder or reduce the percentage pursuant to clause (b) required to consent to any such amendment, in each case without the consent of all such Investor Certificateholders; provided, further, that (w) the transfer of the Accounts and/or the servicing - -------- ------- functions with respect thereto to a national banking association established and owned by Bridgestone/Firestone to own the Originator's credit card accounts and receivables and to act as Servicer shall require the prior written consent of the Rating Agencies, (x) the transfer of the Accounts to any national bank to own the Originator's credit card accounts and receivables shall require written consent of the applicable Rating Agencies and an opinion of counsel stating that the transfer will not result in the transfer of the Receivables for federal tax purposes, (y) any transaction effected in accordance with Section 8.02 hereof and (z) any other transactions related, supplemental or incidental thereto (including any transaction effected pursuant to clause (x) above) shall be deemed not to materially and adversely affect the interests of the Certificateholders and shall not require the delivery of an Officer's Certificate of the Servicer pursuant to clause (i) above. (b) This Agreement and any Supplement may also be amended from time to time by the Servicer, the Transferor and the Trustee with the consent of the Holders of Investor Certificates evidencing Undivided Interests aggregating not less than 66-2/3% of the Invested Amount of each and every Series affected, for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Agreement or of modifying in any manner the rights of the Investor Certificateholders of any Series then issued and outstanding; provided, however, that no such amendment -------- ------- under this Subsection (b) shall (i) reduce in any manner the amount of, or delay the timing of, distributions which are required to be made on any Investor Certificate of such Series without the consent of the related Investor Certificateholders; (ii) change the definition of or the manner of calculating the interest of any Investor Certificateholder of such Series without the consent of the related Investor Certificateholder or (iii) reduce the aforesaid percentage required to consent to any such amendment, in each case without the consent of all such Investor Certificateholders. (c) Promptly after the execution of any amendment described in this Section the Trustee shall furnish written notification of the substance of such amendment to each Investor Certificateholder, and the Servicer shall furnish written notification of the substance of such amendment to any related Enhancement Provider and each Rating Agency. (d) It shall not be necessary for the consent of Investor Certificateholders under this Section 13.01 to approve the particular form of any proposed amendment, but it shall be sufficient if such consent shall approve the substance thereof. The manner of obtaining such consents and of evidencing the authorization of the execution thereof by Investor Certificateholders shall be subject to such reasonable requirements as the Trustee may prescribe. (e) Any Assignment or Reassignments regarding the addition to or removal of Receivables from the Trust respectively, as provided in Sections 2.05 and 2.10, respectively, of the Agreement executed in accordance with the provisions hereof shall not be considered amendments to this Agreement, including, without limitation, for the purpose of Sections 13.01(a) and (b). Section 13.02 Protection of Right, Title and Interest to Trust. ------------------------------------------------ (a) The Servicer shall cause this Agreement, any Supplement, all amendments hereto and/or all financing statements and continuation statements and any other necessary documents covering the Certificateholders and the Trustee's right, title and interest to the Trust Assets, and the Transferor's rights in and to the Receivables to be promptly recorded, registered and filed, and at all times to be kept recorded, registered and filed, all in such manner and in such places as may be required by law fully to preserve and protect the right, title and interest of the Trustee hereunder to all property comprising the Trust Assets and to preserve and protect the right, title and interest of the Transferor to the Receivables. The Servicer shall deliver to the Trustee file-stamped copies of, or filing receipts for, any document recorded, registered or filed as provided above, as soon as available following such recording, registration or filing. The Transferor shall Cooperate fully with the Servicer in connection with the obligations set forth above and will execute any and all documents reasonably required to fulfill the intent of this Section 13.02(a). (b) Within 30 days after the Transferor makes any change in its name identity or corporate structure which would make any financing statement or continuation statement filed in accordance with paragraph (a) above seriously misleading within the meaning of Section 9-402(7) of the UCC as in effect in the Commonwealth of Massachusetts the Transferor shall give the Trustee and the Servicer notice of any such change and shall file such financing statements or amendments as may be necessary to continue the perfection of the Trust's security interest in the Receivables and the proceeds thereof. (c) The Transferor and the Servicer will give the Trustee prompt written notice of any relocation of any office from which the Servicer services Receivables or in which the Transferor and the Servicer keep records concerning the Receivables or of the relocation of the Transferor's and the Servicer's principal executive offices and whether, as a result of such relocation, the applicable provisions of the UCC would require the filing of any amendment of any previously filed financing or continuation statement or of any new financing statement and shall file such financing statements or amendments as may be necessary to perfect or to continue the perfection of the Trust's security interest in the Receivables and the proceeds thereof. The Servicer will at all times maintain each office from which it services Receivables, and the Transferor and the Servicer will at all times maintain their principal executive offices within the United States of America. (d) The Servicer will deliver to the Trustee: (i) upon the execution and delivery of each amendment of the Agreement or any Supplement (provided, however, that the adoption of a Supplement pursuant to Section -------- ------- 6.09 which supplements or modifies Article IV for a particular new Series shall not be considered an amendment) other than amendments pursuant to Section 13.01(a) and upon each date that any Additional Accounts are to be included in the Accounts pursuant to Section 2.05 hereof, an Opinion of Counsel substantially in the form of Exhibit F; and (ii) on or before March --------- 31 of each year, beginning with March 31, 1994, an Opinion of Counsel, dated on or after January 1 of such year, stating to the effect that no filing or other action, except such action as shall be described therein, is necessary from the date thereof through March 31 of the following year to continue the perfected status of the interest of the Trust in the collateral described in the financing statements referred to in such opinion. (e) If at any time the Servicer is no longer Bridgestone/Firestone, the Transferor shall deliver to the Successor Servicer powers-of-attorney such that such Successor Servicer may perform the obligations set forth in Sections 13.02(a), 13.02(b) and 13.02(c). Section 13.03 Limitation on Rights of Certificateholders. ------------------------------------------ (a) The death or incapacity of any Investor Certificateholder shall not operate to terminate this Agreement or the Trust, nor shall such death or incapacity entitle such Investor Certificateholders' legal representatives or heirs to claim an accounting or to take any action or commence any proceeding in any court for a partition or winding up of the Trust, nor otherwise affect the rights, obligations and liabilities of the parties hereto or any of them. (b) No Investor Certificateholder shall have any right to vote (except as specifically provided in this Agreement) or in any manner otherwise control the operation and management of the Trust, or the obligations of the parties hereto, nor shall any Investor Certificateholder be under any liability to any third person by reason of any action taken by the parties to this Agreement pursuant to any provision hereof (other than the Holder of the Exchangeable Transferor Certificate, to the extent provided herein). (c) No Certificateholder shall have any right by virtue of any provisions of this Agreement to institute any suit, action or proceeding in equity or at law upon or under or with respect to this Agreement, unless such Certificateholder previously shall have given to the Trustee, and unless the Holders of Investor Certificates evidencing Undivided Interests in the Trust aggregating more than 50% of the Invested Amount of any Series which may be adversely affected but for the institution of such suit, action or proceeding shall have made, written request upon the Trustee to institute such action, suit or proceeding in its own name as Trustee hereunder and shall have offered to the Trustee such reasonable indemnity as it may require against the costs, expenses and liabilities to be incurred therein or thereby, and the Trustee, for 60 days after its receipt of such notice, request and offer of indemnity, shall have neglected or refused to institute any such action, suit or proceeding; it being understood and intended, and being expressly covenanted by each Certificateholder with every other Certificateholder and the Trustee, that no one or more Certificateholders shall have any right in any manner whatsoever by virtue or by availing itself or themselves of any provisions of this Agreement to affect, disturb or prejudice the rights of the Investor Certificateholders of any other of the Investor Certificates, or to obtain or seek to obtain priority over or preference to any other such Certificateholder, or to enforce any right under this Agreement, except in the manner herein provided and for the equal, ratable and common benefit of all Certificateholders. For the protection and enforcement of the provisions of this Section 13.03, each and every Certificateholder and the Trustee shall be entitled to such relief as can be given either at law or in equity. Section 13.04 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND ------------- CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO ITS CONFLICTS OF LAW PROVISIONS. Section 13.05 Notices. All demands, notices and communications ------- hereunder shall be in writing and shall be deemed to have been duly given if personally delivered at, or sent by overnight courier or facsimile to, or mailed by registered mail, return receipt requested, to (a) in the case of Firestone Retail Credit Corporation to c/o JH Management Company, One International Place, Boston, Massachusetts 02110, Attention: ______________; (b) in the case of Bridgestone/Firestone, Inc., 50 Century Boulevard, Nashville, Tennessee 37214, Attention: Treasurer and (c) in the case of the Trustee, to the Corporate Trust Office; or, as to each party, at such other address as shall be designated by such party in a written notice to each other party. Any notice required or permitted to be mailed to a Certificateholder shall be given by first-class mail, postage prepaid, at the address of such Certificateholder as shown in the Certificate Register. Any notice so mailed within the time prescribed in this Agreement shall be conclusively presumed to have been duly given, whether or not the Certificateholder receives such notice. Copies of all notices, reports, certificates and amendments delivered hereunder shall be mailed to the Rating Agency as follows: (a) Standard & Poor's Corporation, 25 Broadway, New York, NY 10004, Attention: Structured Finance, (b) Moody's Investor Services, 99 Church Street, New York, N.Y. 10007, Attention: Structured Finance and (c) Fitch Investors Service, Inc., One State Street Plaza, New York, NY 10004, Attention: Structured Surveillance Department. Section 13.06 Severability of Provisions. If any one or more of the -------------------------- covenants, agreements, provisions or terms of this Agreement shall for any reason whatsoever be held invalid, then such covenants, agreements, provisions or terms shall be deemed severable from the remaining covenants, agreements, provisions or terms of this Agreement and shall in no way affect the validity or enforceability of the other provisions of this Agreement or of the Certificates or rights of the Certificateholders thereof. Section 13.07 Assignment. Notwithstanding anything to the contrary ---------- contained herein, except as provided in Section 8.02, this Agreement, including any Supplement, may not be assigned by the Servicer without the prior consent of Holders of Investor Certificates evidencing Undivided Interests aggregating not less than 66-2/3% of the Invested amount of the Investor Certificates of each Series on a Series by Series basis. Section 13.08 Certificates Nonassessable and Fully Paid. It is the ----------------------------------------- intention of the parties to this Agreement that the Investor Certificateholders shall not be personally liable for obligations of the Trust, that the interests in the Trust represented by the Investor Certificates shall be nonassessable for any losses or expenses of the Trust or for any reason whatsoever, and that Certificates upon authentication thereof by the Trustee pursuant to Sections 2.09 and 6.02 are and shall be deemed fully paid. Section 13.09 Further Assurances. The Transferor and the Servicer ------------------ agree to do and perform, from time to time, any and all acts and to execute any and all further instruments required or reasonably requested by the Trustee more fully to effect the purposes of this Agreement, including, without limitation, the execution of any financing statements or continuation statements relating to the Receivables for filing under the provisions of the UCC of any applicable jurisdiction. Section 13.10 No Waiver; Cumulative Remedies. No failure to exercise ------------------------------ and no delay in exercising, on the part of the Trustee or the Investor Certificateholders, any right, remedy, power or privilege hereunder, shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exhaustive of any rights, remedies, powers and privileges provided by law. Section 13.11 Counterparts. This Agreement and any 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 together shall constitute one and the same instrument. Section 13.12 Third Party Beneficiaries. This Agreement and any ------------------------- Supplement will inure to the benefit of and be binding upon the parties hereto, and, in addition, shall inure to the benefit of the Certificateholders and their respective successors and permitted assigns. Except as otherwise provided in this Article XIII or Section 7.04, no other person will have any right or obligation hereunder; provided, however, that -------- ------- if so specified in the applicable Supplement, an Enhancement Provider may be deemed to be a third party beneficiary of this Agreement. Section 13.13 Actions by Certificateholders. ----------------------------- (a) Wherever in this Agreement or any Supplement, a provision is made that an action may be taken or a notice, demand or instruction given by Investor Certificateholders, such action, notice or instruction may be taken or given by any Investor Certificateholder of any Series, unless such provision requires a specific percentage of Investor Certificateholders of a certain Series or all Series. (b) Any request, demand, authorization, direction, notice, consent, waiver or other act by a Certificateholder shall bind such Certificateholder and every subsequent holder of such Certificate issued upon the registratiOn of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done or omitted to be done by the Trustee or the Servicer in reliance thereon, whether or not notation of such action is made upon such Certificate. Section 13.14 Merger and Integration. Except as specifically stated ---------------------- otherwise herein, this Agreement sets forth the entire understanding of the parties relating to the subject matter hereof, and all prior understandings, written or oral, are superseded by this Agreement. This Agreement may not be modified, amended, waived or supplemented except as provided herein. Section 13.15 Headings. The headings herein are for purposes of -------- reference only and shall not otherwise affect the meaning or interpretation of any provision hereof. Section 13.16 Voting, Waiver and Consents. Notwithstanding anything --------------------------- herein to the contrary, any certificate held by, or on behalf of, the Transferor or any of its Affiliates shall not be entitled to vote for, or give its consent to, or grant a waiver with respect to, any matter required, permitted or authorized hereby to be voted upon, consented to or waived. For the purposes of calculating the percentage of any Certificates so voting, consenting or granting such waiver, such Certificate held by, or on behalf of, the Transferor or any of it. Affiliates shall be deemed not to be outstanding and it interest shall not be reflected in either the numerator or denominator of the fraction by which such percentage is derived. (END OF ARTICLE XIII) IN WITNESS WHEREOF, the Transferor, Bridgestone/Firestone, the Servicer and the Trustee have caused this Agreement to be duly executed by their respective officers as of the day and year first above written. FIRESTONE RETAIL CREDIT CORPORATION, as Transferor By ----------------------------------------------- Name: Title: BRIDGESTONE/FIRESTONE, INC. as Servicer and individually By ----------------------------------------------- Name: Title: THE FUJI BANK AND TRUST COMPANY, as Trustee By ----------------------------------------------- Name: Title: IN WITNESS WHEREOF, the Transferor, Bridgestone/Firestone, the Servicer and the Trustee have caused this Agreement to be duly executed by their respective officers as of the day and year first above written. FIRESTONE RETAIL CREDIT CORPORATION, as Transferor By ----------------------------------------------- Name: Title: BRIDGESTONE/FIRESTONE, INC. as Servicer and individually By ----------------------------------------------- Name: Title: THE FUJI BANK AND TRUST COMPANY, as Trustee By ----------------------------------------------- Name: Title: Exhibit A-1 ----------- FORM OF EXCHANGEABLE TRANSFEROR CERTIFICATE One Unit BRIDGESTONE/FIRESTONE MASTER TRUST EXCHANGEABLE TRANSFEROR CERTIFICATE THIS CERTIFICATE REPRESENTS THE TRANSFEROR INTEREST IN THE BRIDGESTONE/FIRESTONE MASTER TRUST Evidencing an undivided interest in a trust, the corpus of which consists of receivables generated or to be generated under a private label credit card program (the "Credit Card Program") established by Credit First National Association ("Credit First") and all monies due or to become due in respect thereof. (Not an interest in or obligation of Credit First, Bridgestone/Firestone, Inc. or Firestone Retail Credit Corporation or any affiliate thereof) This certifies that FIRESTONE RETAIL CREDIT CORPORATION is the registered owner of an undivided interest (the "Transferor Interest") in the Bridgestone/Firestone Master Trust (the "Trust") not represented by the Investor Certificates and the Bridgestone/Firestone Certificate issued pursuant to the Amended and Restated Pooling and Servicing Agreement, dated as of October ___, 1996 (the "Agreement"; such term to include any Supplement thereto) by and among Firestone Retail Credit Corporation, as transferor (the "Transferor"), Bridgestone/Firestone, Inc., as servicer (the "Servicer") and The Fuji Bank and Trust Company, as trustee (the "Trustee"). The corpus of the Trust consists of all of the Transferor's right, title and interest in a portfolio of receivables (the "Receivables") existing in consumer revolving credit card accounts identified in the Agreement from time to time (the "Accounts") as of the Cut-Off Date, all Receivables generated under the Accounts from time to time thereafter, all monies due or to become due and all amounts received with respect to the Receivables in existence in the Accounts on the Cut-Off Date or generated thereafter including all Recoveries relating thereto (net of related expenses) insurance proceeds (net of related expenses), all right, title and interest of the Transferor in, to and under the Participation Agreement, Purchase and Sale Agreement and any Insurance Premiums paid under any Insurance Agreement, all monies on deposit in the Collection Account (excluding any investment earnings on such deposited amounts), any other account or accounts maintained for the benefit of Certificateholders and available under any Enhancement to be provided by an Enhancement Provider for any Series for payment to Certificateholders, the Servicer Letter of Credit and all other assets and interests constituting the Trust and all proceeds of the foregoing. Although a summary of certain provisions of the Agreement is set forth below, this Certificate does not purport to summarize the Agreement and reference is made to the Agreement for information with respect to the interests, rights, benefits, obligations, proceeds, and duties evidenced hereby and the rights, duties and obligations of the Trustee. A copy of the Agreement may be requested from the Trustee by writing to the Trustee at The Fuji Bank and Trust Company, Two World Trade Center, 81st Floor, New York, New York 10048, Attention: Trust Administration Department. To the extent not defined herein, the capitalized terms used herein have the meanings ascribed to them in the Agreement. This Certificate is issued under and is subject to the terms, provisions and conditions of the Agreement, to which Agreement, as amended from time to time, the Transferor by virtue of the acceptance hereof assents and by which the Transferor is bound. This Certificate is not permitted to be transferred, assigned, exchanged or otherwise pledged or conveyed except in compliance with the terms of the Agreement . The Receivables consist of amounts transferred to the Transferor, payable by Obligors on any Account, from time to time as shown on the Servicer's records, including, without limitation, amounts payable for the purchases of goods or services and amounts payable for Periodic Finance Charges, Late Fees, Returned Check Fees, returned convenience check fees, cash advance fees and credit related insurance, as more fully specified in the Agreement. This Certificate is the Exchangeable Transferor Certificate (the "Certificate"), which represents an undivided interest in the Trust, ----------- including the right to receive the Collections and other amounts at the times and in the amounts specified in the Agreement to be paid to the holder of the Exchangeable Transferor Certificate. The aggregate interest represented by this Certificate at any time in the Receivables in the Trust shall not exceed the Transferor Interest at such time. In addition to this Certificate, Investor Certificates will be issued to investors pursuant to the Agreement, which will represent the interests of Investor Certificateholders in the Trust and the Bridgestone/Firestone Certificate will be issued to Bridgestone/Firestone, pursuant to the Agreement, which will represent the interest of Bridgestone/Firestone in the Trust. This Certificate shall not represent any interest in the Collection Account or other account or any Enhancement except as provided in the Agreement. Subject to certain conditions in the Agreement, the obligations created by the Agreement and the Trust created thereby shall terminate upon the earlier of (i) September 15, 2092 and (ii) the day after the date on which funds shall have been deposited in the Collection Account sufficient to pay the Aggregate Invested Amount plus interest accrued at the applicable Certificate Rates through the end of the applicable Interest Accrual Period in full on all Series of Investor Certificates; provided, however, that in -------- ------- no event shall the trust created by the Agreement continue beyond the expiration of 21 years from the death of the last survivor of the descendants, living on the date of the Agreement, of Joseph P. Kennedy, of the Commonwealth of Massachusetts, formerly United States representative at the Court of St. James. Upon termination of the Trust pursuant to Article XII of the Agreement, subject to the provisions of the Agreement and the surrender of this Certificate, the Trustee shall assign and convey to the Transferor (without recourse, representation or warranty) all right, title and interest of the Trust in the Receivables, whether then existing or thereafter created, and all proceeds thereof, except for amounts held by the Trustee pursuant to Subsection 12.03(b). The Trustee shall execute and deliver such instruments of transfer and assignment, in each case without recourse, as shall be reasonably requested by the Transferor to vest in the Transfer or all right, title and interest which the Trust has in the Receivables. Unless the certificate of authentication herein has been executed by or on behalf of the Trustee, by manual signature, this Certificate shall not be entitled to any benefit under the Agreement, or be valid for any purpose. IN WITNESS WHEREOF, the Transferor has caused this Certificate to be duly executed. FIRESTONE RETAIL CREDIT CORPORATION By: ---------------------------------------------- Name: Title: CERTIFICATE OF AUTHENTICATION This is the Exchangeable Transferor Certificate referred to in the within mentioned Pooling and Servicing Agreement. THE FUJI BANK AND TRUST COMPANY, as Trustee By: ---------------------------------------------- Authorized Signatory Exhibit A-2 ----------- FORM OF BRIDGESTONE/FIRESTONE CERTIFICATE One Unit BRIDGESTONE/FIRESTONE MASTER TRUST BRIDGESTONE/FIRESTONE CERTIFICATE THIS CERTIFICATE REPRESENTS THE B/F ALLOCATION PERCENTAGE IN THE BRIDGESTONE/FIRESTONE MASTER TRUST Evidencing an undivided interest in a trust, the corpus of which consists of receivables generated or to be generated under a private label credit card program established by Credit First National Association ("Credit First") and all monies due or to become due in respect thereof. (Not an interest in or obligation of Credit First, Bridgestone/Firestone, Inc. or Firestone Retail Credit Corporation or any affiliate thereof) This certifies that BRIDGESTONE/FIRESTONE, INC. is the registered owner of an undivided one percent interest (the "B/F Allocation Percentage") in the Bridgestone/Firestone Master Trust (the "Trust"). This Certificate, the Investor Certificates and the Exchangeable Transferor Certificate were issued pursuant to the Amended and Restated Pooling and Servicing Agreement, dated as of October ___, 1996 (the "Agreement"; such term to include any Supplement thereto) by and among Firestone Retail Credit Corporation, as transferor (the "Transferor"), Bridgestone/Firestone, Inc., as servicer (the "Servicer") and The Fuji Bank and Trust Company, as trustee (the "Trustee"). The corpus of the Trust consists of all of the Transferor's right, title and interest in a portfolio of receivables (the "Receivables") existing in consumer revolving credit card accounts identified in the Agreement from time to time (the "Accounts") as of the Cut-Off Date, all Receivables generated under the Accounts from time to time thereafter, all monies due or to become due and all amounts received with respect to the Receivables in existence in the Accounts on the Cut-Off Date or generated thereafter including all Recoveries relating thereto (net of related expenses) insurance proceeds (net of related expenses), all right, title and interest of the Transferor in, to and under the Participation Agreement, the Purchase and Sale Agreement and any Insurance Premiums paid under any Insurance Agreement, all monies on deposit in the Collection Account (excluding any investment earnings on such deposited amounts), any other account or accounts maintained for the benefit of Certificateholders and available under any Enhancement to be provided by an Enhancement Provider for any Series for payment to Certificateholders, Servicer Letter of Credit and all other assets and interests constituting the Trust and all proceeds of the foregoing. Although a summary of certain provisions of the Agreement is set forth below, this Certificate does not purport to summarize the Agreement and reference is made to the Agreement for information with respect to the interests, rights, benefits, obligations, proceeds, and duties evidenced hereby and the rights, duties and obligations of the Trustee. A copy of the Agreement may be requested from the Trustee by writing to the Trustee at The Fuji Bank and Trust Company, Two World Trade Center, 81st Floor, New York, New York 10048, Attention: Trust Administration Department. To the extent not defined herein, the capitalized terms used herein have the meanings ascribed to them in the Agreement. This Certificate is issued under and is subject to the terms, provisions and conditions of the Agreement, to which Agreement, as amended from time to time, the Transferor by virtue of the acceptance hereof assents and by which the Transferor is bound. This Certificate is not permitted to be transferred, assigned, exchanged or otherwise pledged or conveyed except in compliance with the terms of the Agreement. The Receivables consist of amounts transferred to the Transferor, payable by Obligors on any Account, from time to time as shown on the Servicer's records, including, without limitation, amounts payable for purchases of goods or services and amounts Payable for Periodic Finance Charges, Late Fees, Returned Check Fees, returned convenience check fees, cash advance fees and credit related insurance, as more fully specified in the Agreement. This Certificate is the Bridgestone/Firestone Certificate (the "Certificate"), which represents an undivided one percent interest in the ----------- Trust, including the right to receive the Collections and other amounts at the times and in the amounts specified in the Agreement to be paid to the holder of the Bridgestone/Firestone Certificate. The aggregate interest represented by this Certificate at any time in the Receivables in the Trust shall not exceed the B/F Allocation Percentage. In addition to this Certificate, Investor Certificates will be issued to investors pursuant to the Agreement, which will represent the interests of Investor Certificateholders in the Trust and the Exchangeable Transferor Certificate will be issued to the Transferor, pursuant to the Agreement, which will represent the interest of the Transferor in the Trust. This Certificate shall not represent any interest in the Collection Account or other account or any Enhancement except as provided in the Agreement. Subject to certain conditions in the Agreement, the obligations created by the Agreement and the Trust created thereby shall terminate upon the earlier of (i) September 15, 2092 and (ii) the day after the date on which funds shall have been deposited in the Collection Account sufficient to pay the Aggregate Invested amount plus interest accrued at the applicable Certificate Rates through the end of the applicable Interest Accrual Period in full on all Series of Investor Certificates; provided, however, that in -------- ------- no event shall the trust created by the Agreement continue beyond the expiration of 21 years from the death of the last survivor of the descendants, living on the date of the Agreement, of Joseph P. Kennedy, of the Commonwealth of Massachusetts, formerly United States representative at the Court of St. James. Unless the certificate of authentication herein has been executed by or on behalf of the Trustee, by manual signature, this Certificate shall not be entitled to any benefit under the Agreement, or be valid for any purpose. IN WITNESS WHEREOF, the Transferor has caused this Certificate to be duly executed. FIRESTONE RETAIL CREDIT CORPORATION By: ---------------------------------------------- Name: Title: CERTIFICATE OF AUTHENTICATION This is the BRIDGESTONE/FIRESTONE Certificate referred to in the within mentioned Pooling and Servicing Agreement. THE FUJI BANK AND TRUST COMPANY, as Trustee By: ---------------------------------------------- Authorized Signatory EXHIBIT B --------- FORM OF ASSIGNMENT OF RECEIVABLES IN ELIGIBLE ALTERNATIVE ACCOUNTS (As required by Subsection 2.05(b)(ii) of the Pooling and Servicing Agreement) ASSIGNMENT No. _____ OF RECEIVABLES IN ELIGIBLE ALTERNATIVE ACCOUNTS, dated as of _________________, by and between FIRESTONE RETAIL CREDIT CORPORATION (the "Transferor"), a Massachusetts corporation, as Transferor, and THE FUJI BANK AND TRUST COMPANY, a banking corporation organized and existing under the laws of the State of New York, as Trustee (the "Trustee") pursuant to the Pooling and Servicing Agreement referred to below. W I T N E S E T H: - - - - - - - - - WHEREAS, the Transferor, Bridgestone/Firestone, Inc. ("Bridgestone/Firestone"), as Servicer, and the Trustee are parties to the Amended and Restated Pooling and Servicing Agreement, dated as of October ___, 1996 (hereinafter as such agreement may have been or may from time to time be, amended, supplemented or otherwise modified, the "Pooling and Servicing Agreement"); WHEREAS, pursuant to the Pooling and Servicing Agreement, the Transferor pursuant to Section 2.05(b) and (c) of the Pooling and Servicing Agreement, may designate Eligible Alternative Accounts of the Transferor to be included as Accounts and to convey the Receivables of such Eligible Alternative Accounts, whether now existing or hereafter created, to the Trust as part of the corpus of the Trust (as each such term is defined in the Pooling and Servicing Agreement); and WHEREAS, the Trustee is willing to accept such designation and conveyance of the Receivables in the Eligible Alternative Accounts subject to the terms and conditions hereof; NOW, THEREFORE, the Transferor and the Trustee hereby agree as follows: 1. Defined Terms. All capitalized terms used herein shall have the ------------- meanings ascribed to them in the Pooling and Servicing Agreement unless otherwise defined herein. "Addition Date" shall mean, with respect to the Eligible Alternative ------------- Accounts designated hereby, (___________________, 199__). "Addition Notice Date" shall mean, with respect to the Eligible -------------------- Alternative Accounts, the last day in the month preceding the month in which the Addition Date occurs. 2. Designation of Eligible Alternative Accounts. The Transferor does -------------------------------------------- hereby deliver herewith a list or computer file containing a true and complete schedule identifying all such Eligible Alternative Accounts specifying for each such Account, as of the Addition Notice Date, its account number. Such list or computer file shall be as of the date of this Assignment incorporated into and made part of this Assignment and is marked as Schedule 1 to this Assignment. ---------- 3. Conveyance of Receivables. ------------------------- (a) The Transferor does hereby transfer, assign, set over and otherwise convey to the Trust for the benefit of Certificateholders, without recourse all of its right, title and interest in, to and under the Receivables now existing and hereafter created designated on Schedule 1 hereof, all monies ---------- due or to become due and all amounts received with respect thereto, including all Recoveries related thereto (net of related expenses), insurance proceeds (net of related expenses), and any Insurance Premiums paid under any Insurance Agreement and all proceeds thereof. The foregoing transfer, assignment, set-over and conveyance does not constitute and is not intended to result in a creation or an assumption by the Trust, the Trustee or any Investor Certificateholder of any obligation of the Servicer, the Transferor or any other Person in connection with the Accounts, the Receivables or under any agreement or instrument relating thereto, including, without limitation, any obligation to any Obligors, merchants, or Credit First National Association and any affiliate thereof, or insurers. (b) In connection with such transfer, the Transferor agrees to record and file, at its own expense, a financing statement (and continuation statements with respect to such financing statements when applicable) with respect to the Receivables now existing and hereafter created for the transfer of accounts meeting the requirements of applicable state law in such manner and in such jurisdictions as are necessary to perfect the transfer and assignment of the Receivables to the Trust, and to deliver a file-stamped copy of such financing statement or other evidence of such filing to the Trustee on or prior to the date of issuance of the Certificates. The Trustee shall be under no obligation whatsoever to file such financing statement, or a continuation statement to such financing statement, or make any other filing under the UCC in connection with such transfer. (c) In connection with such transfer, the Transferor further agrees, at its own expense, on or prior to the date of this Assignment to indicate in its books and records that all Receivables created in connection with the Eligible Alternative Accounts designated hereby have been conveyed to the Trust pursuant to this Assignment for the benefit of the Certificateholders. 4. Acceptance by Trustee. Subject to the satisfaction of the --------------------- conditions set forth in Section 6, the Trustee hereby acknowledges its acceptance on behalf of the Trust for the benefit of all Certificateholders of all right, title and interest to the property, now existing and hereafter created, conveyed to the Trust pursuant to Section 3(a) of this Assignment, and declares that it shall maintain such right, title and interest, upon the trust set forth in the Pooling and Servicing Agreement. The Trustee further acknowledges that, prior to or simultaneously with the execution and delivery of this Assignment, the Transferor delivered to the Trustee the written list described in Section 2 of this Assignment. 5. Representations and Warranties of the Transferor. The Transferor ------------------------------------------------ hereby represents and warrants to the Trustee, on behalf of the Trust, as of the date of this Assignment and as of the Addition Date that: (a) Legal, Valid and Binding Obligation. This Assignment constitutes ----------------------------------- a legal, valid and binding obligation of the Transferor enforceable against the Transferor in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws now and hereafter in effect affecting the enforcement of creditors' rights in general and except as such enforceability may be limited by general principles of equity (whether considered in a suit at law or in equity); (b) Eligibility of Accounts: As of the Addition Notice Date, to the ----------------------- best knowledge of the Transferor, each Eligible Alternative Account designated hereby is an Eligible Alternative Account in all material respects; (c) Selection Procedures. No selection procedure adverse to the -------------------- interests of the Investor Certificateholders was utilized in selecting the Alternative Accounts designated hereby from the available Eligible Alternative Accounts; (d) Insolvency. The Transferor is not insolvent and, after giving ---------- effect to the conveyance set forth in Section 3 of the Assignment, will not be insolvent; and (e) Security Interest. This Assignment constitutes a valid transfer ----------------- and assignment to the Trust of all right, title and interest of the Transferor in the Receivables including all Recoveries relating thereto and the proceeds thereof (including insurance proceeds to the extent that the Seller is entitled thereto) relating thereto or, if this Assignment does not constitute a valid transfer and assignment of such property, it constitutes a grant of a "security interest" (as defined in the UCC as in effect in the State of New York) in such property to the Trust, which, in the case of existing Receivables and the proceeds thereof, is enforceable upon execution and delivery of this Assignment, and which will be enforceable with respect to such Receivables hereafter created and the proceeds thereof upon such creation. Upon the filing of the financing statement described in Section 3 of the Assignment and, in the case of the Receivables hereafter created and the proceeds thereof, upon the creation thereof, the Trust shall have a first priority perfected security or ownership interest in such property except for Liens permitted under subsection 2.08(b) of the Pooling and Servicing Agreement; provided, however, that such security interest in proceeds shall -------- ------- remain perfected after 10 days from their receipt by the Servicer (so long as Bridgestone/Firestone is the Servicer) or the Transferor only to the extent that such proceeds are identifiable cash proceeds or that come into the Trust's possession within the applicable 10-day period; and provided, -------- further, that the Transferor makes no representation or warranty with respect - ------- to the effect of Section 9-306(4) of the UCC on the rights of the Trust to proceeds held by the Transferor at the time insolvency proceedings are instituted by or against the Transferor. 6. Conditions Precedent. The acceptance of the Trustee set forth in -------------------- Section 4 hereof and the amendment of the Pooling and Servicing Agreement as set forth in Section 7 hereof are subject to the satisfaction, on or prior to the Addition Date, of the following conditions precedent: (a) Representations and Warranties. Each of the representations and ------------------------------ warranties made by the Transferor in Section 5 shall be true and correct as of the Addition Notice Date or as of the Addition Date as applicable. (b) Officer's Certificate. The Transferor shall have delivered to the --------------------- Trustee a certificate of a Vice President or more senior officer confirming the items set forth in Section 2.05(b)(v) of the Pooling and Servicing Agreement. (c) Opinion of Counsel. The Transferor shall have delivered to the ------------------ Trustee an Opinion of Counsel with respect to the Eligible Alternative Accounts designated hereby substantially in the form of Exhibit F to the --------- Pooling and Servicing Agreement. (d) Additional Information. The Transferor shall have delivered to the ---------------------- Trustee such information, if any, as was reasonably requested by the Trustee to satisfy itself as to the accuracy of the representation and warranty set forth in Section 5(b) of this Agreement. 7. Amendment of the Pooling and Servicing Agreement. The Pooling and ------------------------------------------------ Servicing Agreement is hereby amended by providing that all references to the "Pooling and Servicing Agreement," to "this Agreement" and "herein" shall be deemed from and after the Addition Date to be a dual reference to the Pooling and Servicing Agreement as supplemented by this Assignment. Except as expressly amended hereby, all of the representations, warranties, terms, covenants and conditions of the Pooling and Servicing Agreement shall remain unamended and shall continue to be, and shall remain, in full force and effect in accordance with its terms and except as expressly provided herein shall not constitute or be deemed to constitute a waiver of compliance with or consent to noncompliance with any term or provision of the Pooling and Servicing Agreement. 8. Counterparts. This Assignment may be executed in any number of ------------ counterparts, all of which taken together shall constitute one and the same instrument. 9. Governing Law. THIS ASSIGNMENT SHALL BE GOVERNED BY AND CONSTRUED ------------- IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO ITS CONFLICTS OF LAW PROVISIONS. IN WITNESS WHEREOF, the undersigned have caused this Assignment of Receivables in Eligible Alternative Accounts to be duly executed and delivered by their respective duly authorized officers on the day and the year first above written. FIRESTONE RETAIL CREDIT CORPORATION, as Transferor By ----------------------------------------------- Title: THE FUJI BANK AND TRUST COMPANY, as Trustee By ----------------------------------------------- Title: EXHIBIT C --------- FORM OF REASSIGNMENT OF RECEIVABLES IN REMOVED ACCOUNTS (As required by Subsection 2.10(b)(i) of the Pooling and Servicing Agreement) REASSIGNMENT No. ___ OF RECEIVABLES, dated as of ___________, __, by and between FIRESTONE RETAIL CREDIT CORPORATION, as Transferor (the "Transferor"), a Massachusetts corporation, and THE FUJI BANK AND TRUST COMPANY, a banking corporation organized and existing under the laws of the State of New York, as Trustee (the "Trustee") pursuant to the Pooling and Servicing Agreement referred to below. W I T N E S S E T H ------------------- WHEREAS, the Transferor, Bridgestone/Firestone, Inc. ("Bridgestone/Firestone"), as servicer and the Trustee are parties to the Amended and Restated Pooling and Servicing Agreement, dated as of ______________ (hereinafter as such agreement may have been, or may from time to time be, amended, supplemented or otherwise modified, the "Pooling and Servicing Agreement"); WHEREAS, pursuant to the Pooling and Servicing Agreement, the Transferor wishes to remove all Receivables from certain designated Accounts of the Transferor (the "Removed Accounts.) and to cause the Trustee to reconvey the Receivables of such Removed Accounts, whether now existing or hereafter created, from the Trust to the Transferor; and WHEREAS, the Trustee is willing to accept such designation and to reconvey the Receivables in the Removed Accounts subject to the terms and conditions hereof; NOW, THEREFORE, the Transferor and the Trustee hereby agree as follows: 1. Defined Terms. All terms defined in the Pooling and Servicing ------------- Agreement and used herein shall have such defined meanings when used herein, unless otherwise defined herein. "Removal Date" shall mean, with respect to the Removed Accounts ------------ designated hereby, ___________, 19__. "Removal Notice Date" shall mean, with respect to the Removed Account, ------------------- the billing date for such Removed Account in the month preceding the month in which the Removal Date for such Removed Account occurs, (which shall be a date on or prior to the fifth Business Day prior to the Removal Date). 2. Designation of Removed Accounts. The Transferor shall deliver to ------------------------------- the Trustee herewith a list or computer file containing a true and complete schedule identifying all Accounts the Receivables of which have not been removed from the Trust specifying for each such Account, as of the Removal Notice Date, its account number. Such schedule shall be marked as Schedule -------- 1 to this Reassignment and shall be incorporated into and made a part of this - - Reassignment as of the Removal Date. 3. Conveyance of Receivables. ------------------------- (a) The Trustee does hereby transfer, assign, set-over and otherwise convey to the Transferor, without recourse on and after the Removal Date, all right, title and interest of the Trust in, to and under the Receivables now existing and hereafter created in the Removed Accounts designated hereby, all amounts due or to become due and all amounts received with respect thereto, including all Recoveries relating thereto (net of related expenses), insurance proceeds (net of related expenses), all of its right, title and interest in, to and under the Participation Agreements, Purchase and Sale Agreement and any Insurance Premiums paid under any Insurance Agreement and all proceeds of any Insurance Agreement. (b) In connection with such transfer, the Trustee agrees to execute and deliver to the Transferor, on or prior to the date of this Reassignment, a termination statement prepared by the Transferor in form satisfactory to the Trustee with respect to the Receivables now existing and hereafter created in the Removed Accounts reassigned hereby (which may be a single termination statement with respect to all such Receivables) evidencing the release by the Trust of its lien on the Receivables in the Removed Accounts, and meeting the requirements of applicable state law, in such manner and such jurisdictions as are necessary to remove such lien. 4. Acceptance by Trustee. The Trustee hereby acknowledges that, prior --------------------- to or simultaneously with the execution and delivery of this Reassignment, the Transferor delivered to the Trustee the computer file or microfiche list described in Section 2 of this Reassignment. 5. Representations and Warranties of the Transferor. The Transferor ------------------------------------------------ hereby represents and warrants to the Trustee, on behalf of the Trust, as of the date of this Agreement and as of the Removal Date: (a) Legal, Valid and Binding Obligation. This Reassignment constitutes ----------------------------------- a legal, valid and binding obligation of the Transferor enforceable against the Transferor, in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect affecting the enforcement of creditors' rights in general and except as such enforceability may be limited by general principles of equity (whether considered in a suit at law or in equity); and (b) Selection Procedures. No selection procedures believed by the -------------------- Transferor to be materially adverse to the interests of the Investor Certificateholders of any Series were utilized in selecting the Removed Accounts designated hereby. 6. Conditions Precedent. The amendment of the Pooling and Servicing Agreement set forth in Section 7 hereof is subject to the satisfaction, on or prior to the Removal Date, of the following condition precedent: (a) Officers' Certificate. The Transferor shall have delivered to the --------------------- Trustee an Officers' Certificate certifying that (i) as of the Removal Date, all requirements set forth in Section 2.10 of the Pooling and Servicing Agreement for designating Removed Accounts and reconveying the Receivables of such Removed Accounts, whether now existing or hereafter created, have been satisfied, and (ii) each of the representations and warranties made by the Transferor in Section 5 hereof is true and correct as of the Removal Date. The Trustee may conclusively rely on such Officers' Certificate, shall have no duty to make inquiries with regard to the matters set forth therein and shall incur no liability in so relying. 7. Amendment of the Pooling and Servicing Agreement. The Pooling and ------------------------------------------------ Servicing Agreement is hereby amended to provide that all references therein to the "Pooling and Servicing Agreement," to "this Agreement" and "herein" shall be deemed from and after the Removal Date to be a dual reference to the Pooling and Servicing Agreement as supplemented by this Reassignment. Except as expressly amended hereby, all of the representations, warranties, terms, covenants and conditions of the Pooling and Servicing Agreement shall remain unamended and shall continue to be, and shall remain, in full force and effect in accordance with its terms and except as expressly provided herein shall not constitute or be deemed to constitute a waiver of compliance with or a consent to non-compliance with any term or provision of the Pooling and Servicing Agreement. 8. Counterparts. This Reassignment 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 together shall constitute one and the same instrument. 9. Governing Law. THIS REASSIGNMENT SHALL BE GOVERNED BY AND ------------- CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO ITS CONFLICTS OF LAW PROVISIONS. IN WITNESS WHEREOF, the undersigned have caused this Reassignment of Receivables to be duly executed and delivered by their respective duly authorized officers on the day and year first above written. FIRESTONE RETAIL CREDIT CORPORATION, as Transferor By ----------------------------------------------- Title: THE FUJI BANK AND TRUST COMPANY, as Trustee By ----------------------------------------------- Title: EXHIBIT D --------- Date: ______________, 1992 IRREVOCABLE SERVICER LETTER OF CREDIT NO. _________ The Fuji Bank and Trust Company Two World Trade Center 81st Floor New York, New York 10048 Attention: Trust Administration Department Gentlemen: At the request and for the account of our customer, Bridgestone/Firestone, an Ohio corporation (the "Corporation"), we (the "Bank") hereby establish in your favor this Irrevocable Letter of Credit No. ________________________ wherein you, as trustee (the "Trustee") under the Amended and Restated Pooling and Servicing Agreement, as supplemented (collectively, the "Pooling and Servicing Agreement") among the Corporation, as servicer, Firestone Retail Credit Corporation, as transferor and you, pursuant to which the Bridgestone/Firestone Master Trust, Series 1992-A and Series 1992-B Certificates (the "Certificates") have been issued, are hereby irrevocably authorized, to draw (i) as required under Section 4.01A(a) of the Pooling and Servicing Agreement or (ii) Section 4.01A(e) of the Pooling and Servicing Agreement (a "Special Drawing"), upon the terms and conditions hereinafter set forth, in an aggregate amount not exceeding $45,000,000 (hereinafter, as reduced from time to time in accordance with the provisions hereof, the "Stated Amount"). Funds under this Letter of Credit are available to you only against your written certificate signed by a person purporting to be your authorized officer, appropriately completed, in the form of Annex 1 or Annex 2 hereto for payment of certain amounts due from, but unpaid by, the Corporation under the Pooling and Servicing Agreement. We hereby agree that each demand made under and in compliance with the terms of this Letter of Credit will be duly honored by us upon due delivery of the certificate(s), as specified above, appropriately completed (together with the enclosures, if any, required thereby), if presented as specified on or before the expiration date hereof. If a presentation in respect of payment is made by you hereunder at or prior to 12:00 P.M., New York City time, on a Business Day, and provided that the documents so presented conform to the terms and conditions hereof, payment shall be made to you of the amount specified, in immediately available funds, not later than 3:00 P.M., New York City time, on the same Business Day. If a presentation in respect of payment is made by you hereunder after 3:00 P.M., New York City time, on a Business Day, such presentation shall be deemed to have been made prior to 3:00 P.M., New York City time, on the next succeeding Business Day. You agree to use your best efforts to provide us telephonic notice at the time any presentation in respect of payment is made hereunder; provided, however, -------- ------- that failure to provide such telephonic notice shall not affect our obligation to make payment in respect of any such presentation in respect of payment. If requested by you, payment under this Letter of Credit will be wire transferred to an account in New York, New York specified in the related certificate. As used herein, "Business Day" shall mean any day other than a Saturday, a Sunday, or a day on which banking institutions in New York, New York shall be authorized or obligated by law, executive order or governmental decree to be closed. If a drawing made by you hereunder does not, in any instance, conform to the terms and conditions of this Letter of Credit, we shall give you prompt notice that the purported drawing was not effected in accordance with the terms and conditions of this Letter of Credit, stating the reasons therefor and that we are holding any documents presented in connection therewith at your disposal or are returning the same to you, as we may elect. Except as otherwise specified in Annex 2, each drawing under this Letter of Credit shall be verified to Account No. ________ maintained by the Trustee (the "Collection Account"). Only you, as Trustee, may make a drawing under this Letter of Credit. Upon the payment of the amount specified in the related certificate(s) presented hereunder, we shall be fully discharged of our obligation under this Letter of Credit with respect to such certificate(s) and we shall not thereafter be obligated to make any further payments under this Letter of Credit in respect of such certificate(s) to you or any other person. By paying to you an amount demanded in accordance herewith, we make no representation as to the correctness of the amount demanded. This Letter of Credit shall expire at our close of business in New York, New York on the first to occur of the following dates (the "Termination Date"): (x) ______________ ___, 199_ or, if said date shall not be a Business Day, on the Business Day next succeeding said date, or (y) the date the Corporation ceases to be the Servicer under the Pooling and Servicing Agreement, as provided in a written notice to us from the Trustee, or (z) the date of receipt by us of your written certificate signed by a person purporting to be your authorized officer, appropriately completed, in the form of Annex 3 hereto. This Letter of Credit shall be promptly surrendered to us upon expiration. Drawings in respect of payments hereunder honored by us shall not, in the aggregate, exceed the Stated Amount in effect immediately prior to such drawing. Each drawing honored by us hereunder shall pro tanto reduce the --- ----- Stated Amount in effect immediately prior to such drawing. This Letter of Credit is subject to, and shall be governed by, the Uniform Customs and Practice for Documentary Credits (1983 Revision), International Chamber of Commerce, Publication No. 400 (the "Uniform Customs"). This Letter of Credit shall be deemed to be made under the laws of the State of New York, including Article 5 of the Uniform Commercial Code of such State, and shall, as to matters not governed by the Uniform Customs, be governed by and construed in accordance with the laws of the State of New York. Notwithstanding anything in Article 54(e) of the Uniform Customs to the contrary, this Letter of Credit is transferable in its entirety (but not in part) only to a successor Trustee under the Pooling and Servicing Agreement upon presentation to us of this Letter of Credit accompanied by the transfer form attached hereto as Annex 4, to the transferee specified therein. All documents presented to us in connection with any demand for payment hereunder, as well as all notices and other communications to us in respect of this Letter of Credit, shall be in writing and addressed and presented to us at our office at One World Trade Center, New York, New York 10048 Attention: Loan Administration and shall make specific reference to this Letter of Credit by number. Such documents, notices and other communication shall be personally delivered to us, or may be sent to us by tested telex or over a telecopier (promptly confirmed by delivery of the written document, notice or other communication, as the case may be, provided that such confirmation shall not be a condition to the effectiveness of such demand for payment, notice or other communication) to the following numbers, as applicable: Telex No.: 420575 (Answerback: SMTBK) Telecopier No.: (212) 524-0612 This Letter of Credit sets forth in full our undertaking, and such undertaking shall not in any way be modified, amended, amplified or limited by reference to any document, instrument or agreement referred to herein (including, without limitation, the certificates), except only Annex 1 through 4 hereto; and any such reference shall not be deemed to incorporate herein by reference any document, instrument or agreement except as set forth above. Very truly yours, The Sumitomo Bank, Limited By: ---------------------------------------------- Name: Title: ANNEX 1 TO LETTER OF CREDIT NO. ------------------------------------ CERTIFICATE FOR "ANNEX 1 DRAWING" --------------------------------- The undersigned, as Trustee (the "Trustee"), acting through the undersigned duly authorized officer of the Trustee, hereby certifies to The Sumitomo Bank, Limited (the "Bank"), with reference to the Bank's Irrevocable Letter of Credit No. ______________ (the "Letter of Credit"; any capitalized term used herein and not defined shall have its respective meaning as set forth in the Letter of Credit) issued in favor of the Trustee, that: (1) The Trustee is the Trustee under the Pooling and Servicing Agreement. (2) The Corporation, as servicer (the "Servicer") under the Pooling and Servicing Agreement, has notified us, as Trustee under the Pooling and Servicing Agreement, pursuant to a Monthly Servicer's Certificate (as defined in the Pooling and Servicing Agreement) (a copy of which is attached hereto) furnished pursuant to Section 3.04(b) of the Pooling and Servicing Agreement, that the following amount was required to be remitted by the Corporation to the Collection Account pursuant to Section 4.01(g) of the Pooling end Servicing Agreement with respect to the Distribution Date (as defined in the Pooling and Servicing Agreement) occurring on (insert applicable Distribution Date): ----------------------------------- $(insert amount required to be remitted pursuant to Section 4.01(g)). ----------------------------------------------------------------- (3) The Corporation has failed to deposit the following portion of amounts owed by it with respect to such Distribution Date as set forth in paragraph (2) above: $(insert amount of deficiency). --------------------------- (4) The Trustee is making a drawing under the Letter of Credit in the amount of $_________ which amount equals the lesser of (a) the amount set forth in paragraph (3) and (b) the amount identified by the Servicer in the Monthly Servicer's Certificate referred to in paragraph (2) above as being available on the date hereof (and after giving effect to any contemporaneous demand for payment under the Letter of Credit being made by the Trustee) to be drawn under the Letter of Credit. (5) The Trustee has not received notice from the Corporation or any other person or entity contesting the accuracy of such Monthly Servicer's Certificate. (6) The account to which payment under the Letter of Credit is to be wire transferred is Account No. 30492-01/0.1, maintained at The Fuji Bank and Trust Company. IN WITNESS WHEREOF, the Trustee has executed and delivered this certificate as of the _____ day of _____________. THE FUJI BANK, AND TRUST COMPANY, as Trustee By ----------------------------------------------- Name: Title: ANNEX 2 TO LETTER OF CREDIT NO. ------------------------------------- CERTIFICATE FOR "SPECIAL DRAWING" --------------------------------- ___________, 19__ The Sumitomo Bank, Limited One World Trade Center, 95th Floor New York, New York 10048 Attention: Re: Irrevocable Letter of Credit No. ________________ Gentlemen: The undersigned, a duly authorized officer of The Fuji Bank and Trust Company (the "Trustee"), hereby certifies to The Sumitomo Bank, Limited with reference to irrevocable Letter of Credit No. ________________ (the "Letter of Credit") (any capitalized term used herein and not defined shall have the meaning set forth in the Letter of Credit) issued by The Sumitomo Bank, Limited (the "Bank"), in favor of the Trustee, that: (1) The Trustee is the Trustee under the Pooling and Servicing Agreement. (2) The Trustee has been instructed by the Servicer to make a Special Drawing. (3) A Responsible Officer of the Trustee has obtained knowledge that the short-term debt rating of the Bank has been reduced, suspended or withdrawn. (4) The Trustee hereby demands payment under the Letter of Credit in the amount of $_____, which amount equals the Available Letter of Credit Amount on the Business Day preceding the date hereof, as specified in the Monthly Servicer's Certificate delivered by the Servicer pursuant to Section 3.04(b) of the Pooling and Servicing Agreement (and after giving effect to any contemporaneous demand for payment under the Letter of Credit being made with respect to such date). (5) All amounts received by the Trustee from the Bank in respect of this certificate shall be applied in accordance with Section 4.01A(e) of the Pooling and Servicing Agreement. (6) The Trustee directs that such amounts be deposited in Account No. ____________ at The Fuji Bank and Trust Company. IN WITNESS WHEREOF, the Trustee has executed and delivered this certificate as of this _____ day of ____________, 19__. THE FUJI BANK AND TRUST COMPANY, as Trustee By: ---------------------------------------------- Authorized Signatory ANNEX 3 TO LETTER OF CREDIT NO. ------------------------------------- CERTIFICATE FOR THE TERMINATION OF LETTER OF CREDIT NO. ---------------- The Sumitomo Bank, Limited One World Trade Center New York, New York 10048 Attention: The undersigned, a duly authorized officer of The Fuji Bank and Trust Company (the "Trustee"), hereby certifies to The Sumitomo Bank, Limited, with reference to Irrevocable Letter of Credit No. ________________ (the "Letter of Credit"; any capitalized terms used herein and not defined shall have the meaning set forth in the Letter of Credit) issued by The Sumitomo Bank, Limited in favor of the Trustee, that the Letter of Credit shall terminate on _________________. Accordingly, we herewith return to you for cancellation the Letter of Credit, which is terminated, as of the date hereof, pursuant to its terms. Date: _______________ THE FUJI BANK AND TRUST COMPANY, as Trustee By ------------------------------------------ Authorized Officer ANNEX 4 TO LETTER OF CREDIT NO. ------------------------------------- ___________, 19__ The Sumitomo Bank, Limited One World Trade Center New York, New York 10048 Attention: Loan Administration Re: Irrevocable Letter of Credit No. ---------------- of The Sumitomo Bank, Limited Gentlemen: For value received, the undersigned beneficiary hereby irrevocably transfers to: _________________________________________ (Name of Transferee) _________________________________________ (Address) all rights of the undersigned beneficiary to draw under the above-captioned Letter of Credit (the "Letter of Credit"). The transferee has succeeded the undersigned as Trustee under the Pooling and Servicing Agreement (as defined in the Letter of Credit). By this transfer, all rights of the undersigned beneficiary in the Letter of Credit are transferred to the transferee and the transferee shall hereafter have the sole rights as beneficiary thereof; provided, however, -------- ------- that no rights shall be deemed to have been transferred to the transferee until such transfer complies with the requirements of the Letter of Credit pertaining to transfers. The Letter of Credit is returned herewith and in accordance therewith we ask that this transfer be effective and that you cause the transfer of the Letter of Credit to our transferee or that, if so requested by the transferee, you cause the issuance of a new irrevocable Letter of Credit in favor of the transferee with provisions consistent with the Letter of Credit. Very truly yours, ------------------------------------------------- as predecessor Trustee By ----------------------------------------------- (Name and Title) EXHIBIT E --------- FORM OF ANNUAL SERVICER'S CERTIFICATE (As required to be delivered on or before March 31 of each calendar year, beginning with March 31, 1993, pursuant to Section 3.05 of the Pooling and Servicing Agreement) BRIDGESTONE/FIRESTONE, INC. - -------------------------------------------------------------------------- BRIDGESTONE/FIRESTONE MASTER TRUST - -------------------------------------------------------------------------- The undersigned, duly authorized representatives of Bridgestone/Firestone, Inc. ("Bridgestone/Firestone"), as Servicer pursuant to the Amended and Restated Pooling and Servicing Agreement dated as of _______________ by and between Firestone Retail Credit Corporation, as Transferor, Bridgestone/Firestone, as Servicer, and The Fuji Bank and Trust Company, as Trustee, do hereby certify that: 1. Bridgestone/Firestone is, as of the date hereof, the Servicer under the Pooling and Servicing Agreement. 2. The undersigned are duly authorized pursuant to the Pooling and Servicing Agreement to execute and deliver this Certificate to the Trustee. 3. A review of the activities of the Servicer during the calendar year ended December 31, 19_ and of its performance under the Pooling and Servicing Agreement was conducted under our supervision. 4. Based on such review, the Servicer has, to the best of our knowledge, fully performed all its obligations under the Pooling and Servicing Agreement and no default in the performance of such obligations has occurred or is continuing except as set forth in paragraph 5 below. 5. The following is a description of each default in the performance of the Servicer's obligations under the provisions of the Pooling and Servicing Agreement known to us to have been made by the Servicer noted during the year ended December 31, 19__, which sets forth in detail the (i) nature of each such default, (ii) the action taken by the Servicer, if any, to remedy each such default and (iii) the current status of each default: (If applicable, insert "None.") IN WITNESS WHEREOF, the undersigned has duly executed this Certificate this __ day of ________, 19__. BRIDGESTONE/FIRESTONE, INC., as Servicer By ----------------------------------------------- Name: Title: By ----------------------------------------------- Name: Title: EXHIBIT F --------- (FORM OF OPINION OF COUNSEL PROVISIONS TO BE INCLUDED IN OPINION OF COUNSEL TO BE DELIVERED PURSUANT TO SUBSECTION 2.05(b)(vi) ---------------------------- The opinion set forth below may be subject to certain qualifications, assumptions, limitations and exemptions (including, without limitation, with respect to the consideration given for the Eligible Alternative Accounts and the insolvency of the Transferor at the time of the conveyance of such Accounts) taken or made in the opinion of ____________________________ with respect to similar matters delivered on the Closing Date. Pursuant to the Assignment No. __ of Receivables in Eligible Alternative Accounts (the "Assignment"), the Transferor will transfer, assign, set-over ---------- and otherwise convey to the Trust all of its right, title and interest in, to and under the Receivables now existing and hereafter created in the Eligible Alternative Accounts ("Receivables in Eligible Alternative Accounts"). If the assignment, transfer and conveyance of the Receivables in Eligible Alternative Accounts is determined to be a sale of the Receivables in Eligible Alternative Accounts and such sale is a sale of accounts (as defined in the Code), the Assignment together with the filing of a UCC-1 financing statement with the Secretary of State of the Commonwealth of Massachusetts, is effective to transfer the Transferor's interest therein on the terms and conditions set forth in the Assignment, prior to all liens. If the assignment, transfer and conveyance of the Receivables in Eligible Alternative Account is determined to be a sale of general intangibles, then, assuming the applicability of Massachusetts law the Assignment is effective to transfer the Transferor's interest in the Receivables in Eligible Alternative Accounts. If the assignment, transfer and conveyance of the Receivables in Eligible Alternative Accounts is determined to be the granting of a security interest in the Receivables in Eligible Alternative Accounts, the Assignment, together with the filing (which has been completed) of a UCC-1 financing statement with the Secretary of State of the Commonwealth of Massachusetts is effective to grant to and create in favor of the Trust a first priority perfected security interest in the Receivables in Eligible Alternative Accounts.) EXHIBIT G --------- Date: ___________, 1992 IRREVOCABLE TRANSFEROR LETTER OF CREDIT NO. _____ The Fuji Bank and Trust Company Two World Trade Center 81st Floor New York, New York 10048 Attention: Trust Administration Department Gentlemen: At the request and for the account of our customer, Bridgestone/Firestone, an Ohio corporation (the "Corporation"), we (the "Bank") hereby establish in your favor this Irrevocable Letter of Credit No. ______ wherein you, as trustee (the "Trustee") under the Pooling and Servicing Agreement, as supplemented by the Series 1992-A and Series 1992-B Supplements, each dated as of November 1, 1992 (collectively, the "Pooling and Servicing Agreement") among the Corporation, as servicer, Firestone Retail Credit Corporation, as transferor and you, pursuant to which the Bridgestone/Firestone Master Trust, Series 1992-A and Series 1992-B Certificates (the "Certificates") have been issued, are hereby irrevocably authorized, to draw (i) as required under Section 4.01B(a) of the Pooling and Servicing Agreement or (ii) Section 4.01B(d) of the Pooling and Servicing Agreement (a "Special Drawing"), upon the terms and conditions hereinafter set forth, in an aggregate amount not exceeding $15,000,000 (hereinafter, as reduced from time to time in accordance with the provisions hereof, the "Stated Amount"). Funds under this Letter of Credit are available to you only against your written certificate signed by a person purporting to be your authorized officer, appropriately completed, in the form of Annex 1 or Annex 2 hereto for payment of certain amounts due from, but unpaid by, the Corporation under the Pooling and Servicing Agreement. We hereby agree that each demand made under and in compliance with the terms of this Letter of Credit will be duly honored by us upon due delivery of the certificate(s), as specified above, appropriately completed (together with the enclosures, if any, required thereby), if presented as specified on or before the expiration date hereof. If a presentation in respect of payment is made by you hereunder at or prior to 12:00 P.M., New York City time, on a Business Day, and provided that the documents so presented conform to the terms and conditions hereof, payment shall be made to you of the amount specified, in immediately available funds, not later than 3:00 P.M., New York City time, on the same Business Day. If a presentation in respect of payment is made by you hereunder after 3:00 P.M., New York City time, on a Business Day, such presentation shall be deemed to have been made prior to 3:00 P.M., New York City time, on the next succeeding Business Day. You agree to use your best efforts to provide us telephonic notice at the time any presentation in respect of payment is made hereunder; provided, however, that failure to -------- ------- provide such telephonic notice shall not affect our obligation to make payment in respect of any such presentation in respect of payment. If requested by you, payment under this Letter of Credit will be wire transferred to an account in New York, New York specified in the related certificate. As used herein, "Business Day" shall mean any day other than a Saturday, a Sunday, or a day on which banking institutions in New York, New York shall be authorized or obligated by law, executive order or governmental decree to be closed. If a drawing made by you hereunder does not, in any instance, conform to the terms and conditions of this Letter of Credit, we shall give you prompt notice that the purported drawing was not effected in accordance with the terms and conditions of this Letter of Credit, stating the reasons therefor and that we are holding any documents presented in connection therewith at your disposal or are returning the same to you, as we may elect. Except as otherwise specified in Annex 2, each drawing under this Letter of Credit shall be verified to Account No. _____ maintained by the Trustee (the "Collection Account"). Only you, as Trustee, may make a drawing under this Letter of Credit. Upon the payment of the amount specified in the related certificate(s) presented hereunder, we shall be fully discharged of our obligation under this Letter of Credit with respect to such certificate(s) and we shall not thereafter be obligated to make any further payments under this Letter of Credit in respect of such certificate(s) to you or any other person. By paying to you an amount demanded in accordance herewith, we make no representation as to the correctness of the amount demanded. This Letter of Credit shall expire at our close of business in New York, New York on the first to occur of the following dates (the "Termination Date"): (x) ________, 199__ or, if said date shall not be a Business Day, on the Business Day next succeeding said date, or (y) the date the Corporation ceases to be the Servicer under the Pooling and Servicing Agreement, as provided in a written notice to us from the Trustee, or (z) the date of receipt by us of your written certificate signed by a person purporting to be your authorized officer, appropriately completed, in the form of Annex 3 hereto. This Letter of Credit shall be promptly surrendered to us upon expiration. Drawings in respect of payments hereunder honored by us shall not, in the aggregate, exceed the Stated Amount in effect immediately prior to such drawing. Each drawing honored by us hereunder shall pro tanto reduce the --- ----- Stated Amount in effect immediately prior to such drawing. This Letter of Credit is subject to, and shall be governed by, the Uniform Customs and Practice for Documentary Credits (1983 Revision), International Chamber of Commerce, Publication No. 400 (the "Uniform Customs"). This Letter of Credit shall be deemed to be made under the laws of the State of New York, including Article 5 of the Uniform Commercial Code of such State, and shall, as to matters not governed by the Uniform Customs, be governed by and construed in accordance with the laws of the State of New York. Notwithstanding anything in Article 54(e) of the Uniform Customs to the contrary, this Letter of Credit is transferable in its entirety (but not in part) only to a successor Trustee under the Pooling and Servicing Agreement upon presentation to us of this Letter of Credit accompanied by the transfer form attached hereto as Annex 4, to the transferee specified therein. All documents presented to us in connection with any demand for payment hereunder, as well as all notices and other communications to us in respect of this Letter of Credit, shall be in writing and addressed and presented to us at our office at One World Trade Center, New York, New York 10048 Attention: Loan Administration and shall make specific reference to this Letter of Credit by number. Such documents, notices and other communication shall be personally delivered to us, or may be sent to us by tested telex or over a telecopier (promptly confirmed by delivery of the written document, notice or other communication, as the case may be, provided that such confirmation shall not be a condition to the effectiveness of such demand for payment, notice or other communication) to the following numbers, as applicable: Telex No.: 420575 (Answerback: SMTBK) Telecopier No.: (212) 524-0612 This Letter of Credit sets forth in full our undertaking, and such undertaking shall not in any way be modified, amended, amplified or limited by reference to any document, instrument or agreement referred to herein (including, without limitation, the Certificates), except only Annex 1 through 4 hereto; and any such reference shall not be deemed to incorporate herein by reference any document, instrument or agreement except as set forth above. Very truly yours, The Sumitomo Bank, Limited By: ---------------------------------------------- Name: Title: ANNEX 1 TO LETTER OF CREDIT NO. --------------------------------- CERTIFICATE FOR "ANNEX 1 DRAWING" --------------------------------- The undersigned, as Trustee (the "Trustee"), acting through the undersigned duly authorized officer of the Trustee, hereby certifies to The Sumitomo Bank, Limited (the "Bank"), with reference to the Bank's Irrevocable Letter of Credit No. ____________ (the "Letter of Credit"; any capitalized term used herein and not defined shall have its respective meaning as set forth in the Letter of Credit) issued in favor of the Trustee, that: (1) The Trustee is the Trustee under the Pooling and Servicing Agreement. (2) The Corporation, a servicer (the "Servicer") under the Pooling and Servicing Agreement, has notified us, as Trustee under the Pooling and Servicing Agreement, pursuant to a Monthly Servicer's Certificate (as defined in the Pooling and Servicing Agreement) (a copy of which is attached hereto) furnished pursuant to Section 3.04(b) of the Pooling and Servicing Agreement, that the following amount was required to be remitted by the Corporation to the Collection Account pursuant to Section 3.09(a) of the Pooling and Servicing Agreement with respect to the Distribution Date (as defined in the Pooling and Servicing Agreement) occurring on (insert applicable Distribution Date): $(insert ----------------------------------- amount required to be remitted pursuant to Section 3.09(a)). (3) The Corporation has failed to deposit the following portion of amounts owed by it with respect to such Distribution Date as set forth in paragraph (2) above: $(insert amount of deficiency). --------------------------- (4) The Trustee is making a drawing under the Letter of Credit in the amount of $_________ which amount equals the lesser of (a) the amount set forth in paragraph (3) and (b) the amount identified by the Servicer in the Monthly Servicer's Certificate referred to in paragraph (2) above as being available on the date hereof (and after giving effect to any contemporaneous demand for payment under the Letter of Credit being made by the Trustee) to be drawn under the Letter of Credit. (5) The Trustee has not received notice from the Corporation or any other person or entity contesting the accuracy of such Monthly Servicer's Certificate. (6) The account to which payment under the Letter o(Pound Sterling) Credit is to be wire transferred is Account No. 30492-01/0.1, maintained at The Fuji Bank and Trust Company. IN WITNESS WHEREOF, the Trustee has executed and delivered this certificate as of the _____ day of _____________. THE FUJI BANK, AND TRUST COMPANY, as Trustee By ----------------------------------------------- Name: Title: ANNEX 2 TO LETTER OF CREDIT NO. --------------------------------- CERTIFICATE FOR "SPECIAL DRAWING" --------------------------------- ___________, 19__ The Sumitomo Bank, Limited One World Trade Center New York, New York 10048 Attention: Re: Irrevocable Letter of Credit No.____________ Gentlemen: The undersigned, a duly authorized officer of The Fuji Bank and Trust Company (the "Trustee"), hereby certifies to The Sumitomo Bank, Limited with reference to irrevocable Letter of Credit No. ______________ (the "Letter of Credit") (any capitalized term used herein and not defined shall have the meaning set forth in the Letter of Credit) issued by The Sumitomo Bank, Limited (the "Bank"), in favor of the Trustee, that: (1) The Trustee is the Trustee under the Pooling and Servicing Agreement. (2) The Trustee has been instructed by the Servicer to make a Special Drawing. (3) A Responsible Officer of the Trustee has obtained knowledge that the short-term debt rating of the Bank has been reduced, suspended or withdrawn. (4) The Trustee hereby demands payment under the Letter of Credit in the amount of $_____, which amount equals the Available Letter of Credit Amount on the Business Day preceding the date hereof, as specified in the Monthly Servicer's Certificate delivered by the Servicer pursuant to Section 3.04(b) of the Pooling and Servicing Agreement (and after giving effect to any contemporaneous demand for payment under the Letter of Credit being made with respect to such date). (5) All amounts received by the Trustee from the Bank in respect of this certificate shall be applied in accordance with Section 4.01A(e) of the Pooling and Servicing Agreement. (6) The Trustee directs that such amounts be deposited in Account No. ______________ at The Fuji Bank and Trust Company. IN WITNESS WHEREOF, the Trustee has executed and delivered this certificate as of this _____ day of ________, 19__. THE FUJI BANK AND TRUST COMPANY, as Trustee By: ---------------------------------------------- Authorized Signatory ANNEX 3 TO LETTER OF CREDIT NO. --------------------------------- CERTIFICATE FOR THE TERMINATION OF LETTER OF CREDIT NO. _________________ The Sumitomo Bank, Limited One World Trade Center New York, New York 10048 Attention: Loan Administration The undersigned, a duly authorized officer of The Fuji Bank and Trust Company (the "Trustee"), hereby certifies to The Sumitomo Bank, Limited, with reference to Irrevocable Letter of Credit No. _______________ (the "Letter of Credit"; any capitalized terms used herein and not defined shall have the meaning set forth in the Letter of Credit) issued by The Sumitomo Bank, Limited in favor of the Trustee, that the Letter of Credit shall terminate on _________________. Accordingly, we herewith return to you for cancellation the Letter of Credit, which is terminated, as of the date hereof, pursuant to its terms. Date: ____________ THE FUJI BANK AND TRUST COMPANY, as Trustee By ----------------------------------------------- Authorized Officer ANNEX 4 TO LETTER OF CREDIT NO. ------------------------------------- ___________, 19__ The Sumitomo Bank, Limited One World Trade Center New York, New York 10048 Attention: Loan Administration Re: Irrevocable Letter of Credit No._________ of The Sumitomo Bank, Limited Gentlemen: For value received, the undersigned beneficiary hereby irrevocably transfers to: --------------------------- (Name of Transferee) --------------------------- (Address) all rights of the undersigned beneficiary to draw under the above-captioned Letter of Credit (the "Letter of Credit"). The transferee has succeeded the undersigned as Trustee under the Pooling and Servicing Agreement (as defined in the Letter of Credit). By this transfer, all rights of the undersigned beneficiary in the Letter of Credit are transferred to the transferee and the transferee shall hereafter have the sole rights as beneficiary thereof; provided, however, -------- ------- that no rights shall be deemed to have been transferred to the transferee until such transfer complies with the requirements of the Letter of Credit pertaining to transfers. The Letter of Credit is returned herewith and in accordance therewith we ask that this transfer be effective and that you cause the transfer of the Letter of Credit to our transferee or that, if so requested by the transferee, you cause the issuance of a new irrevocable Letter of Credit in favor of the transferee with provisions consistent with the Letter of Credit. Very truly yours, ------------------------------------------------- as predecessor Trustee By ----------------------------------------------- (Name and Title) Telegraphic Address One World Trade "SUMITBANK, New York" THE SUMITOMO BANK, LIMITED Center Telephone No. Suite 9651, (212)553-0100 New York Branch New York, New York 10048 Date: December 2, 1992 IRREVOCABLE TRANSFEROR LETTER OF CREDIT NO. LG/MIS/NY-430647 The Fuji Bank and Trust Company Two World Trade Center 81st Floor New York, New York 10048 Attention: Trust Administration Department Gentlemen: At the request and for the account of our customer, Bridgestone/Firestone, an Ohio corporation (the "Corporation"), we (the "Bank") hereby establish in your favor this irrevocable Letter of Credit No. LG/MIS/NY-430647 wherein you, as trustee (the "Trustee') under the Pooling and Servicing Agreement, as supplemented by the Series 1992-A and Series 1992-B Supplements, each dated as of November 1, 1992 (collectively, the "Pooling and Servicing Agreement") among the Corporation, as servicer, Firestone Retail Credit Corporation, as transferor and you, pursuant to which the Bridgestone/Firestone Master Trust, Series 1992-A and Series 1992-B Certificates (the "Certificates") have been issued, are hereby irrevocably authorized, to draw (i) as required under Section 4.01B(a) of the Pooling and Servicing Agreement or (ii) Section 4.01B(d) of the Pooling and Servicing Agreement (a "Special Drawing"), upon the terms and conditions hereinafter set forth, in an aggregate amount not exceeding $15,000,000 (hereinafter, as reduced from time to time in accordance with the provisions hereof, the "Stated Amount"). Funds under this Letter of Credit are available to you only against your written certificate signed by a person purporting to be your authorized officer, appropriately completed, in the form of Annex 1 or Annex 2 hereto for payment of certain amounts due from, but unpaid by, the Corporation under the Pooling and Servicing Agreement. We hereby agree that each demand made under and in compliance with the terms of this Letter of Credit will be duly honored by us upon due delivery of the certificate(s), as specified above, appropriately completed (together with the enclosures, if any, required thereby), if presented as specified on or before the expiration date hereof. If a presentation in respect of payment is made by you hereunder at or prior to 1:00 P.M., New York City time,on a Business Day, and provided that the documents so presented conform to the terms and conditions hereof, payment shall be made to you of the amount specified, in immediately available funds, not later than 4:00 P.M., New York City time, on the same Business Day. If a presentation in respect of payment is made by you hereunder after 1:00 P.M., New York City time, on a Business Day, such presentation shall be deemed to have been made prior to 1:00 P.M., New York City time, on the next succeeding Business Day. You agree to use your best efforts to provide us telephonic notice at the time any presentation in respect of payment is made hereunder; provided, however, that failure to provide such telephonic notice shall not affect our obligation to make payment in respect of any such presentation in respect of payment. If requested by you, payment under this Letter of Credit will be wire transferred to an account in New York, New York specified in the related certificate. As used herein, "Business Day" shall mean any day other than a Saturday, a Sunday, or a day on which banking institutions in New York, New York shall be authorized or obligated by law, executive order or governmental decree to be closed. If a drawing made by you hereunder does not, in any instance, conform to the terms and conditions of this Letter of Credit, we shall give you prompt notice that the purported drawing was not effected in accordance with the terms and conditions of this Letter of Credit, stating the reasons therefor and that we are holding any documents presented in connection therewith at your disposal or are returning the same to you, as we may elect. Except as otherwise specified in Annex 2, each drawing under this Letter of Credit shall be verified to Account No. 30492-01/0.1 maintained by the Trustee (the "Collection Account"). Telegraphic Address One World Trade "SUMITBANK, New York" THE SUMITOMO BANK, LIMITED Center Telephone No. Suite 9651, (212)553-0100 New York Branch New York, New York 10048 Only you, as Trustee, may make a drawing under this Letter of Credit. Upon the payment of the amount specified in the related certificate(s) presented hereunder, we shall be fully discharged of our obligation under this Letter of Credit with respect to such certificate(s) and we shall not thereafter be obligated to make any further payments under this Letter of Credit in respect of such certificate(s) to you or any other person. By paying to you an amount demanded in accordance herewith, we make no representation as to the correctness of the amount demanded. This Letter of Credit shall expire at our close of business in New York, New York on the first to occur of the following dates (the "Termination Date"): (x) November 30, 1993 or, if said date shall not be a Business Day, on the Business Day next succeeding said date, or (y) the date of receipt by us of your written certificate signed by a person purporting to be your authorized officer, appropriately completed, in the form of Annex 3 hereto. This Letter of Credit shall be promptly surrendered to us upon expiration. Drawings in respect of payments hereunder honored by us shall not in the aggregate, exceed the Stated Amount in effect immediately prior to such drawing. Each drawing honored by us hereunder shall pro tanto reduce the --- ----- Stated Amount in effect immediately prior to such drawing. This Letter of Credit is subject to, and shall be governed by, the Uniform Customs and Practice for Documentary Credits (1983 Revision), International Chamber of Commerce, Publication No. 400 (the "Uniform Customs"). This Letter of Credit shall be deemed to be made under the laws of the State of New York, including Article 5 of the Uniform Commercial Code of such State, and shall, as to matters not governed by the Uniform Customs, be governed by and construed in accordance with the laws of the State of New York. Notwithstanding anything in Article 54(e) of the Uniform Customs to the contrary, this Letter of Credit is transferable in its entirety (but not in part) only to a successor Trustee under the Pooling and Servicing Agreement upon presentation to us of this Letter of Credit accompanied by the transfer form attached hereto as Annex 4, to the transferee specified therein. All documents presented to us in connection with any demand for payment hereunder, as well as all notices and other communications to us in respect of this Letter of Credit, shall be in writing and addressed and presented to us at our office at One World Trade Center, New York, New York 10048 Attention: Loan Administration and shall make specific reference to this Letter of Credit by number. Such documents, notices and other communication shall be personally delivered to us, or may be sent to us by tested telex or over a telecopier (promptly confirmed by delivery of the written document, notice or other communication, as the case may be, provided that such confirmation shall not be a condition to the effectiveness of such demand for payment, notice or other communication) to the following numbers, as applicable: Telex No.: 420615 (Answerback: SMTBK) Telecopier No.: (212) 524-0612 This Letter of Credit sets forth in full our undertaking, and such undertaking shall not in any way be modified, amended, amplified or __________________ by reference to any document, instrument or agreement referred to herein (including, without limitation, the Certificates), except only Annex 1 through 4 hereto; and any such reference shall not be deemed to incorporate herein by reference any document, instrument or agreement except as set forth above. Very Truly yours, The Sumitomo Bank, Limited By:____________________________________ Name: Title: EX-4.2 6 FORM OF SERIES 1996-1 SUPPLEMENT EXHIBIT 4.2 Brown & Wood Draft 10/14/96 FIRESTONE RETAIL CREDIT CORPORATION, Transferor, BRIDGESTONE/FIRESTONE, INC. and THE FUJI BANK AND TRUST COMPANY, Trustee on behalf of the Series 1996-1 Certificateholders ______________________________ SERIES 1996-1 SUPPLEMENT Dated as of October ___, 1996 to AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT Dated as of October ___, 1996 ______________________________ BRIDGESTONE/FIRESTONE MASTER TRUST SERIES 1996-1 TABLE OF CONTENTS SECTION 1. Designation . . . . . . . . . . . . . . . . . . . . . . . . . 1 SECTION 2. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . 2 SECTION 3. Aggregate Receivables . . . . . . . . . . . . . . . . . . . . 16 SECTION 4. Reassignment and Transfer Terms . . . . . . . . . . . . . . . 16 SECTION 5. Delivery and Payment for the Series 1996-1 Certificates . . . . . . . . . . . . . . . . . . . . .. . . . 16 SECTION 6. Form of Delivery of the Series 1996-1 Certificates . . . . . . . . . . . . . . . . . . . . . . . . 17 SECTION 7. Article IV of the Agreement . . . . . . . . . . . . . . . . . 17 Section 4.02. Rights of Certificateholders . . . . . . . . . . . . 17 Section 4.03. Collections and Allocation . . . . . . . . . . . . . 17 Section 4.04. Determination of Monthly Interest for the Series 1996-1 Certificates . . . . . . . . . . . . . 19 Section 4.05. Determination of Monthly Principal . . . . . . . . . 21 Section 4.06. Coverage of Required Amount for the Series 1996-1 Certificates . . . . . . . . . . . . . . . . . 23 Section 4.07. Application of Funds on Deposit in the Collection Account for the Series 1996-1 Certificates . . . . . . . . . . . . . . . . . . . . 24 Section 4.08. Investor Charge-Offs . . . . . . . . . . . . . . . . 27 Section 4.09. Excess Finance Charge Collections for the Series 1996-1 Certificates . . . . . . . . . . . . . 29 Section 4.10. Reallocated Principal Collections for the Series 1996-1 Certificates . . . . . . . . . . . . . 33 SECTION 8. Article V of the Agreement . . . . . . . . . . . . . . . . . 33 Section 5.01. Distributions . . . . . . . . . . . . . . . . . . . . 33 Section 5.02. Statements to Series 1996-1 Certificateholders . . . . . . . . . . . . . . . . . 34 SECTION 9. Article VI of the Agreement . . . . . . . . . . . . . . . . 35 SECTION 10. Consents of Series 1996-1 Certificateholders . . . . . . . . 36 SECTION 11. Amortization Events . . . . . . . . . . . . . . . . . . . . 37 SECTION 12. Servicing Fee . . . . . . . . . . . . . . . . . . . . . . . 39 SECTION 13. Ratification of Pooling and Servicing Agreement . . . . . 39 SECTION 14. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . 39 SECTION 15. Governing Law . . . . . . . . . . . . . . . . . . . . . . . 39 SECTION 16. Certain Amendments . . . . . . . . . . . . . . . . . . . . . 39 EXHIBITS A-1: Form of Class A Certificate A-2: Form of Class B Certificate A-3: Form of Subordinated Transferor Certificate B: Form of Payment Date Statement C: Form of Monthly Servicer's Certificate D: Form of Investment Letter (Rule 144A) E: Form of Transferor Certificate F: Form of Investment Letter (Non Rule 144A) SERIES 1996-1 SUPPLEMENT, dated as of October ___, 1996 (this "Series ------ Supplement") among FIRESTONE RETAIL CREDIT CORPORATION, a corporation - ---------- organized and existing under the laws of the Commonwealth of Massachusetts, as Transferor, BRIDGESTONE/FIRESTONE, INC., a corporation organized and existing under the laws of the State of Ohio, individually and as Servicer and THE FUJI BANK AND TRUST COMPANY, a banking corporation organized and existing under the laws of the State of New York (together with its successors in trust thereunder as provided in the Agreement referred to below, the "Trustee"), as trustee under the Amended ------- and Restated Pooling and Servicing Agreement dated as of October ___, 1996, as amended, modified or supplemented from time to time (the "Agreement"). --------- PRELIMINARY STATEMENT Section 6.09 of the Agreement provides, among other things, that the Transferor and the Trustee may at any time and from time to time enter into a Supplement to the Agreement for the purpose of authorizing the issuance by the Trustee to the Transferor for execution and redelivery to the Trustee for authentication of one or more Series of Certificates. The Transferor has tendered the Exchange Notice required by Section 6.09(b) of the Agreement and hereby enters into this Supplement with the Trustee as required by Section 6.09(c) of the Agreement to provide for the issuance, authentication and delivery of the Series 1996-1 Asset Backed Certificates (the "Investor Certificates"). 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 Series Supplement shall govern. All capitalized terms not otherwise defined herein are defined in the Agreement. All Article or Section references herein shall mean Article or Section of the Agreement, except as otherwise provided herein. Unless otherwise stated herein, as the context otherwise requires or if such term is otherwise defined in the Agreement, each capitalized term used or defined herein shall relate only to the Series 1996-1 Certificates and no other Series of Investor Certificates issued by the Trust. SECTION 1. Designation. There is hereby created a Series of ----------- Investor Certificates to be issued pursuant to the Agreement and this Series Supplement to be known as the Series 1996-1 Asset Backed Certificates (the "Series 1996-1 Certificates"), -------------------------- consisting of $(200,000,000) principal amount of Class A Certificates (the "Class A Certificates"), $(28,000,000) principal amount of Class B -------------------- Certificates (the "Class B Certificates"), $10,000,000 principal amount of -------------------- an uncertificated interest in the Trust (the "Collateral Interest"), and ------------------- $19,000,000 principal amount of a Subordinated Transferor Certificate (the "Subordinated Transferor Certificate"). ----------------------------------- SECTION 2. Definitions. The following words and phrases shall ----------- have the meanings set forth below with respect to the Series 1996-1 Certificates and the definitions of such terms are applicable to the singular as well as the plural form of such terms and to the masculine as well as the feminine and neuter genders of such terms: "Amortization Event" shall have the meaning specified in Section ------------------ 12. "Amortization Period" shall mean, with respect to the Investor ------------------- Certificates, the period following the Revolving Period which shall be either the Controlled Amortization Period or the Rapid Amortization Period. "Base Rate" shall mean the Weighted Average Certificate Rate plus --------- 2.00% per annum. "Class A Additional Interest" shall have the meaning specified in --------------------------- Section 4.04(a) of the Agreement. "Class A Certificate Rate" shall mean _____% per annum, calculated ------------------------ on the basis of a 360-day year of twelve 30-day months. "Class A Certificateholder" shall mean the Person in whose name a ------------------------- Class A Certificate is registered in the Certificate Register. "Class A Certificateholders' Interest" shall mean the portion of ------------------------------------ the Series 1996-1 Certificateholders' Interest evidenced by the Class A Certificates. "Class A Certificates" shall mean any one of the certificates -------------------- executed by the Transferor and authenticated by or on behalf of the Trustee, substantially in the form of Exhibit A-1 hereto. "Class A Controlled Amortization Amount" shall mean $__________. -------------------------------------- "Class A Floating Allocation Percentage" shall mean, with respect -------------------------------------- to any Collection Period, the percentage equivalent of a fraction, the numerator of which is the Class A Invested Amount and the denominator of which is the Aggregate Receivables in the Trust each on the last day of the immediately preceding Collection Period; provided, however, that when used in respect of the allocation of Finance Charge Collections, such percentage shall be the percentage equivalent of a fraction the numerator of which is the Class A Invested Amount on the last day of the immediately preceding Collection Period and the denominator of which is the sum of the numerators used to calculate the Invested Percentage for the allocation of Finance Charge Collections for all Series of Certificates outstanding during such Collection Period (including all classes of such Series) and the B/F Amount. "Class A Initial Invested Amount" shall mean the aggregate initial ------------------------------- principal amount of the Class A Certificates, which is $(200,000,000). "Class A Interest Shortfall" shall have the meaning specified in -------------------------- Section 4.04(a). "Class A Invested Amount" shall mean, when used with respect to any ----------------------- date, an amount equal to (a) the Class A Initial Invested Amount, minus (b) the aggregate amount of principal payments made to Class A Certificateholders prior to such date minus (c) the excess, if any, of the aggregate amount of Class A Investor Charge-Offs for all Distribution Dates preceding such date over Class A Investor Charge-Offs reimbursed pursuant to Section 4.08(a) prior to such date. "Class A Investor Charge-Offs" shall have the meaning specified ---------------------------- in Section 4.08(a). "Class A Investor Default Amount" shall mean, with respect to each ------------------------------- Distribution Date, an amount equal to the product of the Class A Floating Allocation Percentage applicable during the immediately preceding Collection Period and the amount of Defaulted Receivables for such Collection Period. "Class A Monthly Interest" shall mean the monthly interest ------------------------ distributable in respect of the Class A Certificates as calculated in accordance with Section 4.04(a). "Class A Monthly Principal" shall mean the monthly principal ------------------------- distributable in respect of the Class A Certificates as calculated in accordance with Section 4.05(a). "Class A Monthly Servicing Fee" shall mean, with respect to any ----------------------------- Distribution Date, one twelfth of the product of 2.00% and the Class A Invested Amount on the last day of the second preceding Collection Period (or in the case of the first Distribution Date, the initial principal amount of the Class A Certificates). "Class A Pool Factor" shall mean, with respect to any Record Date, ------------------- a number carried out to eight decimal places representing the ratio of the Class A Invested Amount as of such Record Date (determined after taking into account any decreases in the Class A Invested Amount which will occur on the following Distribution Date) to the Class A Initial Invested Amount. "Class A Required Amount" shall mean, with respect to any ----------------------- Distribution Date, the amount 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) Class A Additional Interest, if any, 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 Monthly Servicing Fee for such Distribution Date and (v) the Class A Investor Default Amount, if any, for such Distribution Date exceeds (b) the Class A Floating Allocation Percentage of Finance Charge Collections deposited in the Collection Account for the immediately preceding Collection Period. "Class B Additional Interest" shall have the meaning specified in --------------------------- Section 4.04(b) of the Agreement. "Class B Certificate Rate" shall mean ____% per annum, calculated ------------------------ on the basis of a 360-day year of twelve 30-day months. "Class B Certificateholder" shall mean the Person in whose name a ------------------------- related Class B Certificate is registered in the Certificate Register. "Class B Certificateholders' Interest" shall mean the portion of ------------------------------------ the Series 1996-1 Certificateholders' Interest evidenced by the Class B Certificates. "Class B Certificates" shall mean any one of the certificates -------------------- executed by the Transferor and authenticated by or on behalf of the Trustee, substantially in the form of Exhibit A-2. "Class B Floating Allocation Percentage" shall mean, with respect -------------------------------------- to any Collection Period, the percentage equivalent of a fraction, the numerator of which is the Class B Invested Amount and the denominator of which is the Aggregate Receivables in the Trust each on the last day of the immediately preceding Collection Period; provided, however, that when used in respect of the allocation of Finance Charge Collections, such percentage shall be the percentage equivalent of a fraction the numerator of which is the Class B Invested Amount on the last day of the immediately preceding Collection Period and the denominator of which is the sum of the numerators used to calculate the Invested Percentage for the allocation of Finance Charge Collections for all Series of Certificates outstanding during such Collection Period (includingall classes ofsuch Series) andthe B/F Amount. "Class B Initial Invested Amount" shall mean the aggregate initial ------------------------------- principal amount of the Class B Certificates, which is $(28,000,000). "Class B Interest Shortfall" shall have the meaning specified in -------------------------- Section 4.04(b). "Class B Invested Amount" shall mean, when used with respect to any ----------------------- date, an amount equal to (a) the Class B Initial Invested Amount, minus (b) the amount of principal payments made to Class B Certificateholders prior to such date, minus (c) the aggregate amount of Class B Investor Charge-Offs for all prior Distribution Dates, minus (d) the aggregate amount of Class B Reallocated Principal Collections for all prior Distribution Dates which have been used to fund the Required Amount with respect to such Distribution Dates pursuant to Sections 4.06 and 4.10 for which neither the Subordinated Transferor Invested Amount nor the Collateral Interest Invested Amount has been reduced for all prior Business Days (provided that the Class B Invested Amount shall in no event be reduced to an amount less than zero), minus (e) an amount equal to the aggregate amount by which the Class B Invested Amount has been reduced to fund the Class A Investor Default Amount on all prior Distribution Dates pursuant to Section 4.08(a) and plus (f) the amount of Excess Finance Charge Collections allocated and available on all prior Distribution Dates pursuant to Section 4.09(d), for the purpose of reimbursing amounts deducted pursuant to the foregoing clauses (c), (d) and (e). "Class B Investor Charge-Offs" shall have the meaning specified in ---------------------------- Section 4.08(b). "Class B Investor Default Amount" shall mean, with respect to each ------------------------------- Distribution Date, an amount equal to the product of the Class B Floating Allocation Percentage applicable during the immediately preceding Collection Period and the amount of Defaulted Receivables for such Collection Period. "Class B Monthly Interest" shall mean the monthly interest ------------------------ distributable in respect of the Class B Certificates as calculated in accordance with Section 4.04(b). "Class B Monthly Principal" shall mean the monthly principal ------------------------- distributable in respect of the Class B Certificates as calculated in accordance with Section 4.05(b). "Class B Monthly Servicing Fee" shall mean, with respect to any ----------------------------- Distribution Date, one twelfth of the product of 2.00% and the Class B Invested Amount on the last day of the second preceding Collection Period (or in the case of the first Distribution Date, the initial principal amount of the Class B Certificates). "Class B Pool Factor" shall mean, with respect to any Record Date, ------------------- a number carried out to eight decimal places representing the ratio of the Class B Invested Amount as of such Record Date (determined after taking into account any increases or decreases in the Class B Invested Amount which will occur on the following Distribution Date) to the Class B Initial Invested Amount. "Class B Reallocated Principal Collections" shall mean, with ----------------------------------------- respect to each Distribution Date, the Principal Collections allocable to the Class B Certificates with respect to such Distribution Date (equal to the Class B Floating Allocation Percentage of Principal Collections for the related Collection Period for any such Distribution Date during the Revolving Period and equal to the product of the Fixed Allocation Percentage of Principal Collections and a fraction, the numerator of which is the Class B Invested Amount and the denominator of which is the Invested Amount of the Series 1996-1 Certificates as of the last day of the prior Collection Period for any such Distribution Date during any Amortization Period), in an amount equal to the Class A Required Amount, if any, with respect to such Distribution Date after giving effect to any payment of the Class A Required Amount from Excess Finance Charge Collections, Subordinated Transferor Reallocated Principal Collections and Collateral Interest Reallocated Principal Collections. "Class B Required Amount" shall mean, with respect to any ----------------------- Distribution Date, the amount 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) Class B Additional Interest, if any, 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 Monthly Servicing Fee for such Distribution Date and (v) the Class B Investor Default Amount, if any, for such Distribution Date exceeds (b) the Class B Floating Allocation Percentage of Finance Charge Collections deposited in the Collection Account for the immediately preceding Collection Period. "Closing Date" shall mean, with respect to the Series 1996-1 ------------ Certificates, October __, 1996. "Collateral Interest Accrual Period" shall mean, with respect to ---------------------------------- any Distribution Date, the period from and including the first day of the preceding calendar month to and including the last day of such preceding calendar month, except the initial Collateral Interest Accrual Period shall be deemed to be the period from the Closing Date through the last day of the calendar month preceding the initial Distribution Date. "Collateral Interest Additional Interest" shall have the meaning --------------------------------------- specified in Section 4.04(c) of the Agreement. "Collateral Interest Certificateholders' Interest" shall mean the ------------------------------------------------ portion of the Series 1996-1 Certificateholders' Interest evidenced by the Collateral Interest. "Collateral Interest Floating Allocation Percentage" shall mean, -------------------------------------------------- with respect to any Collection Period, the percentage equivalent of a fraction, the numerator of which is the Collateral Interest Invested Amount and the denominator of which is the Aggregate Receivables in the Trust each on the last day of the immediately preceding Collection Period; provided, however, that when used in respect of the allocation of Finance Charge Collections, such percentage shall be the percentage equivalent of a fraction the numerator of which is the Collateral Interest Invested Amount on the last day of the immediately preceding Collection Period and the denominator of which is the sum of the numerators used to calculate the Invested Percentage for the allocation of Finance Charge Collections for all Series of Certificates outstanding during such Collection Period (including all classes of such Series) and the B/F Amount. "Collateral Interest Holder" shall mean the entity so designated -------------------------- in the Loan Agreement. "Collateral Interest Initial Invested Amount" shall mean the ------------------------------------------- aggregate initial principal amount of the Collateral Interest, which is $(10,000,000). "Collateral Interest Invested Amount" shall mean, when used with ----------------------------------- respect to any date, an amount equal to (a) the Collateral Interest Initial Invested Amount, minus (b) the amount of principal payments made to Collateral Interest Holder prior to such date, minus (c) the aggregate amount of Collateral Interest Investor Charge-Offs for all prior Distribution Dates, minus (d) the aggregate amount of Collateral Interest Reallocated Principal Collections for all prior Distribution Dates which have been used to fund the Required Amount with respect to such Distribution Dates pursuant to Sections 4.06 and 4.10 for which the Subordinated Transferor Invested Amount has not been reduced for all prior Business Days (provided that the Collateral Interest Invested Amount shall in no event be reduced to an amount less than zero), minus (e) an amount equal to the aggregate amount by which the Collateral Interest 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 pursuant to Section 4.08 and plus (f) the amount of Excess Finance Charge Collections allocated and available on all prior Distribution Dates pursuant to Section 4.09(f), for the purpose of reimbursing amounts deducted pursuant to the foregoing clauses (c), (d) and (e). "Collateral Interest Investor Charge-Offs" shall have the meaning ---------------------------------------- specified in Section 4.08(c). "Collateral Interest Investor Default Amount" shall mean, with ------------------------------------------- respect to each Distribution Date, an amount equal to the product of the Collateral Interest Floating Allocation Percentage applicable during the immediately preceding Collection Period and the amount of Defaulted Receivables for such Collection Period. "Collateral Interest Monthly Interest" shall mean the monthly ------------------------------------ interest distributable in respect of the Collateral Interest as calculated in accordance with Section 4.04(c). "Collateral Interest Monthly Principal" shall mean the monthly ------------------------------------- principal distributable in respect of the Collateral Interest as calculated in accordance with Section 4.05(c). "Collateral Interest Monthly Servicing Fee" shall mean, with ----------------------------------------- respect to any Distribution Date, one twelfth of the product of 2.00% and the Collateral Interest Invested Amount on the last day of the second preceding Collection Period (or in the case of the first Distribution Date, the initial principal amount of the Collateral Interest). "Collateral Interest Pool Factor" shall mean, with respect to any ------------------------------- Record Date, a number carried out to eight decimal places representing the ratio of the Collateral Interest Invested Amount as of such Record Date (determined after taking into account any increases or decreases in the Collateral Interest Invested Amount which will occur on the following Distribution Date) to the Collateral Interest Initial Invested Amount. "Collateral Interest Rate" shall mean, with respect to any Interest ------------------------ Accrual Period, a per annum rate equal to LIBOR for such Interest Accrual Period plus % provided, however, with respect to the first Interest ------ Accrual Period, the Collateral Interest Rate will be equal to %. --- "Collateral Interest Reallocated Principal Collections" shall mean, ----------------------------------------------------- with respect to each Distribution Date, the Principal Collections allocable to the Collateral Interest with respect to such Distribution Date (equal to the Collateral Interest Floating Allocation Percentage of Principal Collections for the related Collection Period for any such Distribution Date during the Revolving Period and equal to the product of the Fixed Allocation Percentage of Principal Collections and a fraction, the numerator of which is the Collateral Interest Invested Amount and the denominator of which is the Invested Amount of the Series 1996-1 Certificates as of the last day of the prior Collection Period for any such Distribution Date during any Amortization Period) in an amount equal to the Class A and Class B Required Amount, if any, with respect to such Distribution Date after giving effect to any payment of the Class A and Class B Required Amount from Excess Finance Charge Collections and Subordinated Transferor Reallocated Principal Collections. "Collateral Interest Required Amount" shall mean, with respect to ----------------------------------- any Distribution Date, the amount by which (a) the sum of (i) Collateral Interest Monthly Interest for such Distribution Date, (ii) any Collateral Interest Monthly Interest previously due but not paid to the Collateral Interest Holder on a prior Distribution Date, (iii) Collateral Interest Additional Interest, if any, for such Distribution Date and any Collateral Interest Additional Interest previously due but not paid to the Collateral Interest Holder on a prior Distribution Date, (iv) the Collateral Interest Monthly Servicing Fee for such Distribution Date and (v) the Collateral Interest Investor Default Amount, if any, for such Distribution Date exceeds (b) the Collateral Interest Floating Allocation Percentage of Finance Charge Collections deposited in the Collection Account for the immediately preceding Collection Period. "Collateral Interest Shortfall" shall have the meaning specified ----------------------------- in Section 4.04(c). "Controlled Amortization Period" shall mean an amortization period ------------------------------ commencing on ________, 1998 and continuing to, but not including, the date on which the Class A Invested Amount has been paid in full or to, and including, (i) the date of termination of the Trust pursuant to Section 12.01 or (ii) the Final Series 1996-1 Termination Date or (iii) the day on which an Amortization Event occurs or is deemed to have occurred. "Controlled Distribution Amount" shall mean, for any Distribution ------------------------------ Date with respect to the Controlled Amortization Period, an amount equal to the sum of the Class A Controlled Amortization Amount and any existing Deficit Controlled Amortization Amount. "Deficit Controlled Amortization Amount" shall mean, on the first -------------------------------------- Distribution Date with respect to the Controlled Amortization Period, the excess, if any, of the Class A Controlled Amortization Amount over the amount distributed as Class A Monthly Principal for such Distribution Date and, on each subsequent Distribution Date with respect to the Controlled Amortization Period, the excess, if any, of the Class A Controlled Amortization Amount and any then existing Deficit Controlled Amortization Amount over the aggregate Class A Monthly Principal distributed on such Distribution Date. "Designated Maturity" shall mean, for any LIBOR Determination Date, ------------------- (a) with respect to the Collateral Interest, prior to the occurrence of an Amortization Event, (three months), and after the occurrence of an Amortization Event, (one month). "Distribution Date" shall mean the first day of each month, unless ----------------- such first day is not a Business Day, in which case the next Business Day, commencing on __________, 1996. "Excess Finance Charge Collections" shall mean, with respect to any --------------------------------- Distribution Date, the sum of the amounts, if any, specified pursuant to Sections 4.07 (a)(iv), (b)(iv), (c)(iv) and (d)(ii) with respect to such Distribution Date. "Final Series 1996-1 Termination Date" shall mean ________________. ------------------------------------ "Fixed Allocation Percentage" shall mean, for any Collection Period --------------------------- with respect to an Amortization Period when used with respect to the allocation of Principal Collections, the percentage equivalent of the ratio which the sum of the Class A Invested Amount, the Class B Invested Amount, the Collateral Interest Invested Amount and the Subordinated Transferor Invested Amount, each as of the last day of the Revolving Period, bears to the greater of (a) the Aggregate Receivables on the last day of the prior Collection Period and (b) the sum of the numerators used to calculate the Invested Percentage with respect to Principal Collections for all Series of Certificates outstanding for such Collection Period. "Floating Allocation Percentage" shall mean for any Collection ------------------------------ Period, the sum of the applicable Class A Floating Allocation Percentage, the Class B Floating Allocation Percentage for such Collection Period, the Collateral Interest Floating Percentage and the Subordinated Transferor Floating Allocation Percentage. "Floating Rate Interest Factor" shall mean with respect to any ----------------------------- Interest Accrual Period, the number of days from and including the first day in the Interest Accrual Period to but excluding the last day in the Interest Accrual Period, divided by 360. "Initial Invested Amount" shall mean the aggregate initial ----------------------- principal amount of the Investor Certificates of Series 1996-1, which is $(275,000,000). "Interest Accrual Period" shall mean, with respect to any ----------------------- Distribution Date, the period from and including the first day of the preceding calendar month to and including the last day of such preceding calendar month, which shall be deemed to be a 30-day period, (except the initial Interest Accrual Period shall be deemed to be the period from the Closing Date through the last day of the calendar month preceding the initial Distribution Date.) "Invested Amount" shall mean, when used with respect to any date, --------------- an amount equal to the sum of the Class A Invested Amount, the Class B Invested Amount, the Collateral Interest Invested Amount and Subordinated Transferor Invested Amount, each as of such date. "Invested Percentage" shall mean for any Collection Period, (a) ------------------- with respect to Finance Charge Collections and Defaulted Receivables at any time or Principal Collections during the Revolving Period, the Floating Allocation Percentage and (b) with respect to Principal Collections during the Amortization Period, the Fixed Allocation Percentage. "Investor Certificateholder" shall mean the Holder of record of an -------------------------- Investor Certificate of Series 1996-1. "Investor Certificates" shall mean the Class A Certificates, the --------------------- Class B Certificates, the Collateral Interest and the Subordinated Transferor Certificate. "Investor Default Amount" shall mean, with respect to each ----------------------- Distribution Date, an amount equal to the sum of the Class A Investor Default Amount, the Class B Investor Default Amount, the Collateral Interest Investor Default Amount and the Subordinated Transferor Investor Default Amount, each for such Distribution Date. "LIBOR" shall mean, as of any LIBOR Determination Date, the rate ----- for deposits in United States dollars for a period of the Designated Maturity commencing on the first day of the relevant Interest Accrual Period which appears on Telerate Page 3750 as of 11:00 a.m., London time, on the day that is the LIBOR Determination Date. If such rate does not appear on Telerate Page 3750, the rate for that day 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 major banks in the London interbank market for a period of the Designated Maturity commencing on the first day of the relevant Interest Accrual Period. The Servicer 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 day will be the arithmetic mean of the quotations. If fewer than two quotations are provided as requested, the rate for that day will be the arithmetic mean of the rates quoted by major banks in New York City, 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 the Designated Maturity commencing on the first day of the relevant Interest Accrual Period. "LIBOR Determination Date" shall mean, with respect to any Interest ------------------------ Accrual Period, the second London Business Day prior to the commencement of such Interest Accrual Period. "Loan Agreement" shall mean the agreement, dated as of October ___, -------------- 1996, among the Transferor, the Servicer, the Trustee and the Collateral Interest Holder, as amended or modified from time to time. "London Business Day" shall mean, a business day on which dealings ------------------- in deposits in United States dollars are transacted in the London interbank market. "Minimum Transferor Interest Percentage" shall mean, with respect -------------------------------------- to the Series 1996-1 Certificates, __________. "Payment Date Statement" shall have the meaning specified in ---------------------- Section 5.02(a). "Principal Shortfalls" shall mean on any Business Day (x) for -------------------- Series 1996-1, (i) during the Controlled Amortization Period, the excess of the Controlled Distribution Amount over the aggregate amount applied with respect thereto for such Business Day and for each prior Business Day in such Collection Period, and (ii) at all other times, the Invested Amount of the class then receiving principal payments after the application of Principal Collections on such Business Day or (y) for any other Series the amounts specified as such in the Supplement for such other Series. "Rapid Amortization Period" shall mean an Amortization Period ------------------------- commencing on the earlier of the day on which (i) the Class A Invested Amount has been reduced to zero or (ii) an Amortization Event occurs or is deemed to have occurred and ending on the earlier to occur of (x) the date on which the Invested Amount has been paid in full or (x) the Final Series 1996-1 Termination Date. "Rating Agency" shall mean Standard & Poor's Ratings Services, a ------------- division of the McGraw-Hill Companies, Inc. and Moody's Investor's Services, Inc., to the extent such entities were selected by the Transferor to rate the Series 1996-1 Investor Certificates. "Reallocated Principal Collections" shall mean, with respect to --------------------------------- each Distribution Date, the sum of the Class B Reallocated Principal Collections, Collateral Interest Reallocated Principal Collections and the Subordinated Transferor Reallocated Principal Collections. "Record Date" shall mean, with respect to any Distribution Date, ----------- the 15th day of the calendar month immediately preceding such Distribution Date. "Reference Banks" shall mean four major banks in the London --------------- interbank market selected by the Servicer. "Required Amount" shall mean the sum of the Class A Required --------------- Amount, the Class B Required Amount and the Collateral Interest Required Amount. "Revolving Period" shall mean, with respect to the Series 1996-1 ---------------- Certificates, the period from and including the Closing Date, up to and including the day prior to the day on which an Amortization Period commences. "Series 1996-1 Certificateholders' Interest" shall have the meaning ------------------------------------------ specified in Section 4.02. "Servicing Fee Percentage" shall mean 2.00% per annum. ------------------------ "Shared Principal Collections" shall mean, as the context requires, ---------------------------- either (a) the amount allocated to the Series 1996-1 Certificates which may be applied in accordance with Article IV of the Agreement or (b) the amounts allocated to the investor certificates (other than Transferor Retained Certificates) of other Series which the applicable Series Supplements for such Series specify are to be treated as "Shared Principal Collections" and which may be applied to cover Principal Shortfalls with respect to the Series 1996-1 Certificates. "Subordinated Transferor Certificate" shall mean the certificate ----------------------------------- executed by the Transferor and authenticated by or on behalf of the Trustee, substantially in the form of Exhibit A-3. "Subordinated Transferor Certificateholder" shall mean the Person ----------------------------------------- in whose name the Subordinated Transferor Certificate is registered in the Certificate Register. "Subordinated Transferor Certificateholders' Interest" shall mean ---------------------------------------------------- the Series 1996-1 Certificateholders' Interest evidenced by the Subordinated Transferor Certificate. "Subordinated Transferor Floating Allocation Percentage" shall ------------------------------------------------------ mean, with respect to any Collection Period, the percentage equivalent of a fraction, the numerator of which is the Subordinated Transferor Invested Amount and the denominator of which is the Aggregate Receivables in the Trust each on the last day of the immediately preceding Collection Period; provided, however, that when used in respect of the allocation of Finance Charge Collections, such percentage shall be the percentage equivalent of a fraction the numerator of which is the Subordinated Transferor Invested Amount on the last day of the immediately preceding Collection Period and the denominator of which is the sum of the numerators used to calculate the Invested Percentage for the allocation of Finance Charge Collections for all Series of Certificates outstanding during such Collection Period (including all classes of such Series) and the B/F Amount. "Subordinated Transferor Investor Default Amount" shall mean, with ----------------------------------------------- respect to each Distribution Date, an amount equal to the product of the Subordinated Transferor Floating Allocation Percentage applicable during the immediately preceding Collection Period and the amount of Defaulted Receivables for such Collection Period. "Subordinated Transferor Initial Invested Amount" shall mean the ----------------------------------------------- aggregate initial principal amount of the Subordinated Transferor Certificate, which is $(19,000,000). "Subordinated Transferor Invested Amount" shall mean, when used --------------------------------------- with respect to any date, an amount equal to (a) the Subordinated Transferor Initial Invested Amount, minus (b) the amount of principal payments made to the Subordinated Transferor Certificateholder prior to such date, minus (c) the aggregate amount of Subordinated Transferor Investor Charge-Offs for all prior Distribution Dates, minus (d) the aggregate amount of Reallocated Principal Collections for all prior Distribution Dates which have been used to fund the Required Amount with respect to such Distribution Dates pursuant to Sections 4.06 and 4.10 (provided that the Subordinated Transferor Invested Amount shall in no event be reduced to an amount less than zero), minus (e) an amount equal to the aggregate amount by which the Subordinate Transferor Invested Amount has been reduced to fund the Class A Investor Default Amount, the Class B Investor Default Amount and the Collateral Interest Investor Default Amount on all prior Distribution Dates pursuant to Section 4.08 and plus (f) the amount of Excess Finance Charge Collections allocated and available on all prior Distribution Dates pursuant to Section 4.09(h), for the purpose of reimbursing amounts deducted pursuant to the foregoing clauses (c), (d) and (e). "Subordinated Transferor Investor Charge-Offs" shall have the -------------------------------------------- meaning specified in Section 4.08(d). "Subordinated Transferor Monthly Principal" shall mean the monthly ----------------------------------------- principal distributable in respect of the Subordinated Transferor Certificate as calculated in accordance with Section 4.05(d). "Subordinated Transferor Monthly Servicing Fee" shall mean, with --------------------------------------------- respect to any Distribution Date, one twelfth of the product of 2.00% and the Subordinated Transferor Invested Amount on the last day of the second preceding Collection Period (or in the case of the first Distribution Date, the initial principal amount of the Subordinated Transferor Certificate). "Subordinated Transferor Pool Factor" shall mean, with respect to ----------------------------------- any Record Date, a number carried out to eight decimal places representing the ratio of the Subordinated Transferor Invested Amount as of such Record Date (determined after taking into account any increases or decreases in the Subordinated Transferor Invested Amount which will occur on the following Distribution Date) to the Subordinated Transferor Initial Invested Amount. "Subordinated Transferor Reallocated Principal Collections" shall --------------------------------------------------------- mean, with respect to each Distribution Date, the Principal Collections allocable to the Subordinated Transferor Certificate with respect to such Distribution Date (equal to the Subordinated Transferor Floating Allocation Percentage of Principal Collections for the related Collection Period for any such Distribution Date during the Revolving Period and equal to the product of the Fixed Allocation Percentage of Principal Collections and a fraction, the numerator of which is the Subordinated Transferor Invested Amount and the denominator of which is the Invested Amount of the Series 1996-1 Certificates as of the last day of the prior Collection Period for any such Distribution Date during any Amortization Period) in an amount equal to the Class A, Class B and Collateral Interest Required Amount, if any, with respect to such Distribution Date (after giving effect to any payment of the Class A, Class B and Collateral Interest Required Amount from Excess Finance Charge Collections). "Telerate Page 3750" means the display page currently so designated ------------------ on the Dow Jones Telerate Service (or such other page as may replace that page on that service for the purpose of displaying comparable rates or prices). "Termination Payment Date" shall mean the earlier of the first ------------------------ Distribution Date following the liquidation or sale of the Receivables as a result of an Amortization Event and the occurrence of the Final Series 1996-1 Termination Date. "Weighted Average Certificate Rate" shall mean, with respect to any --------------------------------- Determination Date, a fraction, the numerator of which is equal to the sum of (a) the product of the Class A Certificate Rate and the Class A Invested Amount, (b) the product of the Class B Certificate Rate and the Class B Invested Amount and (c) the product of the Collateral Interest Rate and the Collateral Interest Invested Amount, and the denominator of which is equal to the sum of the Class A Invested Amount, the Class B Invested Amount and the Collateral Interest Invested Amount. SECTION 3. Aggregate Receivables. The Transferor shall maintain --------------------- the Aggregate Receivables at a level such that the Transferor Amount (plus any amounts available under the Transferor Letter of Credit or the Transferor Escrow Account and the B/F Amount) is equal to or greater than _% (the "Minimum Transferor Interest Percentage") of the Aggregate Invested -------------------------------------- Amount of all Series of Certificates issued by the Trust. On each Determination Date, the Transferor shall calculate whether the Aggregate Receivables have been maintained at the specified level. SECTION 4. Reassignment and Transfer Terms. The Series 1996-1 ------------------------------- Certificates may be reassigned and transferred to the Transferor on any Distribution Date on or after which the Invested Amount is reduced to an amount less than or equal to $__________ or 5% of the Initial Invested Amount, subject to the provisions of Section 12.02. SECTION 5. Delivery and Payment for the Series 1996-1 ------------------------------------------ Certificates. The Trustee shall deliver the Series 1996-1 Certificates when - ------------ authenticated in accordance with Section 6.02 of the Agreement. SECTION 6. Form of Delivery of the Series 1996-1 Certificates. -------------------------------------------------- The Class A Certificates and the Class B Certificates shall be delivered as Book-Entry Certificates as provided in Section 6.11 of the Agreement. The Collateral Interest shall be transferred pursuant to the Loan Agreement. The Subordinated Transferor Certificate shall be delivered in physical form. SECTION 7. Article IV of the Agreement. Any provisions of Article --------------------------- IV of the Agreement which distribute Collections to the Transferor on the basis of the Transferor Percentage shall continue to apply irrespective of the issuance of the Series 1996-1 Certificates. Section 4.01, Section 4.01A and Section 4.01B of the Agreement shall read in their entirety as provided in the Agreement. Article IV of the Agreement (except for Sections 4.01, 4.01A and 4.01B) shall read in its entirety as follows and shall be applicable to the Series 1996-1 Certificates: ARTICLE IV RIGHTS OF CERTIFICATEHOLDERS AND ALLOCATION AND APPLICATION OF COLLECTIONS Section 4.02. Rights of Certificateholders. The Series 1996-1 ---------------------------- Certificates shall represent undivided interests in the Trust, consisting of the right to receive, to the extent necessary to make the required payments with respect to such Investor Certificates at the times and in the amounts specified in this Agreement, (a) the Floating Allocation Percentage and Fixed Allocation Percentage (as applicable from time to time pursuant to Sections 4.04 and 4.05 of the Agreement) of Collections received with respect to the Receivables and (b) funds on deposit in the Collection Account (for such Series, the "Series 1996-1 Certificateholders' Interest"). The ------------------------------------------ Subordinated Transferor Certificate shall be subordinate to the Collateral Interest, the Collateral Interest shall be subordinate to the Class B Certificates and the Class B Certificates shall be subordinate to the Class A Certificates. The Exchangeable Transferor Certificate shall not represent any interest in the Collection Account, except as specifically provided in this Article IV. Section 4.03. Collections and Allocation. -------------------------- (a) Collections. The Servicer will apply or will instruct the ----------- Trustee to apply all funds on deposit in the Collection Account as described in this Article IV. (b) Allocations. On each Determination Date, the Servicer shall ----------- determine whether an Amortization Event is deemed to have occurred in the related Collection Period with respect to the Series 1996-1 Certificates, and the Servicer shall allocate Collections with respect to the related Collection Period as follows: (i) During the Revolving Period. On each Determination Date, --------------------------- or more frequently at the option of the Servicer, allocate to the Series 1996-1 Certificateholders' Interest (x) an amount equal to the Floating Allocation Percentage of the Principal Collections for the prior Collection Period and remit such amounts to the Holder of the Exchangeable Transferor Certificate (except that such remittance shall not include Reallocated Principal Collections used to cover the Required Amount (except to the extent of the Class A Investor Default Amount) and shall not exceed the Transferor Interest on such Determination Date, after giving effect to any new Receivables purchased by the Holder of the Exchangeable Transferor Certificate and transferred to the Trust on such day) and (y) an amount equal to the Floating Allocation Percentage of the Finance Charge Collections for the prior Collection Period and deposit such amount into the Collection Account as and when required pursuant to Section 4.01; (ii) During any Amortization Period. On each Determination ------------------------------ Date, or more frequently at the option of the Servicer, allocate to the Series 1996-1 Certificateholders' Interest (x) an amount equal to the Fixed Allocation Percentage of the Principal Collections for the prior Collection Period and deposit such amount into the Collection Account and (y) an amount equal to the Floating Allocation Percentage of the Finance Charge Collections for the prior Collection Period and deposit such amount into the Collection Account as and when required pursuant to Section 4.01; and (iii) Allocations and Payments to the Holder of the --------------------------------------------- Exchangeable Transferor Certificate and the Bridgestone/Firestone ----------------------------------------------------------------- Certificate. ----------- Amounts to be allocated to the Holder of the Exchangeable Transferor Certificate and the Bridgestone/Firestone Certificate and payments with respect thereto shall be determined and made only as provided in Sections 4.03(b)(i), 4.01(d) and 4.01(g). The allocations to be made pursuant to this Section 4.03(b) also apply to deposits into the Collection Account that are treated as Collections, including Transfer Deposit Amounts, Adjustment Payments, proceeds from the sale, disposition or liquidation of the Receivables pursuant to Section 9.02 or 12.01. Such deposits to be treated as Collections will be allocated as Finance Charge Collections or Principal Collections as provided in the Agreement. Section 4.04. Determination of Monthly Interest for the Series ------------------------------------------------ 1996-1 Certificates. (a) The amount of monthly interest (the "Class A - ------------------- Monthly Interest") distributable from the Collection Account with respect to the Class A Certificates of the Series 1996-1 Certificates on any Distribution Date shall be an amount equal to one-twelfth of the product of (i) the Class A Certificate Rate and (ii) the outstanding principal balance of the Class A Certificates as of the preceding Distribution Date (after subtracting therefrom the aggregate amount of all distributions of Class A Monthly Principal made through such Distribution Date to the Class A Certificateholders); provided, however, that with respect to the first -------- ------- Distribution Date for the Series 1996-1 Certificates, Class A Monthly Interest shall be equal to $____________. On the Determination Date preceding each Distribution Date, the Servicer shall determine an amount (the "Class A Interest Shortfall") equal -------------------------- to the excess, if any, of (x) the aggregate Class A Monthly Interest for the Interest Accrual Period applicable to the preceding Distribution Date over - ---- (y) the amount which was paid to the Class A Certificateholders in respect of interest on such preceding Distribution Date. If there is a Class A Interest Shortfall with respect to any Distribution Date, an additional amount ("Class A Additional Interest") shall be payable as provided herein --------------------------- with respect to the Class A Certificates on each Distribution Date following such Distribution Date to and including the Distribution Date on which such Class A Interest Shortfall is paid to Class A Certificateholders equal to one-twelfth of the product of (i) the Class A Certificate Rate and (ii) such Class A Interest Shortfall. 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 (the "Class B Monthly Interest") ------------------------ distributable from the Collection Account with respect to the Class B Certificates of the Series 1996-1 Certificates on any Distribution Date shall be an amount equal to one-twelfth of the product of (i) the Class B Certificate Rate and (ii) the outstanding principal balance of the Class B Certificates as of the preceding Distribution Date (after subtracting therefrom the aggregate amount of all distributions of Class B Monthly Principal made through such Distribution Date to the Class B Certificateholders); provided, however, that with respect -------- ------- to the first Distribution Date for the Series 1996-1 Certificates, Class B Monthly Interest shall be equal to $ _____________. On the Determination Date preceding each Distribution Date, the Servicer shall determine an amount (the "Class B Interest Shortfall") equal -------------------------- to the excess, if any, of (x) the aggregate Class B Monthly Interest for the Interest Accrual Period applicable to the preceding Distribution Date over - ---- (y) the amount which was paid to the Class B Certificateholders in respect of interest on such preceding Distribution Date. If there is a Class B Interest Shortfall with respect to any Distribution Date, an additional amount ("Class B Additional Interest") shall be payable as provided herein --------------------------- with respect to the Class B Certificates on each Distribution Date following such Distribution Date to and including the Distribution Date on which such Class B Interest Shortfall is paid to Class B Certificateholders equal to one-twelfth of the product of (i) the Class B Certificate Rate and (ii) such Class B Interest Shortfall. 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 (the "Collateral Interest Monthly --------------------------- Interest") distributable from the Collection Account with respect to the - -------- Collateral Interest of the Series 1996-1 Certificates on any Distribution Date shall be an amount equal the product of (i) the Floating Rate Interest Factor, (ii) the Collateral Interest Rate and (iii) the outstanding principal balance of the Collateral Interest as of the preceding Distribution Date (after subtracting therefrom the aggregate amount of all distributions of Collateral Interest Monthly Principal made through such Distribution Date to the Collateral Interest Holder); provided, however, that with respect to the -------- ------- first Distribution Date for the Series 1996-1 Certificates, Collateral Interest Monthly Interest shall be equal to $________. On the Determination Date preceding each Distribution Date, the Servicer shall determine an amount (the "Collateral Interest Shortfall") ----------------------------- equal to the excess, if any, of (x) the aggregate Class-C Monthly Interest for the Collateral Interest Accrual Period applicable to the preceding Distribution Date over (y) the amount which was paid to the Collateral ---- Interest Holder in respect of interest on such preceding Distribution Date. If there is a Collateral Interest Shortfall with respect to any Distribution Date, an additional amount ("Collateral Interest Additional Interest") shall --------------------------------------- be payable as provided herein with respect to the Collateral Interest on each Distribution Date following such Distribution Date to and including the Distribution Date on which such Collateral Interest Shortfall is paid to the Collateral Interest Holder equal to the product of (i) the Floating Rate Interest Factor, (ii) the Collateral Interest Rate and (iii) such Collateral Interest Shortfall. Notwithstanding anything to the contrary herein, Collateral Interest Additional Interest shall be payable or distributed to the Collateral Interest Holder only to the extent permitted by applicable law. Section 4.05. Determination of Monthly Principal. (a) The amount ---------------------------------- of monthly principal (the "Class A Monthly Principal") distributable from the ------------------------- Collection Account with respect to the Class A Certificates on each Distribution Date beginning with the Distribution Date related to the Collection Period in which the Controlled Amortization Period or any Rapid Amortization Period begins shall be equal to an amount calculated as follows: the sum of (i) an amount equal to the Fixed Allocation Percentage of all Principal Collections received during the Collection Period immediately preceding such Distribution Date (or portion thereof, in the case of an Amortization Event which occurs during such Collection Period) (other than Reallocated Principal Collections used to pay the Required Amount due on the Class A Certificates), (ii) the amount of Shared Principal Collections allocated to the Series 1996-1 Certificates with respect to the preceding Collection Period pursuant to Section 4.05(e), (iii) the amount, if any, of Transfer Deposit Amounts and Adjustment Payments with respect to such Distribution Date and (iv) the amount, if any, of Finance Charge Collections and Excess Finance Charge Collections allocated and available on such Distribution Date to (A) fund the Class A Investor Default Amount and the Class B Investor Default Amount with respect to such Distribution Date and (B) reimburse Class A Investor Charge-Offs and previous reductions in the Class B Invested Amount; provided, -------- however, that for each Distribution Date with respect to the Controlled ------- Amortization Period (unless and until an Amortization Event shall have occurred), Class A Monthly Principal shall not exceed the Controlled Distribution Amount for such Distribution Date; provided, however, that with -------- ------- respect to the Final Series 1996-1 Termination Date, Class A Monthly Principal shall be an amount equal to the Class A Invested Amount. (b) The amount of monthly principal (the "Class B Monthly --------------- Principal") distributable from the Collection Account with respect to the - --------- Class B Certificates on each Distribution Date, beginning with the Distribution Date on which the Class A Invested Amount is paid in full, shall be an amount equal to and calculated as follows: the sum of (a)(i) an amount equal to the Fixed Allocation Percentage of Principal Collections received during the Collection Period immediately preceding such Distribution Date (or portion thereof, in the case of an Amortization Event which occurs during such Collection Period), (ii) the amount of Shared Principal Collections allocated to the Series 1996-1 Certificates with respect to the preceding Collection Period pursuant to Section 4.05(e), and (iii) the amount, if any, of Excess Finance Charge Collections to be distributed pursuant to Section 4.09(c) and (d) with respect to such Distribution Date, minus (b) the Class A Monthly Principal, if any, with respect to such Distribution Date. (c) The amount of monthly principal (the "Collateral Interest ------------------- Monthly Principal") distributable from the Collection Account with respect - ----------------- to the Collateral Interest on each Distribution Date, beginning with the Distribution Date on which the Class B Invested Amount is paid in full, shall be an amount equal to and calculated as follows: the sum of (a)(i) an amount equal to the Fixed Allocation Percentage of Principal Collections received during the Collection Period immediately preceding such Distribution Date (or portion thereof, in the case of an Amortization Event which occurs during such Collection Period), (ii) the amount of Shared Principal Collections allocated to the Series 1996-1 Certificates with respect to the preceding Collection Period pursuant to Section 4.05(e), and (iii) the amount, if any, of Excess Finance Charge Collections to be distributed pursuant to Section 4.09(e) and (f) with respect to such Distribution Date, minus (b) the Class B Monthly Principal, if any, with respect to such Distribution Date. (d) The amount of monthly principal (the "Subordinated Transferor ----------------------- Monthly Principal") distributable from the Collection Account with respect - ----------------- to the Subordinated Transferor Certificates on each Distribution Date, beginning with the Distribution Date on which the Collateral Interest Invested Amount is paid in full, shall be an amount equal to and calculated as follows: the sum of (a)(i) an amount equal to the Fixed Allocation Percentage of Principal Collections received during the Collection Period immediately preceding such Distribution Date (or portion thereof, in the case of an Amortization Event which occurs during such Collection Period), (ii) the amount of Shared Principal Collections allocated to the Series 1996-1 Certificate with respect to the preceding Collection Period pursuant to Section 4.05(e), and (iii) the amount, if any, of Excess Finance Charge Collections to be distributed pursuant to Section 4.09(g) and (h) with respect to such Distribution Date, minus (b) the Collateral Interest Monthly Principal, if any, with respect to such Distribution Date. (e) Shared Principal Collections allocated to the Series 1996-1 Certificates for any Business Day with respect to the Amortization Period shall mean an amount equal to the product of (x) Shared Principal Collections for all Series for such Business Day and (y) a fraction, the numerator of which is the Principal Shortfall for the Series 1996-1 Certificates for such Business Day and the denominator of which is the aggregate amount of Principal Shortfalls for all Series for such Business Day. For any Business Day with respect to the Revolving Period, Shared Principal Collections allocated to the Series 1996-1 Certificates shall be zero. Section 4.06. Coverage of Required Amount for the Series 1996-1 ------------------------------------------------- Certificates. On each Determination Date, the Servicer shall determine the - ------------ Required Amount, if any. In the event that the Required Amount for such Distribution Date is greater than zero, the Servicer shall give written notice to the Trustee of such positive Required Amount on the Determination Date prior to such Distribution Date and all or a portion of the Excess Finance Charge Collections with respect to such Distribution Date in an amount equal to the Required Amount for such Distribution Date shall be distributed from the Collection Account on such Distribution Date pursuant to Section 4.09(a). In the event that the Required Amount for such Distribution Date exceeds the amount of Excess Finance Charge Collections with respect to such Distribution Date, first, all or a portion of the ----- Subordinated Transferor Reallocated Principal Collections, second, the ------ Collateral Interest Reallocated Principal Collections, and third, the Class ----- B Reallocated Principal Collections, in an amount equal to such excess shall be distributed from the Collection Account on such Distribution Date to or for the benefit of first, the Class A Certificateholders, second, the Class ----- ------ B Certificateholders and third, the Collateral Interest Holder pursuant to ----- Section 4.10. In the event that the Required Amount exceeds the amount of such Excess Finance Charge Collections and Reallocated Principal Collections, the Subordinated Transferor Invested Amount shall be reduced by the amount of such remaining deficiency, but not to exceed the amount of the Class A, Class B and Collateral Interest Investor Default Amount for the related Collection Period. In the event that any such reduction would cause the Subordinated Transferor Invested Amount to be a negative number, the Collateral Interest Invested Amount shall be reduced as provided in Section 4.08. In the event that any such reduction would cause the Collateral Interest Invested Amount to be a negative number, the Class B Invested Amount shall be reduced as provided in Section 4.08. In the event that any such reduction would cause the Class B Invested Amount to be a negative number, the Class A Invested Amount shall be reduced as provided in Section 4.08. Section 4.07. Application of Funds on Deposit in the Collection ------------------------------------------------- Account for the Series 1996-1 Certificates. The Servicer shall apply or - ------------------------------------------ cause the Trustee to apply, on each Distribution Date funds on deposit in the Collection Account with respect to such Distribution Date, to make the following distributions: (a) On each Distribution Date, an amount equal to the Class A Floating Allocation Percentage of Finance Charge Collections deposited in the Collection Account for the Collection Period immediately preceding such Distribution Date shall 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 paid to Class A Certificateholders on a prior Distribution Date, plus the amount of any Class A Additional Interest for ---- such Distribution Date, plus the amount of any Class A Additional Interest ---- previously due but not paid to the Class A Certificateholders on a prior Distribution Date, shall be paid to the Class A Certificateholders; (ii) an amount equal to the aggregate Class A Investor Default Amount for such Distribution Date shall be distributed to the Transferor on Distribution Dates with respect to the Revolving Period (unless such amount has been previously netted against deposits to the Collection Account) (but not exceeding the Transferor Interest after giving effect to any new Receivables transferred to the Trust on such date) and thereafter shall be included in the funds on deposit in the Collection Account to be paid pursuant to Section 4.07(e) to the Series 1996-1 Certificateholders on Distribution Dates with respect to any Amortization Period; (iii) an amount equal to the Class A Monthly Servicing Fee for such Distribution Date shall be distributed to the Servicer (unless such amount has been previously netted against deposits to the Collection Account); (iv) the balance, if any, shall constitute Excess Finance Charge Collections and shall be allocated and distributed as set forth in Section 4.09. If Bridgestone/Firestone is not the Servicer, the priority of items (ii) and (iii) above shall be reversed. (b) On each Distribution Date, an amount equal to the Class B Floating Allocation Percentage of Finance Charge Collections deposited in the Collection Account for the Collection Period immediately preceding such Distribution Date shall 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 paid to Class B Certificateholders on a prior Distribution Date, plus the amount of any Class B Additional Interest for ---- such Distribution Date, plus the amount of any Class B Additional Interest ---- previously due but not paid to the Class B Certificateholders on a prior Distribution Date, shall be paid to the Class B Certificateholders; (ii) an amount equal to the Class B Monthly Servicing Fee for such Distribution Date shall be distributed to the Servicer (unless such amount has been previously netted against deposits to the Collection Account); (iii) the balance, if any, shall constitute Excess Finance Charge Collections and shall be allocated and distributed as set forth in Section 4.09. (c) On each Distribution Date, an amount equal to the Collateral Interest Floating Allocation Percentage of Finance Charge Collections deposited in the Collection Account for the Collection Period immediately preceding such Distribution Date shall be distributed in the following priority: (i) an amount equal to Collateral Interest Monthly Interest for such Distribution Date, plus the amount of any Collateral Interest ---- Monthly Interest previously due but not paid to the Collateral Interest Holder on a prior Distribution Date, plus the amount of any Collateral ---- Interest Additional Interest for such Distribution Date, plus the amount ---- of any Collateral Interest Additional Interest previously due but not paid to the Collateral Interest Holder on a prior Distribution Date, shall be paid to the Collateral Interest Holder; (ii) an amount equal to the Collateral Interest Monthly Servicing Fee for such Distribution Date shall be distributed to the Servicer (unless such amount has been previously netted against deposits to the Collection Account); (iii) the balance, if any, shall constitute Excess Finance Charge Collections and shall be allocated and distributed as set forth in Section 4.09; and (d) On each Distribution Date, an amount equal to the Subordinated Transferor Floating Allocation Percentage of Finance Charge Collections deposited in the Collection Account for the Collection Period immediately preceding such Distribution Date shall be distributed in the following priority; (i) an amount equal to the Subordinated Transferor Monthly Servicing Fee for such Distribution Date shall be distributed to the Servicer (unless such amount has been previously netted against deposits to the Collection Account); and (ii) the balance, if any, shall constitute Excess Finance Charge Collections and shall be allocated and distributed as set forth in Section 4.09. (e) On each Distribution Date with respect to the Controlled Amortization Period or any Rapid Amortization Period, the remaining funds on deposit in the Collection Account (other than Excess Finance Charge Collections and any Reallocated Principal Collections which pursuant to Section 4.09 or 4.10 are not to be included in the funds to be distributed pursuant to this Section 4.07(e)) will be distributed in the following priority: (i) an amount equal to the Class A Monthly Principal for such Distribution Date to the extent of the Class A Invested Amount, shall be paid to the Class A Certificateholders; (ii) for each Distribution Date, beginning with the Distribution Date on which the Class A Invested Amount is paid in full, after giving effect to the transactions referred to in clause (i) above, the amount of any such remaining funds then on deposit in the Collection Account, up to the amount of Class B Monthly Principal, shall be paid to the Class B Certificateholders; (iii) for each Distribution Date, beginning with the Distribution Date on which the Class B Invested Amount is paid in full, after giving effect to the transactions referred to in clauses (i) and (ii) above, the amount of any such remaining funds then on deposit in the Collection Account, up to the amount of Collateral Interest Monthly Principal, shall be paid to the Collateral Interest Holder; (iv) for each Distribution Date, beginning with the Distribution Date on which the Collateral Interest Invested Amount is paid in full, after giving effect to the transactions referred to in clauses (i) to (iii) above, the amount of any such remaining funds then on deposit in the Collection Account, up to the amount of Subordinated Transferor Monthly Principal, shall be paid to the Subordinated Transferor Certificateholder; and (v) for each Distribution Date, after giving effect to the transactions referred to in clauses (i) to (iv) above, an amount equal to the balance, if any, of such remaining funds then on deposit in the Collection Account and allocable to the Series 1996-1 Certificates shall be treated as Shared Principal Collections and applied in accordance with Article IV of the Agreement and thereafter be paid by the Servicer or the Trustee to the Transferor but not exceeding the Transferor Interest (after giving effect to any new Receivables transferred to the Trust). Section 4.08. 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 Required Amount for such Distribution Date exceeds the sum of (i) Excess Finance Charge Collections with respect to the Collection Period immediately preceding such Distribution Date, ((ii) the amount of the Transferor Interest available to be written down, if any, to cover Class A Investor Charge-Offs, Class B Investor Charge-Offs, Collateral Interest Investor Charge-Offs and Subordinated Transferor Investor Charge-Offs) and (iii) the amount of Reallocated Principal Collections with respect to such Collection Period, the Subordinated Transferor Invested Amount shall be reduced by the amount of such excess, but not more than the Class A, Class B and Collateral Interest Investor Default Amount for such Distribution Date second, the Collateral ------ Interest Invested Amount shall be reduced by the amount of such excess, but not more than the Class A and Class B Investor Default Amount for such Distribution Date, and third, the Class B Invested Amount shall be reduced ----- by the amount of such excess, but not more than 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, 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 more than 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 (but not by an amount in excess of the aggregate Class A Investor Charge-Offs) (and the Class B, Collateral Interest and Subordinated Transferor Invested Amount increased) by the amount of Excess Finance Charge Collections allocated and available for that purpose pursuant to Section 4.09(b). (b) On each Determination Date, the Servicer shall calculate the Class B Investor Default Amount, if any, for the related Distribution Date. If on any Distribution Date, the Class B Investor Default Amount, if any, for such Distribution Date exceeds the sum of (i) Excess Finance Charge Collections with respect to the Collection Period immediately preceding the Distribution Date which are allocated and available to pay such amount pursuant to Section 4.09(c) and (ii) the amount of Collateral Interest and Subordinated Transferor Reallocated Principal Collections, then the Class B Invested Amount shall be reduced by the aggregate amount of such excess, but not more than 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) on any Distribution Date by the amount of Excess Finance Charge Collections allocated and available for that purpose pursuant to Section 4.09(d) (but only, in any case, to the extent such amount is not required to reimburse Class A Investor Charge-Offs pursuant to Section 4.08(a) and not, in any case, in excess of the unpaid principal balance of the Class B Certificates). (c) On each Determination Date, the Servicer shall calculate the Collateral Interest Investor Default Amount, if any, for the related Distribution Date. If on any Distribution Date, the Collateral Interest Investor Default Amount, if any, for such Distribution Date exceeds the sum of (i) Excess Finance Charge Collections with respect to the Collection Period immediately preceding the Distribution Date which are allocated and available to pay such amount pursuant to Section 4.09(e) and (ii) the amount of Subordinated Transferor Reallocated Principal Collections, then the Collateral Interest Invested Amount shall be reduced by the aggregate amount of such excess, but not more than the Collateral Interest Investor Default Amount for such Distribution Date (a "Collateral Interest Investor ---------------------------- Charge-Off"). Collateral Interest Investor Charge-Offs shall thereafter be - ---------- reimbursed (and the Collateral Interest Invested Amount increased) on any Distribution Date by the amount of Excess Finance Charge Collections allocated and available for that purpose pursuant to Section 4.09(f) (but only, in any case, to the extent such amount is not required to reimburse Class A and Class B Investor Charge-Offs pursuant to Section 4.08(a) and (b) and not, in any case, in excess of the unpaid principal balance of the Collateral Interest). (d) On each Determination Date, the Servicer shall calculate the Subordinated Transferor Investor Default Amount, if any, for the related Distribution Date. If on any Distribution Date, the Subordinated Transferor Investor Default Amount, if any, for such Distribution Date exceeds the amount of Excess Finance Charge Collections with respect to the Collection Period immediately preceding the Distribution Date which are allocated and available to pay such amount pursuant to Section 4.09(g), then the Subordinated Transferor Invested Amount shall be reduced by the aggregate amount of such excess, but not more than the Subordinated Transferor Investor Default Amount for such Distribution Date (a "Subordinated Transferor Investor Charge-Off"). Subordinated Transferor ------------------------------------------- Investor Charge-Offs shall thereafter be reimbursed (and the Subordinated Transferor Invested Amount increased) on any Distribution Date by the amount of Excess Finance Charge Collections allocated and available for that purpose pursuant to Section 4.09(h) (but only, in any case, to the extent such amount is not required to reimburse Class A, Class B and Collateral Interest Investor Charge-Offs pursuant to Section 4.08(a), (b) and (c) and not, in any case, in excess of the unpaid principal balance of the Subordinated Transferor Certificate). Section 4.09. Excess Finance Charge Collections for the Series ------------------------------------------------ 1996-1 Certificates. The Servicer shall apply or shall cause the Trustee to - ------------------- apply, on each Distribution Date, Excess Finance Charge Collections for the Series 1996-1 Certificates with respect to the Collection Period immediately preceding such Distribution Date, 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 Servicer or the Trustee to fund any deficiency pursuant to Sections 4.07(a)(i), 4.07(a)(ii) or 4.07(a)(iii); provided that in the event the Class A Required Amount for such Distribution Date exceeds the amount of Excess Finance Charge Collections, such Excess Finance Charge Collections shall be applied first, to pay amounts due pursuant to Section 4.07(a)(i), ------ second, to pay the Class A Investor Default Amount, if any, pursuant to - ------ Section 4.07(a)(ii), and third, to pay the Class A Monthly Servicing Fee to ----- the Servicer pursuant to Section 4.07(a)(iii) (in the event that Bridgestone/Firestone is not the Servicer, the Class A Monthly Servicing Fee shall be paid prior to the Class A Investor Default Amount); (b) an amount equal to the aggregate amount of Class A Investor Charge-Offs which have not been previously reimbursed pursuant to this Section 4.09(b) shall be distributed by the Servicer or the Trustee to the Holder of the Exchangeable Transferor Certificate on Distribution Dates with respect to the Revolving Period, but not exceeding the Transferor Interest on such day (after giving effect to any new Receivables transferred to the Trust on such date) and thereafter shall be included in the funds on deposit in the Collection Account to be distributed pursuant to Section 4.07(c) on Distribution Dates with respect to the Amortization Period; (c) an amount equal to the Class B Required Amount, if any, with respect to such Distribution Date shall be distributed by the Servicer or the Trustee to fund any deficiency pursuant to Sections 4.07(b)(i), 4.07(b)(ii) or 4.07(b)(iii); provided that in the event the Class B Required Amount for such Distribution Date exceeds the amount of available Excess Finance Charge Collections, such Excess Finance Charge Collections shall be applied first, to pay amounts due pursuant to Section 4.07(b)(i), second, to ----- ------ pay the Class B Investor Default Amount, if any, pursuant to Section 4.07(b)(ii), and third, to pay the Class B Monthly Servicing Fee to the ----- Servicer pursuant to Section 4.07(b)(iii) (in the event that Bridgestone/Firestone is not the Servicer, the Class B Monthly Servicing Fee shall be paid prior to the Class B Investor Default Amount); (d) an amount equal to the aggregate amount by which the Class B Invested Amount has been reduced below the Class B Initial Invested Amount (other than by payments to the Class B Certificateholders) (but not in excess of the aggregate amount of such reductions which have not been previously reimbursed) shall be distributed by the Servicer or the Trustee to the Holder of the Exchangeable Transferor Certificate on Distribution Dates with respect to the Revolving Period, but not exceeding the Transferor Interest on such day (after giving effect to any new Receivables transferred to the Trust on such date) and thereafter shall be included in the funds on deposit in the Collection Account to be distributed pursuant to Section 4.07(e) on Distribution Dates with respect to any Amortization Period; (e) an amount equal to the aggregate Class B Investor Default Amount for such Distribution Date shall be distributed to the Transferor on Distribution Dates with respect to the Revolving Period (unless such amount has been previously netted against deposits to the Collection Account) (but not exceeding the Transferor Interest after giving effect to any new Receivables transferred to the Trust on such date) and thereafter shall be included in the funds on deposit in the Collection Account to be paid pursuant to Section 4.07(e) to the Series 1996-1 Certificateholders on Distribution Dates with respect to any Amortization Period; (f) an amount equal to the Collateral Interest Required Amount, if any, with respect to such Distribution Date shall be distributed by the Servicer or the Trustee to fund any deficiency pursuant to Sections 4.07(c)(i), 4.07(c)(ii) or 4.07(c)(iii); provided that in the event the Collateral Interest Required Amount for such Distribution Date exceeds the amount of available Excess Finance Charge Collections, such Excess Finance Charge Collections shall be applied first, ----- to pay amounts due pursuant to Section 4.07(c)(i), second, to pay the ------ Collateral Interest Investor Default Amount, if any, pursuant to Section 4.07(c)(ii), and third, to pay the Collateral Interest Monthly Servicing Fee ----- to the Servicer pursuant to Section 4.07(c)(iii) (in the event that Bridgestone/Firestone is not the Servicer, the Collateral Interest Monthly Servicing Fee shall be paid prior to the Collateral Interest Investor Default Amount); (g) an amount equal to the aggregate amount by which the Collateral Interest Invested Amount has been reduced below the Collateral Interest Initial Invested Amount (other than by payments to the Collateral Interest Holder) (but not in excess of the aggregate amount of such reductions which have not been previously reimbursed) shall be distributed by the Servicer or the Trustee to the Holder of the Exchangeable Transferor Certificate on Distribution Dates with respect to the Revolving Period, but not exceeding the Transferor Interest on such day (after giving effect to any new Receivables transferred to the Trust on such date) and thereafter shall be included in the funds on deposit in the Collection Account to be distributed pursuant to Section 4.07(e) on Distribution Dates with respect to any Amortization Period; (h) an amount equal to the aggregate Collateral Interest Investor Default Amount for such Distribution Date shall be distributed to the Transferor on Distribution Dates with respect to the Revolving Period (unless such amount has been previously netted against deposits to the Collection Account) (but not exceeding the Transferor Interest after giving effect to any new Receivables transferred to the Trust on such date) and thereafter shall be included in the funds on deposit in the Collection Account to be paid pursuant to Section 4.07(e) to the Series 1996-1 Certificateholders on Distribution Dates with respect to any Amortization Period; (i) any additional amounts required to be paid on such Distribution Date pursuant to the terms of the Loan Agreement; (j) an amount equal to the aggregate Subordinated Transferor Investor Default Amount, if any, for such Distribution Date shall be distributed by the Servicer or the Trustee to the Holder of the Exchangeable Transferor Certificate on Distribution Dates with respect to the Revolving Period, but not exceeding the Transferor Interest on such day (after giving effect to any new Receivables transferred to the Trust on such date) and thereafter shall be included in the funds on deposit in the Collection Account to be distributed pursuant to Section 4.07(e) on Distribution Dates with respect to any Amortization Period; (k) an amount equal to the aggregate amount by which the Subordinated Transferor Invested Amount has been reduced below the Subordinated Transferor Initial Invested Amount (other than by payments to the Holder of the Subordinated Transferor Certificate) (but not in excess of the aggregate amount of such reductions which have not been previously reimbursed) shall be distributed by the Servicer or the Trustee to the Holder of the Exchangeable Transferor Certificate on Distribution Dates with respect to the Revolving Period, but not exceeding the Transferor Interest on such day (after giving effect to any new Receivables transferred to the Trust on such date) and thereafter shall be included in the funds on deposit in the Collection Account to be distributed pursuant to Section 4.07(e) on Distribution Dates with respect to any Amortization Period; (l) the balance, if any, shall be treated as Shared Excess Finance Charge Collections, to the extent necessary, and the Servicer shall direct the Trustee in writing on such Determination Date to withdraw such amounts from the Collection Account and to make such amounts available to pay to Certificateholders of other Series to the extent of shortfalls, if any, in amounts payable to such Certificateholders from Finance Charge Collections allocated to such other Series; (m) the balance, if any, shall be treated as Shared Principal Collections to the extent necessary; and (n) the balance, if any, shall be distributed by the Servicer or the Trustee to Bridgestone/Firestone. For each Business Day with respect to the Revolving Period, the funds on deposit in the Collection Account to the extent of the product of (i) the sum of the Class A Floating Allocation Percentage, the Class B Floating Allocation Percentage and the Collateral Interest Floating Allocation Percentage and (ii) Principal Collections with respect to such Business Day (less the amount of Collateral Interest Reallocated Principal Collections and Class B Reallocated Principal Collections on such Business Day) will be treated as Shared Principal Collections and applied, pursuant to the written direction of the Servicer in the Payment Date Statement for such Business Day. Section 4.10. Reallocated Principal Collections for the Series ------------------------------------------------ 1996-1 Certificates. (a) The Servicer shall apply or cause the Trustee to - ------------------- apply, on each Distribution Date, Subordinated Transferor Reallocated Principal Collections with respect to the Collection Period immediately preceding such Distribution Date, first to the components of the Class A Required Amount, if any, then to the components of the Class B Required Amount, if any, and then to the components of the Collateral Interest Required Amount, if any, in the same priority as such amounts are applied to such components from Excess Finance Charge Collections pursuant to Section 4.09 herein. (b) The Servicer shall apply or cause the Trustee to apply, on each Distribution Date, Collateral Interest Reallocated Principal Collections with respect to the Collection Period immediately preceding such Distribution Date, first to the components of the Class A Required Amount, if any, and then to the components of the Class B Required Amount, if any, in the same priority as such amounts are applied to such components from Excess Finance Charge Collections pursuant to Section 4.09 herein. (c) The Servicer shall apply or cause the Trustee to apply, on each Distribution Date, Class B Reallocated Principal Collections with respect to the Collection Period immediately preceding such Distribution Date to the components of the Class A Required Amount, if any, in the same priority as such amounts are applied to such components from Excess Finance Charge Collections pursuant to Section 4.09 herein. SECTION 8. Article V of the Agreement. Article V of the Agreement -------------------------- shall read in its entirety as follows: ARTICLE V DISTRIBUTIONS AND REPORTS TO CERTIFICATEHOLDERS Section 5.01. Distributions. (a) On each Distribution Date, the ------------- Paying Agent shall distribute (in accordance with the Monthly Servicer's Certificate) to each Class A, Class B, Collateral Interest and Subordinated Transferor Certificateholder on the preceding Record Date (other than as provided in Section 12.02 of the Agreement respecting a final distribution) such Certificateholder's pro rata share (based on the aggregate Undivided Interests represented by the Certificates held by such Certificateholder) of the amounts on deposit in the Collection Account pursuant to Section 4.07. (b) Except as provided in Section 12.02 with respect to a final distribution, distributions to Investor Certificateholders hereunder shall be made by check mailed to each such Certificateholder at such Certificateholder's address appearing in the Certificate Register without presentation or surrender of any such Investor Certificate or the making of any notation thereon; provided, however, that with respect to such Investor Certificates registered in the name of a Clearing Agency, such distributions shall be made to such Clearing Agency in immediately available funds. Section 5.02. Statements to Series 1996-1 Certificateholders. (a) ---------------------------------------------- On each Distribution Date, the Paying Agent, on behalf of the Trustee, shall forward to each Class A, Class B and Collateral Interest Holder a statement substantially in the form of Exhibit B (the "Payment Date Statement") ---------------------- prepared by the Servicer setting forth certain information relating to the Trust and the Investor Certificates. (b) Annual Certificateholders' Statement. On or before January ------------------------------------ 31 of each calendar year, beginning with calendar year 1997, the Paying Agent, on behalf of Bridgestone/Firestone, shall furnish or cause to be furnished to each Person who at any time during the preceding calendar year was an Investor Certificateholder, a statement prepared by the Trustee on behalf of Bridgestone/Firestone containing such information as is required to be provided to a holder of indebtedness under the Internal Revenue Code and such other information as may be reasonably requested by the Investor Certificateholders to prepare their tax returns. Such obligation of the Trustee 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. (c) No later than the second business day prior to each Distribution Date, the Servicer shall forward by facsimile (to be followed by original confirmation in writing) or overnight delivery service to the Trustee, the Paying Agent and each Rating Agency a certificate of a Servicing Officer substantially in the form attached as Exhibit C (the "Monthly ------- Servicer's Certificate"). - ---------------------- (END OF ARTICLE V) SECTION 9. Article VI of the Agreement. Article VI shall, for --------------------------- purposes of Series 1996-1, contain the following Section 6.14: Section 6.14 Transfers of the Collateral Interest and the -------------------------------------------- Subordinated Transferor Certificate. - ----------------------------------- (a) The Collateral Interest shall not be listed for trading on a recognized securities exchange. (b) The Collateral Interest shall be issued in minimum denominations of ($200,000). At any point in time, the Collateral Interest shall not be held by more than (fifty) different investors. (c) No transfer of any Collateral Interest shall be made pursuant to an effective registration statement under the Securities Act of 1933, as amended (the "1933 Act") or pursuant to a qualification under applicable state securities laws. Each transfer of a Collateral Interest shall be made in a transaction which does not require such registration or qualification. If such a transfer is to be made without registration or qualification, then the Certificate Registrar shall require, in order to assure compliance with such laws, receipt of: (i) if such transfer is of a Collateral Interest and is purportedly being made in reliance upon Rule 144A under the 1933 Act, a certificate from the Certificateholder desiring to effect such transfer substantially in the form attached as Exhibit D hereto and a certificate from such Certificateholder's prospective transferee substantially in the form attached as Exhibit E hereto; and (ii) in all other cases, (A) except where the Transferor or an Affiliate thereof is the transferor or transferee, an Opinion of Counsel satisfactory to the Trustee to the effect that such transfer may be made without such registration or qualification (which Opinion of Counsel shall not be an expense of the Trust Fund or the Transferor or the Trustee in their respective capacities as such), (B) a certificate from the Certificateholder desiring to effect such transfer substantially in the form attached as Exhibit E hereto and (C) a certificate from such Certificateholder's prospective transferee substantially in the form attached as Exhibit F hereto. Neither the Transferor nor the Trustee shall register or qualify the Collateral Interest under the 1933 Act or any other securities law or to take any action not otherwise required under this Agreement to permit the transfer of any Collateral Interest pursuant to a registration statement or qualification. In addition, neither the Transferor nor the Trustee shall transfer the Collateral Interest unless such transfer is made pursuant to an effective exemption from registration. Any Collateral Interest Holder desiring to effect such a transfer shall, and does hereby agree to, indemnify the Trustee and the Transferor against any liability that may result if the transfer is not so exempt from registration or qualification. (d) No transfer of Collateral Interest shall be made unless the prospective transferee represents (i) that it is acquiring the Certificate for its own behalf and is not acting as agent or custodian for any other person or entity in connection with such acquisition, and (ii) if the prospective transferee is a partnership, grantor trust or S corporation for federal income tax purposes (a "Flow-Through Entity"), any Collateral Interest owned by such Flow-Through Entity will represent less than 50% of the value of all the assets owned by such Flow-Through Entity and no special allocation of income, gain, loss, deduction or credit from such Certificates will be made among the beneficial owners of such Flow-Through Entity. Such representation shall be made by the transferee in the form attached as Exhibit D or F, as applicable. (d) The Subordinated Transferor Certificate may not be sold, assigned, transferred, participated, pledged, hypothecated, or otherwise conveyed by the Transferor except that an interest in the Subordinated Transferor Certificate may be participated to Bridgestone/Firestone. SECTION 10. Consents of Series 1996-1 Certificateholders. -------------------------------------------- Whenever the Agreement provides for the vote, consent or waiver of Series 1996-1 Certificateholders, such vote, consent or waiver shall be obtained on the basis of the Investor Certificateholders on an aggregate basis, except with respect to the votes, consents or waivers permitted or required by the Sections indicated below, with respect to which such votes, consents or waivers shall be obtained from either Class, or each and every Class, as a separate Class, as specified below: shall be required on Section: the following basis: - --------------------------- 6.13 Class A and B and Collateral Interest 9.02 Class A and B and Collateral Interest 10.01(b) and (c) Class A and B and Collateral Interest 10.04 Class A and B and Collateral Interest 13.01 Class A and B and Collateral Interest 13.07 Class A and B and Collateral Interest SECTION 11. Amortization Events. If any one of the events ------------------- specified in Section 9.01 of the Agreement (after any grace periods or consents applicable thereto) or any one of the following events shall occur during the Revolving Period or the Controlled Amortization Period with respect to the Series 1996-1 Certificates (each, an "Amortization Event"): ------------------ (a) failure on the part of the Servicer, the Originator or the Transferor, as applicable (i) to make any payment or deposit required by the terms of the Agreement or Supplement on or before five Business Days after the date such payment or deposit is required to be made herein, or (ii) duly to observe or perform in any material respect the covenant of the Transferor set forth in Section 2.08(b) of the Agreement, or (iii) duly to observe or perform in any material respect any other covenants or agreements of the Transferor set forth in this Agreement or Supplement, which, in the case of clause (iii), 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 Servicer, the Originator or the Transferor, as applicable by the Trustee, or to the Transferor and the Trustee by the Holders of Investor Certificates evidencing Undivided Interests aggregating not less than 10% of the Invested Amount of either Class of the Series 1996-1 Certificates provided, however, that an -------- ------- Amortization Event pursuant to this Section 12(a) shall not be deemed to have occurred hereunder with respect to any such Series if the Transferor has accepted the transfer of the 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; (b) any representation or warranty made by the Servicer, the Originator or the Transferor, as applicable in the Purchase and Sale Agreement or this Supplement or any information contained in a list required to be delivered by the Transferor pursuant to Section 2.01 or 2.05 of the Agreement 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 Servicer, the Originator or the Transferor, as applicable by the Trustee, or to the Transferor and the Trustee by the Holders of Investor Certificates evidencing Undivided Interests aggregating not less than 10% of the Invested Amount of any Class of the Series 1996-1 Certificates and as a result of which the interests of such Series are materially and adversely affected provided, however, that an Amortization Event pursuant to this Section 12(b) shall not be deemed to have occurred hereunder with respect to any such Series if the Transferor has accepted the transfer of the 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; (c) the Portfolio Yield averaged over any three consecutive Collection Periods in less than the Base Rate of such Series; (d) any Servicer Default shall occur which would have a material adverse effect on the Holders of the Investor Certificates; (e) the Transferor Amount (plus any amounts available under the Transferor Letter of Credit or the Transferor Escrow Account and the B/F Amount) is less than __% of the Aggregate Invested Amount of all Series each on the last day of any Collection Period (such determination shall be made on each Determination Date and reported in the Monthly Servicer's Certificate); or (f) the Transferor Amount plus the B/F Amount and the Subordinated Transferor Invested Amount (plus the invested amount of any other subordinated class of certificates of additional Series which is retained by the Transferor and with respect to which no legal opinion is delivered characterizing such certificates as indebtedness for federal income tax purposes) is less than __% of Aggregate Receivables on the last day of any Collection Period (such determination shall be made on each Determination Date and reported in the Monthly Servicer's Certificate): then, (x) in the case of any event described in subparagraphs (a), (b) or (d) of this Section 12, after the applicable grace period, if any, either the Trustee or the Investor Certificateholders evidencing interest aggregating not less than 50% of the Invested Amount by written notice to the Transferor (and to the Trustee if given by the Investor Certificateholders) may declare that an Amortization Event has occurred with respect to the Investor Certificates as of the date of such notice, or (y) in the case of any event described in Section 9.01(a) or (b) of the Agreement an Amortization Event with respect to all series of certificates, including the Investor Certificates, or (z) in the case of subparagraphs (c), (e) or (f) of this Section 12 an Amortization Event with respect to the Investor Certificates, shall occur immediately upon the occurrence of such event, without any notice or other action on the part of the Trustee or the Certificateholders. SECTION 12. Servicing Fee. Notwithstanding Section 3.02 of the ------------- Agreement, the Monthly Servicing Fee shall equal the sum of the Class A Monthly Servicing Fee, the Class B Monthly Servicing Fee, the Collateral Interest Monthly Servicing Fee and the Subordinated Transferor Monthly Servicing Fee. SECTION 13. Ratification of Pooling and Servicing Agreement. As ----------------------------------------------- supplemented or modified by this Supplement, the Agreement is in all respects ratified and confirmed and the Agreement as so supplemented or modified by this Supplement shall be read, taken, and construed as one and the same instrument. SECTION 14. Counterparts. This Supplement may be executed in any ------------ number of counterparts, each of which when so executed shall be deemed to be an original, but all of which counterparts shall together constitute but one and the same instrument. SECTION 15. Governing Law. THIS SUPPLEMENT SHALL BE GOVERNED BY ------------- AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO ITS CONFLICTS OF LAW PROVISIONS. SECTION 16. Certain Amendments. In the event that federal ------------------ legislation creates a new type of entity for federal income tax purposes, the "financial asset securitization investment trust" (a "FASIT"), the Transferor may amend this Series Supplement in order to effect a "financial asset securitization investment trust" (a "FASIT") election for all or a portion of the Trust or the Investor Certificates; provided, -------- that the Transferor delivers an opinion to the Trustee to the effect that such election will not adversely affect the Federal or applicable state income tax characterization of any outstanding Series of Investor Certificates or the taxability of the Trust under Federal or applicable state income tax laws or otherwise have a material adverse effect on any class of Series 1996-1 Certificates. IN WITNESS WHEREOF, the Transferor, the Servicer and the Trustee have caused this Supplement to be duly executed by their respective officers duly authorized as of the day and year first above written. FIRESTONE RETAIL CREDIT CORPORATION, as Transferor By ---------------------------- Name: Title: BRIDGESTONE/FIRESTONE, INC. as Servicer and individually By ---------------------------- Name: Title: THE FUJI BANK AND TRUST COMPANY, as Trustee By ---------------------------- Name: Title: EX-4.3 7 AMENDED AND RESTATED PURCHASE AND SALE AGREEMENT EXHIBIT 4.3 SECOND AMENDED AND RESTATED PURCHASE AND SALE AGREEMENT AMENDED AND RESTATED PURCHASE AND SALE AGREEMENT, as amended and restated as of October __, 1996, among FIRESTONE RETAIL CREDIT CORPORATION, a Massachusetts corporation (together with its successors and assigns, called the "Company"), CREDIT FIRST NATIONAL ASSOCIATION, a national bank (together with its successors and assigns, called "CFNA"), and BRIDGESTONE/FIRESTONE, INC., an Ohio corporation (together with its successors and assigns, called "FIRESTONE"). W I T N E S S E T H: - - - - - - - - - - WHEREAS, the Company and Firestone Retail Credit Corporation, a Delaware corporation ("FRCC"), purchased from Ameritrust Company National Association ("Ameritrust") and Society National Bank ("Society"), successor in interest by merger to Ameritrust, certain revolving open-ended charge card receivables arising under credit cards issued by Ameritrust and Society (the "Predecessor Cards") pursuant to credit card programs in which Ameritrust and Society extend credit to Firestone customers and to customers of dealers of Firestone and customers of certain other dealers and marketers of automotive products in order to permit such customers to purchase goods and services from Firestone stores, participating Firestone dealers, and other entities, as the case may be (the "Predecessor Program"); WHEREAS, the Company, Firestone and Ameritrust were parties to that certain purchase and sale agreement dated as of July 31, 1986, as amended (the "Original Purchase Agreement"); WHEREAS, FRCC, Firestone and Ameritrust were parties to that certain purchase and sale agreement, as amended and restated as of December 31, 1986, as further amended (the "FRCC" Purchase Agreement"); WHEREAS, FRCC, was merged into the Company and the Company thereupon succeeded by operation of law to all the rights, properties and obligation of FRCC; WHEREAS, the Company, as successor by merger of the rights and obligations of FRCC under the FRCC Purchase Agreement, and the other parties to the FRCC Purchase Agreement and the Original Purchase Agreement consolidated, amended and restated the FRCC Purchase Agreement and the Original Purchase Agreement by executing the Purchase Agreement, amended and restated as of October 3, 1989 (the "1989 Purchase Agreement"); WHEREAS, on July 13, 1992, Ameritrust was merged into Society and Society succeeded by operation of law to all the rights, properties and obligations of Ameritrust, including, but not limited to, the 1989 Purchase Agreement; WHEREAS, the Company, Firestone and Society were parties to that certain First Amendment to the Purchase and Sale Agreement, dated as of November 1, 1992 (the "First Amendment"), and that certain Second Amendment to the Purchase and Sale Agreement, dated as of October 1, 1993 (the "Second Amendment") (the 1989 Purchase Agreement, as amended by the First Amendment and Second Amendment is hereby collectively referred to as the "Amended Purchase Agreement"); WHEREAS, Society has assigned and transferred all its right, title and interest in and to the Amended Purchase Agreement to CFNA and CFNA has assumed and agreed to perform all of the rights and obligations of Society under the Amended Purchase Agreement pursuant to a Transfer Agreement, dated as of October 1, 1993; WHEREAS, the Company, Firestone and the Fuji Bank and Trust Company (the "Trustee") were parties to that certain Pooling and Servicing Agreement, dated as of November 1, 1992 (the "Original Pooling and Servicing Agreement"), pursuant to which the Company has assigned its right, title and interest in and to the Amended Purchase Agreement; WHEREAS, the Company, Firestone and CFNA were parties to the Amended and Restated Purchase and Sale Agreement, dated as of October 20, 1993, and amended on August 12, 1994 (as so amended, the "Amended and Restated Purchase Agreement"). WHEREAS, the Company, Firestone and the Trustee desire to amend and restate the Original Pooling and Servicing Agreement and supplement the Pooling and Servicing Agreement with the Series 1996-1 Supplement, each dated the date hereof (the Original Pooling and Servicing Agreement as so amended and supplemented and as amended and supplemented from time to time (the "Pooling and Servicing Agreement"); and WHEREAS, the parties hereto wish to further amend and restate the Amended and Restated Purchase Agreement; NOW, THEREFORE, the parties hereto agree as follows: 2 ARTICLE I DEFINITION SECTION 1.01. Definitions. For all purposes of this Agreement, ----------- except as otherwise expressly provided herein or unless the context otherwise requires, capitalized terms not otherwise defined herein or in Annex X attached hereto shall have the meanings specified in the Pooling and Servicing Agreement. ARTICLE II PURCHASE AND SALE AND ASSIGNMENT Section 2.01. Sale of Eligible Trade Receivables to the Company. ------------------------------------------------- Subject to and upon the terms and conditions herein set forth, CFNA does hereby transfer, sell and assign to the Company, without recourse to CFNA except as provided herein, and the Company does hereby acquire and purchase all of CFNA's right, title and interest in, to and under the Eligible Receivables now existing and hereafter created in any Eligible Accounts whether now existing or hereafter created on or after the Cut-Off Date, all amounts due or to become due on or after the Cut-Off Date and all amounts received with respect thereto, including all Recoveries relating thereto (net of related expenses), Insurance Proceeds (net of related expenses), and all of its right, title and interest in, to any Insurance Premiums paid under any Insurance Agreements and all proceeds of any Insurance Agreement to the extent not previously purchased, at a purchase price equal to the face amount of such Receivables. CFNA shall deliver to the Company on each Settlement Date a Monthly Servicer Certificate substantially in the form of Annex A attached hereto. The foregoing transfer, assignment, set-over and conveyance does not constitute and is not intended to result in a creation or an assumption by the Company of any obligation of CFNA or any other Person in connection with the Accounts, the Receivables or under any agreement or instrument relating thereto, including, without limitation, any obligation to any merchants, Obligors or insurers. Section 2.02. Assignment of Certain Rights Under the Participation ---------------------------------------------------- Agreement. - --------- (a) As further consideration for the transfer, sale and assignment of the Receivables by CFNA to the Company pursuant to Section 2.01, the Company hereby assigns to CFNA any and all of its rights to any amounts payable to it by Firestone pursuant to Section 2(c)(ii) of the Amended and Restated Participation Agreement dated as of the date hereof, between 3 Firestone and the Company (the "Participation Agreement") and CFNA hereby accepts such assignment. (b) Firestone hereby acknowledges and agrees to the assignment set forth in Section 2.02(a) and hereby agrees that CFNA shall have full recourse against it for the payment of any amounts payable to the Company pursuant to Section 2(c)(ii) of the Participation Agreement. (c) CFNA hereby acknowledges and agrees that it shall not have any claim nor have any recourse available to it against the Company for payment of any amount under Section 2.01 which is in respect of the Discount Amount. Section 2.03. Customer Service Adjustments. CFNA may accept a ---------------------------- return of goods for full or partial credit or make a daily adjustment in the principal amount or finance or other charges accrued or payable with respect to the account of a customer who has purchased merchandise or services on credit under a Credit Card Agreement, provided that such adjustment is -------- permitted under CFNA's applicable Credit Card Guidelines. The aggregate amount of all such adjustments made by CFNA during any Collection Period shall be payable to the Company by CFNA and shall be due no later than the Transfer Date at the end of such Collection Period. Section 2.04 Addition of Accounts. -------------------- (a) All accounts created after the Series 1996-1 Closing Date which meet the definition of Eligible Accounts shall be included as Accounts from and after the date upon which such Eligible Accounts are created and all Receivables in such Eligible Accounts, whether such Receivables are existing or thereafter created, shall be transferred automatically to the Trust upon purchase by the Transferor from the Originator. (b) Subject to Section 2.04(c) and (d), CFNA may, but shall not be obligated to, designate from time to time additional credit card accounts with respect to Receivables arising from Alternative Programs ("Eligible Alternative Accounts") to be included as Accounts and convey the Eligible Alternative Receivables arising from such Eligible Alternative Accounts to the Trust. (c) CFNA shall be permitted to designate and assign Eligible Alternative Receivables from Eligible Alternative Accounts only upon satisfaction of the following conditions. (i) CFNA shall designate only Eligible Alternative Accounts; 4 (ii) On or prior to each Addition Date in respect of Eligible Alternative Accounts, CFNA shall have executed and delivered to the Company a written assignment in substantially the form of Exhibit _ (the "Assignment") and a true and complete list identifying all such Eligible Alternative Accounts specifying for each such Account, as of the Addition Notice Date, its account number. Such list shall be as of the Addition Date with respect to such Assignment and shall be incorporated into and made a part of such Assignment and this Agreement; (iii) CFNA represents and warrants (x) as of each Addition Date with respect to Eligible Alternative Accounts added pursuant to Section 2.04(b) and 2.04(c) that (a) the list of Eligible Alternative Accounts, as of the Addition Notice Date, complies in all material respects with the requirements of paragraph (ii) above and (b) no selection procedure was utilized by CFNA in selecting the Eligible Alternative Accounts which is adverse to the interests of the Company and (y) as of the Addition Notice Date and as of the Addition Date, is not insolvent; (iv) The Company has received written confirmation from each Rating Agency that such Rating Agency will not reduce or withdraw its rating on any outstanding Series as a result of such addition; (v) On or before each Addition Date, CFNA shall deliver a certificate of a Vice President or more senior officer confirming the items set forth in paragraphs (ii), (iii) and (iv) above. The Company may conclusively rely on such certificate, shall have not duty to make inquiries with regard to matters set forth therein and shall incur no liability in so relying; and (vi) On or before each Addition Date, the Company shall deliver to the Trustee and each Rating Agency, an Opinion of Counsel (which, in this instance, shall be outside counsel to the Transferor) with respect to the Receivables in the Eligible Alternative Accounts substantially in the form of Exhibit F to the Pooling and Servicing Agreement. Upon satisfaction of the above conditions, CFNA shall execute and deliver the Assignment to the Company, and the Eligible Alternative Receivables from the Eligible Alternative Accounts shall be conveyed to the Company as provided in the Assignment. (d) CFNA shall be permitted to designate Eligible Alternative Accounts and convey such Eligible Alternative Accounts and the Eligible Alternative Receivables arising out of such Eligible Alternative Accounts pursuant to Sections 2.04(b) 5 and (c) until either (i) the number of Eligible Alternative Accounts equals 10% of the number of Eligible Accounts and Eligible Alternative Accounts (the "Ten Percent Number Test") or (ii) the aggregate dollar amount of Eligible Alternative Accounts equals 10% of the aggregate dollar amount of Eligible Accounts and Eligible Alternative Accounts (the "Ten Percent Aggregate Test") together with the Ten Percent Number Test, the "Ten Percent Tests"). When either Ten Percent Test has been met, CFNA shall not convey Eligible Alternative Receivables to the Transfer until the earlier of date on which the Ten Percent Test is no longer met or the Company receives written confirmation from each Rating Agency that such Rating Agency will not reduce or withdraw its then current rating on any outstanding Series as a result of such conveyance. When the Company has received written confirmation from each Rating Agency that such Rating Agency will not reduce or withdraw its then current rating on any outstanding series as a result of the continued inclusion of Eligible Alternative Accounts from a Designated Alternative Program, CFNA may continue to transfer Eligible Alternative Accounts from a designated Alternative Program to the Company, provided that (i) the number of Eligible Alternative Accounts relating to a Designated Alternative Program does not exceed 20% of the number of Eligible Accounts and Eligible Alternative Accounts, calculated as of December 31, of each calendar year (the "Twenty Percent Yearly Cap") and (ii) the number of Eligible Alternative Accounts relating to a Designated Alternative Program does not exceed 15% of the number of Eligible Accounts and Eligible Alternative Accounts, calculated as of March 31, June 30, September 30 and December 31 of each year for the preceding three Collection Periods (the "Fifteen Percent Quarterly Cap"). In addition, CFNA may continue to transfer Eligible Alternative Accounts from Non-Designated Alternative Programs, subject to the Ten Percent Maximum Number Test and the Ten Percent Aggregate Test. Section 2.05 Transfer of Merchant Fees ------------------------- In consideration of its agreement to accept the transfer or Receivables hereunder, CFNA agrees to transfer to the Company on each Determination Date, commencing on the Determination Date related to the December 1996 Distribution Date, an amount of merchant fees received by CFNA from authorized merchants pursuant to credit card program agreements during the calendar month preceding such Determination Date equal to the lesser of (x) $350,000 and (y) the total amount of merchant fees received by CFNA during such Collection Period from such authorized merchants pursuant to credit card program agreements. 6 ARTICLE III REPRESENTATIONS, WARRANTIES AND COVENANTS Section 3.01. Representations, Warranties of Firestone. Firestone ---------------------------------------- represents and warrants to the Company that: (a) Firestone has been duly organized and is validly existing and in good standing as a corporation under the laws of the State of Ohio, with full corporate power and authority to own its properties and to transact the business in which it is now engaged. (b) The performance of its obligations under this Agreement and the consummation of the transactions herein contemplated have been duly authorized by all requisite corporate action and will not conflict with or result in a breach of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any of its property or assets in the United States or upon that of any of its Significant Subsidiaries pursuant to the terms of, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which it or any of its Significant Subsidiaries is a party or by which it or any of its Significant Subsidiaries is bound or to which any of its property or assets in the United States is subject, nor will such action result in any violation of the provisions of its articles of incorporation and regulations or of any statute or any order, rule or regulation of any court or governmental agency subdivision of either having jurisdiction over it or any of its properties; and no consent, approval, authorization, order, registration or qualification of or with any such court or any such regulatory authority or other such governmental agency or body is required to be obtained by or with respect to Firestone for the consummation of the transactions contemplated by this Agreement. (c) This Agreement has been duly executed and delivered by Firestone and constitutes its valid and legally binding obligation, enforceable against it in accordance with its terms, subject as to enforcement to bankruptcy, insolvency, reorganization and other similar laws of general applicability relating to or affecting creditors' rights' and to general equity principles. Section 3.02. Representations and Warranties of CFNA. CFNA -------------------------------------- represents and warrants to the Company that: (a) CFNA has been duly organized and is validly existing and in good standing as a national bank under the laws of the United States. 7 (b) The sale by CFNA of Receivables pursuant to this Agreement and the performance of its obligations under this Agreement have been duly authorized by all requisite corporate action and will not conflict with or resulting a breach of any of the terms or provisions or, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any of its property or assets pursuant to the terms of, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which it is a party or by which it is bound or to which any of its property of assets is subject, nor will such action result in any violation of the provisions of its articles of association and by-laws or of any statute or any order, rule or regulation of any court or governmental agency or body of the United States, any State or any political subdivision having jurisdiction over it or any of its properties; and o consent, approval, authorization, order, registration or qualification of or with any such court or any such regulatory authority or other such governmental agency or body is required to be obtained by or with respect to CFNA for the sale of Receivables to the Company hereunder. (c) This Purchase Agreement has been duly executed and delivered by CFNA and constitutes its valid and legally binding obligation, enforceable against it in accordance with its terms, subject as to enforcement to bankruptcy, insolvency, reorganization and other similar laws of general applicability relating to or affecting creditors' rights, to debt moratorium laws relating to national banking associations and to general equity principles. (d) CFNA will be, as to each Receivable sold by it to the Company, the owner immediately prior to the sale of such Receivable free from any lien, security interest, encumbrance or other right, title or interest of any Person. (e) There is no effective financing statement (or similar statement or instrument of registration under the law of any jurisdiction) now on file or registered in any public office filed by CFNA or purporting to be filed on behalf of CFNA covering any interest of any kind in the Receivables except any financing statements filed in respect of and covering the purchase of the Receivables by the Company pursuant to this Purchase Agreement. (f) All filings and recordings (including pursuant to the Uniform Commercial Code) required to perfect the title of the Company in each Receivable sold hereunder have been accomplished and are in full force and effect. (g) The chief executive office of CFNA is located in Cuyahoga County, Ohio. Originals or duplicates of documents evidencing all Receivables are kept in Cuyahoga County and Summit County. 8 Section 3.03. Representations and Warranties of the Company. The --------------------------------------------- Company represents and warrants to each of Firestone and CFNA that: (a) The Company has been duly organized and is validly existing and in good standing as a corporation under the laws of the Commonwealth of Massachusetts, with full corporate power and authority to own its properties and to transact the business in which it is now engaged or in which it proposes to engage. (b) The purchase by the Company of Receivables pursuant to this Agreement and the consummation of the transactions herein contemplated will not conflict with or result in a breach of any of the terms or provisions of, or constitute a default under or, except as contemplated hereby and by the Pooling and Servicing Agreement, result in the creation or imposition of any lien, charge or encumbrance upon any of the property or assets of the Company pursuant to the terms of, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company is a party or by which it is bound or to which any of the property or assets of the Company is subject, nor will such action result in any violation of the provisions of the certificate of incorporation or the by-laws of the Company or of any statue or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company or any of its properties; and no consent, approval, authorization, order, registration or qualification of or with any court or any such regulatory authority or other governmental agency or body is required for the purchase of Receivables by the Company. (c) This Agreement has been duly authorized, executed and delivered by the Company and constitutes the valid and legally binding obligation of the Company enforceable against the Company in accordance with its terms, subject, as to enforcement, to bankruptcy, insolvency, reorganization and other similar law of general applicability relating to or affecting creditors' rights and to general equity principles. Section 3.04. Covenants of CFNA. CFNA covenants and agrees with ----------------- the Company and Firestone as follows: (a) CFNA will not move its chief executive office or cause the documents and books evidencing the Receivables to be moved from Cuyahoga County, Ohio unless (i) it shall have given to the Company and Firestone not less than 45 days written notice of its intentions so to do, clearly describing the new location, and (ii) it shall have taken such action, satisfactory to the Company, to maintain any security interest of, or any filing in respect of title of, the Company or the Trustee for 9 the benefit of the Certificateholders in the Receivables at all times fully perfected and in full force and effect. (b) CFNA shall duly fulfill all obligations on its part to be fulfilled under or in connection with the Receivables and will do nothing to impair the right, title and interest of the Company in the Receivables. (c) CFNA shall make, execute or endorse, acknowledge, and file or deliver to the Company from time to time such vouchers, invoices, schedules, confirmatory assignments, conveyances, transfer endorsements, powers of attorney, certificates, reports and other assurances or instruments and take such further steps relating to the Receivables and other property or rights covered by the security interest granted pursuant to the Pooling and Servicing Agreement as the Company may reasonably request. (d) CFNA agrees that, in the event that is changes its name, place of business or corporate structure so that the financing statements on file with respect to the Receivables become misleading, it will notify the Company and Firestone and cooperate with the Company and Firestone to file amendments to such financing statements to evidence, perfect, maintain and enforce the title or the security interest of the Company or the Trustee in the Receivables and the priority thereof. (e) CFNA agrees to indemnify, defend and hold the Company harmless from and against any and all loss, liability, damage, judgment, claim, deficiency or expense including interest, penalties, reasonable attorneys' fees and disbursements and amounts paid in settlement to which the Company may become subject insofar as such loss, liability, damage, judgment, claim, deficiency or expense arise out of, or is based upon or relates to, a breach by CFNA of any warranty, representation, covenant or agreement contained in this Agreement. (f) CFNA shall defend the Receivables sold by it to the Company against all claims and demands of all Persons at any time claiming the same or any interest therein adverse to the Company. (g) CFNA will not execute nor will there be on file in any public office any effective financing statement (or similar statement or instrument of registration under the laws of any jurisdiction) or statements relating to the Receivables, except any financing statements filed or to be filed in respect of and covering the purchase of the Receivables by the Company pursuant to this Agreement and the security interest created in favor of the Trustee pursuant to the Pooling and Servicing Agreement and any financing statements assigned to the Trustee 10 for the benefit of the Certificateholders in connection herewith or therewith. (h) CFNA shall at its expense perform all acts and execute all documents reasonably requested by the Company at any time to evidence, perfect, maintain and enforce the title or the security interest of the Company in the Receivables and the priority thereof. CFNA will, at the reasonable request of a duly authorized officer of the Company, execute and deliver financing statements relating to or covering the Receivables (reasonably satisfactory in form and substance to the Company) and, where permitted by law, CFNA authorizes the Company to file one or more financing statements signed only by the Company. (i) Until such time as it shall notify the Company and Firestone in writing of the revocation of such authority, CFNA hereby agrees that payments in respect of Receivables made by the obligors thereunder may be collected pursuant to the CFNA credit card agreements between each obligor and CFNA in the name of CFNA. In addition, upon the written request of the Company, CFNA agrees to notify all obligors under Receivables to make payment thereof to a bank account(s) designated by the Company and specified in such notice. (j) Upon the occurrence of a Liquidation Event with respect to CFNA, CFNA shall immediately cease to sell Receivables to the Company and immediately notify the Company of the occurrence thereof. (k) CFNA hereby covenants and agrees that, except as otherwise required by law or as is deemed by CFNA, in its sole discretion, based upon a good faith assessment by it of the nature of its competition, to be necessary or advisable, it will not (i) reduce the annual percentage rate of the monthly finance charge assessed on the Receivables, if as a result of such reduction, its reasonable expectation is that (x) the Portfolio Yield would be a rate less than the Base Rate, or (ii) reduce the minimum payment terms or otherwise alter the terms of the Accounts or the policies applicable thereto, if, as a result of such change, in its reasonable expectation, an Amortization Event with respect to the Certificates or any other Series of Certificates would occur. (l) CFNA hereby agrees that it may transfer or otherwise convey its interest in Accounts, including the Receivables in such Accounts (subject to the interest of the Company and the Trustee on behalf of the Certificateholders), otherwise than pursuant to this Agreement, in whole or in part only upon satisfaction of the following condition: (i) the acquiring person shall (a) be organized and existing under the laws of the United States of America or any state or the District of Columbia, and be a bank or other entity that is not subject to the Bankruptcy Code of 1978, which may be established by and owned by Firestone, and (b) expressly assume by an agreement supplemental to this Agreement the performance of CFNA's obligations with respect to such Accounts; (ii) the 11 Company shall deliver to the Trustee opinions of counsel (a) stating that all conditions precedent to the conveyance have been complied with and (b) to the effect that the conveyance shall not adversely affect the treatment of the Certificates as debt for Federal and applicable state income tax purposes or materially adversely impact the Federal income tax consequences that affect any Certificateholder and generally to the effect that the transfer would not affect the Federal income tax ownership of the Receivables; and (iii) the Company shall obtain from each Rating Agency a letter confirming that the rating of the Certificates, after such conveyance, will not be lowered or withdrawn. Section 3.05 Representations and Warranties Deemed Made. The sale ------------------------------------------ of Receivables on each Purchase Date pursuant to Section 2.01 of this agreement shall be deemed to constitute a representation and warranty by Firestone that the representations and warranties made under Section 3.01 of this Agreement and by CFNA that the representations and warranties made under Section 3.02 of this Agreement are true and correct on such Purchase Date, as if made on such Purchase Date. Section 3.06 Firestone Covenant. Firestone covenants and agrees ------------------ with CFNA and the Company that it will, on behalf of the Company, maintain records of the Receivables assigned pursuant to this Agreement which are sufficient to identify the specific accounts that constitute the Receivables sold and assigned hereunder. ARTICLE IV CONDITIONS PRECEDENT Section 4.01 Conditions to the Obligations of the company. The -------------------------------------------- obligations of the Company hereunder on each Purchase Date shall be subject to the satisfaction of the following conditions: (a) All representations and warranties of CFNA and Firestone contained in this Agreement shall be true and correct on such Purchase Date and CFNA and Firestone shall be in compliance in all material respects with all of their respective obligations hereunder. (b) On or prior to such Purchase Date, there shall have been made and there shall be in full force and effect all filings (including, without limitation, Uniform Commercial Code filings), recordings and/or registrations, and there shall have been given, or taken, any notice or any other similar action, as may be necessary or, to the extent requested by the Company, advisable, in order to establish, perfect, protect and preserve the right, title and interest, remedies, powers, privileges, 12 liens and security interests of the Company and/or to the Trustee for the benefit of the Certificateholders granted pursuant to this Agreement or the Pooling and Servicing Agreement, as the case may be, and the Company and the Trustee shall have received evidence satisfactory to them of all of the foregoing. (c) All corporate and legal proceedings and all instruments in connection with the transactions contemplated by this Agreement shall be satisfactory in form and substance to the Company and the Company shall have received copies of all documents (including without limitation, records or corporate proceedings) relevant to the transactions herein contemplated as the Company may have reasonably requested. (d) No Servicer Default or Liquidation Event with respect to CFNA shall have occurred. (e) The Final Trust Termination Date shall have not occurred. ARTICLE V MISCELLANEOUS Section 5.01. Notices, etc. Except where telephonic instructions ------------- or notices are authorized herein to be given, all notices, demands, instructions and other communications required or permitted to be given to or made upon any party hereto shall be in writing and shall be personally delivered or sent by registered, certified or express mail, postage prepaid, return receipt requested, or by prepaid facsimile, Telex, TWX or telegram (with messenger delivery specified in the case of a telegram) and shall be deemed to be given for purposes of this Agreement on the day that such writing is delivered or sent to the intended recipient thereof in accordance with the provisions of this Section. Unless otherwise specified in a notice sent or delivered in accordance with the foregoing provisions of this Section, notices, demands, instructions and other communications in writing shall be given to or made upon the respective parties hereto at their respective addresses (or to their respective facsimile, Telex or TWX numbers) indicated below, and, in the case of telephonic instructions or notices, by calling the telephone number or numbers indicated for such party below: If to the Company: Firestone Retail Credit Corporation c/o J.H. Management Corporation, Room 5/10 One International Place Boston, Massachusetts 02110-2624 Attention: Nancy D. Smith, President Tel. No. (617) 951-7727 13 Facsimile No. (617) 951-7050 If to CFNA: Credit First National Association 6275 Eastland Road Brook Park, Ohio 44142 Attention: President Tel. No. (216) 362-5005 Facsimile No. (216) 362-5069 If to Firestone: Bridgestone/Firestone, Inc. 50 Century Boulevard Nashville, Tennessee 37214 Attention: Treasurer Tel. No. (615) 872-5000 Facsimile No. (615) 872-1599 Section 5.02. Successors and Assigns. This Agreement shall be ---------------------- binding upon CFNA, Firestone and the Company and their respective successors and assigns and shall inure to the benefit of CFNA, Firestone and the Company and their respective successors and assigns, provided that neither CFNA nor -------- Firestone shall assign any of its rights or obligations hereunder without the prior written consent of the Company other than an assignment by Firestone of its rights and obligations hereunder to the Trust which assignment is hereby acknowledged and consented to by the Company and CFNA. Except as expressly permitted hereunder or in any of the Company Documents, the Company shall not assign any of its rights or obligations hereunder without the prior written consent of Firestone and CFNA. Section 5.03. Severability Clause. Any provisions of this ------------------- Agreement which are prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. Section 5.04. Amendments; Governing Law. This Agreement and the ------------------------- rights and obligations of the parties hereunder may not be changed orally but only by an instrument in writing signed by the party against which enforcement is sought and shall be construed in accordance with and governed by the laws of the State of New York. So long as this Agreement is in effect, the Company and Firestone shall not amend the Pooling and Servicing Agreement without the prior written consent of CFNA. 14 Section 5.05. Counterparts. This Agreement my be executed in any ------------ number of copies, and by the different parties hereto on the same or separate counterparts, each of which shall be deemed to be an original instrument. Section 5.06. Costs and Expenses. CFNA agrees to pay all ------------------ reasonable costs and expenses of the Company and CFNA in connection with the negotiation, preparation, printing, typing, reproduction, execution and delivery of this Agreement, any amendments or modifications of (or supplements to) this Agreement and any and all other documents furnished pursuant hereto or in connection herewith, relative hereto, as well as all costs and expenses (including without limitation, attorneys' fees and expenses), if any, in connection with the enforcement of this Agreement or any other agreement furnished pursuant hereto or in connection herewith. Section 5.07. Bankruptcy Petition Against the Company. CFNA --------------------------------------- covenants and agrees that prior to the date which is one year and one day after the payment in full of all Certificates issued pursuant to the Pooling and Servicing Agreement it shall not institute against, or join any other person in instituting against, the Company any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings under any Federal or state bankruptcy or similar law. Section 5.08. Remedies. In addition to any rights and remedies -------- now or hereafter granted under applicable law, and not by way of litigation of any such rights and remedies, the Company shall have all of the rights and remedies under the Uniform Commercial Code as enacted in any applicable jurisdiction in addition to the rights and remedies provided in this Agreement. Section 5.09. CFNA Obligations. The Company shall have no ---------------- obligations or liabilities to any obligor under a CFNA Card nor shall the Company be required or obligated in any manner to perform or fulfill any of the obligations of CFNA under or pursuant to any Receivable. It is further expressly agreed that CFNA shall have no obligations to the Company except as expressly set forth in this Purchase Agreement. Section 5.10. Company's Fee. In consideration of its agreement ------------- to accept Receivables hereunder, CFNA agrees to pay to the Company a fee of $16,500 per year, which fee shall be payable in advance on the ( ) and on each anniversary thereof. Section 5.11. Consent to Jurisdiction. Any legal action or ----------------------- proceeding with respect to this Agreement may be brought in the courts of the State of New York or of the United States of America for the Southern District of New York, and, by 15 execution and delivery of this Agreement, each of CFNA and Firestone hereby accepts for itself and in respect of this property, generally and unconditionally, the jurisdiction of the aforesaid courts and hereby irrevocably waives, to the fullest extent permitted by law, any objection which it my now or hereafter have to the laying of the venue of any legal action or proceeding arising out of or relating to this Agreement, as the case my be, in the State of New York and hereby further irrevocably waives any clams that the State of New York is not a convenient forum for any such legal action or proceeding. Bach of CFNA and Firestone hereby irrevocably designates CT Corporation System, Inc., a New York corporation located at 1633 Broadway, New York, New York 10019, as its designee, appointee and agent respectively, to receive, for and on behalf of it, service of process in such respective jurisdictions in any legal action or proceeding with respect to this Agreement, and such service shall be deemed completed 10 days after delivery thereof to said agent. It is understood that a copy of such process served on any such agent will be promptly forwarded by first class mail to CFNA or Firestone, as the case my be, at its address set forth in Section 5.01, but the failure of CFNA or Firestone, as the case my be, to receive such copy shall not affect in any way the service of such process. Each of CFNA and Firestone, further irrevocably consents to the service of process out of any of the aforementioned courts in any such action or proceedings by the mailing of copies thereof by registered or certified first class mail, postage prepaid, to CFNA or Firestone, as the case my be, at its said address, such service to become effective 30 days after such mailing. Nothing herein shall affect the right of the Company or the Trustee to serve process in any other manner permitted by law or to commence legal proceedings or otherwise proceed against either CFNA or Firestone in any other jurisdiction. Section 5.12. No Recourse. The obligations of the Company under ----------- this Agreement are solely the corporate obligations of the Company. No recourse shall be had for the payment of any amount owing in respect of any fee hereunder or any other obligation or claim arising out of or based upon this Agreement against any stockholder, employee, officer, director or incorporator of the Company. Section 5.13. Acknowledgment of Assignment. CFNA hereby ---------------------------- acknowledges and consents to the assignment by the Company of its rights under this Agreement to the Trustee on behalf of the Certificateholders pursuant to the Pooling and Servicing Agreement, which shall in no way limit the assignment set forth in Section 2.02(a). 16 IN WITNESS WHEREOF, each of the parties hereto has caused this Purchase Agreement to be duly executed and delivered as of the date first above written. FIRESTONE RETAIL CREDIT CORPORATION By ---------------------------------- Authorized Signatory BRIDGESTONE/FIRESTONE, INC. By ----------------------------------- Authorized Signatory CREDIT FIRST NATIONAL ASSOCIATION By ------------------------------------- uthorized Signatory ACKNOWLEDGED AND AGREED: THE FUJI BANK AND TRUST COMPANY By _____________________________ Authorized Signatory 16 ANNEX X DEFINITIONS "Account" ------- "Amortization Event" shall have the meaning set forth in Section ------------------ 10 of the applicable Supplement. "Bridgestone/Firestone Certificate" --------------------------------- "Closing Date" shall mean December 2, 1992. ------------ "Discount Amount" shall mean with respect to any Receivable --------------- purchased by the Company pursuant to Section 2.01 after the exercise by the Company of the Discount Option, the product of the face amount of such Receivable and the Discount Percentage. "Discount Option" shall mean the Company's option under Section --------------- 2.11 of the Pooling and Servicing Agreement. "Liquidation Event" shall mean, with respect to any Person, that ----------------- such Person voluntarily seeks, consents to or acquiesces in the benefit or benefits of any Debtor Relief Law or become a party to (or is made the subject of) any proceeding provided for in any Debtor Relief Law, other than as a creditor or claimant, and in the event such proceeding is involuntary, the petition instituting same is not dismissed within 90 days of its filing. "Monthly Servicer Certificate" shall mean the document reflecting ---------------------------- the daily sales transactions originated by CFNA and all other transactions including, without limitation, amounts payable for Periodic Finance Charges, Late Fees, Returned Check Fees and miscellaneous adjustments, for the Collection Period. "Pooling and Servicing Agreement" shall mean the Amended and ------------------------------- Restated Pooling and Servicing Agreement dated as of ________ __, 1996, by and among the Company, Firestone and the Trustee, and all amendments thereof and supplements thereto, including any Supplement. "Series 1996-1 Supplement" shall mean the Series 1996-1 Supplement ------------------------ to the Pooling and Servicing Agreement, dated as of _______ __, 1996 by and among the Company, Firestone and the Trustee, on behalf of the Series 1996-1 Certificateholders. "Service Agreement" shall mean the Service Agreement, dated as of ----------------- October 20, 1993, between CFNA and Firestone and all amendments thereof and supplements thereto. "Settlement Date" shall mean the Determination Date (as defined --------------- in the Pooling and Servicing Agreement). "Significant Subsidiary or Subsidiaries" shall mean on any date -------------------------------------- a Subsidiary incorporated under the law of any State of the United States (i) whose total assets as of the end of its next preceding fiscal quarter shall be at least $7,500,000 or (ii) whose total sales during the four fiscal quarters then ended shall be at least $7,500,000 or (iii) which is engaged in manufacturing. "Subsidiary" shall mean any corporation at least a majority of ---------- whose securities having ordinary voting power for the election of directors (other than securities having such power only by reason of the happening of a contingency) are at the time owned by Firestone and/or one or more of its other Subsidiaries. "Transfer Agreement" shall mean the Transfer Agreement, dated as ------------------ of October 1, 1993, by and between Society and CFNA. 2 EX-4.4 8 AMENDED AND RESTATED PARTICIPATION AGREEMENT EXHIBIT 4.4 AMENDED AND RESTATED -------------------- PARTICIPATION AGREEMENT ----------------------- This Participation Agreement, as amended and restated, dated as of October __, 1996 is between Firestone Retail Credit Corporation, a corporation organized and existing under the laws of the Commonwealth of Massachusetts ("FRCC"), and Bridgestone/Firestone, Inc., a corporation ---- organized and existing under the laws of the State of Ohio ("Bridgestone/Firestone"). --------------------- WHEREAS, Credit First National Association, a national banking association ("CFNA"), pursuant to the Second Amended and Restated Purchase ---- and Sale Agreement, dated as of October __, 1996 among CFNA, FRCC and Bridgestone/Firestone (as amended, the "Purchase Agreement"), will sell to ------------------ FRCC certain receivables (the "Receivables"); and ----------- WHEREAS, FRCC, as Transferor, Bridgestone/Firestone, as Servicer, and The Fuji Bank and Trust Company, as Trustee (the "Trustee") have entered ------- into a Pooling and Servicing Agreement, as supplemented by the Series 1992-A Supplement and the Series 1992-B Supplement, each dated as of November 1, 1992 (collectively, the "Original Pooling and Servicing Agreement"), pursuant ---------------------------------------- to which Receivables have been conveyed to the Bridgestone/Firestone Master Trust (the "Trust") in exchange for ceratin investor certificates and certificates of beneficial interest that have been either sold to investors or held by FRCC (those held by FRCC, the "Class B Certificates"), and an -------------------- exchangeable transferor certificate (together with any successor exchangeable transferor certificate the "Exchangeable Transferor Certificate") that is ----------------------------------- held by FRCC; WHEREAS, in order to facilitate and fund the transaction described above, FRCC sold, and Bridgestone/Firestone purchased, an undivided participation interest in the Exchangeable Transferor Certificate and the Class B Certificates pursuant to a Participation Agreement, dated December 2, 1992 between FRCC and Bridgestone/Firestone; WHEREAS, pursuant to the Original Pooling and Servicing Agreement, as amended and restated, and as supplemented by the Series 1996-1 Supplement, each dated as of the date hereof and each by and among FRCC, as Transferor, Bridgestone/Firestone, as Servicer and the Trustee (as amended and supplemented from time to time, the "Pooling and Servicing Agreement") the Transferor will tender the Exchangeable Transferor Certificate to the Trustee in exchange for a new series of investor certificates, a new Exchangeable Transferor Certificate that will be held by FRCC and a subordinated transferor certificate (the "Subordinated Transferor Certificate") that will be held by FRCC; and WHEREAS, in order to facilitate and fund the transaction described in the preceding clause, FRCC wishes to sell, and Bridgestone/Firestone wishes to purchase, an undivided participation interest in the Subordinated Transferor Certificate and confirm its purchase of an undivided participation interest in the Exchangeable Transferor Certificate and the Class B Certificates on the terms and subject to the conditions set forth in this Agreement; NOW, THEREFORE, the parties hereby agree as follows: Section 1. Definitions. ----------- (a) The following terms, when capitalized in this Agreement and used either in the singular of the plural, shall have the following meanings: "Participation" means the undivided ownership interest in the ------------- Exchangeable Transferor Certificate, the Subordinated Transferor Certificate and the Class B Certificates purchased by Bridgestone/Firestone pursuant to Section 2(a) hereof on the Purchase Date. "Participation Percentage" means, as of any day, in respect of the ------------------------ Participation acquired by Bridgestone/Firestone in the Exchangeable Transferor Certificate, the Subordinated Transferor Certificate and the Class B Certificates, 100%. "Purchase Date" shall mean ________ __, 1996. ------------- "Transferor Interest" shall mean the interest in the Trust not ------------------- represented by any Series of investor Certificates or the Bridgestone/Firestone Certificate then outstanding, including the right to receive Collections and other amounts to be paid to the Transferor at the times and in the amounts specified in Article IV to the Pooling and Servicing Agreement. (b) Capitalized terms not otherwise defined in this Agreement shall have the same meanings when used in the Pooling and Servicing Agreement. Section 2. Sales of Participation. ---------------------- (a) FRCC hereby agrees to sell to Bridgestone/Firestone, without recourse, representation or warranty whatsoever except as expressly provided herein, and Bridgestone/Firestone hereby agrees to purchase from FRCC on the Purchase Date, or such other date as the parties may agree, an undivided ownership interest in the Subordinated Transferor Certificate equal to the Participation Percentage thereof, including all amounts allocated to the holder of the Subordinated Transferor Certificate pursuant to Article IV of the Pooling and Servicing Agreement and the benefit of all representations, warranties and agreements made for the benefit of the holder of the Subordinated Transferor Certificate therein. (b) FRCC hereby confirms that it sold to Bridgestone/Firestone, without recourse, representation or warranties except as expressly provided herein and Bridgestone/Firestone confirms that it purchased from FRCC on December 2, 1992 an undivided ownership interest in the Exchangeable Transferor Certificate, the Class B Certificates and the Transferor Interest equal to the Participation Percentage, including all amounts allocated to the holders of the Exchangeable Transferor Certificate and the holders of the Class B Certificates pursuant to Article IV of the Pooling and Servicing Agreement and the benefit of all representations, warranties, and agreements made for the benefit of the holder of the Exchangeable Transferor Certificate and the Class B Certificates therein. (c) The initial price to be paid by Bridgestone/Firestone for the Participation acquired by it shall be an amount agreed between the parties at the time such sale occurs pursuant to this Agreement and shall be paid on the Purchase Date. In addition, Bridgestone/Firestone shall pay to FRCC (i) on each day on which it has been determined that the Transferor Amount has increased (each, a "Settlement Date") the amount of such increase and (ii) --------------- on any day after the exercise by FRCC of the option set forth in Section 2.11 of the Pooling and Servicing Agreement (the "Discount Option"), an amount equal to the product of (x) the face amount of all Receivables conveyed to the Trust on such day and (y) the Discount Percentage. (d) Bridgestone/Firestone shall be required to purchase from FRCC (i) on any day, any Ineligible Receivables removed from the Trust pursuant to Section 2.06 of the Pooling and Servicing Agreement and any Receivables in Removed Accounts pursuant to Section 2.10 of the Pooling and Servicing Agreement or (ii) any Investor Certificates purchased by FRCC pursuant to Section 2.07 of the Pooling and Servicing Agreement. The amount to be paid by Bridgestone/Firestone in the case of clause (i) and (ii) shall be equal to the amount required to be paid by FRCC pursuant to Section 2.06, 2.07 or 2.10 of the Pooling and Servicing Agreement, respectively. (e) In consideration of the acquisition by Bridgestone/Firestone of the Participation and of its obligation to purchase Ineligible Receivables, Receivables in Removed Accounts and, in certain circumstances, Investor Certificates, hereunder, FRCC agrees to pay to Bridgestone/Firestone, on each day on which FRCC receives a payment in respect of the Exchangeable Transferor Certificate, the Subordinated Transferor Certificate or the Class B Certificates (each such day also a "Settlement Date"), an amount equal to the product of --------------- Bridgestone/Firestone'sParticipation Percentage as of such date and the amount of any decrease in the Transferor Amount occurring as a result of payments received by FRCC as Holder of the Exchangeable Transferor Certificate, as Holder of the Subordinated Transferor Certificate or as Holder of the Class B Certificates from the Servicer, the Trustee or any other person, in respect of the Exchangeable Transferor Certificate, the Subordinated Transferor Certificate or the Class B Certificates, as the case may be (including, in the case of the Exchangeable Transferor Certificate, any proceeds from the sale of Investor Certificates of any Series issued following the tender of the Exchangeable Transferor Certificate and the reissue thereof as part of any Exchange pursuant to Section 6.09 of the Pooling and Servicing Agreement) during the period since the immediately preceding Settlement Date, in the same funds as received by FRCC. FRCC shall only engage in any Exchange pursuant to Section 6.09 of the Pooling and Servicing Agreement, a removal of accounts pursuant to Section 2.10 of the Pooling and Servicing Agreement or the exercise of the Discount Option at the written request of Bridgestone/Firestone. (f) There shall be allocated to Bridgestone/Firestone with respect to each Collection Period a portion of the Defaulted Amount with respect to such Collection Period equal to the product of Bridgestone/Firestone's Participation Percentage and the Defaulted Amount allocated to FRCC as Holder of the Exchangeable Transferor Certificate with respect to such Collection Period. There shall be allocated to Bridgestone/Firestone with respect to each Collection Period a portion of all reductions to the Class B Invested Amount as defined in the Series 1992-A Supplement, the Class B Invested Amount as defined in the Series 1992-B Supplement and the Subordinated Transferor Invested Amount (to the extent not attributable to principal payments covered by paragraph (e) above) with respect to each Collection Period equal to the amount of Bridgestone/Firestone's Participation Percentage and the amount of such reductions with respect to such Collection Period. (g) All amounts payable to the Transferor pursuant to Section 4.01(b) of the Pooling and Servicing Agreement shall be paid by the Transferor to Bridgestone/Firestone. (h) Notwithstanding anything in clauses 2(c) and 2(e) hereof, the parties may agree to settle monthly on each Distribution Date under the Pooling and Servicing Agreement or another date, so long as there is at least one Settlement Date occurring in each calendar month during the term of this Agreement; provided, however, that amounts owed pursuant to -------- ------- Section 2(e) above shall be paid on the day on which FRCC receives such payment referred to in Section 2(e). Section 3. Delivery of Documents; Procedure. On the Purchase -------------------------------- Date, FRCC shall submit to Bridgestone/Firestone a copy of the Purchase Agreement, the Series 1996-1 Supplement, the Pooling and Servicing Agreement and all other documents relating to the transactions contemplated therein, together with a Participation Certificate in the form set forth in Annex I ------- hereto, dated such Purchase Date and representing an undivided interest, to the extent of the Participation Percentage, in all of FRCC's right, title and interest in and to the Exchangeable Transferor Certificate, the Class B Certificates and the Transferor Interest. On each Settlement Date, FRCC shall deliver a statement (the "Settlement Statement") in the form of Annex -------------------- II hereof, setting forth the net amount of funds owing by FRCC to Bridgestone/Firestone or by Bridgestone/Firestone to FRCC. Such statement shall be appropriately modified if there are settlements occurring more frequently than monthly on Distribution Dates under the Pooling and Servicing Agreement. Section 4. FRCC Required to Furnish Certain Information. -------------------------------------------- Bridgestone/Firestone shall have the right from time to time at reasonable intervals to require FRCC to supply such information as Bridgestone/Firestone may reasonably request respecting the Exchangeable Transferor Certificate, the Class B Certificates and Bridgestone/Firestone's participation interest therein, including but not limited to the information and documents with respect to the Investor Certificateholders of any Series provided to FRCC by the Trustee. FRCC shall deliver to Bridgestone/Firestone copies of all reports, notices, certificates, etc. received or delivered by it pursuant to the Pooling and Servicing Agreement. FRCC hereby agrees to consult with and take direction from Bridgestone/Firestone prior to exercising any rights as Holder of the Exchangeable Transferor Certificate, as Holder of the Class B Certificates or as Transferor under the Pooling and Servicing Agreement or any Series Supplement related thereto. Section 5. Termination. This Agreement shall terminate following ----------- the surrender of the Exchangeable Transferor Certificate, the Subordinated Transferor Certificate and the Class B Certificates and termination of the Trust pursuant to Article XII of the Pooling and Servicing Agreement. Section 6. Representations and Warranties of and Agreement By -------------------------------------------------- Bridgestone/Firestone. - --------------------- (a) Bridgestone/Firestone is a corporation duly organized and validly existing in good standing under the laws of the State of Ohio, and has full corporate power, authority and legal right to execute, deliver and perform its obligations under this Agreement and the transactions contemplated under this Agreement and, in all material respects, to own its properties and conduct its business as such properties are presently owned and such business is presently conducted. (b) The execution and delivery of this Agreement and the consummation of the transactions provided for in this Agreement have been duly authorized by Bridgestone/Firestone by all necessary corporate action on the part of Bridgestone/Firestone. (c) This Agreement constitutes a legal, valid and binding obligation of Bridgestone/Firestone, enforceable in connection with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws nor or hereafter in effect affecting the enforcement of creditors' rights in general and except as such enforceability may be limited by general principles of equity (whether considered in a proceeding at law or in equity). (d) Bridgestone/Firestone represents and warrants that it is acquiring the Participation for its own account and not with a view toward, or for sale in connection with, any distribution thereof. Section 7. Representations and Warranties of FRCC. -------------------------------------- (a) FRCC is a corporation duly organized and validly existing in good standing under the laws of the Commonwealth of Massachusetts, and has full corporate power, authority and legal right to execute, deliver and perform its obligations under this Agreement and the transactions contemplated under this Agreement and, in all material respects, to own its properties and conduct its business as such properties are presently owned and such business is presently conducted. (b) The execution and delivery of this Agreement and the consummation of the transactions provided for in this Agreement have been duly authorized by FRCC by all necessary corporate action on the part of FRCC. (c) This Agreement constitutes a legal, valid and binding obligation of FRCC, enforceable in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws nor or hereafter in effect affecting the enforcement of creditors' rights in general and except as such enforceability may be limited by general principles of equity (whether considered in a proceeding at law or in equity). (d) FRCC represents that this Agreement, together with the Participation Certificate provided for in Section 3, will vest in Bridgestone/Firestone an undivided interest, to the extent of the Participation Percentage, in all of its right, title and interest in and to, the Exchangeable Transferor Certificate, the Subordinated Transferor Certificate and the Class B Certificates and in and to the proceeds thereof, including proceeds, with respect to the Exchangeable Transferor Certificate, resulting from any Exchange, free from liens, encumbrances or claims of third parties. Section 8. Maintenance of Records. ---------------------- FRCC agrees to maintain or cause to be maintained accurate and complete record with respect to the Exchangeable Transferor Certificate and the Class B Certificates and to deliver to Bridgestone/Firestone on demand copies of any records required by Bridgestone/Firestone in connection with Bridgestone/Firestone's enforcement of its rights under this Agreement. Section 9. Exculpation. ----------- Except as otherwise set forth in this Agreement, FRCC's sole obligation hereunder shall be to distribute, as aforesaid, to Bridgestone/Firestone the Participation Percentage of any payment received by FRCC relating to the Exchangeable Transferor Certificate, the Subordinated Transferor Certificate and the Class B Certificates, as and when received by FRCC. No other obligation or duty is assumed by FRCC beyond the foregoing, nor shall any other obligation or duty be deemed to be implied. FRCC shall not have any fiduciary relationship with Bridgestone/Firestone by virtue of this Agreement or the transactions contemplated hereby. Without limiting the generality of the foregoing, it is agreed that, except with respect to representations and warranties set forth in this Agreement, FRCC does not assume, nor shall FRCC or any of its officers, directors, employees or agents have any responsibility or liability, expressed or implied, for: (a) any action taken or omitted, whether by FRCC, the Servicer, Society or any other Person in connection with any Receivable except for FRCC's own gross negligence or willful misconduct; (b) the authorization, execution, effectiveness, enforceability, genuineness or validity of any Receivable, the Pooling and Servicing Agreement, the Purchase Agreement, the Series 1992-A Supplement, the Series 1992-B Supplement, the Series 1996-1 Supplement or any document, instrument or other writing in connection therewith, except with respect to the authorization, execution, effectiveness, enforceability, genuineness or validity by or against FRCC of any such document, instrument or other writing executed by FRCC; (c) the genuineness, truthfulness or accuracy of any recitals, statements, representations or warranties made in or in connection with any Receivable, the Pooling and Servicing Agreement, the Purchase Agreement, the Series 1992-A Supplement, the Series 1992-B Supplement, the Series 1996-1 Supplement or any other document, instrument or other writing in connection therewith, except for any representation and warranty of FRCC made in any such document, instrument or writing executed by FRCC; (d) the financial condition of any Obligor or CFNA or for any credit or other information regarding any Obligor or card issuer; or (e) the performance of any of the obligations of any person (including any Obligor) primarily or secondarily labile with respect to any Receivable. Section 10. No Petition. Bridgestone/Firestone agrees that, prior ----------- to the date which is one year and one day after the payment in full of all Investor Certificates issued pursuant to the Pooling and Servicing Agreement, it shall not institute against, or join any other person in instituting against, FRCC any bankruptcy, reorganization, insolvency or liquidation proceedings or other similar proceeding under the laws of the United States or any state thereof. Section 11. Modification; Successors and Assigns. No amendment ------------------------------------ or modification of this Agreement shall be effective unless in writing and signed by the party against whom enforcement of such amendment or modification is sought. No amendment or modification to this Agreement shall amend or modify the definition of "Participation Percentage" unless there shall have been delivered to the Trustee an Opinion of Counsel hat such amendment or modification shall not have any material adverse impact on the Federal income tax characterization of any outstanding Series of Investor Certificates. FRCC shall promptly provide to each Rating Agency a copy of any amendment or modification made to this Agreement. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns. Bridgestone/Firestone may not assign, transfer or participate any of its rights or obligations hereunder or the Participation without the prior written consent of FRCC. Section 12. Acknowledgment of Assignment. Bridgestone/Firestone ---------------------------- hereby acknowledges and consents to the assignment by FRCC of its rights under Section 2(c)(ii) of this Agreement to CFNA pursuant to the Purchase Agreement. Section 13. Notices. Any notice required or permitted by this ------- Agreement shall be deemed to have been duly and properly given if addressed to FRCC at: Firestone Retail Credit Corporation c/o Ropes & Gray One International Place Boston, Massachusetts 02110 Telephone No: (617) 423-7900 Telecopier No: (617) 423-7901 Attention: ( ) or to Bridgestone/Firestone at: Bridgestone/Firestone, Inc. 50 Century Boulevard Nashville, Tennessee 37214 Telephone No. (615) 872-1542 Telecopier No. (615) 872-1545 Attention: Assistant Treasurer and delivered by hand or sent by first class mail or sent by telecopier with a written confirmation sent by first class mail on the same day (unless notice by telephone is expressly authorized herein) to such officer at the address hereinabove specified or such other address as either party hereto may furnish to the other in writing at any time. Section 14. Miscellaneous. This Agreement shall be governed by ------------- and construed in accordance with the law of the State of New York. There are no restrictions, promises, warranties, covenants, undertakings or representations other than those expressly set forth herein. Nothing in this Agreement or otherwise shall be construed as making Bridgestone/Firestone or FRCC responsible in any way or to any extent for the payment of any principal, interest or premium on the Exchangeable Transferor Certificate, the Subordinated Transferor Certificate or the Class B Certificates, the Participation or any Receivable or for the fulfillment of any obligation or commitment of the Trustee or the Servicer under the Pooling and Servicing Agreement, the Series 1992-A Supplement, the Series 1992-B Supplement or the Series 1996-1 Supplement or CFNA under the Purchase Agreement, except to the extent of FRCC's obligations herein or under any such documents, instruments or other writings. IN WITNESS WHEREOF, the parties hereto have caused this Participation Agreement to be duly executed by their respective officers hereunto duly authorized, as of the day and year first above written. FIRESTONE RETAIL CREDIT CORPORATION By_______________________________ Name: Title: BRIDGESTONE/FIRESTONE, INC. By________________________________ Name: Title: (Participation Agreement) PARTICIPATION CERTIFICATE FIRESTONE RETAIL CREDIT CORPORATION ("FRCC") has transferred and ---- assigned to BRIDGESTONE/FIRESTONE, INC., pursuant to and on the terms and conditions set forth in the Amended and Restated Participation Agreement dated as of ________ __, 1996 (terms capitalized but undefined herein being used as defined in said Agreement), an undivided interest equal to the Participation Percentage in all of the right, title and interest of FRCC in and to the Exchangeable Transferor Certificate, the Subordinated Transferor Certificate, the Class B Certificates and the Transferor Interest, and all representations and warranties and agreements made for the benefit of the Holder of the Exchangeable Transferor Certificate, the Subordinated Transferor Certificate and the Class B Certificates in the Pooling and Servicing Agreement, and any proceeds of any of the foregoing, and to any successor Exchangeable Transferor Certificate and proceeds thereof, issued as the result of any Exchange pursuant to Section 6.09 of the Pooling and Servicing Agreement. FIRESTONE RETAIL CREDIT CORPORATION By:___________________________________ Name: Title: EX-4.5 9 SERVICER LETTER OF CREDIT EXHIBIT 4.5 Date: December 2, 1992 IRREVOCABLE SERVICER LETTER OF CREDIT NO. LG/MIS/NY-430646 The Fuji Bank and Trust Company Two World Trade Center 81st Floor New York, New York 10048 Attention: Trust Administration Department Gentlemen: At the request and for the account of our customer, Bridgestone/Firestone, an Ohio corporation (the "Corporation"), we (the "Bank") hereby establish in your favor this Irrevocable Letter of Credit No. LG/MIS/NY-430646 wherein you, as trustee (the "Trustee") under the Amended and Restated Pooling and Servicing Agreement, as supplemented (collectively, the "Pooling and Servicing Agreement") among the Corporation, as servicer, Firestone Retail Credit Corporation, as transferor and you, pursuant to which the Bridgestone/Firestone Master Trust, Series 1992-A and Series 1992-B Certificates (the "Certificates") have been issued, are hereby irrevocably authorized, to draw (i) as required under Section 4.01A(a) of the Pooling and Servicing Agreement or (ii) Section 4.01A(e) of the Pooling and Servicing Agreement (a "Special Drawing"), upon the terms and conditions hereinafter set forth, in an aggregate amount not exceeding $45,000,000 (hereinafter, as reduced from time to time in accordance with the provisions hereof, the "Stated Amount"). Funds under this Letter of Credit are available to you only against your written certificate signed by a person purporting to be your authorized officer, appropriately completed, in the form of Annex 1 or Annex 2 hereto for payment of certain amounts due from, but unpaid by, the Corporation under the Pooling and Servicing Agreement. We hereby agree that each demand made under and in compliance with the terms of this Letter of Credit will be duly honored by us upon due delivery of the certificate(s), as specified above, appropriately completed (together with the enclosures, if any, required thereby), if presented as specified on or before the expiration date hereof. If a presentation in respect of payment is made by you hereunder at or prior to 12:00 P.M., New York City time, on a Business Day, and provided that the documents so presented conform to the terms and conditions hereof, payment shall be made to you of the amount specified, in immediately available funds, not later than 3:00 P.M., New York City time, on the same Business Day. If a presentation in respect of payment is made by you hereunder after 3:00 P.M., New York City time, on a Business Day, such presentation shall be deemed to have been made prior to 3:00 P.M., New York City time, on the next succeeding Business Day. You agree to use your best efforts to provide us telephonic notice at the time any presentation in respect of payment is made hereunder; provided, however, -------- ------- that failure to provide such telephonic notice shall not affect our obligation to make payment in respect of any such presentation in respect of payment. If requested by you, payment under this Letter of Credit will be wire transferred to an account in New York, New York specified in the related certificate. As used herein, "Business Day" shall mean any day other than a Saturday, a Sunday, or a day on which banking institutions in New York, New York shall be authorized or obligated by law, executive order or governmental decree to be closed. If a drawing made by you hereunder does not, in any instance, conform to the terms and conditions of this Letter of Credit, we shall give you prompt notice that the purported drawing was not effected in accordance with the terms and conditions of this Letter of Credit, stating the reasons therefor and that we are holding any documents presented in connection therewith at your disposal or are returning the same to you, as we may elect. Except as otherwise specified in Annex 2, each drawing under this Letter of Credit shall be verified to Account No. 30492-01/0.1 maintained by the Trustee (the "Collection Account"). Only you, as Trustee, may make a drawing under this Letter of Credit. Upon the payment of the amount specified in the related certificate(s) presented hereunder, we shall be fully discharged of our obligation under this Letter of Credit with respect to such certificate(s) and we shall not thereafter be obligated to make any further payments under this Letter of Credit in respect of such certificate(s) to you or any other person. By paying to you an amount demanded in accordance herewith, we make no representation as to the correctness of the amount demanded. This Letter of Credit shall expire at our close of business in New York, New York on the first to occur of the following dates (the "Termination Date"): (x) November 30, 1993 or, if said date shall not be a Business Day, on the Business Day next succeeding said date, or (y) the date the Corporation ceases to be the Servicer under the Pooling and Servicing Agreement, as provided in a written notice to us from the Trustee, or (z) the date of receipt by us of your written certificate signed by a person purporting to be your authorized officer, appropriately completed, in the form of Annex 3 hereto. This Letter of Credit shall be promptly surrendered to us upon expiration. Drawings in respect of payments hereunder honored by us shall not, in the aggregate, exceed the Stated Amount in effect immediately prior to such drawing. Each drawing honored by us hereunder shall pro tanto reduce the --- ----- Stated Amount in effect immediately prior to such drawing. This Letter of Credit is subject to, and shall be governed by, the Uniform Customs and Practice for Documentary Credits (1983 Revision), International Chamber of Commerce, Publication No. 400 (the "Uniform Customs"). This Letter of Credit shall be deemed to be made under the laws of the State of New York, including Article 5 of the Uniform Commercial Code of such State, and shall, as to matters not governed by the Uniform Customs, be governed by and construed in accordance with the laws of the State of New York. Notwithstanding anything in Article 54(e) of the Uniform Customs to the contrary, this Letter of Credit is transferable in its entirety (but not in part) only to a successor Trustee under the Pooling and Servicing Agreement upon presentation to us of this Letter of Credit accompanied by the transfer form attached hereto as Annex 4, to the transferee specified therein. All documents presented to us in connection with any demand for payment hereunder, as well as all notices and other communications to us in respect of this Letter of Credit, shall be in writing and addressed and presented to us at our office at One World Trade Center, New York, New York 10048 Attention: Loan Administration and shall make specific reference to this Letter of Credit by number. Such documents, notices and other communication shall be personally delivered to us, or may be sent to us by tested telex or over a telecopier (promptly confirmed by delivery of the written document, notice or other communication, as the case may be, provided that such confirmation shall not be a condition to the effectiveness of such demand for payment, notice or other communication) to the following numbers, as applicable: Telex No.: 420575 (Answerback: SMTBK) Telecopier No.: (212) 524-0612 This Letter of Credit sets forth in full our undertaking, and such undertaking shall not in any way be modified, amended, amplified or limited by reference to any document, instrument or agreement referred to herein (including, without limitation, the certificates), except only Annex 1 through 4 hereto; and any such reference shall not be deemed to incorporate herein by reference any document, instrument or agreement except as set forth above. Very truly yours, The Sumitomo Bank, Limited By: /S/ Natsud Okada ----------------------- Name: Natsud Okada Title: Joint General Manager ANNEX 1 T0 LETTER OF CREDIT NO. LG/MIS/NY-430646 ------------------------------------- LG/MIS/NY-430646 FOR "ANNEX 1 DRAWING" The undersigned, as Trustee (the "Trustee"), acting through the undersigned duly authorized officer of the Trustee, hereby certifies to The Sumitomo Bank, Limited (the "Bank"), with reference to the Bank's Irrevocable Letter of Credit No. LG/MIS/NY-430646 (the "Letter of Credit"; any capitalized term used herein and not defined shall have its respective meaning as set forth in the Letter of Credit) issued in favor of the Trustee, that: (1) The Trustee is the Trustee under the Pooling and Servicing Agreement. (2) The Corporation, as servicer (the "Servicer") under the Pooling and Servicing Agreement, has notified us, as Trustee under the Pooling and Servicing Agreement, pursuant to a Monthly Servicer's Certificate (as defined in the Pooling and Servicing Agreement) (a copy of which is attached hereto) furnished pursuant to Section 3.04(b) of the Pooling and Servicing Agreement, that the following amount was required to be remitted by the Corporation to the Collection Account pursuant to Section 4.01(g) of the Pooling end Servicing Agreement with respect to the Distribution Date (as defined in the Pooling and Servicing Agreement) occurring on (insert applicable Distribution Date): $(insert amount required ------------------------------------ ---------------------- to be remitted pursuant to Section 4.01(g)). ------------------------------------------ (3) The Corporation has failed to deposit the following portion of amounts owed by it with respect to such Distribution Date as set forth in paragraph (2) above: $(insert amount of deficiency). --------------------------- (4) The Trustee is making a drawing under the Letter of Credit in the amount of $_________ which amount equals the lesser of (a) the amount set forth in paragraph (3) and (b) the amount identified by the Servicer in the Monthly Servicer's Certificate referred to in paragraph (2) above as being available on the date hereof (and after giving effect to any contemporaneous demand for payment under the Letter of Credit being made by the Trustee) to be drawn under the Letter of Credit. (5) The Trustee has not received notice from the Corporation or any other person or entity contesting the accuracy of such Monthly Servicer's Certificate. (6) The account to which payment under the Letter of Credit is to be wire transferred is Account No. 30492-01/0.1, maintained at The Fuji Bank and Trust Company. IN WITNESS WHEREOF, the Trustee has executed and delivered this certificate as of the _____ day of _____________. THE FUJI BANK, AND TRUST COMPANY, as Trustee By ___________________________ Name: Title: ANNEX 2 TO LETTER OF CREDIT NO. LG/MIS/NY-430646 -------------------------------------- CERTIFICATE FOR "SPECIAL DRAWING" --------------------------------- ___________, 19__ The Sumitomo Bank, Limited One World Trade Center, 95th Floor New York, New York 10048 Attention: Re: Irrevocable Letter of Credit No. LG/MIS/NY-430646 Gentlemen: The undersigned, a duly authorized officer of The Fuji Bank and Trust Company (the "Trustee"), hereby certifies to The Sumitomo Bank, Limited with reference to irrevocable Letter of Credit No. LG/MIS/NY-430646 (the "Letter of Credit") (any capitalized term used herein and not defined shall have the meaning set forth in the Letter of Credit) issued by The Sumitomo Bank, Limited (the "Bank"), in favor of the Trustee, that: (1) The Trustee is the Trustee under the Pooling and Servicing Agreement. (2) The Trustee has been instructed by the Servicer to make a Special Drawing. (3) A Responsible Officer of the Trustee has obtained knowledge that the short-term debt rating of the Bank has been reduced, suspended or withdrawn. (4) The Trustee hereby demands payment under the Letter of Credit in the amount of $_____, which amount equals the Available Letter of Credit Amount on the Business Day preceding the date hereof, as specified in the Monthly Servicer's Certificate delivered by the Servicer pursuant to Section 3.04(b) of the Pooling and Servicing Agreement (and after giving effect to any contemporaneous demand for payment under the Letter of Credit being made with respect to such date). (5) All amounts received by the Trustee from the Bank in respect of this certificate shall be applied in accordance with Section 4.01A(e) of the Pooling and Servicing Agreement. (6) The Trustee directs that such amounts be deposited in Account No. ____________ at The Fuji Bank and Trust Company. IN WITNESS WHEREOF, the Trustee has executed and delivered this certificate as of this _____ day of ____________, 19__. THE FUJI BANK AND TRUST COMPANY, as Trustee By: ________________________ Authorized Signatory ANNEX 3 TO LETTER OF CREDIT NO. LG/MIS/NY-430646 ------------------------------------- CERTIFICATE FOR THE TERMINATION OF LETTER OF CREDIT NO. LG/MIS/NY-430646 The Sumitomo Bank, Limited One World Trade Center New York, New York 10048 Attention: The undersigned, a duly authorized officer of The Fuji Bank and Trust Company (the "Trustee"), hereby certifies to The Sumitomo Bank, Limited, with reference to Irrevocable Letter of Credit No. LG/MIS/NY-430646 (the "Letter of Credit"; any capitalized terms used herein and not defined shall have the meaning set forth in the Letter of Credit) issued by The Sumitomo Bank, Limited in favor of the Trustee, that the Letter of Credit shall terminate on _________________. Accordingly, we herewith return to you for cancellation the Letter of Credit, which is terminated, as of the date hereof, pursuant to its terms. Date: _______________ THE FUJI BANK AND TRUST COMPANY, as Trustee By ___________________________ Authorized Officer ANNEX 4 TO LETTER OF CREDIT NO. LG/MIS/NY-430646 ------------------------------------- ___________, 19__ The Sumitomo Bank, Limited One World Trade Center New York, New York 10048 Attention: Loan Administration Re: Irrevocable Letter of Credit No. LG/MIS/NY-430646 of The Sumitomo Bank, Limited Gentlemen: For value received, the undersigned beneficiary hereby irrevocably transfers to: _________________________________________ (Name of Transferee) _________________________________________ (Address) all rights of the undersigned beneficiary to draw under the above-captioned Letter of Credit (the "Letter of Credit"). The transferee has succeeded the undersigned as Trustee under the Pooling and Servicing Agreement (as defined in the Letter of Credit). By this transfer, all rights of the undersigned beneficiary in the Letter of Credit are transferred to the transferee and the transferee shall hereafter have the sole rights as beneficiary thereof; provided, however, -------- ------- that no rights shall be deemed to have been transferred to the transferee until such transfer complies with the requirements of the Letter of Credit pertaining to transfers. The Letter of Credit is returned herewith and in accordance therewith we ask that this transfer be effective and that you cause the transfer of the Letter of Credit to our transferee or that, if so requested by the transferee, you cause the issuance of a new irrevocable Letter of Credit in favor of the transferee with provisions consistent with the Letter of Credit. Very truly yours, __________________________ as predecessor Trustee By _______________________ (Name and Title) AMENDMENT TO LETTER OF CREDIT ----------------------------- This AMENDMENT TO LETTER OF CREDIT is made as of June 5, 1995, to Irrevocable Servicer Letter of Credit No. LC/MIS/NY-430646, dated as of December 2, 1992 (the "Letter of Credit") and issued by The Sumitomo Bank, Limited, New York Branch to The Fuji Bank and Trust Company, as trustee, for the account of Bridgestone/Firestone, Inc. in the stated amount of $45,000,000. The first paragraph of the Letter of Credit is hereby amended by amending and restating such paragraph in its entirety as follows: At the request and for the account of our customer, Bridgestone/Firestone, an Ohio corporation (the "Corporation"), we (the "Bank") hereby establish in your favor this Irrevocable Letter of Credit No. LG/MIS/NY-430646 wherein you, as trustee (the "Trustee") under the Pooling and Servicing Agreement dated November 1, 1992, as supplemented by (i) the Series 1992-A Supplement, dated as of November 1, 1992 and amended as of June 5, 1995, (ii) the Series 1992-B Supplement, dated as of November 1, 1992 and amended and restated as of January 4, 1993, and (iii) the Series 1995-A Supplement dated as of June 5, 1995 (collectively, the "Pooling and Servicing Agreement"), among the Corporation, as servicer, Firestone Retail Credit Corporation, as transferor and you, pursuant to which the Bridgestone/Firestone Master Trust, Series 1992-A, Series 1992-B and Series 1995-A Certificates (collectively, the "Certificates") have been issued, are hereby irrevocably authorized, to draw (i) as required under Section 4.01A(a) of the Pooling and Servicing Agreement or (ii) Section 4.01A(e) of the Pooling and Servicing Agreement (a "Special Drawing"), upon the terms and conditions hereinafter set forth, in an aggregate amount not exceeding $45,000,000 (hereinafter, as reduced from time to time in accordance with the provisions hereof, the "Stated Amount"). Except as expressly amended hereby, the Letter of Credit remains in full force and effect. THE SUMITOMO BANK, LIMITED, NEW YORK BRANCH By:___________________________ Name: Title: EX-4.6 10 TRANSFEROR LETTER OF CREDIT EXHIBIT 4.6 Date: December 2, 1992 IRREVOCABLE TRANSFEROR LETTER OF CREDIT NO. LG/MIS/NY-430647 The Fuji Bank and Trust Company Two World Trade Center 81st Floor New York, New York 10048 Attention: Trust Administration Department Gentlemen: At the request and for the account of our customer, Bridgestone/Firestone, an Ohio corporation (the "Corporation"), we (the "Bank") hereby establish in your favor this Irrevocable Letter of Credit No. LG/MIS/NY-430647 wherein you, as trustee (the "Trustee") under the Pooling and Servicing Agreement, as supplemented by the Series 1992-A and Series 1992-B Supplements, each dated as of November 1, 1992 (collectively, the "Pooling and Servicing Agreement") among the Corporation, as servicer, Firestone Retail Credit Corporation, as transferor and you, pursuant to which the Bridgestone/Firestone Master Trust, Series 1992-A and Series 1992-B Certificates (the "Certificates") have been issued, are hereby irrevocably authorized, to draw (i) as required under Section 4.01B(a) of the Pooling and Servicing Agreement or (ii) Section 4.01B(d) of the Pooling and Servicing Agreement (a "Special Drawing"), upon the terms and conditions hereinafter set forth, in an aggregate amount not exceeding $15,000,000 (hereinafter, as reduced from time to time in accordance with the provisions hereof, the "Stated Amount"). Funds under this Letter of Credit are available to you only against your written certificate signed by a person purporting to be your authorized officer, appropriately completed, in the form of Annex 1 or Annex 2 hereto for payment of certain amounts due from, but unpaid by, the Corporation under the Pooling and Servicing Agreement. We hereby agree that each demand made under and in compliance with the terms of this Letter of Credit will be duly honored by us upon due delivery of the certificate(s), as specified above, appropriately completed (together with the enclosures, if any, required thereby), if presented as specified on or before the expiration date hereof. If a presentation in respect of payment is made by you hereunder at or prior to 12:00 P.M., New York City time, on a Business Day, and provided that the documents so presented conform to the terms and conditions hereof, payment shall be made to you of the amount specified, in immediately available funds, not later than 3:00 P.M., New York City time, on the same Business Day. If a presentation in respect of payment is made by you hereunder after 3:00 P.M., New York City time, on a Business Day, such presentation shall be deemed to have been made prior to 3:00 P.M., New York City time, on the next succeeding Business Day. You agree to use your best efforts to provide us telephonic notice at the time any presentation in respect of payment is made hereunder; provided, however, -------- ------- that failure to provide such telephonic notice shall not affect our obligation to make payment in respect of any such presentation in respect of payment. If requested by you, payment under this Letter of Credit will be wire transferred to an account in New York, New York specified in the related certificate. As used herein, "Business Day" shall mean any day other than a Saturday, a Sunday, or a day on which banking institutions in New York, New York shall be authorized or obligated by law, executive order or governmental decree to be closed. If a drawing made by you hereunder does not, in any instance, conform to the terms and conditions of this Letter of Credit, we shall give you prompt notice that the purported drawing was not effected in accordance with the terms and conditions of this Letter of Credit, stating the reasons therefor and that we are holding any documents presented in connection therewith at your disposal or are returning the same to you, as we may elect. Except as otherwise specified in Annex 2, each drawing under this Letter of Credit shall be verified to Account No. 30492-01/0.1 maintained by the Trustee (the "Collection Account"). Only you, as Trustee, may make a drawing under this Letter of Credit. Upon the payment of the amount specified in the related certificate(s) presented hereunder, we shall be fully discharged of our obligation under this Letter of Credit with respect to such certificate(s) and we shall not thereafter be obligated to make any further payments under this Letter of Credit in respect of such certificate(s) to you or any other person. By paying to you an amount demanded in accordance herewith, we make no representation as to the correctness of the amount demanded. This Letter of Credit shall expire at our close of business in New York, New York on the first to occur of the following dates (the "Termination Date"): (x) November 30, 1993 or, if said date shall not be a Business Day, on the Business Day next succeeding said date, or (y) the date the Corporation ceases to be the Servicer under the Pooling and Servicing Agreement, as provided in a written notice to us from the Trustee, or (z) the date of receipt by us of your written certificate signed by a person purporting to be your authorized officer, appropriately completed, in the form of Annex 3 hereto. This Letter of Credit shall be promptly surrendered to us upon expiration. Drawings in respect of payments hereunder honored by us shall not, in the aggregate, exceed the Stated Amount in effect immediately prior to such drawing. Each drawing honored by us hereunder shall pro tanto reduce the --- ----- Stated Amount in effect immediately prior to such drawing. This Letter of Credit is subject to, and shall be governed by, the Uniform Customs and Practice for Documentary Credits (1983 Revision), International Chamber of Commerce, Publication No. 400 (the "Uniform Customs"). This Letter of Credit shall be deemed to be made under the laws of the State of New York, including Article 5 of the Uniform Commercial Code of such State, and shall, as to matters not governed by the Uniform Customs, be governed by and construed in accordance with the laws of the State of New York. Notwithstanding anything in Article 54(e) of the Uniform Customs to the contrary, this Letter of Credit is transferable in its entirety (but not in part) only to a successor Trustee under the Pooling and Servicing Agreement upon presentation to us of this Letter of Credit accompanied by the transfer form attached hereto as Annex 4, to the transferee specified therein. All documents presented to us in connection with any demand for payment hereunder, as well as all notices and other communications to us in respect of this Letter of Credit, shall be in writing and addressed and presented to us at our office at One World Trade Center, New York, New York 10048 Attention: Loan Administration and shall make specific reference to this Letter of Credit by number. Such documents, notices and other communication shall be personally delivered to us, or may be sent to us by tested telex or over a telecopier (promptly confirmed by delivery of the written document, notice or other communication, as the case may be, provided that such confirmation shall not be a condition to the effectiveness of such demand for payment, notice or other communication) to the following numbers, as applicable: Telex No.: 420575 (Answerback: SMTBK) Telecopier No.: (212) 524-0612 This Letter of Credit sets forth in full our undertaking, and such undertaking shall not in any way be modified, amended, amplified or limited by reference to any document, instrument or agreement referred to herein (including, without limitation, the Certificates), except only Annex 1 through 4 hereto; and any such reference shall not be deemed to incorporate herein by reference any document, instrument or agreement except as set forth above. Very truly yours, The Sumitomo Bank, Limited By: _________________________ Name: Title: ANNEX 1 TO LETTER OF CREDIT NO. LG/MIS/NY-430647 ------------------------------------- CERTIFICATE FOR "ANNEX 1 DRAWING" --------------------------------- The undersigned, as Trustee (the "Trustee"), acting through the undersigned duly authorized officer of the Trustee, hereby certifies to The Sumitomo Bank, Limited (the "Bank"), with reference to the Bank's Irrevocable Letter of Credit No. LG/MIS/NY-430647 (the "Letter of Credit"; any capitalized term used herein and not defined shall have its respective meaning as set forth in the Letter of Credit) issued in favor of the Trustee, that: (1) The Trustee is the Trustee under the Pooling and Servicing Agreement. (2) The Corporation, a servicer (the "Servicer") under the Pooling and Servicing Agreement, has notified us, as Trustee under the Pooling and Servicing Agreement, pursuant to a Monthly Servicer's Certificate (as defined in the Pooling and Servicing Agreement) (a copy of which is attached hereto) furnished pursuant to Section 3.04(b) of the Pooling and Servicing Agreement, that the following amount was required to be remitted by the Corporation to the Collection Account pursuant to Section 3.09(a) of the Pooling and Servicing Agreement with respect to the Distribution Date (as defined in the Pooling and Servicing Agreement) occurring on (insert applicable Distribution Date): ------------------------------------ $(insert amount required to be remitted pursuant to Section 3.09(a)). ----------------------------------------------------------------- (3) The Corporation has failed to deposit the following portion of amounts owed by it with respect to such Distribution Date as set forth in paragraph (2) above: $(insert amount of deficiency). --------------------------- (4) The Trustee is making a drawing under the Letter of Credit in the amount of $_________ which amount equals the lesser of (a) the amount set forth in paragraph (3) and (b) the amount identified by the Servicer in the Monthly Servicer's Certificate referred to in paragraph (2) above as being available on the date hereof (and after giving effect to any contemporaneous demand for payment under the Letter of Credit being made by the Trustee) to be drawn under the Letter of Credit. (5) The Trustee has not received notice from the Corporation or any other person or entity contesting the accuracy of such Monthly Servicer's Certificate. (6) The account to which payment under the Letter of Credit is to be wire transferred is Account No. 30492-01/0.1, maintained at The Fuji Bank and Trust Company. IN WITNESS WHEREOF, the Trustee has executed and delivered this certificate as of the _____ day of _____________. THE FUJI BANK, AND TRUST COMPANY, as Trustee By ______________________________ Name: Title: ANNEX 2 TO LETTER OF CREDIT NO. LG/MIS/NY-430647 ------------------------------------- CERTIFICATE FOR "SPECIAL DRAWING" --------------------------------- ___________, 19__ The Sumitomo Bank, Limited One World Trade Center New York, New York 10048 Attention: Re: Irrevocable Letter of Credit No. LG/MIS/NY-430647 Gentlemen: The undersigned, a duly authorized officer of The Fuji Bank and Trust Company (the "Trustee"), hereby certifies to The Sumitomo Bank, Limited with reference to irrevocable Letter of Credit No. LG/MIS/NY-430647 (the "Letter of Credit") (any capitalized term used herein and not defined shall have the meaning set forth in the Letter of Credit) issued by The Sumitomo Bank, Limited (the "Bank"), in favor of the Trustee, that: (1) The Trustee is the Trustee under the Pooling and Servicing Agreement. (2) The Trustee has been instructed by the Servicer to make a Special Drawing. (3) A Responsible Officer of the Trustee has obtained knowledge that the short-term debt rating of the Bank has been reduced, suspended or withdrawn. (4) The Trustee hereby demands payment under the Letter of Credit in the amount of $_____, which amount equals the Available Letter of Credit Amount on the Business Day preceding the date hereof, as specified in the Monthly Servicer's Certificate delivered by the Servicer pursuant to Section 3.04(b) of the Pooling and Servicing Agreement (and after giving effect to any contemporaneous demand for payment under the Letter of Credit being made with respect to such date). (5) All amounts received by the Trustee from the Bank in respect of this certificate shall be applied in accordance with Section 4.01A(e) of the Pooling and Servicing Agreement. (6) The Trustee directs that such amounts be deposited in Account No. 30492-01/0.1 at The Fuji Bank and Trust Company. IN WITNESS WHEREOF, the Trustee has executed and delivered this certificate as of this _____ day of ________, 19__. THE FUJI BANK AND TRUST COMPANY, as Trustee By: ___________________________ Authorized Signatory ANNEX 3 TO LETTER OF CREDIT NO. LG/MIS/NY-430647 ------------------------------------- CERTIFICATE FOR THE TERMINATION OF LETTER OF CREDIT NO. LG/MIS/NY-430647 The Sumitomo Bank, Limited One World Trade Center New York, New York 10048 Attention: Loan Administration The undersigned, a duly authorized officer of The Fuji Bank and Trust Company (the "Trustee"), hereby certifies to The Sumitomo Bank, Limited, with reference to Irrevocable Letter of Credit No. LG/MIS/NY-430647 (the "Letter of Credit"; any capitalized terms used herein and not defined shall have the meaning set forth in the Letter of Credit) issued by The Sumitomo Bank, Limited in favor of the Trustee, that the Letter of Credit shall terminate on _________________. Accordingly, we herewith return to you for cancellation the Letter of Credit, which is terminated, as of the date hereof, pursuant to its terms. Date: ____________ THE FUJI BANK AND TRUST COMPANY, as Trustee By ________________________ Authorized Officer ANNEX 4 TO LETTER OF CREDIT NO. LG/MIS/NY-430647 ------------------------------------- ___________, 19__ The Sumitomo Bank, Limited One World Trade Center New York, New York 10048 Attention: Loan Administration Re: Irrevocable Letter of Credit No. LG/MIS/NY-430647 of The Sumitomo Bank, Limited Gentlemen: For value received, the undersigned beneficiary hereby irrevocably transfers to: --------------------------- (Name of Transferee) --------------------------- (Address) all rights of the undersigned beneficiary to draw under the above-captioned Letter of Credit (the "Letter of Credit"). The transferee has succeeded the undersigned as Trustee under the Pooling and Servicing Agreement (as defined in the Letter of Credit). By this transfer, all rights of the undersigned beneficiary in the Letter of Credit are transferred to the transferee and the transferee shall hereafter have the sole rights as beneficiary thereof; provided, however, -------- ------- that no rights shall be deemed to have been transferred to the transferee until such transfer complies with the requirements of the Letter of Credit pertaining to transfers. The Letter of Credit is returned herewith and in accordance therewith we ask that this transfer be effective and that you cause the transfer of the Letter of Credit to our transferee or that, if so requested by the transferee, you cause the issuance of a new irrevocable Letter of Credit in favor of the transferee with provisions consistent with the Letter of Credit. Very truly yours, _____________________________ as predecessor Trustee By ____________________________ (Name and Title) AMENDMENT TO LETTER OF CREDIT ----------------------------- This AMENDMENT TO LETTER OF CREDIT is made as of June 5, 1995, to Irrevocable Transferor Letter of Credit No. LG/MIS/NY-430647, dated as of December 2, 1992 (the "Letter of Credit") and issued by the Sumitomo Bank, Limited, New York Branch to The Fuji Bank and Trust Company, as trustee, for the account of Bridgestone/Firestone, Inc. in the stated amount of $15,000,000. The first paragraph of the Letter of Credit is hereby amended by amending and restating such paragraph in its entirety as follows: At the request and for the account of our customer, Bridgestone/Firestone, an Ohio corporation (the "Corporation"), we (the "Bank") hereby establish in your favor this Irrevocable Letter of Credit No. LG/MIS/NY-430647 wherein you, as trustee (the "Trustee") under the Pooling and Servicing Agreement dated November 1, 1992, as supplemented by (i) the Series 1992-A Supplement, dated as of November 1, 1992 and amended as of June 5, 1995, (ii) the Series 1992-B Supplement, dated as of November 1, 1992 and amended and restated as of January 4, 1993, and (iii) the Series 1995-A Supplement dated as of June 5, 1995 (collectively, the "Pooling and Servicing Agreement"), among the Corporation, as servicer, Firestone Retail Credit Corporation, as transferor and you, pursuant to which the Bridgestone/Firestone Master Trust, Series 1992-A, Series 1992-B and Series 1995-A Certificates (collectively, the "Certificates") have been issued, are hereby irrevocably authorized, to draw (i) as required under Section 4.01B(a) of the Pooling and Servicing Agreement or (ii) Section 4.01B(d) of the Pooling and Servicing Agreement (a "Special Drawing"), upon the terms and conditions hereinafter set forth, in an aggregate amount not exceeding $15,000,000 (hereinafter, as reduced from time to time in accordance with the provisions hereof, the "Stated Amount"). Except as expressly amended hereby, the Letter of Credit shall remain in full force and effect. THE SUMITOMO BANK, LIMITED, NEW YORK BRANCH By:___________________________ Name: Title: EX-5.1 11 OPINION OF STROOCK & LAVAN EXHIBIT 5.1 October 28, 1996 Firestone Retail Credit Corporation One International Place Boston, Massachusetts 02110-2624 Re: Bridgestone/Firestone Master Trust ---------------------------------- Ladies and Gentlemen: We have been asked to deliver this opinion in connection with the preparation of the registration statement on Form S-1 (No. 33-07185) (the "Registration Statement") relating to the issuance by Bridgestone/Firestone Master Trust (the "Trust") of Class A and Class B Asset Backed Certificates, Series 1996-1 (the "Certificates") pursuant to a Pooling and Servicing Agreement and the Series 1996-1 Supplement hereto, each dated as of October , 1996 (collectively, the "Pooling and Servicing Agreement"), among Firestone Retail Credit Corporation, as transferor (the "Transferor"), Bridgestone/Firestone, Inc. ("Bridgestone"), as Servicer, and The Fuji Bank and Trust Company, as trustee (in such capacity, the "Trustee"). The Registration Statement has been filed with the Securities and Exchange Commission (the "Commission") under the Securities Act of 1933, as amended (the "Act"). All capitalized terms used but not specifically defined herein have the meaning assigned to such terms in the Agreement. In connection with this opinion, we have examined original, reproduced or certified copies of the Certificate of Incorporation and By-Laws of the Transferor, each as amended to date, the Registration Statement, records of actions taken by the Board of Directors of the Transferor and a form of the Agreement. We have also examined such other documents, papers, statutes and authorities as we have deemed necessary as a basis for the opinions hereinafter set forth. In all such examinations made by us in connection with this opinion, we have assumed the genuineness of all signatures, the completeness and authenticity of all records and all documents submitted to us as originals, and the conformity with the originals of all documents submitted to us as copies thereof. As to various matters of fact relevant to the opinions hereinafter expressed, we have relied, to the extent we deemed appropriate, upon representations, statements and certificates of officers and representatives of the Transferor, Bridgestone and others. Attorneys involved in the preparation of this opinion are admitted to practice law in the State of New York and we do not express any opinion herein concerning any law other than the federal laws of the United States of America and the laws of the State of New York. Based upon and subject to the foregoing, we are of the opinion that when the issuance, execution and delivery of the Certificates have been authorized by all necessary corporate action of the Transferor in accordance with the provisions of the Pooling and Servicing Agreement, and when such Certificates have been duly executed and delivered, authenticated by the Trustee and sold as described in the Registration Statement assuming that the terms of such Certificates are otherwise in compliance with applicable law at such time, such Certificates will be legally issued, fully paid and non-assessable and entitled to the benefits of the Pooling and Servicing Agreement. This opinion is subject to the effect of bankruptcy, insolvency, moratorium, fraudulent conveyance and similar laws relating to or affecting creditors' rights generally and court decisions with respect thereto and we express no opinion with respect to the application of equitable principles or remedies in any proceeding, whether at law or in equity. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the references to this firm under the caption "Legal Matters" in the Prospectus which forms a part of the Registration Statement. In giving such consent, we do not admit hereby that we come within the category of persons whose consent is required under Section 7 of the Act or the Rules and Regulations of the Commission thereunder. Very truly yours, /s/ Stroock & Stroock & Lavan STROOCK & STROOCK & LAVAN EX-8.1 12 OPINION OF BROWN & WOOD EXHIBIT 8.1 (Letterhead of Brown & Wood LLP) October 28, 1996 Firestone Retail Credit Corporation c/o JH Management Company One International Place, Suite 520 Boston, Massachusetts 02110-2624 Re: Bridgestone/Firestone Master Trust Asset Backed Certificates, Series 1996-1 Registration Statement on Form S-1 (Registration No. 333-07185) -------------------------------------------- Ladies and Gentlemen: We have acted as special federal income tax counsel to Firestone Retail Credit Corporation, a Massachusetts corporation (the "Registrant"), in connection with the issuance and sale of its Asset Backed Certificates, Series 1996-1, Class A and Class B that evidence interests in a trust consisting primarily of a portfolio of account balances generated or to be generated under a private label credit card program established by Credit First National Association (the "Certificates"). The Certificates will be issued pursuant to a Pooling and Servicing Agreement among the Registrant, Bridgestone/Firestone, Inc., as servicer, and The Fuji Bank and Trust Company, as trustee. We have advised the Registrant with respect to certain federal income tax consequences of the proposed issuance of the Certificates. This advice is summarized under the headings "Summary of Terms -- Certain Federal Income Tax Consequences" and "Federal Income Tax Consequences" in the form of prospectus forming a part of the Registration Statement on Form S-1 (the "Registration Statement"), filed with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the "Act"), on the date hereof for the registration of such Certificates under the Act. Such description does not purport to discuss all possible federal income tax ramifications of the proposed issuance, but with respect to those tax consequences which are discussed, in our opinion, the description is accurate in all material respects. We hereby consent to the filing of this letter as an exhibit to the Registration Statement and to a reference to this firm (as special federal income tax counsel to the Registrant) under the headings "Federal Income Tax Consequences" and "Legal Matters" in the Prospectus forming a part of the Registration Statement, without implying or admitting that we are "experts" within the meaning of the Act or the rules and regulations of the Commission issued thereunder, with respect to any part of the Registration Statement, including this exhibit. Very truly yours, /s/ Brown & Wood LLP -----END PRIVACY-ENHANCED MESSAGE-----