-----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, Fr5HG7wqtj68WCwkR9FlqjskL3A3rmp5eDMsWy6S9RqY6Emqzo2eUou8F/Kv9XSY RUmlSihj2Qfyx1uuddHCpA== 0000928385-01-001015.txt : 20010416 0000928385-01-001015.hdr.sgml : 20010416 ACCESSION NUMBER: 0000928385-01-001015 CONFORMED SUBMISSION TYPE: S-3/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20010413 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CAPITAL ONE BANK CENTRAL INDEX KEY: 0001003952 STANDARD INDUSTRIAL CLASSIFICATION: ASSET-BACKED SECURITIES [6189] IRS NUMBER: 541088621 STATE OF INCORPORATION: VA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3/A SEC ACT: SEC FILE NUMBER: 333-54134 FILM NUMBER: 1602446 BUSINESS ADDRESS: STREET 1: 11013 WEST BROAD ST CITY: GLEN ALLEN STATE: VA ZIP: 23060 BUSINESS PHONE: 8049671000 MAIL ADDRESS: STREET 1: 11011 WEST BROAD ST CITY: GLEN ALLEN STATE: VA ZIP: 23060 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CAPITAL ONE MASTER TRUST CENTRAL INDEX KEY: 0000922869 STANDARD INDUSTRIAL CLASSIFICATION: ASSET-BACKED SECURITIES [6189] IRS NUMBER: 541719855 STATE OF INCORPORATION: VA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3/A SEC ACT: SEC FILE NUMBER: 333-54134-01 FILM NUMBER: 1602447 BUSINESS ADDRESS: STREET 1: 11013 W BROAD ST RD CITY: GLEN ALLEN STATE: VA ZIP: 23060 BUSINESS PHONE: 8049671000 MAIL ADDRESS: STREET 1: 11013 WEST BROAD ST RD CITY: GLEN ALLEN STATE: VA ZIP: 23060 FORMER COMPANY: FORMER CONFORMED NAME: SIGNET MASTER TRUST DATE OF NAME CHANGE: 19940509 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CAPITAL ONE FSB CENTRAL INDEX KEY: 0001132737 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 541807777 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3/A SEC ACT: SEC FILE NUMBER: 333-54134-02 FILM NUMBER: 1602448 BUSINESS ADDRESS: STREET 1: 2980 FAIRVIEW PARK DRIVE CITY: FALLS CHURCH STATE: VA ZIP: 22042 BUSINESS PHONE: 7032051000 MAIL ADDRESS: STREET 1: 2980 FAIRVIEW PARK DRIVE CITY: FALLS CHURCH STATE: VA ZIP: 22042 S-3/A 1 0001.txt FORM S-3 AMENDMENT NO. 1 As filed with the Securities and Exchange Commission on April 13, 2001 Registration No. 333-54134, 333-54134-01 and 333-54134-02 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 --------------- Amendment No. 1 to FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 --------------- CAPITAL ONE MASTER TRUST (Issuer of the Certificates) CAPITAL ONE BANK CAPITAL ONE, F.S.B. (Depositors to the Trust described herein) (Exact Name of Each Registrant as Specified in Its Charter) Virginia 54-1719855 United States of 54-1807777 (State or Other (I.R.S. Employer America (IRS Employer Jurisdiction of Identification (State or Other Identification Organization) Number) Jurisdiction of Number) Organization) Capital One Bank Capital One, F.S.B. 11011 West Broad Street 2980 Fairview Park Drive Glen Allen, VA 23060 Falls Church, VA 22042 (804) 967-1000 (703) 205-1000 (Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant's Principal Executive Office) John G. Finneran, Jr. Capital One Financial Corporation Executive Vice President and General Counsel 2980 Fairview Park Drive Falls Church, Virginia 22042 (703) 205-1000 (Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent for Service) Copies to: Amy K. Snyder, Esq. Cameron L. Cowan, Esq. Assistant General Counsel Orrick, Herrington & Sutcliffe LLP Capital One Financial Corporation Washington Harbour 8000 Jones Branch Drive 3050 K Street, N.W., Suite 200 McLean, VA 22102 Washington, DC 20007 (703) 875-1490 (202) 339-8400 Approximate date of commencement of proposed sale to the public: From time to time after this registration statement becomes effective as determined by market conditions. If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [_] If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. [X] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act Registration Statement number of the earlier effective Registration Statement for the same offering. [_] If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act Registration Statement number of the earlier effective Registration Statement for the same offering. [_] If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [_] CALCULATION OF REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------------------------------ Amount to be Proposed maximum Proposed Title of securities to registered aggregate price maximum aggregate Amount of be registered (a)(b) per certificate(c) offering price(c) registration fee(d) - ------------------------------------------------------------------------------------------------------------------------------------ Asset Backed Certificates.......... $16,172,669,000 100% $16,172,669,000 $4,043,167 - ------------------------------------------------------------------------------------------------------------------------------------
(a) With respect to any Asset Backed Certificates issued with original issue discount, the amount to be registered is calculated based on the initial public offering price thereof. (b) With respect to any Asset Backed Certificates denominated in any foreign currency, the amount to be registered shall be the U.S. dollar equivalent thereof based on the prevailing exchange rate at the time such Asset Backed Certificate is first offered. (c) Estimated solely for the purpose of calculating the registration fee. (d) $250 of which previously was paid in connection with the initial filing of this Registration Statement. In addition, a filing fee of $668,167 was paid with Registration Statement Nos. 333-40168 and 333-40168-01 in connection with $2,530,936,593 of unissued Asset Backed Certificates registered under Registration Statement Nos. 333-40168 and 333-40168-01, and is being offset against the total filing fee due for this Registration Statement pursuant to Rule 457(p) of the General Rules and Regulations under the Securities Act of 1933, as amended. The Registrants hereby amend this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrants shall file a further amendment which specifically states that this 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 Commission, acting pursuant to said Section 8(a), may determine. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- INTRODUCTORY NOTE This Registration Statement includes: . a form of base prospectus relating to asset backed certificates of the Capital One Master Trust; and . a representative form of prospectus supplement to the base prospectus relating to the offering by Capital One Master Trust of a series of asset backed certificates. ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ +The information in this prospectus supplement and the accompanying prospectus + +is not complete and may be amended. We may not sell these securities until + +the registration statement filed with the Securities and Exchange Commission + +is effective and we deliver a final prospectus supplement and accompanying + +prospectus. This prospectus supplement and the accompanying prospectus are + +not an offer to sell nor are they seeking an offer to buy these securities in + +any state where the offer or sale is prohibited. + ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ Representative Form of Prospective Supplement SUBJECT TO COMPLETION, DATED APRIL 13, 2001 Prospectus Supplement to Prospectus Dated , 2001 [LOGO OF CAPITAL ONE APPEARS HERE] Capital One Master Trust Issuer Capital One Bank Seller and Servicer Capital One, F.S.B. Seller $ Class A Floating Rate Asset Backed Certificates, Series 2001- $ Class B Floating Rate Asset Backed Certificates, Series 2001- You should consider carefully the risk factors beginning on page S-6 in this prospectus supplement and on page 6 in the prospectus. A certificate is not a deposit and neither the certificates nor the underlying accounts or receivables are insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The certificates will represent interests in the trust only, not interests in or obligations of Capital One Bank, Capital One, F.S.B. or any of their affiliates. This prospectus supplement may be used to offer and sell the certificates only if accompanied by the prospectus.
Class A certificates Class B certificates -------------------- -------------------- Principal amount $ $ Certificate rate [One]-Month LIBOR [One]-Month LIBOR plus % per year plus % per year Interest paid [Monthly], beginning [Monthly], beginning , 2001 , 2001 Expected final payment date , 20 , 20 Legal final maturity , 20 , 20 Price to public per certificate % % Underwriting discount per certificate % % Proceeds to sellers per certificate % %
The total price to public is $ , the total amount of the underwriting discount is $ and the total amount of proceeds plus accrued interest and before deduction of expenses is $ . Credit Enhancement-- . The Class B certificates are subordinated to the Class A certificates. Subordination of the Class B certificates provides credit enhancement for the Class A certificates. . The trust also is issuing a collateral interest that is subordinated to both the Class A certificates and the Class B certificates. Subordination of the collateral interest provides credit enhancement for both the Class A certificates and the Class B certificates. This prospectus supplement and the accompanying prospectus relate only to the offering of the Class A certificates and the Class B certificates. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved these certificates or determined that this prospectus supplement or the prospectus is accurate or complete. Any representation to the contrary is a criminal offense. Underwriters of the Class A certificates A Co. B Co. C Co. Underwriters of the Class B certificates A Co. B Co. , 2001 Important Notice about Information Presented in this Prospectus Supplement and the Accompanying Prospectus We provide information to you about the certificates in two separate documents: (a) the accompanying prospectus, which provides general information, some of which may not apply to your certificates and (b) this prospectus supplement, which describes the specific terms of your certificates. If the terms of your certificates vary between this prospectus supplement and the accompanying prospectus, you should rely on the information in this prospectus supplement. We include cross-references in this prospectus supplement and the accompanying prospectus to captions in these materials where you can find additional related discussions. The table of contents in this prospectus supplement and the table of contents in the accompanying prospectus provide the pages on which these captions are located. Parts of this prospectus supplement and the accompanying prospectus use defined terms. You can find these terms and their definitions under the caption "Glossary of Defined Terms" beginning on page S-33 in this prospectus supplement and on page 68 in the accompanying prospectus. ---------------- Transaction Summary Trust and Issuer: Capital One Master Trust Sellers: Capital One Bank and Capital One, F.S.B. Servicer: Capital One Bank Trustee: The Bank of New York Series Issuance Date: , 2001 Servicing Fee Rate: % per year Clearance and Settlement: DTC/Clearstream/Euroclear Receivables originated in MasterCard(R) and VISA(R) Primary Trust Assets: accounts
Class A Class B ------- ------- Principal Amount: $ $ Percentage of Series:* % % Anticipated Ratings:** [Aaa/AAA/AAA] [A2/A/A] ([Moody's/Standard & Poor's/Fitch]) Credit subordination of Class B and subordination of collateral interest Enhancement: collateral interest Certificate Rate: [one]-month [one]-month LIBOR plus LIBOR plus % per year % per year Interest Accrual Method: actual/360 actual/360 Distribution Dates: [monthly (15th)] [monthly (15th)] Certificate Rate 2 London business days before each 2 London business days before each Index Reset Date: distribution date distribution date First Distribution Date: , 2001 , 2001 Commencement of Accumulation Period (subject to adjustment): , 20 , 20 Expected Final Payment Date: , 20 , 20 Legal Final Maturity: , 20 , 20 ERISA eligibility [Yes, subject to important [No, except in limited circumstances (investors are considerations described under described in "ERISA Considerations" in cautioned to "ERISA Considerations" in this this prospectus supplement.] consult with prospectus supplement and the their counsel): accompanying prospectus.] Debt for United Yes, subject to important Yes, subject to important States Federal considerations described under considerations described under Income Tax "Federal Income Tax "Federal Income Tax Purposes Consequences" in the - Consequences" in the (investors are accompanying prospectus. accompanying prospectus. cautioned to consult with their tax counsel):
- -------- * The percentage of Series 2001- comprised by the collateral interest is %. ** It is a condition to issuance of the Series 2001- certificates that one of these ratings be obtained. Table of Contents
Page ---- Summary of Terms.......................................................... S-1 The Trust................................................................ S-1 The Sellers and the Servicer............................................. S-1 Offered Securities....................................................... S-1 Certificates............................................................ S-1 Distribution Dates...................................................... S-1 Interest................................................................ S-1 Principal............................................................... S-1 Collateral Interest...................................................... S-2 Credit Enhancement....................................................... S-2 Other Interests in the Trust............................................. S-2 Other Series of Certificates............................................ S-2 The Sellers' Interest................................................... S-2 The Receivables.......................................................... S-2 Collections by the Servicer.............................................. S-3 Allocations.............................................................. S-3 To Your Series.......................................................... S-3 Among Classes........................................................... S-3 Application of Collections............................................... S-3 Finance Charge Receivables Collections.................................. S-3 Excess Spread........................................................... S-3 Principal Collections................................................... S-4 Pay Out Events........................................................... S-4 Optional Repurchase...................................................... S-4 Registration............................................................. S-4 Tax Status............................................................... S-4 ERISA Considerations..................................................... S-5 Certificate Ratings...................................................... S-5 Exchange Listing......................................................... S-5 Risk Factors.............................................................. S-6 The credit enhancement may be insufficient to ensure expected payments on the certificates........................................................ S-6 Trust assets may be diverted from the Class B certificates to make payments on the Class A certificates.................................... S-6 Introduction.............................................................. S-7 Maturity Considerations................................................... S-7 The Bank Portfolio........................................................ S-10
The Trust Portfolio........................................................ S-10 General................................................................... S-10 Delinquency and Loss Experience........................................... S-11 Revenue Experience........................................................ S-12 Payment Rates............................................................. S-13 The Receivables........................................................... S-13
Page ---- Use of Proceeds............................................................ S-15 The Banks.................................................................. S-15 Capital One Bank.......................................................... S-15 Capital One, F.S.B........................................................ S-15 Series Provisions.......................................................... S-16 Interest Payments......................................................... S-16 Principal Payments........................................................ S-17 Revolving Period......................................................... S-17 Accumulation Period...................................................... S-17 Early Amortization Period................................................ S-18 Postponement of the Accumulation Period................................... S-18 Subordination............................................................. S-19 Allocation Percentages.................................................... S-19 Principal Funding Account................................................. S-19 Reserve Account........................................................... S-20 Reallocation of Cash Flows................................................ S-21 Class A Required Amount.................................................. S-21 Class B Required Amount.................................................. S-22 Application of Collections................................................ S-22 Payment of Interest, Fees and Other Items................................ S-22 Excess Spread; Excess Finance Charges.................................... S-23 Payments of Principal.................................................... S-24 Defaulted Receivables; Investor Charge-Offs............................... S-25 Class A Investor Charge-Offs............................................. S-25 Class B Investor Charge-Offs............................................. S-25 Shared Principal Collections.............................................. S-26 Paired Series............................................................. S-26 Required Principal Balance; Addition of Accounts.......................... S-26 Pay Out Events............................................................ S-27 Servicing Compensation and Payment of Expenses............................ S-28 Series Termination........................................................ S-29 Reports................................................................... S-29 Legal Matters............................................................. S-30 ERISA Considerations....................................................... S-30 General................................................................... S-30 The Authorization......................................................... S-30 Underwriting............................................................... S-31 Glossary of Defined Terms.................................................. S-33 Annex I: Previous Issuances of Certificates................................ I-1
i Summary of Terms This summary highlights selected information and does not contain all of the information that you need to make your investment decision. It also provides general, simplified descriptions of matters that, in some cases, are highly technical and complex. More detail is provided in other sections of this document and in the accompanying prospectus. Do not rely upon this summary for a full understanding of the matters you need to consider for any potential investment in the certificates. To understand all of the terms of the offering of the certificates, read carefully this entire document and the accompanying prospectus. The Trust The certificates will be issued by Capital One Master Trust, which is a master trust formed in 1993. The trustee is The Bank of New York. The Sellers and the Servicer Capital One Bank and Capital One, F.S.B. sell the receivables to the trust. Capital One Bank is a Virginia banking corporation. Its principal office currently is located at 11011 West Broad Street, Glen Allen, Virginia 23060, and its telephone number is (804) 967-1000. Capital One, F.S.B. is a federal savings bank. Its principal office currently is located at 2980 Fairview Park Drive, Falls Church, Virginia 22042, and its telephone number is (703) 205- 1000. Capital One Bank services the receivables. We refer to Capital One Bank and Capital One, F.S.B. together as the banks. Offered Securities Certificates Capital One Master Trust is offering: . $ of Class A certificates; and . $ of Class B certificates. In this document, references to certificates include both Class A and Class B. Only the Class A certificates and the Class B certificates are offered by this prospectus supplement and the accompanying prospectus. Beneficial interests in the certificates may be purchased in minimum denominations of $1,000 and integral multiples of $1,000. The series issuance date for the certificates is expected to be , 2001. Distribution Dates Distribution dates for the certificates will be , 2001 and, after that, will be the 15th day of each month if the 15th is a business day and, if not, the following business day. Interest Interest on the certificates will be paid on each distribution date. The Class A certificates will bear interest at [one]-month LIBOR as determined each month plus % per year. The Class B certificates will bear interest at [one]-month LIBOR as determined each month plus % per year. Interest for the Class A certificates and Class B certificates will be calculated as follows: Principal amount Number of days in interest period Rate for interest at end of prior month 360 period
X X You may obtain the interest rates for the current interest period and the immediately preceding interest period by telephoning the trustee at (212) 815- 5738. Principal Principal of the certificates is expected to be paid in full on the distribution date. We are scheduled to begin accumulating collections of principal receivables for payment to the certificateholders starting on , 20 , but we may begin accumulating at a later date. No principal will be paid to the Class B S-1 certificateholders until the Class A certificateholders are paid in full. The certificates are expected to be paid on the date noted above; however, principal may be paid earlier or later. Certificateholders will not be entitled to any premium for early or late payment of principal. If certain adverse events known as pay out events occur, principal may be paid earlier than expected. If collections of the credit card receivables are less than expected or are collected more slowly than expected, then principal payments may be delayed. If the certificates are not paid on the expected final payment date, collections of principal receivables will continue to be used to pay principal on the certificates until the certificates are paid or until , , whichever occurs first. , is the legal final maturity date. See "Maturity Considerations," "Series Provisions--Allocation Percentages" and "--Principal Payments" in this prospectus supplement. Collateral Interest At the same time the certificates are issued, the trust will issue an interest in the assets of the trust known as the collateral interest. The initial amount of the collateral interest is $ , which represents % of the initial aggregate principal amount of the certificates plus the collateral interest. The holder of the collateral interest will have voting and certain other rights as if the collateral interest were a subordinated class of certificates. The collateral interest will be subordinated to both the Class A certificates and the Class B certificates. The collateral interest is not offered by this prospectus supplement and the accompanying prospectus. Credit Enhancement Credit enhancement for the Class A certificates is provided by the subordination of the Class B certificates and the collateral interest. Credit enhancement for the Class B certificates is provided by the subordination of the collateral interest. Credit enhancement for your series is for your series' benefit only, and you are not entitled to the benefits of credit enhancement available to other series. See "Series Provisions--Reallocation of Cash Flows," "--Application of Collections" and "--Defaulted Receivables; Investor Charge-Offs" in this prospectus supplement. Other Interests in the Trust Other Series of Certificates The trust has issued numerous other series of certificates and expects to issue additional series. A summary of the outstanding series is in "Annex I: Previous Issuances of Certificates" included in this prospectus supplement. Annex I is incorporated into this prospectus supplement by reference. The issuance of future series will occur without prior review or consent by you or any other certificateholder. The Sellers' Interest The interest in the trust not represented by your series or by any other series is the sellers' interest. The sellers' interest is owned by the banks. Each of the banks may, however, sell a portion of its interest in the sellers' interest. The sellers' interest does not provide credit enhancement for your series or any other series. The Receivables The primary assets of the trust are receivables in MasterCard(R) and VISA(R) revolving credit card accounts. The receivables consist of principal receivables and finance charge receivables. The following information is as of , 2001: . Receivables in the trust: $ . Accounts designated to the trust: See "The Trust Portfolio" in this prospectus supplement. S-2 Collections by the Servicer Capital One Bank, as servicer, will collect payments on the receivables and will deposit those collections in an account. Allocations To Your Series Each month Capital One Bank, as servicer, will allocate collections received among: . your series; . other series outstanding; and . the sellers' interest in the trust. The amount allocated to your series will be determined based mainly upon the size of the invested amount of your series compared to the total amount of principal receivables in the trust. At the time of issuance of the certificates, the invested amount for Series 2001- will be $ . Among Classes Amounts allocated to your series will be further allocated among the Class A certificates, the Class B certificates and the collateral interest on the basis of the invested amount of each class. Initially the invested amount of each class will be equal to the original principal amount of such class. See "Series Provisions--Allocation Percentages" in this prospectus supplement. You are entitled to receive payments of interest and principal only from collections and other trust assets allocated to your series. The invested amount, which is the primary basis for allocations to your series, is the sum of: (a) the Class A invested amount, plus (b) the Class B invested amount, plus (c) the collateral invested amount. If the invested amount of your series declines, amounts allocated and available for payment to your series and to you will be reduced. In addition, for purposes of allocating finance charge collections, the monthly servicing fee and amounts that are written off as uncollectible, the allocations to the certificates will be based upon the adjusted invested amount, which will be the invested amount less amounts accumulated in the principal funding account for payment to the certificateholders and the collateral interest holder on the expected final payment date. For a description of the events which may lead to these reductions, see "Series Provisions--Allocation Percentages" and "-- Reallocation of Cash Flows" in this prospectus supplement. Application of Collections The following steps describe how the trust allocates and applies collections of finance charge receivables to your series. Finance Charge Receivables Collections . Collections of finance charge receivables allocated to the Class A certificates will be used to pay interest on the Class A certificates, to pay Class A's portion of the servicing fee and to cover Class A's portion of receivables that are written off as uncollectible. Any remaining amount will become excess spread and be applied as described below. . Collections of finance charge receivables allocated to the Class B certificates will be used to pay interest on the Class B certificates and to pay Class B's portion of the servicing fee. Any remaining amount will become excess spread and be applied as described below. . Collections of finance charge receivables allocated to the collateral interest will be used to pay the collateral interest's portion of the servicing fee and any remaining amount will become excess spread and be applied as described below. Excess Spread Each month the trust will distribute the excess spread and your series' share of excess finance charges from other series in the following order of priority: . first to make up deficiencies with respect to Class A; . then to make up deficiencies with respect to Class B; S-3 . then to pay interest on the collateral interest and to make up deficiencies with respect to the collateral interest; . then, in limited circumstances, to fund a reserve account to cover interest payment shortfalls during the accumulation period; and . finally to make payments to the holder of the collateral interest. See "Series Provisions--Application of Collections" in this prospectus supplement. Principal Collections The trust will apply your series' share of principal collections each month as follows: . First, principal collections allocated to the collateral interest and the Class B certificates may be reallocated, if necessary, to make required payments on the Class A certificates and the Class B certificates not made from finance charge collections, excess spread or funds in the reserve account. . During the revolving period, no principal will be paid to you or accumulated in a trust account. Instead, your series' share of principal collections will be treated as shared principal collections and may be available to make principal payments for other series. . The accumulation period is scheduled to begin on , but may begin at a later date. During the accumulation period, principal collections will be deposited in a trust account, up to a controlled deposit amount, for payment to the holders of the Class A certificates, the Class B certificates and the collateral interest on the expected final payment date. . If a pay out event (described below) that applies to Series 2001- or to all series occurs, the early amortization period will begin. During the early amortization period, principal collections will be paid first to the Class A certificateholders, then to the Class B certificateholders and then to the collateral interest holder. . Any remaining principal collections will be first made available to other series and then paid to the sellers or deposited in the excess funding account. Pay Out Events Upon the occurrence of certain adverse events called pay out events, each month the trust will use collections of principal receivables allocated to Series 2001- to pay principal. See "Series Provisions--Pay Out Events" in this prospectus supplement for a description of the pay out events that apply specifically to Series 2001- , and "Description of the Certificates--Pay Out Events" in the accompanying prospectus for a description of the pay out events that apply to all series. Optional Repurchase A seller (so long as that seller is the servicer or its affiliate) have the option to repurchase your certificates when the invested amount for your series has been reduced to 5% or less of the initial invested amount. See "Risk Factors" in the accompanying prospectus. Registration The certificates will be in book-entry form and will be registered in the name of Cede & Co., as the nominee of The Depository Trust Company. Except in certain limited circumstances, you will not receive a definitive certificate representing your interest. See "The Pooling Agreement Generally--Definitive Certificates" in the accompanying prospectus. You may elect to hold your certificates through The Depository Trust Company, in the United States, or Clearstream Banking, societe anonyme or the Euroclear System in Europe. See "The Pooling Agreement Generally--Book-Entry Registration" and "--Definitive Certificates" in the accompanying prospectus. Tax Status Orrick, Herrington & Sutcliffe LLP, as special tax counsel to the banks, is of the opinion that under existing law your certificates will be characterized as debt for federal income tax purposes. By your acceptance of a certificate, you will agree to treat your certificates as debt for federal, state and local income and franchise tax purposes. See "Federal Income Tax Consequences" in the accompanying prospectus for additional information concerning the application of federal income tax laws. S-4 ERISA Considerations Subject to important considerations described under "ERISA Considerations" in this prospectus supplement and the accompanying prospectus, the Class A certificates are eligible for purchase by persons investing assets of employee benefit plans or individual retirement accounts. For the reasons discussed under "ERISA Considerations" in this prospectus supplement and the accompanying prospectus, the Class B certificates are not eligible for purchase by persons investing assets of employee benefit plans or individual retirement accounts other than an insurance company investing assets of its general account. Certificate Ratings The Class A certificates are required to be rated in the highest rating category by at least one nationally recognized rating organization and the Class B certificates are required to be rated in one of the three highest rating categories by at least one nationally recognized rating organization. See "Prospectus Summary--Certificate Ratings" and "Risk Factors--The credit ratings of your certificates are limited" in the accompanying prospectus. [Exchange Listing We will apply to list the certificates on the Luxembourg Stock Exchange. We cannot guarantee that the application for the listing will be accepted.] S-5 Risk Factors In the accompanying prospectus there is a section called "Risk Factors." The information in that section applies to all series, including yours. The information in this section applies more specifically to your series. Please carefully read "Risk Factors" in the accompanying prospectus and the risk factors discussed below before deciding whether to purchase any of the certificates. The credit enhancement may be insufficient to ensure expected payments on the certificates. The credit enhancement for your certificates is limited. Credit enhancement is provided (i) for the Class A certificates, through the subordination of the Class B certificates and the collateral interest, and (ii) for the Class B certificates, through the subordination of the collateral interest. The only sources of payment for your certificates are the assets of the trust allocated to your series. If problems develop with the receivables, such as an increase in losses on the receivables, or there are problems in the collection and transfer of the receivables to the trust, it is possible that you may not receive the full amount of interest and principal that you would otherwise receive. See "Series Provisions--Allocation Percentages" and "--Defaulted Receivables; Investor Charge- Offs" in this prospectus supplement. Trust assets may be diverted from the Class B certificates to make payments on the Class A certificates. If you purchase a Class B certificate, your right to receive principal payments is subordinated to the payment in full of the Class A certificates. No principal will be paid to you until the full amount of the principal has been paid or accumulated for payment on the Class A certificates. In addition, if Class A's share of collections of finance charge receivables allocated to Series 2001- , excess spread and the collateral interest's share of principal collections are insufficient to make all required payments for the Class A certificates, collections of principal receivables allocated to Class B may be diverted to Class A. Also, if Class A's share of losses on the receivables exceeds collections and credit enhancement available to cover those losses and the collateral interest amount is reduced to zero, the Class B invested amount may be reduced to avoid reducing the Class A invested amount. If this occurs, the Class B invested amount and future allocations to Class B would be reduced. Accordingly, you may receive payments of interest or principal later than you expect or you may not receive the full amount of principal and interest due to you. See "Series Provisions--Reallocation of Cash Flows" and "--Defaulted Receivables; Investor Charge-Offs" in this prospectus supplement. S-6 Introduction The following provisions of this prospectus supplement contain more detailed information concerning the certificates offered by this prospectus supplement and the accompanying prospectus. The certificates will be issued by the trust pursuant to a pooling and servicing agreement, dated as of September 30, 1993, originally between a predecessor in interest to Capital One Bank, as seller and servicer, and The Bank of New York, as trustee. The pooling and servicing agreement has been and may be amended from time to time and is referred to in this prospectus supplement and the accompanying prospectus as the pooling agreement. Series 2001- is included in a Group of series designated as Group One. "Annex I: Previous Issuances of Certificates" in this prospectus supplement contains a list of each currently outstanding series in Group One. Other series in the future may be included in Group One. Annex I is incorporated by reference into this prospectus supplement. The property of the trust includes receivables generated from time to time in a portfolio of consumer revolving credit card accounts and other consumer revolving accounts, collections thereon and certain other property. Descriptions of the Bank Portfolio and the Trust Portfolio are provided in "The Bank Portfolio" and "The Trust Portfolio" in this prospectus supplement. Pursuant to the pooling agreement as supplemented by the Series 2001- supplement, the trust is issuing $ of Class A certificates and $ of Class B certificates as a part of Series 2001- . The $ of Collateral Interest (which is not offered by this prospectus supplement and the accompanying prospectus) is also a part of Series 2001- . The Class A certificates, the Class B certificates and the Collateral Interest represent interests in the assets of the trust. Maturity Considerations The Class A certificateholders, the Class B certificateholders and the Collateral Interest holder are expected to receive payment of principal in full on the Expected Final Payment Date or earlier if a Pay Out Event occurs. The likelihood that Class A certificateholders, Class B certificateholders and the Collateral Interest holder will receive payments of principal on the Expected Final Payment Date depends on the payment rates on the receivables, the amount of outstanding receivables, the delinquencies, charge-offs and new borrowings on the accounts, the potential issuance by the trust of additional series and the availability of Shared Principal Collections. Monthly payment rates on the receivables vary because, among other things, accountholders may fail to make a required minimum payment, may only make payments as low as the minimum required amount or may make payments as high as the entire outstanding balance. Monthly payment rates may also vary due to seasonal purchasing and payment habits of accountholders and to changes in any terms and conditions of the account. See the "Accountholder Monthly Payment Rates" table under "The Trust Portfolio" in this prospectus supplement. During the Revolving Period, no payments of principal will be made to the Class A certificateholders, the Class B certificateholders or the Collateral Interest holder, and collections of principal receivables allocable to the Invested Amount will generally be treated as Shared Principal Collections, subject to certain limitations described in "Description of Series Provisions-- Principal Payments--Revolving Period" in this prospectus supplement. On each Distribution Date during the Accumulation Period, amounts equal to the least of: (a) Available Investor Principal Collections (see "Series Provisions-- Principal Payments" in this prospectus supplement) for the related Monthly Period on deposit in the Collection Account, (b) the applicable Controlled Deposit Amount, and (c) the Adjusted Invested Amount will be deposited in the Principal Funding Account until the amount on deposit in the Principal Funding Account equals the Invested Amount or, if earlier, the Expected Final Payment Date. S-7 Unless a Pay Out Event with respect to Series 2001- occurs, amounts on deposit in the Principal Funding Account will be used to make payments of principal on the Expected Final Payment Date: . first to the Class A certificateholders (until the Class A Invested Amount is paid in full), . then to the Class B certificateholders (until the Class B Invested Amount is paid in full), and . finally to the Collateral Interest holder (until the Collateral Invested Amount is paid in full). See "Series Provisions--Postponement of the Accumulation Period" in this prospectus supplement for a discussion of circumstances under which the start of the Accumulation Period may be delayed. The sellers may, at or after the time at which the Accumulation Period begins, cause another series issued or to be issued by the trust (or some portion thereof, to the extent that the full principal amount of such other series is not otherwise outstanding at such time) to be a paired series with Series 2001- to be used to finance the increase in the Sellers' Interest caused by the accumulation of principal in the Principal Funding Account for Series 2001- . Although no assurances can be given as to whether such other series will be issued and, if issued, the terms thereof, the outstanding principal amount of such other series may vary from time to time (whether or not a Pay Out Event occurs with respect to Series 2001- ), and the interest rate with respect to certificates of such other series may be established on its date of issuance and may be reset periodically. Further, since the terms of Series 2001- will vary from the terms of such other series, the Pay Out Events for such other series may vary from the Pay Out Events for Series 2001- and may include Pay Out Events that are unrelated to the status of the banks or the receivables, such as pay out events related to the continued availability and rating of certain providers of Series Enhancement to such other series. If a Pay Out Event does occur for any such paired series prior to the payment in full of Series 2001- , the Principal Allocation Percentage could be reduced and the final payment of principal to the Class A certificateholders, the Class B certificateholders and the Collateral Interest holder could be delayed. Should a Pay Out Event occur with respect to Series 2001- (including the failure to pay the Invested Amount on the Expected Final Payment Date), the Early Amortization Period will begin, and on the first Special Payment Date with respect to the Early Amortization Period, any amount on deposit in the Principal Funding Account will be paid to the Class A certificateholders and, after the Class A Invested Amount has been paid in full, the Class B certificateholders and, after the Class B Invested Amount has been paid in full, the Collateral Interest holder. In addition, to the extent that the Class A Invested Amount has not been paid in full, Available Investor Principal Collections will be paid to the Class A certificateholders on each Special Payment Date until the earliest of: . the date on which the Class A Invested Amount has been paid in full, . the Series 2001- Termination Date, or . the Trust Termination Date. After the Class A Invested Amount has been paid in full, Available Investor Principal Collections will be paid to the Class B certificateholders on each Special Payment Date until the earliest of: . the date on which the Class B Invested Amount has been paid in full, . the Series 2001- Termination Date, or . the Trust Termination Date. After the Class B Invested Amount has been paid in full, Available Investor Principal Collections will be paid to the Collateral Interest holder on each Special Payment Date until the earliest of: . the date on which the Collateral Invested Amount has been paid in full, . the Series 2001- Termination Date, or . the Trust Termination Date. S-8 Additionally, should a Pay Out Event occur with respect to Series 2001- and the Early Amortization Period begins, any amount on deposit in the Excess Funding Account will be released and treated as Shared Principal Collections and Excess Shared Principal Collections to the extent needed to cover principal payments due to or for the benefit of any series entitled to the benefits of Shared Principal Collections or Excess Shared Principal Collections. See "Description of the Certificates--Pay Out Events" in the accompanying prospectus and "Series Provisions--Pay Out Events" in this prospectus supplement. The banks cannot predict, and no assurance can be given, as to the accountholder monthly payment rates that will actually occur in any future period, as to the actual rate of payment of principal of Series 2001- or whether the terms of any previously or subsequently issued series might have an impact on the amount or timing of any such payment of principal. In addition, the amount of outstanding receivables and the delinquencies, charge-offs and new borrowings on the accounts may vary from month to month due to seasonal variations, the product mix of the Trust Portfolio, the availability of other sources of credit, legal factors, general economic conditions and spending and borrowing habits of individual accountholders. There can be no assurance that collections of principal receivables with respect to the Trust Portfolio, and thus the rate at which the Class A certificateholders, the Class B certificateholders and the Collateral Interest holder could expect to receive payments of principal during the Early Amortization Period or the rate at which the Principal Funding Account could be funded during the Accumulation Period, will be similar to the historical experience set forth in the "Accountholder Monthly Payment Rates" table under "The Trust Portfolio" in this prospectus supplement. As described under "Series Provisions--Principal Payments" in this prospectus supplement, the servicer may shorten the Accumulation Period and, in such event, there can be no assurance that there will be sufficient time to accumulate all amounts necessary to pay the Invested Amount on the Expected Final Payment Date. The trust, as a master trust, has issued [ ] series which are currently outstanding, and may issue additional series from time to time. There can be no assurance that the terms of any such series might not have an impact on the timing or amount of payments received by the Class A certificateholders, the Class B certificateholders and the Collateral Interest holder. Further, if a Pay Out Event occurs, the average life and maturity of the Class A certificates, the Class B certificates and the Collateral Interest could be significantly reduced. Due to the reasons set forth above, and the fact that the payment experience for the more recently originated accounts in the Trust Portfolio is limited (see "The Trust Portfolio" in this prospectus supplement), there can be no assurance that deposits in the Principal Funding Account will be made in accordance with the Controlled Accumulation Amount or that the actual number of months elapsed from the date of issuance of the Class A certificates, the Class B certificates and the Collateral Interest to their final Distribution Date will equal the expected number of months. See "Risk Factors" in the accompanying prospectus. S-9 The Bank Portfolio The Bank Portfolio is primarily comprised of VISA and MasterCard accounts originated by the banks and Capital One Bank's predecessor since 1992, regardless of whether such accounts meet the eligibility requirements specified in the pooling agreement. Although such accounts were not originated using identical underwriting criteria, the receivables arising under such accounts are assessed finance charges having the following annual percentage rate characteristics: Fixed Rate or Variable Rate An annual percentage rate is either a fixed rate or a variable rate that adjusts periodically according to an index. Some accounts have a low fixed rate. Introductory Period or Non-introductory Period An account may have an introductory period during which a relatively low annual percentage rate is charged. In such instances, the annual percentage rate is converted to a higher annual percentage rate at the end of the introductory period. Non-introductory rate products include customized products targeted at both a range of consumer credit risk profiles, such as low fixed- rate cards and secured cards, as well as special consumer interests, such as affinity and joint account cards, co-brand cards, student cards and other cards targeted to certain other market segments. Historically, non-introductory rate cards tend to have lower credit lines, balances that build over time, less attrition, higher interest margins, higher fees and, in some cases, higher delinquencies and credit losses than the banks' traditional low introductory rate products. In the fourth quarter of 1997, the banks adopted a more conservative accounting methodology for charge-offs and made an adjustment to its recognition of finance charges and fee income. The banks modified their methodology for charging off credit card loans (net of any collateral) to 180 days past-due, from the prior practice of charging off loans during the billing cycle after 180 days past-due. This resulted in adjustments to delinquencies and losses, as well as a reduction in revenue as a result of a reversal of previously accrued finance charges and fee income. In addition, the banks also began recognizing the estimated uncollectible portion of finance charges and fee income receivables, which resulted in a decrease in loans and a corresponding decrease in revenue. The Trust Portfolio General The receivables conveyed to the trust arise in accounts selected from the Bank Portfolio based on the eligibility criteria specified in the pooling agreement as applied on the Trust Cut-Off Date and subsequent additional cut- off dates. See "The Accounts," "The Pooling Agreement Generally--Conveyance of Receivables" and "--Representations and Warranties" in the accompanying prospectus. The number of low fixed-rate products and non-introductory rate products in the Trust Portfolio has been increasing, and as the number of these accounts increases and as such accounts season, the characteristics of these accounts as described above in "The Bank Portfolio" will have a more significant effect on the Trust Portfolio. Receivables added to the trust have included and will include such low fixed-rate and non-introductory rate credit card receivables, which on the series issuance date constitute, and at any given time thereafter may constitute, a material portion of the Trust Portfolio. See "Risk Factors,""The Banks' Credit Card and Consumer Lending Business--Underwriting Procedures" and "Certain Legal Aspects of the Receivables--Transfer of Receivables" in the accompanying prospectus. S-10 Delinquency and Loss Experience Because new accounts usually initially exhibit lower delinquency rates and credit losses, the growth of the Trust Portfolio from approximately $ billion at year end 20 , to approximately $ billion as of the end of , 20 has had the effect of significantly lowering the charge-off and delinquency rates for the entire portfolio from what they otherwise would have been. However, as the proportion of new accounts to seasoned accounts becomes smaller, this effect should be lessened. As seasoning occurs or if new account origination slows, the banks expect that the charge-off rates and delinquencies will increase over time. The delinquency and net loss rates at any time reflect, among other factors, the quality of the credit card loans, the average seasoning of the accounts, the success of the banks' collection efforts, the product mix of the Trust Portfolio and general economic conditions. The following tables set forth the delinquency and loss experience for the Trust Portfolio for each of the periods shown. The Trust Portfolio includes groups of accounts, each created in connection with a particular solicitation, which may, when taken individually, have delinquency and loss characteristics different from those of the overall Trust Portfolio. There can be no assurance that the delinquency and loss experience for the receivables in the future will be similar to the historical experience set forth below for the Trust Portfolio. Delinquencies as a Percentage of the Trust Portfolio (Dollars in Thousands)
At Year End ----------------------------------------------------------------- 200 199 199 --------------------- --------------------- --------------------- Delinquent Delinquent Delinquent Number of Days Delinquent Amount Percentage Amount Percentage Amount Percentage - ------------------------- ---------- ---------- ---------- ---------- ---------- ---------- 30 - 59 days............. $ % $ % $ % 60 - 89 days............. 90 + days................ ---- --- ---- --- ---- --- TOTAL................... $ % $ % $ % ==== === ==== === ==== ===
Loss Experience for the Trust Portfolio (Dollars in Thousands)
Year Ended ---------------- 200 199 199 ---- ---- ---- Average Receivables Outstanding............................. $ $ $ Gross Losses................................................ $ $ $ Gross Losses as a Percentage of Average Receivables Outstanding................................................ % % % Recoveries.................................................. $ $ $ Net Losses.................................................. $ $ $ Net Losses as a Percentage of Average Outstanding........... % % %
S-11 Revenue Experience The following table sets forth the revenues from finance charges and fees billed and interchange received with respect to the Trust Portfolio for the periods shown. Revenue Experience for the Trust Portfolio (Dollars in Thousands)
Year Ended -------------------- 200 199 199 ----- ------ ----- Average Receivables Outstanding........................... $ $ $ Finance Charges and Fees.................................. $ $ $ Yield from Finance Charges and Fees....................... % % % Interchange............................................... $ $ $ Yield from Interchange.................................... % % %
There can be no assurance that the yield experience for the receivables in the future will be similar to the historical experience set forth above for the Trust Portfolio. In addition, revenue from the receivables will depend on the types of fees and charges assessed on the accounts, and could be adversely affected by future changes made by the banks or the servicer in such fees and charges or by other factors. See "Risk Factors" in the accompanying prospectus. The revenue from finance charges and fees for the accounts in the Trust Portfolio shown in the above table is comprised of three primary components: periodic rate finance charges, the amortized portion of annual membership fees and other charges, such as cash advance fees, late charges, overlimit fees and other miscellaneous fees. If payment rates decline, the balances subject to monthly periodic rate finance charges tend to grow, assuming no change in the level of purchasing activity. Accordingly, under these circumstances, the yield related to monthly periodic rate finance charges normally increases. Conversely, if payment rates increase, the balances subject to monthly periodic rate finance charges tend to fall, assuming no change in the level of purchasing activity. Accordingly, under these circumstances, the yield related to monthly periodic rate finance charges normally decreases. The Trust Portfolio may experience growth in receivables through the banks' origination of accounts having an introductory period during which a relatively low annual percentage rate is charged. As the introductory period on these accounts expire, the banks may choose to waive all or part of the annual percentage rate increase for such accounts. Under these circumstances, the yield related to monthly periodic rate finance charges would be adversely affected. The impact of service charges on the Trust Portfolio's yield varies with the type and volume of activity in and the amount of each account, as well as with the number of delinquent accounts. As aggregate account balances increase, annual membership fees, which remain constant, represent a smaller percentage of the aggregate account balances. S-12 Payment Rates The following table sets forth the highest and lowest accountholder monthly payment rates for the Trust Portfolio during any single month in the periods shown and the average accountholder monthly payment rates for all months during the periods shown, in each case calculated as a percentage of average monthly account balances during the periods shown. Payment rates shown in the table are based on amounts which would be payments of principal receivables and finance charge receivables on the accounts. Accountholder Monthly Payment Rates for the Trust Portfolio
Year Ended ------------- 200 199 199 --- --- --- Lowest Month..................................................... % % % Highest Month.................................................... % % % Average Payment Rate for the Period.............................. % % %
The Receivables As of , 20 : . the Trust Portfolio included $ of principal receivables and $ of finance charge receivables; . the accounts had an average principal receivable balance of $ and an average credit limit of $ ; . the percentage of the aggregate total receivable balance to the aggregate total credit limit was %; . the average age of the accounts was approximately months; . all of the accounts in the Trust Portfolio were VISA or MasterCard credit card accounts, of which % were standard accounts and % were premium accounts; and . approximately % of the accounts in the Trust Portfolio were assessed a variable rate periodic finance charge and approximately % were assessed a fixed rate periodic finance charge. S-13 The following tables summarize the Trust Portfolio by various criteria as of , 20 . References to "Receivables Outstanding" in the following tables include both finance charge receivables and principal receivables. Because the future composition and product mix of the Trust Portfolio may change over time, these tables are not necessarily indicative of the composition of the Trust Portfolio at any specific time in the future. Composition by Account Balance Trust Portfolio
Percentage Percentage of Total of Total Number of Number of Receivables Receivables Account Balance Range Accounts Accounts Outstanding Outstanding - --------------------- ----------- ---------- --------------- ----------- Credit Balance............ % $( ) ( )% No Balance................ More than $0 and less than or equal to $1,500.00.... $1,500.01-$5,000.00....... $5,000.01-$10,000.00...... Over $10,000.00........... ----------- ------ --------------- ------- TOTAL................... % $ % =========== ====== =============== =======
Composition by Credit Limit Trust Portfolio
Percentage Percentage of Total of Total Number of Number of Receivables Receivables Credit Limit Range Accounts Accounts Outstanding Outstanding - ------------------ ---------- ---------- ----------------- ----------- Less than or equal to $1,500.00................ % $ % $1,500.01-$5,000.00....... $5,000.01-$10,000.00...... Over $10,000.00........... ---------- ------ ----------------- ------ TOTAL................... % $ % ========== ====== ================= ======
Composition by Payment Status Trust Portfolio
Percentage Percentage of Total of Total Number of Number of Receivables Receivables Payment Status Accounts Accounts Outstanding Outstanding - -------------- ---------- ---------- ------------------ ----------- Current to 29 days......... % $ % Past due 30 - 59 days...... Past due 60 - 89 days...... Past due 90+ days.......... ---------- ------ ------------------ ------ TOTAL.................... % $ % ========== ====== ================== ======
S-14 Composition by Account Age Trust Portfolio
Percentage Percentage of Total of Total Number of Number of Receivables Receivables Account Age Accounts Accounts Outstanding Outstanding - ----------- ---------- ---------- ------------------ ----------- Not More than 6 Months... % $ % Over 6 Months to 12 Months.................. Over 12 Months to 24 Months.................. Over 24 Months to 36 Months.................. Over 36 Months to 48 Months.................. Over 48 Months to 60 Months.................. Over 60 Months........... ---------- ------ ------------------ ------ TOTAL.................. % $ % ========== ====== ================== ======
Composition of Accounts by Accountholder Billing Address
Percentage Percentage of Total of Total Number of Number of Receivables Receivables State or Territory Accounts Accounts Outstanding Outstanding - ------------------ ---------- ---------- ------------------ ----------- [List States] % $ % ---------- ------ ------------------ ------ TOTAL.................... % $ % ========== ====== ================== ======
Since the largest number of accountholders (based on billing addresses) whose accounts were included in the trust as of , 20 were in , , and adverse economic conditions affecting accountholders residing in these areas could affect timely payment by such accountholders of amounts due on the accounts and, accordingly, the actual rates of delinquencies and losses with respect to the Trust Portfolio. See "Risk Factors" in the accompanying prospectus. Use of Proceeds The net proceeds from the sale of the Class A certificates and the Class B certificates will be paid to the banks. The banks will use such proceeds for general corporate purposes. The Banks Capital One Bank Capital One Bank, a Virginia banking corporation, is a subsidiary of Capital One Financial Corporation. At , 20 , Capital One Bank had assets of approximately $ billion and stockholders' equity of approximately $ million. For a more detailed description of Capital One Bank, see "The Banks-- Capital One Bank" in the accompanying prospectus. Capital One, F.S.B. Capital One, F.S.B. is a federal savings bank and a subsidiary of Capital One Financial Corporation. At , 20 , Capital One, F.S.B. had assets of approximately $ billion and stockholders' equity of approximately $ million. For a more detailed description of Capital One, F.S.B., see "The Banks--Capital One, F.S.B." in the accompanying prospectus. S-15 Series Provisions The Class A certificates, the Class B certificates and the Collateral Interest will be issued pursuant to the pooling agreement and the Series 2001- supplement. The following summary describes certain terms applicable to the Class A certificates and the Class B certificates. Reference should be made to the accompanying prospectus for additional information concerning the Class A certificates, the Class B certificates and the pooling agreement. Interest Payments The Class A certificates will accrue interest at a rate of % per year above LIBOR prevailing on the related LIBOR Determination Date with respect to the related Interest Period. The Class B certificates will accrue interest at a rate of % per year above LIBOR prevailing on the related LIBOR Determination Date with respect to the related Interest Period. Interest will be paid on each Distribution Date. Interest for any Distribution Date will accrue from and including the preceding Distribution Date (or, in the case of the first Distribution Date, from and including the series issuance date) to but excluding such Distribution Date. Because the Class A certificate rate and the Class B certificate rate are floating rates, interest for any Distribution Date will be calculated based on the actual number of days in the period from and including the preceding Distribution Date (or, in the case of the first Distribution Date, from and including the series issuance date) to but excluding such Distribution Date and a 360-day year. Interest payments on the Class A certificates for each Distribution Date will be calculated on the outstanding principal balance of the Class A certificates as of the close of business on the preceding Record Date. Interest on the Class A certificates for the first Distribution Date, however, will be calculated on the initial Class A principal balance. On each Distribution Date, Class A Monthly Interest, Class A Outstanding Monthly Interest and Class A Additional Interest, if any, for such Distribution Date will be paid to the Class A certificateholders. Interest payments to the Class A certificateholders on any Distribution Date will be funded from Class A Available Funds for the related Monthly Period. To the extent Class A Available Funds allocated to the Class A certificates for such Monthly Period are insufficient to pay such interest, Excess Spread and Excess Finance Charges allocated to Series 2001- and Reallocated Principal Collections allocable first to the Collateral Invested Amount and then the Class B Invested Amount will be used to make such payments or deposits. Interest payments on the Class B certificates for each Distribution Date will be calculated on the outstanding principal balance of the Class B certificates as of the close of business on the preceding Record Date. Interest on the Class B certificates for the first Distribution Date, however, will be calculated on the initial Class B principal balance. On each Distribution Date, Class B Monthly Interest, Class B Outstanding Monthly Interest and Class B Additional Interest, if any, for such Distribution Date will be paid to the Class B certificateholders. Interest payments to the Class B certificateholders on any Distribution Date will be funded from Class B Available Funds for the related Monthly Period. To the extent Class B Available Funds allocated to the Class B certificates for such Monthly Period are insufficient to pay such interest, Excess Spread and Excess Finance Charges allocated to Series 2001- not required to pay the Class A Required Amount or reimburse Class A Investor Charge-Offs and Reallocated Principal Collections allocable to the Collateral Invested Amount and not required to pay the Class A Required Amount or reimburse Class A Investor Charge-Offs, will be used to make such payments or deposits. Interest payments on the Collateral Interest for each Distribution Date will be calculated on the outstanding principal balance of the Collateral Interest as of the close of business on the preceding Record Date based on the Collateral Interest Minimum Rate. Interest on the Collateral Interest for the first Distribution Date, however, will be calculated on the initial principal balance of the Collateral Interest. The Collateral Interest S-16 Minimum Rate is fixed, so interest will be calculated on the basis of a 360-day year consisting of twelve 30-day months. On each Distribution Date, Collateral Minimum Monthly Interest for the related Monthly Period and any Collateral Minimum Monthly Interest previously due but not distributed to the Collateral Interest holder will be paid to the Collateral Interest holder. Minimum interest payments to the Collateral Interest holder on any Distribution Date will be funded from Excess Spread and Excess Finance Charges allocated to Series 2001 - not required to pay the Class A Required Amount or the Class B Required Amount or reimburse Class A Investor Charge-Offs or reductions in the Class B Invested Amount for such Monthly Period. Principal Payments Revolving Period Series 2001- will have a Revolving Period when the trust will not pay or accumulate principal for the Class A certificates, the Class B certificates or the Collateral Interest. The Revolving Period starts on the series issuance date and ends on the earlier to begin of: . the Accumulation Period, or . the Early Amortization Period. During the Revolving Period, collections of principal receivables allocable to the Invested Amount will, subject to certain limitations, including the allocation of any Reallocated Principal Collections for the related Monthly Period to pay the Class A Required Amount and the Class B Required Amount, be paid back to the banks to purchase additional receivables in order to maintain the Invested Amount and, if necessary, be treated as Shared Principal Collections or deposited in the Excess Funding Account. Accumulation Period On each Distribution Date during the Accumulation Period, the trustee will deposit in the Principal Funding Account an amount equal to the least of: (a) Available Investor Principal Collections for such Distribution Date, (b) the applicable Controlled Deposit Amount, and (c) the Adjusted Invested Amount prior to any deposits on that date, until the aggregate amount on deposit in the Principal Funding Account equals the Invested Amount. Unless a Pay Out Event with respect to Series 2001- has occurred, amounts on deposit in the Principal Funding Account will be paid: . first to Class A certificateholders (in an amount not to exceed the Class A Invested Amount) on the Expected Final Payment Date, . then to Class B certificateholders (to the extent such funds exceed the Class A Invested Amount and in an amount not to exceed the Class B Invested Amount) on the Expected Final Payment Date, and . lastly to the Collateral Interest holder (to the extent such funds exceed the sum of the Class A Invested Amount and the Class B Invested Amount and in an amount not to exceed the Collateral Invested Amount) on the Expected Final Payment Date. During the Accumulation Period, the portion of Available Investor Principal Collections not applied to Class A Monthly Principal, Class B Monthly Principal and Collateral Monthly Principal will, subject to certain limitations, including the allocation of any Reallocated Principal Collections for the related Monthly Period to pay the Class A Required Amount and the Class B Required Amount, be paid back to the banks to purchase additional receivables in order to maintain the Invested Amount and, if necessary, be treated as Shared Principal Collections or deposited in the Excess Funding Account. S-17 If funds on deposit in the Principal Funding Account are insufficient to pay in full the Invested Amount on the Expected Final Payment Date, the Early Amortization Period will begin. Early Amortization Period If a Pay Out Event with respect to Series 2001- occurs, the Early Amortization Period will begin and any amount on deposit in the Principal Funding Account will be paid on the first Special Payment Date: . first to the Class A certificateholders (up to the Class A Invested Amount), . then to the Class B certificateholders (up to the Class B Invested Amount), and . lastly to the Collateral Interest holder (up to the Collateral Invested Amount). On each Special Payment Date with respect to the Early Amortization Period, the Class A certificateholders will be entitled to receive Available Investor Principal Collections for such Special Payment Date in an amount up to the Class A Invested Amount until the earliest of: . the date the Class A Invested Amount is paid in full, . the Series 2001- Termination Date, and . the Trust Termination Date. After payment in full of the Class A Invested Amount, the Class B certificateholders will be entitled to receive, on each Special Payment Date, Available Investor Principal Collections for such Special Payment Date in an amount up to the Class B Invested Amount until the earliest of: . the date the Class B Invested Amount is paid in full, . the Series 2001- Termination Date, and . the Trust Termination Date. After payment in full of the Class B Invested Amount, the Collateral Interest holder will be entitled to receive, on each Special Payment Date, Available Investor Principal Collections for such Special Payment Date in an amount up to the Collateral Invested Amount until the earliest of: . the date the Collateral Invested Amount is paid in full, . the Series 2001- Termination Date, and . the Trust Termination Date. Postponement of the Accumulation Period The Accumulation Period is scheduled to begin at the close of business on the last day of the 20 Monthly Period. However, the servicer may elect to postpone the start of the Accumulation Period, and extend the length of the Revolving Period subject to certain conditions, including those set forth below. The servicer may make such election only if the Accumulation Period length (determined as described below) is less than twelve months. On each Determination Date until the Accumulation Period begins, the servicer will determine the Accumulation Period length, which is the number of months expected to be required to fully fund the Principal Funding Account no later than the Expected Final Payment Date, based on (i) the expected monthly collections of principal receivables expected to be distributable to the certificateholders of all series (excluding certain other series), assuming a principal payment rate no greater than the lowest monthly principal payment rate on the receivables for the preceding twelve months and (ii) the amount of principal expected to be distributable to certificateholders of all series (excluding certain other series) which are not expected to be in their Revolving Period during the Accumulation Period. If the Accumulation Period length is less than twelve months, the servicer may, at its option, postpone the start of the Accumulation Period such that the number of months included in the Accumulation Period will be equal to or exceed the Accumulation Period length. The effect of the foregoing calculation is to permit the reduction of the length of the Accumulation Period based on the Invested Amounts of certain other series which are expected to be in their Revolving Periods during the Accumulation Period or on increases in the principal payment rate occurring after the series issuance date. Notwithstanding the above, the Series 2001- supplement may require that the number of months in the Accumulation Period exceed the Accumulation Period length and that certain minimum deposits be made to the S-18 Principal Funding Account during the Accumulation Period. The length of the Accumulation Period will not be less than one month. If the start of the Accumulation Period is delayed in accordance with the foregoing, and if a Pay Out Event occurs after the date originally scheduled as the start of the Accumulation Period, then it is probable that the Class A certificateholders, the Class B certificateholders and the Collateral Interest holder would receive some of their principal later than if the Accumulation Period had not been delayed. Subordination The Class B certificates and the Collateral Interest will be subordinated to the extent necessary to fund certain payments with respect to the Class A certificates. In addition, the Collateral Interest will be subordinated to the extent necessary to fund certain payments with respect to the Class B certificates. Certain principal payments otherwise allocable to the Class B certificateholders may be reallocated to the Class A certificateholders and the Class B Invested Amount may be reduced. Similarly, certain principal payments allocable to the Collateral Interest may be reallocated to the Class A certificateholders and the Class B certificateholders and the Collateral Invested Amount may be reduced. To the extent the Class B Invested Amount is reduced and not reimbursed, the percentage of collections of finance charge receivables allocated to the Class B certificateholders in subsequent Monthly Periods will be reduced. Moreover, to the extent the amount of such reduction in the Class B Invested Amount is not reimbursed, the amount of principal and interest distributable to the Class B certificateholders will be reduced. See "--Allocation Percentages," "-- Reallocation of Cash Flows" and "--Application of Collections--Excess Spread; Excess Finance Charges" in this prospectus supplement. Allocation Percentages Pursuant to the pooling agreement, the servicer will allocate all collections of finance charge receivables and principal receivables and the Defaulted Amount for such Monthly Period among the Class A certificates, the Class B certificates, the Collateral Interest, the certificateholders' interest for all other outstanding series of certificates and the Sellers' Interest. Collections of finance charge receivables and the Defaulted Amount for any Monthly Period will be allocated to Series 2001- based on the Floating Allocation Percentage. Such amounts so allocated will be further allocated among the Class A certificateholders, the Class B certificateholders and the Collateral Interest holder in accordance with the Class A Floating Percentage, the Class B Floating Percentage and the Collateral Floating Percentage. Collections of principal receivables will be allocated to Series 2001- based on the Principal Allocation Percentage. Such amounts so allocated to Series 2001- will be further allocated among the Class A certificateholders, the Class B certificateholders and the Collateral Interest holder based on the Class A Principal Percentage, the Class B Principal Percentage and the Collateral Principal Percentage. Principal Funding Account The servicer will establish and maintain in the name of the trustee, on behalf of the trust, the Principal Funding Account as an Eligible Deposit Account held for the benefit of the Class A certificateholders, the Class B certificateholders and the Collateral Interest holder. During the Accumulation Period, the servicer will transfer collections of principal receivables, Shared Principal Collections allocated to Series 2001- , Miscellaneous Payments allocated to Series 2001- and other amounts described herein to be treated in the same manner as collections of principal receivables from the Collection Account to the Principal Funding Account as described under "--Application of Collections" in this prospectus supplement. Unless a Pay Out Event has occurred with respect to Series 2001- , all amounts on deposit in the Principal Funding Account on any Distribution Date (after giving effect to any deposits to, or withdrawals from, the Principal Funding Account to be made on such Distribution Date) will be invested to mature on or S-19 before the following Distribution Date by the trustee at the direction of the servicer in Eligible Investments. On each Distribution Date for the Accumulation Period (on or prior to the Expected Final Payment Date) the interest and other investment income (net of losses and investment expenses) earned on such investments will be withdrawn from the Principal Funding Account and will be treated as a portion of Class A Available Funds, Class B Available Funds and Collateral Available Funds. If, for any such Distribution Date, these amounts are less than the Covered Amount for such Distribution Date, the amount of any such shortfall will be withdrawn from the Reserve Account, if available, as described under "--Reserve Account" in this prospectus supplement. The Available Reserve Account Amount at any time will be limited and there can be no assurance that sufficient funds will be available to fund any such shortfall. Reserve Account The servicer will establish and maintain in the name of the trustee, on behalf of the trust, the Reserve Account as an Eligible Deposit Account for the benefit of the Class A certificateholders, the Class B certificateholders and the Collateral Interest holder. The Reserve Account will be established to assist with the subsequent distribution of interest during the Accumulation Period. On each Distribution Date from and after the funding of the Reserve Account begins, but prior to the termination of the Reserve Account, the trustee, acting pursuant to the servicer's instructions, will apply Excess Spread and Excess Finance Charges allocated to Series 2001- (to the extent described under "--Application of Collections--Payment of Interest, Fees and Other Items" in this prospectus supplement) to increase the amount on deposit in the Reserve Account (to the extent such amount is less than the Required Reserve Account Amount). The Reserve Account will be funded no later than one month prior to the commencement of the Accumulation Period, or such earlier date as the servicer may designate. On each Distribution Date, after giving effect to any deposit to be made to, and any withdrawal to be made from, the Reserve Account on such Distribution Date, the trustee will withdraw from the Reserve Account an amount equal to the excess, if any, of the amount on deposit in the Reserve Account over the Required Reserve Account Amount and will pay such amount to the Collateral Interest holder. If the Reserve Account has not terminated as described below, all amounts remaining on deposit in the Reserve Account on any Distribution Date (after giving effect to any deposits to, or withdrawals from, the Reserve Account to be made on such Distribution Date) will be invested to mature on or before the following Distribution Date by the trustee at the direction of the servicer in Eligible Investments. The interest and other investment income (net of losses and investment expenses) earned on such investments will be retained in the Reserve Account (to the extent the amount on deposit therein is less than the Required Reserve Account Amount) or deposited in the Collection Account and treated as collections of finance charge receivables. On or before each Distribution Date during the Accumulation Period (on or prior to the Expected Final Payment Date) and on the first Special Payment Date, a withdrawal will be made from the Reserve Account, and the amount of such withdrawal will be deposited in the Collection Account and included in Class A Available Funds or Class B Available Funds or distributed to the Collateral Interest holder, as provided in the Series 2001- supplement, in an amount equal to the lesser of: (a) the Available Reserve Account Amount for such Distribution Date or Special Payment Date, and (b) the amount, if any, by which the Covered Amount exceeds: (i) the investment earnings (net of losses and investment expenses), if any, in the Principal Funding Account for the related Distribution Date, and (ii) Excess Spread and Excess Finance Charges allocated to Series 2001- available for application towards the Covered Amount on such Distribution Date or Special Payment Date; provided that the amount of such withdrawal will be reduced to the extent that funds otherwise would be available to be deposited in the Reserve Account on such Distribution Date or Special Payment Date. On each Distribution Date, the amount available to be withdrawn from the Reserve Account will equal the Available Reserve Account Amount. S-20 The Reserve Account will be terminated following the earliest to occur of: (a) the termination of the trust pursuant to the pooling agreement, (b) the date on which the Invested Amount is paid in full, and (c) if the Accumulation Period has not begun, the occurrence of a Pay Out Event with respect to Series 2001- or, if the Accumulation Period has begun, the first Special Payment Date. Upon the termination of the Reserve Account, all amounts on deposit therein (after giving effect to any withdrawal from the Reserve Account on such date as described above) will be distributed to the Collateral Interest holder. Any amounts withdrawn from the Reserve Account and distributed to the Collateral Interest holder as described above will not be available for distribution to the Class A certificateholders and the Class B certificateholders. Reallocation of Cash Flows Class A Required Amount On each Determination Date, the servicer will calculate the Class A Required Amount. If the Class A Required Amount is greater than zero, the following reallocations will occur: . Excess Spread and Excess Finance Charges allocated to Series 2001- and available for such purpose will be used to fund the Class A Required Amount for the related Distribution Date; . if such Excess Spread and Excess Finance Charges are insufficient to fund the Class A Required Amount, Reallocated Principal Collections allocable first to the Collateral Interest and then to the Class B certificates will be used to fund the remaining Class A Required Amount; and . if Reallocated Principal Collections for the related Monthly Period, together with Excess Spread and Excess Finance Charges allocated to Series 2001- are insufficient to fund the Class A Required Amount for such related Monthly Period, then the Collateral Invested Amount will be reduced by the amount of such excess (but not by more than the Class A Investor Default Amount for such related Distribution Date). In the event that such reduction would cause the Collateral Invested Amount to be a negative number, the Collateral Invested Amount will be reduced to zero, and the Class B Invested Amount will be reduced by the amount by which the Collateral Invested Amount would have been reduced below zero (but not by more than the excess of the Class A Investor Default Amount, if any, for such Distribution Date over the amount of such reduction, if any, of the Collateral Invested 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 will be reduced to zero, and the Class A Invested Amount will be reduced by the amount by which the Class B Invested Amount would have been reduced below zero (but not by more than the excess, if any, of the Class A Investor Default Amount for such Distribution Date over the amount of the reductions, if any, of the Collateral Invested Amount and the Class B Invested Amount for such Distribution Date as described above). Any such reduction in the Class A Invested Amount may have the effect of slowing or reducing the return of principal and interest to the Class A certificateholders. In such case, the Class A certificateholders will bear directly the credit and other risks associated with their undivided interest in the trust. See "--Defaulted Receivables; Investor Charge-Offs" in this prospectus supplement. Reductions of the Class A Invested Amount or Class B Invested Amount shall thereafter be reimbursed and the Class A Invested Amount or Class B Invested Amount shall be increased on each Distribution Date by the amount, if any, of Excess Spread and Excess Finance Charges allocated to Series 2001- and available to reimburse such reductions. See "--Application of Collections-- Excess Spread; Excess Finance Charges" in this prospectus supplement. When such reductions of the Class A Invested Amount and Class B Invested Amount have been fully reimbursed, reductions of the Collateral Invested Amount will be reimbursed and the Collateral Invested Amount increased in a similar manner. S-21 Class B Required Amount On each Determination Date, the servicer will calculate the Class B Required Amount. If the Class B Required Amount is greater than zero, the following reallocations will occur: . Excess Spread and Excess Finance Charges allocated to Series 2001- and not required to pay the Class A Required Amount or reimburse Class A Investor Charge-Offs will be used to fund the Class B Required Amount for the related Distribution Date; . if such Excess Spread and Excess Finance Charges are insufficient to pay the Class B Required Amount, Reallocated Principal Collections allocable to the Collateral Interest and not required to pay the Class A Required Amount will then be used to fund the remaining Class B Required Amount; and . if such Reallocated Principal Collections allocable to the Collateral Interest for the related Monthly Period are insufficient to fund the remaining Class B Required Amount, then the Collateral Invested Amount will be reduced by the amount of such insufficiency (but not by more than the Class B Investor Default Amount for such related Distribution Date). In the event that such a reduction would cause the Collateral Invested Amount to be a negative number, the Collateral Invested Amount will be reduced to zero, and the Class B Invested Amount will be reduced by the amount by which the Collateral Invested Amount would have been reduced below zero (but not by more than the excess of the Class B Investor Default Amount for such Distribution Date over the amount of such reduction of the Collateral Invested Amount). Any such reduction may have the effect of slowing or reducing the return of principal and interest to the Class B certificateholders. In that case, the Class B certificateholders will bear directly the credit and other risks associated with their undivided interests in the trust. See "--Defaulted Receivables; Investor Charge-Offs" in this prospectus supplement. Application of Collections Payment of Interest, Fees and Other Items On each Distribution Date, the trustee, acting pursuant to the servicer's instructions, will apply Class A Available Funds, Class B Available Funds and Collateral Available Funds (see "--Interest Payments" in this prospectus supplement) on deposit in the Collection Account in the following priority: (a) An amount equal to the Class A Available Funds will be distributed in the following priority: (i) an amount equal to Class A Monthly Interest for such Distribution Date, plus the amount of any Class A Outstanding Monthly Interest, plus the amount of any Class A Additional Interest for such Distribution Date and any Class A Additional Interest previously due but not distributed to the Class A certificateholders on a prior Distribution Date will be distributed to the Class A certificateholders; (ii) an amount equal to the Class A Servicing Fee for such Distribution Date, plus the amount of any Class A Servicing Fee previously due but not distributed to the servicer on a prior Distribution Date, will be distributed to the servicer (unless such amount has been netted against deposits to the Collection Account); (iii) an amount equal to the Class A Investor Default Amount for such Distribution Date will be treated as a portion of Available Investor Principal Collections for such Distribution Date; and (iv) the balance, if any, shall constitute Excess Spread and shall be allocated and distributed as described under "--Excess Spread; Excess Finance Charges" in this prospectus supplement. (b) An amount equal to the Class B Available Funds will be distributed in the following priority: (i) an amount equal to Class B Monthly Interest for such Distribution Date, plus the amount of any Class B Outstanding Monthly Interest, plus the amount of any Class B Additional Interest for such Distribution Date and any Class B Additional Interest previously due but not distributed to the Class B certificateholders on a prior Distribution Date will be distributed to the Class B certificateholders; S-22 (ii) an amount equal to the Class B Servicing Fee for such Distribution Date, plus the amount of any Class B Servicing Fee previously due but not distributed to the servicer on a prior Distribution Date, will be distributed to the servicer (unless such amount has been netted against deposits to the Collection Account); and (iii) the balance, if any, shall constitute Excess Spread and shall be allocated and distributed as described under "--Excess Spread; Excess Finance Charges" in this prospectus supplement. (c) An amount equal to the Collateral Available Funds will be distributed in the following priority: (i) an amount equal to the Collateral Servicing Fee for such Distribution Date, plus the amount of any Collateral Servicing Fee previously due but not distributed to the servicer on a prior Distribution Date, will be distributed to the servicer (unless such amount has been netted against deposits to the Collection Account); and (ii) the balance, if any, shall constitute Excess Spread and shall be allocated and distributed as described under "--Excess Spread; Excess Finance Charges" in this prospectus supplement. Excess Spread; Excess Finance Charges On each Distribution Date, the trustee, acting pursuant to the servicer's instructions, will apply Excess Spread and Excess Finance Charges allocated to Series 2001- for the related Monthly Period to make the following distributions in the following priority: (a) an amount equal to the Class A Required Amount, if any, for such Distribution Date will be used to fund the Class A Required Amount, and if the Class A Required Amount for such Distribution Date exceeds the amount of Excess Spread and Excess Finance Charges allocated to Series 2001- , such Excess Spread and Excess Finance Charges will be applied: . first to pay shortfalls in the payment of amounts described in clause (a)(i) under "--Payment of Interest, Fees and Other Items" in this prospectus supplement, . second to pay shortfalls in the payment of amounts described in clause (a)(ii) under "--Payment of Interest, Fees and Other Items" in this prospectus supplement, and . third to pay shortfalls in the payment of amounts described in clause (a)(iii) under "--Payment of Interest, Fees and Other Items" in this prospectus supplement; (b) an amount equal to the aggregate amount of Class A Investor Charge- Offs that 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 treated as a portion of Available Investor Principal Collections for such Distribution Date as described under "--Payments of Principal" in this prospectus supplement; (c) an amount equal to the Class B Required Amount, if any, for such Distribution Date will be (i) used to fund the Class B Required Amount and (ii) applied, up to the Class B Investor Default Amount, as a portion of Available Investor Principal Collections for such Distribution Date; provided that if the Class B Required Amount for such Distribution Date exceeds the amount of Excess Spread and Excess Finance Charges allocated to Series 2001- , such Excess Spread and Excess Finance Charges will be applied: . first to pay amounts described in clause (b)(i) under "--Payment of Interest, Fees and Other Items" in this prospectus supplement, . second to pay amounts described in clause (b)(ii) above under "-- Payment of Interest, Fees and Other Items" in this prospectus supplement, and . third, up to the Class B Investor Default Amount, as a portion of Available Investor Principal Collections for such Distribution Date; (d) an amount equal to the aggregate amount by which the Class B Invested Amount has been reduced pursuant to clauses (iii), (iv) and (v) of the definition of Class B Invested Amount (but not in excess of the aggregate amount of such reductions that have not been previously reimbursed) will be treated as a portion of Available Investor Principal Collections for such Distribution Date; S-23 (e) an amount equal to the sum of the following will be distributed to the Collateral Interest holder: (i) Collateral Minimum Monthly Interest for such Distribution Date, plus the amount of any Collateral Outstanding Monthly Interest, and (ii) the amount of any Collateral Additional Interest for such Distribution Date and any Collateral Additional Interest previously due but not distributed to the Collateral Interest holder on a prior Distribution Date; (f) an amount equal to the Collateral Servicing Fee due but not paid to the servicer on such Distribution Date or a prior Distribution Date will be paid to the servicer; (g) an amount equal to the Collateral Investor Default Amount will be treated as a portion of Available Investor Principal Collections for such Distribution Date; (h) an amount equal to the aggregate amount by which the Collateral Invested Amount has been reduced pursuant to clauses (iii), (iv) and (v) of the definition of Collateral Invested Amount (but not in excess of the aggregate amount of such reductions that have not been previously reimbursed) shall be treated as a portion of Available Investor Principal Collections for such Distribution Date; (i) on each Distribution Date on and after the Reserve Account is funded, but prior to the date on which the Reserve Account terminates as described under "--Reserve Account" in this prospectus supplement, an amount up to the excess, if any, of the Required Reserve Account Amount over the Available Reserve Account Amount will be deposited into the Reserve Account; and (j) the balance, if any, will be distributed to the Collateral Interest holder. Payments of Principal On each Distribution Date, the trustee, acting pursuant to the servicer's instructions, will distribute Available Investor Principal Collections (see "-- Principal Payments" in this prospectus supplement) on deposit in the Collection Account in the following priority: (i) on each Distribution Date for the Revolving Period, all such Available Investor Principal Collections will be treated as Shared Principal Collections and applied as described under "Description of the Certificates--Shared Principal Collections; Excess Shared Principal Collections" in the accompanying prospectus; and (ii) on each Distribution Date for the Accumulation Period or the Early Amortization Period, all such Available Investor Principal Collections will be distributed or deposited in the following priority: (w) an amount equal to Class A Monthly Principal for such Distribution Date, up to the Class A Adjusted Invested Amount on such Distribution Date, will be deposited in the Principal Funding Account or, if such Distribution Date is a Special Payment Date on which the aggregate amount on deposit in the Principal Funding Account is zero, will be distributed to the Class A certificateholders; (x) after giving effect to paragraph (w) above, an amount equal to Class B Monthly Principal for such Distribution Date, up to the Class B Adjusted Invested Amount on such Distribution Date, will be deposited in the Principal Funding Account or, if such Distribution Date is a Special Payment Date on which the aggregate amount on deposit in the Principal Funding Account is zero, will be distributed to the Class B certificateholders; (y) after giving effect to paragraphs (w) and (x) above, an amount equal to Collateral Monthly Principal for such Distribution Date, up to the Collateral Adjusted Invested Amount on such Distribution Date, will be deposited in the Principal Funding Account or, if such Distribution Date is a Special Payment Date on which the aggregate amount on deposit in the Principal Funding Account is zero, will be distributed to the Collateral Interest holder; and (z) the balance, if any, will be treated as Shared Principal Collections and applied as described under "Description of the Certificates--Shared Principal Collections; Excess Shared Principal Collections" in the accompanying prospectus. S-24 Defaulted Receivables; Investor Charge-Offs On each Determination Date, the servicer will calculate the Investor Default Amount for the preceding Monthly Period. On each Distribution Date, portions of the Investor Default Amount will be allocated to the Class A certificates and the Class B certificates in amounts equaling the Class A Investor Default Amount and the Class B Investor Default Amount, respectively. The Class A Investor Default Amount for each Monthly Period will be paid from Class A Available Funds, Excess Spread and Excess Finance Charges allocated to Series 2001- or from Reallocated Principal Collections and applied as described in "--Application of Collections--Payment of Interest, Fees and Other Items" and "--Reallocation of Cash Flows" in this prospectus supplement. The Class B Investor Default Amount for each Monthly Period will be paid from Excess Spread and Excess Finance Charges allocated to Series 2001- or from Reallocated Principal Collections allocable to the Collateral Interest and applied as described in "--Application of Collections--Excess Spread; Excess Finance Charges" and "--Reallocation of Cash Flows" in this prospectus supplement. Class A Investor Charge-Offs On each Distribution Date, if the Class A Required Amount for such Distribution Date exceeds the sum of Excess Spread and Excess Finance Charges allocated to Series 2001- and Reallocated Principal Collections, the Collateral Invested Amount will be reduced by the amount of such excess, but not by more than the Class A Investor Default Amount for such Distribution Date. In the event that such reduction would cause the Collateral Invested Amount to be a negative number, the Collateral Invested Amount will be reduced to zero, and the Class B Invested Amount will be reduced by the amount by which the Collateral Invested Amount would have been reduced below zero, but not by more than the excess, if any, of the Class A Investor Default Amount for such Distribution Date over the amount of such reduction, if any, of the Collateral Invested 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 will be reduced to zero, and the Class A Invested Amount will be reduced by the amount, called a Class A Investor Charge-Off, by which the Class B Invested Amount would have been reduced below zero, but not by more than the excess, if any, of the Class A Investor Default Amount for such Distribution Date over the amount of the reductions, if any, of the Collateral Invested Amount and the Class B Invested Amount for such Distribution Date as described above. Such Class A Investor Charge-Off will have the effect of slowing or reducing the return of principal to the Class A certificateholders. If the Class A Invested Amount has been reduced by the amount of any Class A Investor Charge-Offs, it will thereafter be increased on any Distribution Date (but not by an amount in excess of the aggregate Class A Investor Charge-Offs) by the amount of Excess Spread and Excess Finance Charges allocated to Series 2001- and available for such purpose as described under "--Application of Collections--Excess Spread; Excess Finance Charges" in this prospectus supplement. Class B Investor Charge-Offs On each Distribution Date, if the Class B Required Amount for such Distribution Date exceeds the sum of Excess Spread and Excess Finance Charges allocated to Series 2001- and not required to pay the Class A Required Amount, and Reallocated Principal Collections allocable to the Collateral Interest and not required to pay the Class A Required Amount, then the Collateral Invested Amount will be reduced by the amount of such excess. In the event that such reduction would cause the Collateral Invested Amount to be a negative number, the Collateral Invested Amount will be reduced to zero, and the Class B Invested Amount will be reduced by the amount, called a Class B Investor Charge-Off, by which the Collateral Invested Amount would have been reduced below zero, but not by more than the excess, if any, of the Class B Investor Default Amount for such Distribution Date over the amount of such reduction, if any, of the Collateral Invested Amount with respect to such Distribution Date. If the Class B Invested Amount has been reduced by the amount of any Class B S-25 Investor Charge-Offs, it will thereafter be increased on any Distribution Date (but not by an amount in excess of the aggregate Class B Investor Charge-Offs) by the amount of Excess Spread and Excess Finance Charges allocated to Series 2001- and available for such purpose as described under "--Application of Collections--Excess Spread; Excess Finance Charges" in this prospectus supplement. Shared Principal Collections Series 2001- is a principal sharing series. See "Description of the Certificates--Shared Principal Collections; Excess Shared Principal Collections" in the accompanying prospectus. Paired Series Series 2001- may be paired with one or more other series (each called a paired series). Each paired series could be prefunded with an initial deposit to a prefunding account in an amount up to the initial principal balance of such paired series and primarily from the proceeds of the sale of such paired series or could have a variable principal amount. Any such prefunding account will be held for the benefit of such paired series and not for the benefit of the Class A certificateholders, the Class B certificateholders and the Collateral Interest holder. As funds are accumulated in the Principal Funding Account, either (i) in the case of a prefunded paired series, an equal amount of funds on deposit in any prefunding account for such prefunded paired series could be released (which funds will be distributed to the banks) or (ii) in the case of a paired series having a variable principal amount, an interest in such variable paired series in an equal or lesser amount could be sold by the trust (and the proceeds thereof will be distributed to the banks) and, in either case, the Invested Amount in the trust of such paired series could increase by up to a corresponding amount. Upon payment in full of Series 2001- , assuming that there have been no unreimbursed charge-offs with respect to any related paired series, the aggregate Invested Amount of such related paired series could have been increased by an amount up to an aggregate amount equal to the Invested Amount paid to the Class A certificateholders, the Class B certificateholders and the Collateral Interest holder. The issuance of a paired series will be subject to the conditions described under "Description of the Certificates--New Issuances" in the accompanying prospectus. There can be no assurance, however, that the terms of any paired series might not have an impact on the calculation of the Principal Allocation Percentage or the timing or amount of payments received by the Class A certificateholders, the Class B certificateholders and the Collateral Interest holder. The full extent by which the timing or amount of payments received by the Class A certificateholders, the Class B certificateholders and the Collateral Interest holder may be affected will be dependent upon a number of factors and will not be readily determinable by the change that may occur in the Principal Allocation Percentage. See "--Allocation Percentages" in this prospectus supplement and "Risk Factors" in the accompanying prospectus. Required Principal Balance; Addition of Accounts The obligation of the trustee to authenticate certificates of a new series and to execute and deliver the related supplement shall be subject to the conditions described under "Description of the Certificates--New Issuances" in the accompanying prospectus and to the additional condition that, as of the series issuance date and after giving effect to such issuance, the aggregate amount of principal receivables in the trust equals or exceeds the Required Principal Balance. Pay Out Events The Pay Out Events with respect to Series 2001- will include each of the events specified in the accompanying prospectus under "Description of the Certificates--Pay Out Events" and the following: (a) failure on the part of a seller: (i) to make any payment or deposit required under the pooling agreement or the Series 2001- supplement within 5 Business Days after the day such payment or deposit is required to be made; or S-26 (ii) to observe or perform any other covenants or agreements of a seller set forth in the pooling agreement or the Series 2001- supplement, which failure has a material adverse effect on the Class A certificateholders, the Class B certificateholders and the Collateral Interest holder and which continues unremedied for a period of 60 days after written notice; (b) any representation or warranty made by a seller in the pooling agreement or the Series 2001-supplement or any information required to be given by a seller to the trustee to identify the accounts proves to have been incorrect in any material respect when made and continues to be incorrect in any material respect for a period of 60 days after written notice and as a result of which the interests of the Class A certificateholders, the Class B certificateholders and the Collateral Interest holder are materially and adversely affected; provided, however, that a Pay Out Event shall not be deemed to occur thereunder if the applicable seller has accepted reassignment of the related receivables or all such receivables, if applicable, during such period in accordance with the provisions of the pooling agreement; (c) a failure by a seller to make an addition of accounts to the trust within 5 Business Days after the day on which it is required to make such addition pursuant to the pooling agreement or the Series 2001- supplement; (d) the occurrence of any Servicer Default; (e) the average Portfolio Yield for any 3 consecutive Monthly Periods is less than the average of the Base Rates with respect to Series 2001- for such 3 Monthly Periods; (f) the failure to pay in full the Invested Amount on the Expected Final Payment Date; and (g) a seller is unable for any reason to transfer receivables to the trust in accordance with the pooling agreement or the Series 2001- supplement. Then, in the case of any event described in subparagraph (a), (b) or (d), after the applicable grace period, if any, set forth in such subparagraphs, either the trustee or the Class A certificateholders, the Class B certificateholders and the Collateral Interest holder evidencing more than 50% of the aggregate unpaid principal amount of Series 2001- by notice then given in writing to the sellers and the servicer (and to the trustee if given by the Class A certificateholders and Class B certificateholders) may declare that a Pay Out Event has occurred with respect to Series 2001- as of the date of such notice. In the case of any event described in subparagraph (c), (e), (f) or (g), a Pay Out Event shall occur with respect to Series 2001- immediately upon the occurrence of such event, without any notice or other action on the part of the trustee. If, contrary to the opinion of tax counsel described under "Federal Income Tax Considerations--General" in the accompanying prospectus, it is determined that the Class A certificates or the Class B certificates do not constitute indebtedness for federal income tax purposes, such determination will not constitute a Pay Out Event with respect to Series 2001- . If the proceeds of any sale of the receivables following the occurrence of an insolvency event with respect to a seller (including any additional seller), as described in the accompanying prospectus under "Description of the Certificates--Pay Out Events," allocated to the Class A Invested Amount and the proceeds of any collections on the receivables in the Collection Account are not sufficient to pay in full the remaining amount due on the Class A certificates, the Class A certificateholders will suffer a corresponding loss and no such proceeds will be available to the Class B certificateholders. See "Certain Legal Aspects of the Receivables--Certain Matters Relating to Conservatorship and Receivership" in the accompanying prospectus for a discussion of the impact of federal law on the trustee's ability to liquidate the receivables. Servicing Compensation and Payment of Expenses The share of the Servicing Fee allocable to Series 2001- for any Distribution Date, called the Monthly Servicing Fee, will be equal to one- twelfth of the product of: (a) the Servicing Fee Rate, and (b) the Servicing Base Amount. S-27 The Monthly Servicing Fee for the first Distribution Date, however, will be equal to the Servicing Fee accrued on the Initial Invested Amount at the Servicing Fee Rate for the period from the series issuance date through the last day of the first Monthly Period. On each Distribution Date, but only if Capital One Bank or The Bank of New York is the servicer, Servicer Interchange for the related Monthly Period that is on deposit in the Collection Account will be withdrawn from the Collection Account and paid to the servicer in payment of a portion of the Monthly Servicing Fee for such Monthly Period. The Servicer Interchange for any Monthly Period for which Capital One Bank or The Bank of New York is the servicer will be equal to the product of: (a) the Floating Allocation Percentage for such Monthly Period, and (b) the portion of collections of finance charge receivables allocated to Series 2001- for such Monthly Period that is attributed to interchange. The Servicer Interchange for a Monthly Period, however, shall not exceed one- twelfth of the product of (i) the Servicing Base Amount as of the last day of such Monthly Period and (ii) %. In the case of any insufficiency of Servicer Interchange on deposit in the Collection Account, a portion of the Monthly Servicing Fee for such Monthly Period will not be paid to the extent of such insufficiency and in no event shall the trust, the trustee, the Class A certificateholders, the Class B certificateholders or the Collateral Interest holder be liable for the share of the Servicing Fee to be paid out of Servicer Interchange. The share of the Monthly Servicing Fee allocable to the Class A certificateholders (after giving effect to the distribution of any Servicer Interchange to the servicer) for any Distribution Date, called the Class A Servicing Fee, shall be equal to one-twelfth of the product of: (a) the Class A Floating Percentage, (b) the Net Servicing Fee Rate, and (c) the Servicing Base Amount. The Class A Servicing Fee for the first Distribution Date, however, will be equal to $ . The share of the Monthly Servicing Fee allocable to the Class B certificateholders (after giving effect to any distribution of Servicer Interchange to the servicer) for any Distribution Date, called the Class B Servicing Fee, shall be equal to one-twelfth of the product of: (a) the Class B Floating Percentage, (b) the Net Servicing Fee Rate, and (c) the Servicing Base Amount. The Class B Servicing Fee for the first Distribution Date, however, will be equal to $ . The share of the Monthly Servicing Fee allocable to the Collateral Interest holder (after giving effect to the distribution of any Servicer Interchange to the servicer) for any Distribution Date, called the Collateral Servicing Fee, shall be equal to one-twelfth of the product of: (a) the Collateral Floating Percentage, (b) the Net Servicing Fee Rate, and (c) the Servicing Base Amount. The Collateral Servicing Fee for the first Distribution Date, however, will be equal to $ . The remainder of the Servicing Fee will be paid by the sellers or the certificateholders of other series (as provided in the related supplements) or, to the extent of any insufficiency of Servicer Interchange as described above, not be paid and in no event shall the trust, the trustee, the Class A certificateholders, the Class B S-28 certificateholders or the Collateral Interest holder be liable for the share of the Servicing Fee to be paid by the sellers or the certificateholders of any other series or to be paid out of Servicer Interchange. The Class A Servicing Fee, the Class B Servicing Fee and the Collateral Servicing Fee shall be payable to the servicer solely to the extent amounts are available for distribution in respect thereof as described under "--Application of Collections--Payment of Interest, Fees and Other Items" in this prospectus supplement. Series Termination If on the Distribution Date that is 2 months prior to the Series 2001- Termination Date, the Invested Amount (after giving effect to all changes therein on such date) exceeds zero, the servicer will, within the 40-day period beginning on such date, solicit bids for the sale of interests in the principal receivables or certain principal receivables, together in each case with the related finance charge receivables, in an amount equal to the Invested Amount at the close of business on the last day of the Monthly Period preceding the Series 2001- Termination Date (after giving effect to all distributions required to be made on the Series 2001- Termination Date). Upon the expiration of such 40-day period, the trustee will determine (a) which bid is the highest cash purchase offer and (b) the amount which otherwise would be available in the Collection Account on the Series 2001- Termination Date for distribution to the Class A certificateholders, the Class B certificateholders and the Collateral Interest holder. The servicer, on behalf of the trustee, will sell such receivables on the Series 2001- Termination Date to the bidder who provided the highest cash purchase offer and will deposit the proceeds of such sale in the Collection Account for allocation (together with the amount which otherwise would be available in the Collection Account on the Series 2001- Termination Date for distribution to the Class A certificateholders, the Class B certificateholders and the Collateral Interest holder) to Series 2001- . Reports No later than the third Business Day prior to each Distribution Date, the servicer will forward to the trustee, the paying agent and each Rating Agency a monthly report prepared by the servicer setting forth certain information about the trust, the Class A certificates, the Class B certificates and the Collateral Interest, including: (a) the aggregate amount of principal receivables and finance charge receivables in the trust as of the end of the preceding Monthly Period; (b) the Class A Invested Amount, the Class B Invested Amount and the Collateral Invested Amount at the close of business on the last day of such Monthly Period; (c) the Floating Allocation Percentage and, during the Accumulation Period or Early Amortization Period, the Principal Allocation Percentage for the Class A certificates, the Class B certificates and the Collateral Interest; (d) the amount of collections of principal receivables and finance charge receivables processed during such Monthly Period and the portion thereof allocated to Series 2001- ; (e) the aggregate outstanding balance of accounts in the Trust Portfolio which were 30, 60 and 90 days or more delinquent as of the end of such Monthly Period; (f) the Defaulted Amount for such Monthly Period and the portion thereof allocated to Series 2001- ; (g) the amount, if any, of Class A Investor Charge-Offs, Class B Investor Charge-Offs and the amounts by which the Collateral Invested Amount has been reduced pursuant to clauses (iii), (iv) and (v) of the definition of Collateral Invested Amount; (h) the Monthly Servicing Fee; (i) the Portfolio Yield for such Monthly Period; and (j) Reallocated Principal Collections. S-29 Legal Matters Certain legal matters relating to the certificates will be passed upon for the underwriters by Cravath, Swaine & Moore, New York, New York. ERISA Considerations General Subject to the considerations described below and in the prospectus, the Class A certificates may be purchased by, on behalf of, or with "plan assets" of any employee benefit or other Plan that is subject to the Employee Retirement Income Security Act of 1974, as amended, or Section 4975 of the Internal Revenue Code of 1986, as amended. Any Plan fiduciary that proposes to cause a Plan to acquire any of the Class A certificates is cautioned to consult with its counsel with respect to the potential consequences under ERISA and the Internal Revenue Code of the Plan's acquisition and ownership of such Class A certificates. See "ERISA Considerations" in the accompanying prospectus. The Class B certificates may not be acquired or held by any Plan other than an insurance company investing assets of its general account. By its acceptance of a Class B certificate, each Class B certificateholder will be deemed to have represented and warranted that either (i) it is not and will not be a Plan or (ii) it is an insurance company, it acquired and will hold the Class B certificates solely with assets of its general account, and such acquisition and holding satisfies the conditions applicable under Sections I and III of Department of Labor Prohibited Transaction Class Exemption 95-60. The Authorization The Department of Labor has authorized the banks to rely upon the exemptive relief from certain of the prohibited transaction provisions of ERISA and Section 4975 of the Internal Revenue Code available under PTCE 96-62 relating to (1) the initial purchase, the holding and the subsequent resale by Plans of senior certificates representing an undivided interest in a credit card trust with respect to which Capital One Bank or an affiliate is the sponsor; and (2) the servicing, operation and management of such trust, provided that the general conditions and certain other conditions set forth in such authorization are satisfied. The authorization will apply to the acquisition, holding and resale of the Class A certificates by, on behalf of, or with "plan assets" of a Plan, provided that certain conditions described in "ERISA Considerations" in the accompanying prospectus are met. The sellers believe that the authorization will apply to the acquisition and holding of the Class A certificates by Plans and that all conditions of the authorization, other than those within the control of the investors, will be met. Any Plan fiduciary considering whether to purchase any Class A certificates on behalf of, or with "plan assets" of, a Plan is cautioned to consult with its counsel regarding the applicability of the fiduciary responsibility and prohibited transaction provisions of ERISA and Section 4975 of the Internal Revenue Code to such investment. Among other things, before purchasing any Class A certificates, a Plan fiduciary should make its own determination as to the availability of the relief provided in the authorization and also consider the availability of any other prohibited transaction exemptions. S-30 Underwriting Subject to the terms and conditions set forth in the underwriting agreement for the Class A certificates among the banks and the Class A underwriters named below, and the terms and conditions set forth in the underwriting agreement for the Class B certificates among the banks and the Class B underwriters named below, the banks have agreed to sell to the underwriters, and each underwriter has severally agreed to purchase, the amount of certificates set forth opposite its name below.
Principal Class A Underwriters Amount - -------------------- --------- A Co. ................................................................ $ B Co. ................................................................ $ C Co. ................................................................ $ ------ Total............................................................... $ ====== Principal Class B Underwriters Amount - -------------------- --------- A Co. ................................................................ $ B Co.................................................................. $ ------ Total............................................................... $ ======
The Class A underwriting agreement and the Class B underwriting agreement each provide that the obligation of the underwriters to pay for and accept delivery of the certificates is subject to the approval of certain legal matters by their counsel and to certain other conditions. All of the certificates offered hereby will be issued if any are issued. Under the terms and conditions of the Class A underwriting agreement, the Class A underwriters are committed to take and pay for all the Class A certificates, if any are taken. Under the terms and conditions of the Class B underwriting agreement, the Class B underwriters are committed to take and pay for all the Class B certificates, if any are taken. The Class A underwriters propose initially to offer the Class A certificates to the public at % of their principal amount and to certain dealers at such price less concessions not in excess of % of the principal amount of the Class A certificates. The Class A 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 of the Class A certificates and other selling terms may be changed by the Class A underwriters. The Class B underwriters propose initially to offer the Class B certificates to the public at % of their principal amount and to certain dealers at such price less concessions not in excess of % of the principal amount of the Class B certificates. The Class B 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 of the Class B certificates and other selling terms may be changed by the Class B underwriters. The price to public, the underwriters' discounts and commissions and the proceeds to the sellers are as follows:
Per Class A Per Class B Certificate Certificate Total ----------- ----------- ------ Public Offering Price........................... % % $ Underwriting Discounts and Commissions.......... % % $ Proceeds to Sellers............................. % % $
S-31 Additional offering expenses are estimated to be $ . Each underwriter has represented and agreed that: (a) it has complied and will comply with all applicable provisions of the Financial Services Act 1986 and the Public Offers of Securities Regulations 1995 with respect to anything done by it in relation to the certificates in, from or otherwise involving the United Kingdom; (b) it has only issued or passed on and will only issue or pass on in the United Kingdom any document received by it in connection with the issue of the certificates to a person who is of a kind described in Article 11(3) of the Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order 1996 or are persons to whom such document may otherwise lawfully be issued or passed on; (c) if it is an authorized person under Chapter III of part I of the Financial Services Act 1986, it has only promoted and will only promote (as that term is defined in Regulation 1.02(2) of the Financial Services (Promotion of Unregulated Schemes) Regulations 1991) to any person in the United Kingdom the scheme described in this prospectus supplement and the accompanying prospectus if that person is of a kind described either in section 76(2) of the Financial Services Act 1986 or in Regulation 1.04 of the Financial Services (Promotion of Unregulated Schemes) Regulations 1991; and (d) it is a person of a kind described in Article 11(3) of the Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order 1996. The underwriters may engage in over-allotment transactions, stabilizing transactions, syndicate covering transactions and penalty bids with respect to the certificates in accordance with Regulation M under the Securities and Exchange Act of 1934, as amended. Over-allotment transactions involve syndicate sales in excess of the offering size, which creates a syndicate short position. Stabilizing transactions permit bids to purchase the certificates so long as the stabilizing bids do not exceed a specified maximum. Syndicate covering transactions involve purchases of the certificates in the open market after the distribution has been completed in order to cover syndicate short positions. Penalty bids permit the underwriters to reclaim a selling concession from a syndicate member when the certificates originally sold by such syndicate member are purchased in a syndicate covering transaction. Such over-allotment transactions, stabilization transactions, syndicate covering transactions and penalty bids may cause the price of the certificates to be higher than they would otherwise be in the absence of such transactions. Neither the banks nor the underwriters represent that the underwriters will engage in any such transactions or that such transactions, once commenced, will not be discontinued without notice at any time. The banks will indemnify the underwriters against certain liabilities, including liabilities under the Securities Act of 1933, as amended, or contribute to payments the underwriters may be required to make in respect thereof. The closing of the sale of each class of certificates is conditional upon the closing of the sale of the other class and the Collateral Interest. S-32 Glossary of Defined Terms Many of the defined terms below contain terms that are defined elsewhere in this glossary and in the "Glossary of Defined Terms" in the accompanying prospectus. "Adjusted Invested Amount" for any date of determination means an amount equal to the sum of the Class A Adjusted Invested Amount, the Class B Adjusted Invested Amount and the Collateral Adjusted Invested Amount. "Available Investor Principal Collections" means, for any Monthly Period, an amount equal to the sum of: (i) (a) an amount equal to the product of the Principal Allocation Percentage of all collections of principal receivables received during such Monthly Period, minus (b) the amount of Reallocated Principal Collections for such Monthly Period used to fund the Class A Required Amount or the Class B Required Amount, plus (ii) the amount of Miscellaneous Payments, if any, for such Monthly Period allocated to Series 2001- , plus (iii) any Shared Principal Collections from other series that are allocated to Series 2001- , plus (iv) the amount, if any, of Class A Available Funds to be distributed to cover the Class A Investor Default Amount for the related Distribution Date, plus (v) any other amounts which pursuant to the Series 2001- supplement are to be treated as Available Investor Principal Collections for the related Distribution Date. "Available Reserve Account Amount" means, on each Distribution Date and the first Special Payment Date, the amount available to be withdrawn from the Reserve Account equal to the lesser of the amount on deposit in the Reserve Account (before giving effect to any deposit to be made to the Reserve Account on such Distribution Date or such Special Payment Date) and the Required Reserve Account Amount for such Distribution Date or such Special Payment Date. "Base Rate" means, for any Monthly Period, the annualized percentage equivalent of a fraction: . the numerator of which is equal to the sum of Class A Monthly Interest, Class B Monthly Interest, Collateral Minimum Monthly Interest and the Monthly Servicing Fee for Series 2001- for the related Distribution Date, and . the denominator of which is the Invested Amount as of the last day of the preceding Monthly Period; provided, however, that if the sellers receive written notice from each Rating Agency that the following will not have a Ratings Effect, for purposes of determining the Base Rate, the Monthly Servicing Fee will be replaced with an amount equal to one-twelfth of the product of (a) the Net Servicing Fee Rate and (b) the Servicing Base Amount. "Business Day" means, for purposes of this prospectus supplement and the accompanying prospectus (unless otherwise indicated), any day other than (a) a Saturday or Sunday, or (b) any other day on which national banking associations or state banking institutions in New York, New York or Richmond, Virginia are authorized or obligated by law, executive order or governmental decree to be closed. "Class A Account Percentage" means, with respect to any date of determination, the percentage equivalent of a fraction: . the numerator of which is the aggregate amount on deposit in the Principal Funding Account with respect to Class A Monthly Principal as of the Record Date preceding the related Distribution Date; and S-33 . the denominator of which is the aggregate amount on deposit in the Principal Funding Account with respect to Series 2001- on such date (before giving effect to any deposits therein on such date). "Class A Additional Interest" means an amount paid on each Distribution Date, if applicable, equal to the product of: (i) a fraction, the numerator of which if the actual number of days from and including the immediately preceding Distribution Date to but excluding such Distribution Date and the denominator of which is 360, (ii) the Class A certificate rate for the related Interest Period plus % per annum, and (iii) the amount payable on interest amounts that were due but not distributed to the Class A certificateholders on a prior Distribution Date. "Class A Adjusted Invested Amount" for any date of determination means an amount equal to the then current Class A Invested Amount, minus the amount on deposit in the Principal Funding Account (in an amount not to exceed the Class A Invested Amount) on such date. "Class A Available Funds" means, for any Monthly Period, an amount equal to the sum of: (i) the Class A Floating Percentage of collections of finance charge receivables allocated to Series 2001- for such Monthly Period (including any investment earnings and certain other amounts that are to be treated as collections of finance charge receivables in accordance with the pooling agreement or the Series 2001- supplement, but excluding the portion of collections of finance charge receivables attributable to interchange that is allocable to Servicer Interchange); (ii) if such Monthly Period relates to a Distribution Date for the Accumulation Period, an amount equal to the product of: (a) the Class A Account Percentage, and (b) the net investment earnings, if any, in the Principal Funding Account for the related Distribution Date; and (iii) amounts, if any, to be withdrawn from the Reserve Account which are required to be included in Class A Available Funds pursuant to the Series 2001- supplement for the related Distribution Date. "Class A Floating Percentage" means, for any Monthly Period, the percentage equivalent (which percentage shall never exceed 100%) of a fraction: . the numerator of which is equal to the Class A Adjusted Invested Amount as of the close of business on the last day of the preceding Monthly Period (or for the first Monthly Period, as of the series issuance date), and . the denominator of which is equal to the Adjusted Invested Amount as of the close of business on such day (or for the first Monthly Period, the Initial Invested Amount). "Class A Initial Invested Amount" means $ . "Class A Invested Amount" for any date of determination means an amount equal to: (i) the Class A Initial Invested Amount, minus (ii) the amount of principal payments made to the Class A certificateholders on or prior to such date, minus (iii) the excess, if any, of the aggregate amount of Class A Investor Charge-Offs for all prior Distribution Dates over the aggregate amount of any reimbursements of Class A Investor Charge-Offs for all Distribution Dates prior to such date; provided, however, that the Class A Invested Amount may not be reduced below zero. "Class A Investor Charge-Off" has the meaning described in "Series Provisions--Defaulted Receivables; Investor Charge-Offs--Class A Investor Charge-Offs" in this prospectus supplement. "Class A Investor Default Amount" means, for any Distribution Date, the portion of the Investor Default Amount allocated to the Class A certificates in an amount equal to the product of the Class A Floating Percentage applicable during the related Monthly Period and the Investor Default Amount for such Monthly Period. "Class A Monthly Interest" means, for any Distribution Date, an amount equal to the product of: S-34 (i) a fraction, the numerator of which is the actual number of days in the period from and including the preceding Distribution Date to but excluding such Distribution Date and the denominator of which is 360, (ii) the Class A certificate rate in effect for that period, and (iii) the outstanding principal amount of the Class A certificates as of the preceding Record Date; provided, however, for the first Distribution Date, Class A Monthly Interest shall be equal to the interest accrued on the initial principal amount of the Class A certificates at the Class A certificate rate for the period from and including the series issuance date to but excluding the first Distribution Date. "Class A Monthly Principal" for any Distribution Date relating to the Accumulation Period or the Early Amortization Period will equal the least of: (i) the Available Investor Principal Collections on deposit in the Collection Account for such Distribution Date, (ii) for each Distribution Date for the Accumulation Period, and on or prior to the Expected Final Payment Date, the Controlled Deposit Amount for such Distribution Date, and (iii) the Class A Adjusted Invested Amount on such Distribution Date. "Class A Outstanding Monthly Interest" means, for any Distribution Date, the amount of Class A Monthly Interest previously due but not paid to the Class A certificateholders. "Class A Principal Percentage" means, for any Monthly Period: (i) during the Revolving Period, the percentage equivalent (which shall never exceed 100%) of a fraction: . the numerator of which is equal to the Class A Invested Amount as of the last day of the immediately preceding Monthly Period (or, in the case of the first Monthly Period, the Class A Initial Invested Amount), and . the denominator of which is equal to the Invested Amount as of such day (or, in the case of the first Monthly Period, the Initial Invested Amount), and (ii) during the Accumulation Period or the Early Amortization Period, the percentage equivalent (which shall never exceed 100%) of a fraction: . the numerator of which is the Class A Invested Amount as of the last day of the Revolving Period, and . the denominator of which is the Invested Amount as of such last day. "Class A Required Amount" means, for any Determination Date, the amount equal to: (i) Class A Monthly Interest for the related Distribution Date, plus (ii) any Class A Outstanding Monthly Interest, plus (iii) any Class A Additional Interest, plus (iv) the Class A Servicing Fee for the related Distribution Date and any unpaid Class A Servicing Fee, plus (v) the Class A Investor Default Amount, if any, for the related Distribution Date, minus (vi) the Class A Available Funds for the related Distribution Date. "Class A Servicing Fee" has the meaning described in "Series Provisions-- Servicing Compensation and Payment of Expenses" in this prospectus supplement. "Class B Account Percentage" means, with respect to any date of determination, the percentage equivalent of a fraction: . the numerator of which is the aggregate amount on deposit in the Principal Funding Account with respect to Class B Monthly Principal as of the Record Date preceding the related Distribution Date; and S-35 . the denominator of which is the aggregate amount on deposit in the Principal Funding Account with respect to Series 2001- on such date (before giving effect to any deposits therein on such date). "Class B Additional Interest" means an amount paid on each Distribution Date, if applicable, equal to the product of: (i) a fraction, the numerator of which if the actual number of days from and including the immediately preceding Distribution Date to but excluding such Distribution Date and the denominator of which is 360, (ii) the Class B certificate rate for the related Interest Period plus % per annum, and (iii) the amount payable on interest amounts that were due but not distributed to the Class B certificateholders on a prior Distribution Date. "Class B Adjusted Invested Amount" for any date of determination means an amount equal to the then current Class B Invested Amount, minus the amount on deposit in the Principal Funding Account in excess of the Class A Invested Amount (in an amount not to exceed the Class B Invested Amount) on such date. "Class B Available Funds" means, for any Monthly Period, an amount equal to the sum of: (i) the Class B Floating Percentage of collections of finance charge receivables allocated to Series 2001- for such Monthly Period (including any investment earnings and certain other amounts that are to be treated as collections of finance charge receivables in accordance with the pooling agreement or the Series 2001- supplement, but excluding the portion of collections of finance charge receivables attributable to interchange that is allocable to Servicer Interchange); (ii) if such Monthly Period relates to a Distribution Date for the Accumulation Period, an amount equal to the product of: (a) the Class B Account Percentage; and (b) the net investment earnings, if any, in the Principal Funding Account for the related Distribution Date; and (iii) amounts, if any, to be withdrawn from the Reserve Account which are required to be included in the Class B Available Funds pursuant to the Series 2001- supplement for such Distribution Date. "Class B Floating Percentage" means, for any Monthly Period, the percentage equivalent (which percentage shall never exceed 100%) of a fraction: . the numerator of which is equal to the Class B Adjusted Invested Amount as of the close of business on the last day of the preceding Monthly Period (or, for the first Monthly Period, as of the series issuance date), and . the denominator of which is equal to the Adjusted Invested Amount as of the close of business on such day (or, for the first Monthly Period, the Initial Invested Amount). "Class B Initial Invested Amount" means $ . "Class B Invested Amount" for any date of determination means an amount equal to: (i) the Class B Initial Invested Amount, minus (ii) the amount of principal payments made to Class B certificateholders on or prior to such date, minus (iii) the excess, if any, of the aggregate amount of Class B Investor Charge-Offs for all prior Distribution Dates over the aggregate amount of any reimbursement of Class B Investor Charge-Offs for all Distribution Dates preceding such date, minus (iv) the aggregate amount of Reallocated Principal Collections for all prior Distribution Dates which have been used to fund the Class A Required Amount for such Distribution Dates (excluding any Reallocated Principal Collections that have resulted in a reduction of the Collateral Invested Amount), minus S-36 (v) an amount equal to the amount by which the Class B Invested Amount has been reduced to fund the Class A Investor Default Amount on all prior Distribution Dates as described under "Series Provisions--Defaulted Receivables; Investor Charge-Offs" in this prospectus supplement, plus (vi) the aggregate amount of Excess Spread and Excess Finance Charges allocated and available to Series 2001- and applied on all prior Distribution Dates for the purpose of reimbursing amounts deducted as described in clauses (iii), (iv) and (v) above; provided, however, that the Class B Invested Amount may not be reduced below zero. "Class B Investor Charge-Off" has the meaning described in "Series Provisions--Defaulted Receivables; Investor Charge-Offs--Class B Investor Charge-Offs" in this prospectus supplement. "Class B Investor Default Amount" means, for any Distribution Date, the portion of the Investor Default Amount allocated to the Class B certificates in an amount equal to the product of the Class B Floating Percentage applicable during the related Monthly Period and the Investor Default Amount for such Monthly Period. "Class B Monthly Interest" means, for any Distribution Date, an amount equal to the product of: (i) a fraction, the numerator of which is the actual number of days in the period from and including the preceding Distribution Date to but excluding such Distribution Date and the denominator of which is 360, (ii) the Class B certificate rate in effect for that period, and (iii) the outstanding principal amount of the Class B certificates as of the preceding Record Date; provided, however, for the first Distribution Date, Class B Monthly Interest shall be equal to the interest accrued on the initial principal amount of the Class B certificates at the Class B certificate rate for the period from and including the series issuance date to but excluding the first Distribution Date. "Class B Monthly Principal" for any Distribution Date relating to (a) the Accumulation Period, beginning with the first Distribution Date on which the aggregate amount on deposit in the Principal Funding Account is equal to the Class A Invested Amount, or (b) the Early Amortization Period, beginning with the first Special Payment Date on which the Class A Invested Amount is paid in full, will equal the least of: (i) the Available Investor Principal Collections not applied to Class A Monthly Principal on such Distribution Date, (ii) for each Distribution Date for the Accumulation Period, the Controlled Deposit Amount for such Distribution Date (minus the Class A Monthly Principal for such Distribution Date), and (iii) the Class B Adjusted Invested Amount on such Distribution Date. "Class B Outstanding Monthly Interest" means, for any Distribution Date, the amount of Class B Monthly Interest previously due but not paid to the Class B certificateholders. "Class B Principal Percentage" means, for any Monthly Period: (i) during the Revolving Period, the percentage equivalent (which percentage shall never exceed 100%) of a fraction: . the numerator of which is the Class B Invested Amount as of the last day of the immediately preceding Monthly Period (or, in the case of the first Monthly Period, the Class B Initial Invested Amount), and . the denominator of which is the Invested Amount as of such day (or, in the case of the first Monthly Period, the Initial Invested Amount), and S-37 (ii) during the Accumulation Period or the Early Amortization Period, the percentage equivalent (which percentage shall never exceed 100%) of a fraction: . the numerator of which is the Class B Invested Amount as of the last day of the Revolving Period, and . the denominator of which is the Invested Amount as of such last day. "Class B Required Amount" means, for any Determination Date, the sum of: (i) the amount, if any, equal to: (a) Class B Monthly Interest for the related Distribution Date, plus (b) any Class B Outstanding Monthly Interest, plus (c) any Class B Additional Interest, plus (d) the Class B Servicing Fee for such Distribution Date and any unpaid Class B Servicing Fee, minus (e) the Class B Available Funds for such Distribution Date, plus (ii) the Class B Investor Default Amount for the related Monthly Period. "Class B Servicing Fee" has the meaning described in "Series Provisions-- Servicing Compensation and Payment of Expenses" in this prospectus supplement. "Collateral Account Percentage" means, with respect to any date of determination, the percentage equivalent of a fraction: . the numerator of which is the amount on deposit in the Principal Funding Account with respect to Collateral Monthly Principal as of the Record Date preceding the related Distribution Date, and . the denominator of which is the aggregate amount on deposit in the Principal Funding Account on such date (before giving effect to any deposits therein on such date). "Collateral Additional Interest," for any Distribution Date, means additional interest on Collateral Minimum Monthly Interest due but not paid to the Collateral Interest holder on a prior Distribution Date at a rate equal to the Collateral Interest Minimum Rate. "Collateral Available Funds" means, for any Monthly Period, an amount equal to the sum of: (i) the Collateral Floating Percentage of the collections of finance charge receivables allocated to Series 2001- for such Monthly Period (including any investment earnings and certain other amounts that are to be treated as collections of finance charge receivables in accordance with the pooling agreement or the Series 2001- supplement, but excluding finance charge receivables allocated to Servicer Interchange with respect to such Monthly Period), and (ii) if such Monthly Period relates to a Distribution Date for the Accumulation Period, an amount equal to the product of: (a) the Collateral Account Percentage, and (b) the net investment earnings, if any, in the Principal Funding Account for the related Distribution Date. "Collateral Adjusted Invested Amount," for any date of determination, means an amount equal to the Collateral Invested Amount, minus the amount on deposit in the Principal Funding Account in excess of the sum of the Class A Invested Amount and the Class B Invested Amount (in an amount not to exceed the Collateral Invested Amount) on such date. "Collateral Floating Percentage" means, for any Monthly Period, the percentage equivalent (which percentage shall never exceed 100%) of a fraction: S-38 . the numerator of which is the Collateral Adjusted Invested Amount as of the close of business on the last day of the preceding Monthly Period (or, for the first Monthly Period, as of the series issuance date), and . the denominator of which is equal to the Adjusted Invested Amount as of the close of business on such day (or, for the first Monthly Period, the Initial Invested Amount). "Collateral Initial Invested Amount" means $ . "Collateral Interest Minimum Rate" means a rate per annum specified in the agreement between Capital One Bank and the Collateral Interest holder relating to the transfer of the Collateral Interest to the Collateral Interest holder, which rate will not exceed %. "Collateral Invested Amount" for any date of determination means an amount equal to: (i) the Collateral Initial Invested Amount, minus (ii) the aggregate amount of principal payments made to the Collateral Interest holder prior to such date, minus (iii) the aggregate amount of Reallocated Principal Collections allocable to the Collateral Invested Amount for all prior Distribution Dates which have been used to fund the Class A Required Amount or the Class B Required Amount, minus (iv) an amount equal to the aggregate amount by which the Collateral Invested Amount has been reduced to fund the Class A Investor Default Amount and the Class B Investor Default Amount on all prior Distribution Dates as described below under "Series Provisions--Defaulted Receivables; Investor Charge-Offs" in this prospectus supplement, minus (v) an amount equal to the Collateral Investor Default Amount for any Distribution Date that is not funded out of Excess Spread and Excess Finance Charges allocated to Series 2001- and available for such purpose on such Distribution Date, plus (vi) the aggregate amount of Excess Spread and Excess Finance Charges allocated and available on all prior Distribution Dates to reimburse amounts deducted as described in clauses (iii), (iv) and (v) above; provided, however, that the Collateral Invested Amount may not be reduced below zero. "Collateral Investor Default Amount" means, for any Distribution Date, the product of (i) the Collateral Floating Percentage for the related Monthly Period and (ii) the Investor Default Amount for such Monthly Period. "Collateral Minimum Monthly Interest" means, for any Distribution Date, an amount equal to one-twelfth of the product of: (i) the Collateral Interest Minimum Rate, and (ii) the outstanding principal balance of the Collateral Interest as of the preceding Record Date; provided, however, that, for the first Distribution Date, Collateral Minimum Monthly Interest shall be an amount not to exceed $ . "Collateral Monthly Principal" for any Distribution Date relating to the Accumulation Period, beginning with the first Distribution Date on which the aggregate amount on deposit in the Principal Funding Account is equal to the sum of the Class A Invested Amount and the Class B Invested Amount, or the Early Amortization Period, beginning with the first Special Payment Date on which the Class B Invested Amount is paid in full, will equal the least of: (i) the Available Investor Principal Collections not applied to Class A Monthly Principal or Class B Monthly Principal on such Distribution Date, (ii) for each Distribution Date for the Accumulation Period, the Controlled Deposit Amount for such Distribution Date (minus the Class A Monthly Principal and Class B Monthly Principal for such Distribution Date), and (iii) the Collateral Adjusted Invested Amount on such Distribution Date. S-39 "Collateral Outstanding Monthly Interest" means, for any Distribution Date, the amount of Collateral Minimum Monthly Interest previously due but not paid to the Collateral Interest holder. "Collateral Principal Percentage" means, for any Monthly Period: (i) during the Revolving Period, the percentage equivalent (which percentage shall never exceed 100%) of a fraction: . the numerator of which is the Collateral Invested Amount as of the last day of the immediately preceding Monthly Period (or, in the case of the first Monthly Period, the Collateral Initial Invested Amount), and . the denominator of which is the Invested Amount as of such day (or, in the case of the first Monthly Period, the Initial Invested Amount), and (ii) during the Accumulation Period or the Early Amortization Period, the percentage equivalent (which percentage shall never exceed 100%) of a fraction: . the numerator of which is the Collateral Invested Amount as of the last day of the Revolving Period, and . the denominator of which is the Invested Amount as of such last day. "Collateral Servicing Fee" has the meaning described in "Series Provisions-- Servicing Compensation and Payment of Expenses" in this prospectus supplement. "Controlled Accumulation Amount" means $ ; provided, however, that if the start of the Accumulation Period is delayed as described under "Series Provisions--Postponement of the Accumulation Period" in this prospectus supplement, the Controlled Accumulation Amount may be different for each Distribution Date for the Accumulation Period and will be determined by the servicer in accordance with the Series 2001- supplement based on the principal payment rates for the accounts and on the Invested Amounts of other series (other than certain Excluded Series) that are scheduled to be in their Revolving Periods and able to create Shared Principal Collections during the Accumulation Period. "Controlled Deposit Amount" means, for any Distribution Date relating to the Accumulation Period, an amount equal to the sum of the Controlled Accumulation Amount for such Distribution Date and any Deficit Controlled Accumulation Amount for the immediately preceding Distribution Date. "Covered Amount" means, for any Distribution Date, an amount equal to the sum of: (i) the product of: (a) the Class A certificate rate in effect for the related Interest Period, (b) a fraction: . the numerator of which is the actual number of days from and including the immediately preceding Distribution Date to but excluding such Distribution Date, and . the denominator of which is 360, and (c) the aggregate amount on deposit in the Principal Funding Account for the Class A Monthly Principal, if any, as of the preceding Distribution Date, plus (ii) the product of: (a) the Class B certificate rate in effect for the related Interest Period, (b) a fraction: . the numerator of which is the actual number of days from and including the immediately preceding Distribution Date to but excluding such Distribution Date, and . the denominator of which is 360, and S-40 (c) the aggregate amount on deposit in the Principal Funding Account for the Class B Monthly Principal, if any, as of the preceding Distribution Date, plus (iii) one-twelfth of the product of: (a) the Collateral Interest Minimum Rate, and (b) the aggregate amount on deposit in the Principal Funding Account for the Collateral Monthly Principal, if any, as of the preceding Distribution Date. "Deficit Controlled Accumulation Amount" means (a) on the first Distribution Date for the Accumulation Period, the excess, if any, of the Controlled Accumulation Amount for such Distribution Date over the amount distributed from the Collection Account as Class A Monthly Principal, Class B Monthly Principal and Collateral Monthly Principal for such Distribution Date, and (b) on each subsequent Distribution Date for the Accumulation Period, the excess, if any, of the Controlled Deposit Amount for such subsequent Distribution Date plus any Deficit Controlled Accumulation Amount for the prior Distribution Date over the amount distributed from the Collection Account as Class A Monthly Principal, Class B Monthly Principal and Collateral Monthly Principal for such subsequent Distribution Date. "Distribution Date" means , 2001 and the 15th day of each month thereafter (or, if any such day is not a Business Day, the next succeeding Business Day). "Excess Spread" means, for any Distribution Date, an amount equal to the sum of the amounts described in clause (a)(iv), clause (b)(iii) and clause (c)(ii) in "Series Provisions--Application of Collections--Payment of Interest, Fees and Other Items" in this prospectus supplement. "Excluded Series" means each series which is designated in the relevant prospectus supplement as then being an Excluded Series. "Expected Final Payment Date" means , . "Floating Allocation Percentage" means, for any Monthly Period, the percentage equivalent (which percentage shall never exceed 100%) of a fraction: . the numerator of which is the Adjusted Invested Amount as of the last day of the preceding Monthly Period (or, for the first Monthly Period, the Initial Invested Amount), and . the denominator of which is the sum of: (i) the total amount of the principal receivables in the trust as of such day (or for the first Monthly Period, the total amount of principal receivables in the trust on the Series 2001- Cut-Off Date), plus (ii) the principal amount on deposit in the Excess Funding Account as of such day. However, the amount calculated above pursuant to clause (i) of the denominator shall be increased by the aggregate amount of principal receivables in Additional Accounts added to the trust during such Monthly Period as though such receivables had been added to the trust as of the first day of such Monthly Period. "Group One" means the group of series issued by the trust designated as Group One and which includes Series 2001- and the series listed in Annex I. "Initial Invested Amount" means $ . "Interest Period" means, for any Distribution Date, a period from and including the preceding Distribution Date to but excluding such Distribution Date; provided, however, that the initial Interest Period will be the period from and including the series issuance date to but excluding the 2001 Distribution Date. S-41 "Invested Amount" for any date of determination means an amount equal to the sum of the Class A Invested Amount, the Class B Invested Amount and the Collateral Invested Amount. "Investor Default Amount" means, for any Monthly Period, the product of (i) the Floating Allocation Percentage for such Monthly Period and (ii) the Defaulted Amount for such Monthly Period. "LIBOR" means, as of any LIBOR Determination Date, the rate for deposits in United States dollars for a period equal to the relevant Interest Period (commencing on the first day of such Interest Period) which appears on Telerate Page 3750 as of 11:00 a.m., London time, on such date. If such rate does not appear on Telerate Page 3750, the rate for that LIBOR Determination Date will be determined on the basis of the rates at which deposits in United States dollars are offered by four reference banks selected by the servicer at approximately 11:00 a.m., London time, on that day to prime banks in the London interbank market for a period equal to the relevant Interest Period (beginning on the first day of such Interest Period). The servicer will request the principal London office of each such bank to provide a quotation of its rate. If at least two such quotations are provided as requested, 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 international banks for a period equal to the relevant Interest Period (beginning on the first day of such Interest Period). "LIBOR Determination Date" means, for each of the Class A certificate rate and the Class B certificate rate, (i) for the initial Interest Period, the second London Business Day prior to the series issuance date and (ii) for each interest period following the initial Interest Period, the second London Business Day prior to the first day of such Interest Period. For purposes of the LIBOR Determination Date, a London Business Day is any day on which dealings in deposits in United States dollars are transacted in the London interbank market. "Monthly Servicing Fee" has the meaning described in "Series Provisions-- Servicing Compensation and Payment of Expenses" in this prospectus supplement. "Net Servicing Fee rate" means: (i) so long as Capital One Bank or The Bank of New York is the servicer, % per annum, or (ii) if Capital One Bank or The Bank of New York is not the servicer, % per annum. "Pay Out Events" with respect to Series 2001- are the events described in "Series Provisions--Pay Out Events" in this prospectus supplement and "Description of the Certificates--Pay Out Events" in the accompanying prospectus. "Portfolio Yield" means, for any Monthly Period, the annualized percentage equivalent of a fraction: . the numerator of which is equal to: (i) the Floating Allocation Percentage times the amount of collections of finance charge receivables (including any investment earnings and certain other amounts that are to be treated as collections of finance charge receivables in accordance with the pooling agreement) for such Monthly Period calculated on a billed basis or, in the case of any such collections consisting of annual membership fees, on an amortized rather than billed basis, plus (ii) the amount of net investment earnings, if any, in the Principal Funding Account for the related Distribution Date, plus (iii) any Excess Finance Charges that are allocated to Series 2001- , plus (iv) the amount of funds withdrawn from the Reserve Account and which are required to be included as Class A Available Funds or Class B Available Funds or paid to the Collateral Interest holder for the Distribution Date for such Monthly Period, minus (v) the Investor Default Amount for the Distribution Date for such Monthly Period, and . the denominator of which is the Invested Amount as of the last day of the preceding Monthly Period. S-42 "Principal Allocation Percentage" means, for any Monthly Period, the percentage equivalent (which percentage shall never exceed 100%) of a fraction: . the numerator of which is: (i) during the Revolving Period, the Invested Amount as of the last day of the immediately preceding Monthly Period (or, in the case of the first Monthly Period, the series issuance date), and (ii) during the Accumulation Period or the Early Amortization Period, the Invested Amount as of the last day of the Revolving Period, and . the denominator of which is the greater of: (i) the sum of the total amount of principal receivables in the trust as of the last day of the immediately preceding Monthly Period and the principal amount on deposit in the Excess Funding Account as of such last day (or, in the case of the first Monthly Period, the Series 2001- Cut-Off Date), and (ii) the sum of the numerators used to calculate the Principal Allocation Percentages for all series outstanding as of the date as to which such determination is being made; However, the amount calculated above pursuant to clause (i) of the denominator shall be increased by the aggregate amount of principal receivables in Additional Accounts added to the trust during such Monthly Period as though such receivables had been added to the trust as of the first day of such Monthly Period. Because the investor certificates are subject to being paired with a future series, if a Pay Out Event occurs with respect to such a paired series during the Accumulation Period or the Early Amortization Period for Series 2001- , the sellers may, by written notice delivered to the trustee and the servicer, designate a different numerator for the foregoing fraction, provided that such numerator is not less than the Adjusted Invested Amount as of the last day of the Revolving Period for such paired series and the sellers shall have received written notice from each Rating Agency that such designation will not have a Ratings Effect and shall have delivered copies of each such written notice to the servicer and the trustee, and each seller shall have delivered to the trustee a certificate of an authorized officer to the effect that, based on the facts known to such officer at the time, in the reasonable belief of such seller, such designation will not cause a Pay Out Event, or an event that, after the giving of notice or the lapse of time, would constitute a Pay Out Event, to occur with respect to Series 2001- . "Principal Funding Account" means the account established as described under "Series Provisions--Principal Funding Account" in this prospectus supplement. "Principal Shortfall" for Series 2001- means: (i) for any Distribution Date for the Revolving Period, zero, (ii) for any Distribution Date for the Accumulation Period, the excess, if any, of the Controlled Deposit Amount for such Distribution Date over the amount of Available Investor Principal Collections for such Distribution Date (excluding any portion of Available Investor Principal Collections attributable to Shared Principal Collections), and (iii) for any Distribution Date for the Early Amortization Period, the excess, if any, of the Invested Amount over the Available Investor Principal Collections for such Distribution Date (excluding any portion of the Available Investor Principal Collections attributable to Shared Principal Collections). "Reallocated Principal Collections" means, for any Distribution Date, the collections of principal receivables allocable first to the Collateral Interest and then, in the case of the Class A Required Amount, to the Class B certificates that are used to fund the excess, if any, of the Class A Required Amount and the Class B Required Amount remaining after Excess Spread and Excess Finance Charges allocated to Series 2001- and available for such purpose have been used to fund the Class A Required Amount and the Class B Required Amount. S-43 "Required Principal Balance" means, as of any date of determination, the sum of: (i) the "initial invested amount" (as defined in the relevant supplement) of each series outstanding on such date plus the aggregate amounts of any increases in the Invested Amounts of each prefunded series outstanding (in each case, other than any Excluded Series or portion thereof), minus (ii) the principal amount on deposit in the Excess Funding Account on such date; provided, however, that if at any time the only series outstanding are Excluded Series and a Pay Out Event has occurred with respect to one or more such series, the Required Principal Balance shall mean the sum of the "invested amount" (as defined in the relevant supplement) of each such Excluded Series as of the earliest date on which any such Pay Out Event is deemed to have occurred minus the principal amount on deposit in the Excess Funding Account. "Required Reserve Account Amount" for any Distribution Date on or after the Reserve Account must be funded will be equal to: (i) 0.50% of the Invested Amount as of the preceding Distribution Date (after giving effect to all changes therein on such date), or (ii) such other amount designated by the sellers, provided that if such designation is of a lesser amount, such reduction will not result in a Ratings Effect. "Reserve Account" means the account established as described under "Series Provisions--Reserve Account" in this prospectus supplement. "Revolving Period" means the period of time described under "Series Provisions--Principal Payments--Revolving Period" in this prospectus supplement. "Series 2001- Cut-Off Date" means , 2001. "Series 2001- Termination Date" means , . "Servicer Interchange" has the meaning described in "Series Provisions-- Servicing Compensation and Payment of Expenses" in this prospectus supplement. "Servicing Base Amount" means, for any Distribution Date, the Adjusted Invested Amount as of the last day of the Monthly Period preceding such Distribution Date. "Servicing Fee Rate" means %. "Special Payment Date" means each Distribution Date following the Monthly Period in which a Pay Out Event occurs. "Telerate Page 3750" means the display page currently so designated on the Bridge Telerate Market Report (or such other page as may replace that page on that service for the purpose of displaying comparable rates or prices). "Trust Portfolio" means certain accounts selected from the Bank Portfolio and included in the trust as of the Trust Cut-Off Date and subsequent additional cut-off dates, based on the eligibility criteria specified in the pooling agreement. S-44 ANNEX I Previous Issuances of Certificates The table below sets forth the principal characteristics of the Class A and Class B asset backed certificates of the outstanding series that have been issued by the trust prior to the date hereof. For more specific information with respect to any series, prospective investors should contact the servicer (in care of Capital One Bank, attention: Treasury Department) at (703) 875- 1000. The servicer will provide, without charge, to any prospective purchaser of the Class A certificates or Class B certificates, a copy of the prospectus supplement for any previous publicly-issued series. 1. Series 1996-1 Certificates Initial Series 1996-1 Invested Amount...........................$845,000,000 Initial Class A Invested Amount.................................$676,000,000 Initial Class B Invested Amount.................................$109,850,000 Class A Certificate Rate.................Three-month LIBOR + 0.12% per annum Class B Certificate Rate.......................................Floating Rate Class A Expected Final Payment Date..............................August 2001 Class B Expected Final Payment Date.............................October 2001 Class A Controlled Accumulation Amount........................$33,800,000/1/ Group....................................................................One Servicing Fee Rate.....................................................2.00% Series Termination Date.........................................October 2004
The Series 1996-1 Certificates are supported by a collateral indebtedness interest in the receivables which on the respective Series Issuance Date had an initial invested amount of $59,150,000. 2. Series 1996-2 Certificates Initial Series 1996-2 Invested Amount...........................$750,000,000 Initial Class A Invested Amount.................................$600,000,000 Initial Class B Invested Amount..................................$82,500,000 Class A Certificate Rate...................One-month LIBOR + 0.10% per annum Class B Certificate Rate.......................................Floating Rate Class A Expected Final Payment Date............................December 2001 Class B Expected Final Payment Date............................February 2002 Class A Controlled Accumulation Amount........................$30,000,000/1/ Group....................................................................One Servicing Fee Rate.....................................................2.00% Series Termination Date........................................February 2005
The Series 1996-2 Certificates are supported by a collateral indebtedness interest in the receivables which on the respective Series Issuance Date had an initial invested amount of $67,500,000. - -------- /1/ Subject to change if the commencement of the Accumulation Period is delayed. I-1 3. Series 1996-3 Certificates Initial Series 1996-3 Invested Amount...........................$500,000,000 Initial Class A Invested Amount.................................$400,000,000 Initial Class B Invested I Amount................................$55,000,000 Class A Certificate Rate...................One-month LIBOR + 0.12% per annum Class B Certificate Rate.......................................Floating Rate Class A Expected Final Payment Date.............................January 2004 Class B Expected Final Payment Date...............................March 2004 Class A Controlled Accumulation Amount........................$20,000,000/1/ Group....................................................................One Servicing Fee Rate.....................................................2.00% Series Termination Date...........................................March 2007
The Series 1996-3 Certificates are supported by a collateral indebtedness interest in the receivables which on the respective Series Issuance Date had an initial invested amount of $45,000,000. 4. Series 1997-1 Certificates Initial Series 1997-1 Invested Amount...........................$608,275,000 Initial Class A Invested Amount.................................$486,620,000 Initial Class B Invested Amount..................................$66,910,250 Class A Certificate Rate.................Three-month LIBOR - 0.03% per annum Class B Certificate Rate.......................................Floating Rate Class A Expected Final Payment Date................................June 2002 Class B Expected Final Payment Date..............................August 2002 Class A Controlled Accumulation Amount........................$24,331,000/1/ Group....................................................................One Servicing Fee Rate.....................................................2.00% Series Termination Date............................................June 2005
The Series 1997-1 Certificates are supported by a collateral indebtedness interest in the receivables which on the respective Series Issuance Date had an initial invested amount of $54,744,750. 5. Series 1997-2 Certificates Initial Series 1997-2 Invested Amount...........................$502,212,500 Initial Class A Invested Amount.................................$401,770,000 Initial Class B Invested Amount..................................$55,243,375 Initial Class C Invested Amount..................................$45,199,125 Class A Certificate Rate................Three-month LIBOR + 0.049% per annum Class B Certificate Rate.......................................Floating Rate Class A Expected Final Payment Date..............................August 2002 Class B Expected Final Payment Date.............................October 2002 Class A Controlled Accumulation Amount........................$20,088,500/1/ Group....................................................................One Servicing Fee Rate.....................................................2.00% Series Termination Date.........................................October 2005
- -------- /1/ Subject to change if the commencement of the Accumulation Period is delayed. I-2 6. Series 1998-1 Certificates Initial Series 1998-1 Invested Amount...........................$591,016,549 Initial Class A Invested Amount.................................$500,000,000 Initial Class B Invested Amount..................................$50,236,407 Initial Class C Invested Amount..................................$40,780,142 Class A Certificate Rate..............................................6.310% Class B Certificate Rate..............................................6.356% Class A Expected Final Payment Date...............................April 2008 Class B Expected Final Payment Date................................June 2008 Class A Controlled Accumulation Amount........................$25,000,000/1/ Group....................................................................One Servicing Fee Rate.....................................................2.00% Series Termination Date............................................June 2011
7. Series 1998-3 Certificates Initial Series 1998-3 Invested Amount........................$486,472,629 Initial Class A Invested Amount..............................$410,000,000 Initial Class A Sterling Invested Amount..............(Pounds)250,000,000 Initial Class B Invested Amount...............................$38,771,000 Initial Class C Invested Amount...............................$37,701,629 Class A Fixed Dollar Rate........................................5.94507% Class A Certificate Rate/2/.........................................7.25% Class B Certificate Rate....................................Floating Rate Class A Expected Final Payment Date...........................August 2001 Class B Expected Final Payment Date..........................October 2001 Class A Controlled Accumulation Amount.....................$20,500,000/1/ Group.................................................................One Servicing Fee Rate..................................................2.00% Series Termination Date......................................October 2004
8. Series 1998-4 Certificates Initial Series 1998-4 Invested Amount........................$750,000,000 Initial Class A Invested Amount...............................631,875,000 Initial Class B Invested Amount................................60,000,000 Initial Class C Invested Amount................................58,125,000 Class A Certificate Rate............................................5.43% Class B Certificate Rate....................................Floating Rate Class A Expected Final Payment Date.........................November 2003 Class B Expected Final Payment Date..........................January 2004 Class A Controlled Accumulation Amount.....................$31,593,750/1/ Group.................................................................One Servicing Fee Rate..................................................2.00% Series Termination Date......................................January 2007
9. Series 1998-5 Certificates Initial Series 1998-5 Invested Amount..................................$0 Maximum Invested Amount......................................$531,000,000 Certificate Rate............................................Floating Rate Group.................................................................One Series Termination Date.....................................February 2005
- -------- /1/ Subject to change if the commencement of the Accumulation Period is delayed. /2/ Rate applicable to the Class A Sterling Invested Amount. I-3 10. Series 1998-6 Certificates Initial Series 1998-6 Invested Amount..................................$0 Maximum Invested Amount......................................$500,000,000 Certificate Rate............................................Floating Rate Group.................................................................One Series Termination Date........................................March 2007
11. Series 1999-1 Certificates Initial Series 1999-1 Invested Amount...........................$625,000,000 Initial Class A Invested Amount..................................500,000,000 Initial Class B Invested Amount...................................62,500,000 Initial Collateral Invested Amount................................62,500,000 Class A Certificate Rate...................One-month LIBOR + 0.14% per annum Class B Certificate Rate...................One-month LIBOR + 0.34% per annum Expected Final Payment Date.........................................May 2004 Controlled Accumulation Amount................................$31,250,000/1/ Group....................................................................One Servicing Fee Rate.....................................................2.00% Series Termination Date............................................July 2007
12. Series 1999-2 Certificates Initial Series 1999-2 Invested Amount...........................$625,000,000 Initial Class A Invested Amount..................................500,000,000 Initial Class B Invested Amount...................................62,500,000 Initial Collateral Invested Amount................................62,500,000 Class A Certificate Rate..................One-month LIBOR + 0.125% per annum Class B Certificate Rate..................One-month LIBOR + 0.305% per annum Expected Final Payment Date.........................................May 2002 Controlled Accumulation Amount................................$31,250,000/1/ Group....................................................................One Servicing Fee Rate.....................................................2.00% Series Termination Date............................................July 2005
13. Series 1999-3 Certificates Initial Series 1999-3 Invested Amount...........................$500,000,000 Initial Class A Invested Amount..................................400,000,000 Initial Class B Invested Amount...................................50,000,000 Initial Collateral Invested Amount................................50,000,000 Class A Certificate Rate...................One-month LIBOR + 0.25% per annum Class B Certificate Rate...................One-month LIBOR + 0.48% per annum Expected Final Payment Date........................................July 2006 Controlled Accumulation Amount................................$25,000,000/1/ Group....................................................................One Servicing Fee Rate.....................................................2.00% Series Termination Date.......................................September 2009
14. Series 1999-A Certificates Initial Series 1999-A Invested Amount.....................................$0 Maximum Invested Amount.........................................$450,000,000 Certificate Rate...............................................Floating Rate Group....................................................................One Series Termination Date.........................................January 2008
- -------- /1/ Subject to change if the commencement of the Accumulation Period is delayed. I-4 15. Series 1999-4 Certificates Initial Series 1999-4 Invested Amount...........................$600,000,000 Initial Class A Invested Amount..................................480,000,000 Initial Class B Invested Amount...................................60,000,000 Initial Collateral Invested Amount................................60,000,000 Class A Certificate Rate.......................................Floating Rate Class B Certificate Rate.......................................Floating Rate Expected Final Payment Date......................................August 2004 Controlled Accumulation Amount................................$30,000,000/1/ Group....................................................................One Servicing Fee Rate.....................................................2.00% Series Termination Date.........................................October 2007
16. Series 2000-1 Certificates Initial Series 2000-1 Invested Amount...........................$600,000,000 Initial Class A Invested Amount..................................498,000,000 Initial Class B Invested Amount...................................51,000,000 Initial Collateral Invested Amount................................51,000,000 Class A Certificate Rate...............................................7.10% Class B Certificate Rate...............................................7.30% Expected Final Payment Date....................................February 2003 Controlled Accumulation Amount................................$30,000,000/1/ Group....................................................................One Servicing Fee Rate.....................................................2.00% Series Termination Date...........................................April 2006
17. Series 2000-2 Certificates Initial Series 2000-2 Invested Amount...........................$750,000,000 Initial Class A Invested Amount..................................622,500,000 Initial Class B Invested Amount...................................63,750,000 Initial Collateral Invested Amount................................63,750,000 Class A Certificate Rate...............................................7.20% Class B Certificate Rate...............................................7.35% Expected Final Payment Date........................................June 2005 Controlled Accumulation Amount................................$37,500,000/1/ Group....................................................................One Servicing Fee Rate.....................................................2.00% Series Termination Date..........................................August 2008
18. Series 2000-3 Certificates Initial Series 2000-3 Invested Amount.........................$1,000,000,000 Initial Class A Invested Amount..................................807,500,000 Initial Class B Invested Amount...................................92,500,000 Initial Collateral Invested Amount...............................100,000,000 Class A Certificate Rate.................One-month LIBOR plus 0.19% per year Class B Certificate Rate.................One-month LIBOR plus 0.51% per year Expected Final Payment Date......................................August 2007 Controlled Accumulation Amount................................$50,000,000/1/ Group....................................................................One Servicing Fee Rate.....................................................2.00% Series Termination Date.........................................October 2010
- -------- /1/ Subject to change if the commencement of the Accumulation Period is delayed. I-5 19. Series 2000-4 Certificates Initial Series 2000-4 Invested Amount.........................$1,200,000,000 Initial Class A Invested Amount..................................975,000,000 Initial Class B Invested Amount..................................120,000,000 Initial Collateral Invested Amount...............................105,000,000 Class A Certificate Rate.................One-month LIBOR plus 0.14% per year Class B Certificate Rate.......................................Floating Rate Expected Final Payment Date.....................................October 2005 Controlled Accumulation Amount...............................$100,000,000/1/ Group....................................................................One Servicing Fee Rate.....................................................2.00% Series Termination Date..........................................August 2008
20. Series 2000-5 Certificates Initial Series 2000-5 Invested Amount.........................$1,250,000,000 Initial Class A Invested Amount................................1,015,625,000 Initial Class B Invested Amount..................................125,000,000 Initial Collateral Invested Amount...............................109,375,000 Class A Certificate Rate.................One-month LIBOR plus 0.10% per year Class B Certificate Rate................One-month LIBOR plus 0.375% per year Expected Final Payment Date.....................................October 2003 Controlled Accumulation Amount............................$104,166,166.67/1/ Group....................................................................One Servicing Fee Rate.....................................................2.00% Series Termination Date..........................................August 2006
21. Series 2001-A Certificates Initial Series 2001-A Invested Amount.....................................$0 Maximum Invested Amount.........................................$500,000,000 Certificate Rate....................................................Floating Group....................................................................One Series Termination Date........................................November 2005
22. Series 2001-1 Certificates Initial Series 2001-1 Invested Amount.........................$1,200,000,000 Initial Class A Invested Amount..................................975,000,000 Initial Class B Invested Amount..................................120,000,000 Initial Collateral Invested Amount...............................105,000,000 Class A Certificate Rate.................One-month LIBOR plus 0.20% per year Class B Certificate Rate.................One-month LIBOR plus 0.51% per year Expected Final Payment Date....................................February 2008 Controlled Accumulation Amount...............................$100,000,000/1/ Group....................................................................One Servicing Fee Rate.....................................................2.00% Series Termination Date........................................December 2010
- -------- /1/Subject to change if the commencement of the Accumulation Period is delayed. I-6 ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ +The information in this prospectus is not complete and may be amended. We may + +not sell these securities until the registration statement filed with the + +Securities and Exchange Commission is effective and we deliver a final + +prospectus supplement and accompanying prospectus. This prospectus is not an + +offer to sell nor is it seeking an offer to buy these securities in any state + +where the offer or sale is prohibited. + ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ SUBJECT TO COMPLETION DATED APRIL 13, 2001 Prospectus [LOGO OF CAPITAL ONE APPEARS HERE] Capital One Master Trust Issuer Capital One Bank Seller and Servicer Capital One, F.S.B. Seller Asset Backed Certificates -------- Consider carefully the risk factors beginning on page 6 in this prospectus. A certificate is not a deposit and neither the certificates nor the underlying accounts or receivables are insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The certificates represent interests in the trust only and do not represent interests in or obligations of Capital One Bank, Capital One, F.S.B. or any of their affiliates. This prospectus may be used to offer and sell certificates of a series only if accompanied by the prospectus supplement for that series. The Trust-- . may periodically issue asset backed certificates in one or more series with one or more classes; and . will own-- . receivables in a portfolio of revolving credit card accounts; . payments due on those receivables; and . other property described in this prospectus and in the accompanying prospectus supplement. The Certificates-- . will represent interests in the trust and will be paid only from the trust assets; . offered with this prospectus will be rated in one of the four highest rating categories by at least one nationally recognized rating organization; . may have one or more forms of credit enhancement; and . will be issued as part of a designated series which may include one or more classes of certificates and credit enhancement. The Certificateholders-- . will receive interest and principal payments from a varying percentage of credit card account collections. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved the certificates or determined that this prospectus is accurate or complete. Any representation to the contrary is a criminal offense. -------- , 2001 Important Notice about Information Presented in this Prospectus and the Accompanying Prospectus Supplement Information about the certificates is presented to you in two separate documents: (a) this prospectus, which provides general information, some of which may not apply to a particular series of certificates, including your series, and (b) the accompanying prospectus supplement, which will describe the specific terms of your series of certificates, including: . the terms, including interest rates, for each class; . the timing of interest and principal payments; . information about the receivables; . information about credit enhancement, if any, for each class; . the ratings for each class; and . the method for selling the certificates. If the terms of a particular series of certificates vary between the description contained in this prospectus and the description in the prospectus supplement, you should rely on the information in the prospectus supplement. You should rely only on the information provided in this prospectus and the accompanying prospectus supplement, including the information incorporated by reference. We have not authorized anyone to provide you with different information. We are not offering the certificates in any state where the offer is not permitted. We include cross references in this prospectus and the accompanying prospectus supplement to captions in these materials where you can find additional, related discussions. The following table of contents and the table of contents included in the accompanying prospectus supplement provide the pages on which these captions are located. Parts of this prospectus use defined terms. You can find these terms and their definitions under the caption "Glossary of Defined Terms" beginning on page 68 in this prospectus. ---------------- TABLE OF CONTENTS
Page ---- Prospectus Summary........................................................ 1 The Trust and the Trustee................................................ 1 Capital One Bank......................................................... 1 Capital One, F.S.B. ..................................................... 1 Trust Assets............................................................. 1 The Certificates......................................................... 2 The Sellers' Interest.................................................... 2 Collections by the Servicer.............................................. 2 Allocation of Trust Assets............................................... 2 Interest Payments on the Certificates.................................... 2 Principal Payments on the Certificates................................... 2 Revolving Period........................................................ 2 Accumulation Period..................................................... 3 Controlled Amortization Period.......................................... 3 Principal Payment Period................................................ 3 Early Amortization or Early Accumulation Period......................... 4 Pay Out Events.......................................................... 4 Shared Excess Finance Charge Collections................................. 4 Shared Principal Collections............................................. 4 Series Enhancement....................................................... 4 Tax Status............................................................... 5 Certificate Ratings...................................................... 5 Optional Repurchase...................................................... 5 Risk Factors.............................................................. 6 It may not be possible to find an investor to purchase your certificates............................................................ 6 Social, economic and geographic factors can affect credit card payments and may cause a delay in or default on payments......................... 6 The credit ratings of your certificates are limited................................................................. 6 Issuances of additional series by the trust may adversely affect your certificates............................................................ 7 The discount option may slow the payment on your certificates............ 7 The credit quality of the trust assets may be eroded by the addition of new assets.............................................................. 7 Recharacterization of the transfer from the sellers to the trust, or the conservatorship or receivership of the sellers, could delay or reduce payments to you......................................................... 8 If a conservator or receiver were appointed for either bank, payments to you could be delayed or reduced ........................................ 9
Page ---- Consumer protection laws may impede collection efforts or reduce collections............................................................. 10 The trust is dependent on the generation of new receivables because attrition and other factors cause receivables in the trust to decline... 10 The timing of principal payments is not certain................................................................. 12 The sellers' ability to change terms of the receivables could affect payment patterns........................................................ 12 Certificateholders of other series or classes may take actions which are opposed to your interests............................................... 13 Optional repurchase of your certificates by a seller may result in an early return of principal and a reinvestment risk....................... 13 The Banks' Credit Card and Consumer Lending Business...................... 14 Business Overview........................................................ 14 Underwriting Procedures.................................................. 14 Customer Service......................................................... 16 Billing and Payments..................................................... 16 Delinquencies and Collections--Collection Efforts........................ 17 Interchange.............................................................. 18 The Accounts.............................................................. 18 The Banks................................................................. 19 Capital One Bank......................................................... 19 Capital One, F.S.B. ..................................................... 20 Assumption of a Seller's Obligations...................................... 20 Use of Proceeds........................................................... 21 The Trust................................................................. 21 Description of the Certificates........................................... 22 General.................................................................. 22 Interest................................................................. 22 Principal................................................................ 22 Addition of Trust Assets................................................. 24 Removal of Accounts...................................................... 27 New Issuances............................................................ 28 Collection Account....................................................... 28 Allocation Percentages................................................... 29 Deposits in Collection Account........................................... 29 Shared Principal Collections; Excess Shared Principal Collections........ 30 Excess Funding Account................................................... 31
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Page ---- Sharing of Excess Finance Charges......................................... 31 Funding Period............................................................ 32 Paired Series............................................................. 32 Defaulted Receivables; Rebates and Fraudulent Charges; Recoveries......... 33 Credit Enhancement........................................................ 33 Pay Out Events............................................................ 37 Servicing Compensation and Payment of Expenses............................ 38 Record Date............................................................... 38 Optional Termination; Final Payment of Principal.......................... 39 Reports................................................................... 39 The Pooling Agreement Generally............................................ 40 Book-Entry Registration................................................... 40 Definitive Certificates................................................... 43 The Bank Certificate; Additional Sellers.................................. 43 Defeasance................................................................ 44 Termination of Trust...................................................... 44 Conveyance of Receivables................................................. 45 Representations and Warranties............................................ 45 Indemnification........................................................... 47 Collection and Other Servicing Procedures................................. 48 Servicer Covenants........................................................ 48 Certain Matters Regarding the Servicer.................................... 49 Servicer Default.......................................................... 50 Evidence as to Compliance................................................. 50 Amendments................................................................ 51 Trustee................................................................... 52
Page ---- Certain Legal Aspects of the Receivables.................................. 52 Transfer of Receivables.................................................. 52 Certain Matters Relating to Conservatorship and Receivership............. 54 Consumer Protection Laws................................................. 56 Federal Income Tax Consequences........................................... 56 General.................................................................. 56 Treatment of the Certificates as Debt.................................... 57 Treatment of the Trust................................................... 57 Taxation of Interest Income of U.S. Certificate Owners................... 59 Sale or Exchange of Certificates......................................... 60 Foreign Certificate Owners............................................... 60 Backup Withholding and Information Reporting ............................ 61 State and Local Taxation................................................. 61 ERISA Considerations...................................................... 61 Plan of Distribution...................................................... 65 Legal Matters............................................................. 66 Reports to Certificateholders............................................. 66 Where You Can Find More Information.............................................................. 67 Glossary of Defined Terms................................................. 68 Annex I: Global Clearance, Settlement and Tax Documentation Procedures.... A-1
ii Prospectus Summary . This summary highlights selected information and does not contain all of the information that you need in making your investment decision. Prior to making your decision, you should carefully read this entire document and the accompanying prospectus supplement. . It also provides an overview of the trust assets including, in particular, the receivables and how such receivables will be allocated. This summary is qualified by the full description of such information in this prospectus and the accompanying prospectus supplement. The Trust and the Trustee Capital One Master Trust was formed in 1993 pursuant to a pooling and servicing agreement, as amended, between Capital One Bank, as seller and servicer, and The Bank of New York, as trustee. On April 9, 2001, the pooling agreement was amended to add Capital One, F.S.B. as an additional seller. The trust is a master trust under which multiple series of certificates may be issued. Each series is issued pursuant to a supplement to the pooling and servicing agreement. The terms of a series are set forth in the series supplement. Some classes or series may not be offered by this prospectus. They may be offered, for example, in a private placement. Capital One Bank Capital One Bank is a Virginia banking corporation, which owns credit card accounts from which receivables are sold to the trust. Capital One Bank is the servicer and a seller under the pooling agreement and owns a portion of the sellers' interest. Capital One, F.S.B. Capital One, F.S.B. is a federal savings bank, which owns credit card accounts from which receivables are sold into the trust. Capital One, F.S.B. is a seller under the pooling agreement and owns a portion of the sellers' interest. Trust Assets The banks and Capital One Bank's predecessor have designated selected MasterCard(R) and VISA(R) revolving credit card accounts to the trust and have sold the receivables in such accounts to the trust. The banks may designate additional accounts to the trust. The banks select the accounts to be designated to the trust on the basis of criteria established in the pooling agreement. All receivables in the accounts when designated to the trust were transferred to the trust and all new receivables generated in those accounts have been and will be transferred automatically to the trust. The receivables transferred to the trust are the primary trust assets. The total amount of receivables in the trust fluctuates daily as new receivables are generated and payments are received on existing receivables. The trust assets also include or may include: . funds collected on the receivables; . any collateral securing an accountholder's payment obligations under an account; . rights to certain interchange fees that the banks receive through VISA and MasterCard; . monies and investments in the trust's bank accounts; . recoveries (net of collection expenses) and proceeds of credit insurance policies relating to the receivables; . participations in other pools of secured or unsecured revolving credit card accounts or other consumer revolving credit accounts owned by the banks; and . credit enhancement that varies from one series to another and, within a series, may vary from one class to another. See "The Trust" in this prospectus. 1 The Certificates The trust has issued, and in the future expects to issue, asset backed certificates, each evidencing an undivided interest in the trust. The certificates are issued in series. A series may contain one or more classes. The terms of any future series or class will not be subject to your prior review or consent. There can be no assurance that the terms of any future series might not have an impact on the timing or amount of payments received by a certificateholder. The Sellers' Interest The interest in the assets not allocated to any series of certificates is the sellers' interest. The principal amount of the sellers' interest fluctuates with the amount of the principal receivables held in the trust and the amount of certificates outstanding. The pooling agreement requires a seller to designate additional accounts to the trust if the sellers' interest is less than a designated amount, referred to as the required sellers' interest. Each seller may sell part, but not all, of its interest in the sellers' interest by issuing a supplemental certificate. Each seller must retain an interest in the trust. The sellers' interest does not provide credit enhancement for your series or any other series. Collections by the Servicer Capital One Bank services the receivables under the pooling agreement. In limited cases, Capital One Bank may resign or be removed, and either the trustee or a third party may be appointed as the new servicer. The servicer receives a servicing fee from the trust, and each series is obligated to pay a portion of that fee. The servicer receives collections on the receivables, deposits those collections in the collection account and keeps track of them as finance charge receivables or principal receivables. The servicer then allocates those collections as summarized below. See "Description of the Certificates--Deposits in Collection Account" in this prospectus. Allocation of Trust Assets The trust assets are allocated among the series of certificates outstanding and the sellers' interest. The servicer allocates (a) collections of finance charge receivables and principal receivables and (b) receivables in accounts written off as uncollectible, to each series based on varying percentages. The accompanying prospectus supplement describes the allocation percentages applicable to your series. Certificateholders are only entitled to amounts allocated to their series equal to the interest and principal payments on their certificates. See "Description of the Certificates--General," "--Interest" and "--Principal" in this prospectus. Interest Payments on the Certificates Each certificate entitles the holder to receive payments of interest as described in the applicable prospectus supplement. If a series of certificates consists of more than one class, each class may differ in, among other things, priority of payments, payment dates, interest rates, methods for computing interest, and rights to series enhancement. Each class of certificates may have fixed, floating or any other type of interest rate. Generally, interest will be paid monthly, quarterly, semi- annually or on other scheduled dates over the life of the certificates. See "Description of the Certificates--Interest" in this prospectus. Principal Payments on the Certificates Each certificate entitles the holder to receive payments of principal as described in the applicable prospectus supplement. If a series of certificates consists of more than one class, each class may differ in, among other things, the amounts allocated for principal payments, priority of payments, payment dates, maturity, and rights to series enhancement. See "Description of the Certificates--Principal" in this prospectus. Revolving Period Each series of certificates will begin with a period during which the trust will not pay or accumulate principal for payment to the certificateholders. The period when no principal is paid or accumulated is known as the revolving period. During the revolving period, the trust will pay available principal to certificateholders of other series as shared principal collections or to the banks as holders of the sellers' interest, or in certain circumstances will deposit the available principal in the excess funding account. 2 The revolving period for a series begins on the series cut-off date described in the applicable prospectus supplement, and ends at the start of either an amortization period or an accumulation period. Following the revolving period, each class of certificates will have one or more of the following periods in which: . principal is accumulated in specified amounts per month and paid on a scheduled date; . principal is paid in fixed amounts at scheduled intervals; . principal is paid in varying amounts at scheduled intervals; . principal is paid or accumulated in varying amounts each month based on the amount of principal receivables collected following certain adverse events or following the servicer's decision not to extend an initial principal payment date. Accumulation Period If a series or class of certificates is in an accumulation period during which principal is accumulated in specified amounts per month and paid on an expected final payment date, the trust is expected to pay available principal to those certificateholders on the date specified in the prospectus supplement for such series. If the series has more than one class, each class may have a different priority for payment. For a period of time prior to the scheduled principal payment date, the trust will deposit specified amounts of available principal in a trust account. The accumulation period for a series or class begins on a date specified in the applicable prospectus supplement and ends when any one of the following occurs: . the certificates of such series or class are paid in full; . the beginning of a period in which principal is paid or accumulated in the amount of available principal up to the full principal amount owing on the certificates each month following certain adverse events or following the servicer's decision not to extend an initial principal payment date; or . the termination date for the series described in the applicable prospectus supplement (also called the legal final maturity date). Controlled Amortization Period If a series or class of certificates is in a controlled amortization period during which principal is paid in fixed amounts at scheduled intervals, the trust will pay available principal up to such fixed amount to the certificateholders on each distribution date during such period. The trust will pay available principal in a fixed amount, plus any amounts not previously paid. If the series has more than one class, each class may have a different priority for payment. The controlled amortization period for a series or class starts on the date specified in the prospectus supplement for such series and ends when any one of the following occurs: . the certificates of such series or class are paid in full; . the beginning of a period in which principal is paid or accumulated in the amount of available principal up to the full principal amount owing on the certificates each month following certain adverse events or following the servicer's decision not to extend an initial principal payment date; or . the termination date for the series described in the applicable prospectus supplement (also called the legal final maturity date). Principal Payment Period A series or class may have a principal payment period that begins if the servicer decides not to extend an initial principal payment date. The first initial principal payment date will be a distribution date described in the applicable prospectus supplement, but will be automatically extended each month to the next distribution date unless the servicer elects to stop the automatic extension, causing a principal payment event to occur. A principal payment event can occur during the revolving period, the controlled amortization period or the accumulation period. A principal payment event will most likely cause investors to receive payment of principal on their certificates earlier than expected. 3 During a principal payment period, the trust will pay certificateholders the available principal up to the full principal amount on their certificates on each distribution date until any of the following occurs: . the certificates of such series are paid in full; . the beginning of the early amortization period; or . the termination date for the series described in the applicable prospectus supplement (also called the legal final maturity date). Early Amortization or Early Accumulation Period If a series of certificates is in an early amortization period or early accumulation period during which principal is paid or accumulated in the amount of available principal up to the full principal amount owing on the certificates following certain adverse events, the trust will pay available principal to those certificateholders on each distribution date or accumulate amounts by making a deposit into an account on each distribution date. If the series has more than one class, each class may have a different priority for payment. The early amortization period or early accumulation period starts on the day a pay out event occurs and ends when any of the following occurs: . the certificates of such series are paid in full; or . the termination date for the series described in the applicable prospectus supplement (also called the legal final maturity date). Pay Out Events A pay out event for any series of certificates will include adverse events described in the prospectus supplement for such series. In addition, the following will be pay out events for all series: . the occurrence of certain events of insolvency or receivership relating to a seller (including any additional seller); or . the trust becomes an "investment company" under the Investment Company Act of 1940. See "Description of the Certificates--Pay Out Events" in this prospectus. Shared Excess Finance Charge Collections Any series may be included in a group of series. If specified in the prospectus supplement for such series, to the extent that collections of finance charge receivables allocated to a series are not needed for that series, those collections may be applied to cover certain shortfalls of other series in the same group. See "Description of the Certificates--Sharing of Excess Finance Charges" in this prospectus. Shared Principal Collections If a series is identified in its prospectus supplement as a principal sharing series, to the extent that collections of principal receivables allocated to such series are not needed for that series, those collections may be applied to cover principal payments for other principal sharing series, and vice versa. Certain principal payments for certain principal sharing series may have priority in receiving those collections over other principal payments for other principal sharing series. See "Description of the Certificates--Shared Principal Collections; Excess Shared Principal Collections" in this prospectus. Series Enhancement Each class of a series may be entitled to series enhancement. Series enhancement for the certificates of any class may take the form of one or more of the following: . subordination . letter of credit . collateral interest . surety bond . insurance policy . spread account . cash collateral . reserve account guaranty or account . swap arrangements The type, characteristics and amount of any series enhancement will be: . based on several factors, including the characteristics of the receivables and accounts at the time a series of certificates is issued; and . established based on the requirements of the rating agencies. See "Description of the Certificates--Credit Enhancement" in this prospectus. 4 Tax Status For information concerning the application of the United States federal income tax laws, including whether the certificates will be characterized as debt for federal income tax purposes, see "Federal Income Tax Consequences" in this prospectus and "Summary of Terms--Tax Status" in the accompanying prospectus supplement. Certificate Ratings Any certificate offered by this prospectus and an accompanying prospectus supplement will be rated in one of the four highest rating categories by at least one nationally recognized rating organization. A rating is not a recommendation to buy, sell or hold securities, and may be revised or withdrawn at any time by the assigning agency. Each rating should be evaluated independently of any other rating. See "Risk Factors" in this prospectus. Optional Repurchase A seller (so long as that seller is the servicer or its affiliate) have the option to repurchase any series of certificates once the principal amount of the series has been reduced to an amount specified in the prospectus supplement for such series. 5 Risk Factors You should consider the following risk factors before you decide whether or not to purchase the certificates. It may not be possible to find an investor to purchase your certificates. The underwriters may assist in resales of the certificates, but they are not required to do so. A secondary market for any series or class of certificates may not develop. If a secondary market does develop, it may not continue throughout the life of the series or it may not be sufficiently liquid to allow you to meet your needs. As a result, it may be difficult for you to resell the certificates. Social, economic and geographic factors can affect credit card payments and may cause a delay in or default on payments. Changes in credit card use, payment patterns and the rate of defaults by cardholders may result from a variety of social, economic and geographic factors. Social factors include changes in consumer confidence levels, the public's perception of the use of credit cards and changing attitudes about incurring debt and the stigma of personal bankruptcy. Economic factors include the rates of inflation, the unemployment rates and the relative interest rates offered for various types of loans. Moreover, adverse changes in economic conditions in states where cardholders are located could have a direct impact on the timing and amount of payments on the certificates of any series. The credit ratings of your certificates are The credit ratings assigned to your certificates limited. reflect the rating agencies' assessment only of the likelihood that interest and principal will be paid when required under the pooling agreement, not when expected. These ratings are based on the rating agencies' determination of the value of receivables in the trust and the availability of any credit enhancement. The ratings do not address the following: . the likelihood that the principal or interest on your certificates will be prepaid, paid on an expected final payment date or paid on any particular date before the legal final maturity date of your series; . the possibility that your certificates will be paid early or the possibility of the imposition of United States withholding tax for non-U.S. certificateholders; . the marketability of the certificates, or any market price; or . that an investment in the certificates is a suitable investment for you. A rating is not a recommendation to purchase, hold or sell certificates of a series or class of a series. Furthermore, there is no assurance that any rating will remain for any given period of time or that any rating will not be lowered or withdrawn entirely by a rating agency. If a rating assigned to your certificates is reduced or withdrawn, the market value of your certificates could be reduced. 6 Issuances of additional series by the trust may adversely affect your certificates. The trust is a master trust that has issued other series of certificates and is expected to issue additional series from time to time. All such certificates are payable from the receivables in the trust. The trust may issue additional series with terms that are different from your series without your prior review or consent. Before the trust can issue a new series, each rating agency that rated an outstanding series must confirm in writing that the issuance of the new series will not result in a reduction or withdrawal of its earlier rating. Nevertheless, the terms of a new series could affect the timing and amounts of payments on any other outstanding series. The owners of the certificates of any new series will have voting rights that will reduce the percentage interest represented by your series. Such voting rights may relate to the ability to approve waivers and give consents. The actions which may be affected include directing the appointment of a successor servicer following a servicer default, amending the pooling agreement and directing a reassignment of the entire portfolio of accounts. The discount option may slow the payment on your The sellers have the option, from time to time and certificates. without your consent, to designate a fixed or variable percentage of receivables to be treated as finance charge receivables instead of principal receivables. Such a designation could result in an increase in the amount of finance charge receivables and a slower payment rate of collections of the principal receivables. See "Description of the Certificates--Credit Enhancement--Discount Option" in this prospectus. The credit quality of the trust assets may be eroded by the addition of new assets. The assets of the trust are always changing. Receivables are collected and new receivables are added to the trust daily as accountholders pay their credit card bills and charge new amounts to their accounts. In addition, a seller periodically adds additional accounts to the trust. A seller may voluntarily add such additional accounts or it may, at times, be obligated to make such additions to maintain the level of receivables in the trust. Additional accounts may include accounts that were originated using criteria that are different from those applicable to the accounts currently designated to the trust. There are many factors that could explain such differences, including that the additional accounts were originated at a different date or were acquired from an institution that used different underwriting standards or procedures. Consequently, there is no assurance that future additional accounts will have the same credit quality as those currently designated to the trust or that the characteristics of the receivables will be the same as those currently in the trust. 7 In addition, the pooling agreement allows a seller to add participation interests in other receivables to the trust. The addition of such participation interests and of additional accounts will be subject to the satisfaction of certain conditions described in this prospectus under "Description of the Certificates--Addition of Trust Assets." Recharacterization of the transfer from the sellers to the trust, or the conservatorship or receivership of the sellers, could delay or reduce payments to you. Each seller has represented in the pooling agreement that the transfer of the receivables to the trust is either a sale or the grant of a security interest in the receivables. To protect the purchasers of the certificates, each seller has taken and will take actions so that, if a court determines the transfer to be a grant of a security interest and not a sale of the receivables to the trust, the trust will have a "first priority perfected security interest" in the receivables under the Uniform Commerical Code. However, there are circumstances where, regardless of these actions, other creditors may take priority over your interests, for example: . a tax, governmental or other nonconsensual lien on a seller's property arising before new receivables come into existence may have priority over the trust's interests in the receivables; . if the Federal Deposit Insurance Corporation (the United States agency that insures each bank's deposits) were appointed conservator or receiver of either bank, the FDIC's administrative expenses may be paid before the certificateholders are paid; and . Capital One Bank, as servicer, receives collections on the receivables and may hold such collections for a period of time before depositing them into the collection account; if insolvency or similar proceedings were commenced by or against Capital One Bank, or under certain circumstances, if certain time periods were to pass, the trust may not have a first priority perfected security interest in the collections held by Capital One Bank and not deposited into the collection account, which may result in a loss to the certificateholders. For certain receivables, the accountholder has provided Capital One Bank or Capital One, F.S.B. with collateral to secure that bank's interest in those receivables. The collateral typically takes the form of a check or money order that is deposited in a federally-insured depository institution. Each bank will take all necessary action to perfect its security interest in the collateral. The Uniform Commercial Code as in effect in Virginia may not govern the perfection of a security interest in such collateral, and the common law does not provide a definitive method to perfect the lien. Therefore: . It is not entirely clear whether the grant of the security interest in the collateral by accountholders to Capital One Bank or Capital One, F.S.B. and by those banks to the trust will be treated as a first priority perfected security interest. 8 . In connection with the transfer of receivables to the trust, each bank will sell and assign its interest as secured party in any related collateral. The collateral will, however, continue to be in the possession of the depository institution and will not be transferred to the trustee; furthermore, the trust will not have a direct claim to the collateral. . Each bank will take actions to perfect the trust's interests in the receivables and the collateral, if any. There can be no definite assurance, however, that such bank's first priority perfected security interest in the collateral will exist for the benefit of the trust. If a conservator or receiver were appointed for either bank, payments to you could be delayed or reduced. Although each bank will treat its transfer of the receivables to the trust as a sale for accounting purposes, the transfer may constitute the grant of a security interest under general applicable law. Nevertheless, the FDIC has issued regulations surrendering certain rights under the Federal Deposit Insurance Act, as amended by the Financial Institutions Reform, Recovery and Enforcement Act of 1989, to reclaim, recover, or recharacterize a financial institution's transfer of financial assets such as the receivables if (i) the transfer involved a securitization of the financial assets and meets specified conditions for treatment as a sale under relevant accounting principles, (ii) the financial institution received adequate consideration for the transfer, (iii) the parties intended that the transfer constitute a sale for accounting purposes, and (iv) the financial assets were not transferred fraudulently, in contemplation of the financial institution's insolvency, or with the intent to hinder, delay, or defraud the financial institution or its creditors. The pooling agreement and the transfer of the receivables by the banks to the trust are intended to satisfy all of these conditions. If a condition required under the FDIC's regulations were found not to have been met, however, the FDIC could reclaim, recover, or recharacterize the transfer of the receivables by a bank. FDIC staff positions taken prior to the passage of the 1989 amendment to the FDIA do not suggest that the FDIC would interrupt the timely transfer to the trust of payments collected on the receivables. If the FDIC were to assert a different position, the FDIA would limit the trust's damages in this event to its "actual direct compensatory damages" determined as of the date that the FDIC was appointed as conservator or receiver for that bank. The FDIC, moreover, could delay its decision whether to reclaim, recover, or recharacterize transfer of the receivables by that bank for a reasonable period following its appointment as conservator or receiver for that bank. Therefore, if the FDIC were to reclaim, recover, or recharacterize the transfer of the receivables by a bank, payments to certificateholders could be delayed or reduced. Even if the conditions set forth in the regulations were satisfied and the FDIC did not reclaim, recover, or recharacterize the transfer of the receivables by a bank, certificateholders could suffer a loss on their investment if (i) the pooling agreement or the transfer of the receivables by a bank were found to violate the regulatory requirements of the FDIA, (ii) the trustee were required to comply 9 with the claims process established under the FDIA in order to collect payments on the receivables, (iii) the FDIC were to request a stay of any action by the trust or the trustee to enforce the pooling agreement or the certificates, or (iv) the FDIC were to repudiate other parts of the pooling agreement, such as any obligation to collect payments on or otherwise service the receivables. In addition, regardless of the terms of the pooling agreement or the instructions of those authorized to direct the trustee's actions, the FDIC may have the power (i) to prevent or require the commencement of an early amortization period, (ii) to prevent, limit, or require the early liquidation of the receivables and termination of the trust, or (iii) to require, prohibit, or limit the continued transfer of receivables to the trust. The FDIC, moreover, could prevent the trustee or the certificateholders from appointing a successor servicer under the pooling agreement. If any of these events were to occur, payments to certificateholders could be delayed or reduced. See "Certain Legal Aspects of the Receivables-- Transfer of Receivables" and "--Certain Matters Relating to Conservatorship and Receivership" in this prospectus. Consumer protection laws may impede collection efforts or reduce collections. Federal and state consumer protection laws regulate the creation and enforcement of consumer loans. The United States Congress and the states may enact additional laws and amend existing laws to regulate further the credit card and consumer revolving loan industry or to reduce finance charges or other fees or charges. These laws, as well as many new laws, regulations or rulings which may be adopted, may materially adversely affect the servicer's ability to collect the receivables or the banks' ability to maintain previous levels of finance charges or fees. Each seller makes representations and warranties about its compliance with legal requirements. Each seller also makes certain representations and warranties in the pooling agreement about the validity and enforceability of the accounts and the receivables. However, the trustee will not make any examination of the receivables or the records about the receivables for the purpose of establishing the presence or absence of defects, compliance with such representations and warranties, or for any other purpose. If any such representation or warranty is breached, the only remedy is that the applicable seller or the servicer must accept the transfer and reassignment of receivables affected by the breach. Receivables also may be written off as uncollectible if a debtor seeks relief under federal or state bankruptcy laws. This could result in a loss of available funds to pay the certificateholders. See "Description of the Certificates--Defaulted Receivables; Rebates and Fraudulent Charges; Recoveries" in this prospectus. The trust is dependent on the generation of new receivables because attrition and other factors cause receivables in the trust to decline. The continuation of the trust will depend upon the generation, on an ongoing basis, of new receivables for the trust. As accountholders make payments on their accounts, receivables in the trust decline. When accountholders charge additional amounts or when new accounts are designated to the trust, receivables increase. Continued generation of 10 new receivables depends, in part, on the number of accounts or account balances lost to competing card issuers and the banks' ability to designate new accounts to the trust. The credit card industry is highly competitive and the banks must compete with numerous other credit card providers for new accounts and for use of the credit cards. In addition, each bank's ability to grow and generate new accounts will also depend on its ability to obtain funding through continued securitization of credit card loans and access to the capital markets at attractive rates and terms. The banks offer accounts with introductory rates, which are generally at low levels during an initial period and which generally rise to higher rates after the initial period expires. Accounts having this introductory rate feature are subject to a significant risk of attrition at the point the introductory rate expires because accountholders that were initially attracted by the banks' low introductory rates may decide to transfer account balances to other credit card accounts having a lower periodic rate. Although the banks have developed methodologies to retain these accounts after expiration of the initial period, there can be no assurance that attrition in these accounts will not be significant. Credit card customers choose their credit card issuers largely on the basis of price, credit limit and other product features, and brand loyalty may be limited. Customers can and frequently do move balances from one credit card account to another, or cease or limit use of one credit card in favor of another. The credit card and consumer revolving loan industry is highly competitive. New credit card issuers continue to enter the market and compete for new and existing customers. Competition, as evidenced by the increased use of advertising, target marketing, introductory rates and other forms of pricing competition, and incentive programs continue to intensify. In addition, some of the banks' competitors are now attempting to develop and implement programs similar to the specialized marketing programs and information based strategies used by the banks to solicit new accounts. The pooling agreement requires that a seller make an addition of accounts to the trust in the event that the sellers' interest is not maintained at the required minimum level. The required minimum level is 5% but may be reduced under certain circumstances described in this prospectus under "Description of the Certificates--Addition of Trust Assets." A seller may not always be able to make such additions. If a seller fails to make an addition and if the terms of your series so provide, a pay out event will occur with respect to your series. A decline in the amount of receivables in the accounts for any reason (including the decision by accountholders to use competing sources of credit, an economic downturn, increased convenience use or other factors) could result in the occurrence of a pay out event and the start of an early amortization period. In such event, you would bear the risk of reinvestment of the principal amounts of your certificates. 11 The timing of principal payments is not certain. The receivables may be paid at any time. We cannot assure you that the creation of additional receivables in the accounts will occur or that any particular pattern of accountholder payments will occur. The timing of the payment of principal on your certificates may be different than expected if the principal payment pattern of the receivables is different than expected or if certain adverse events happen to either bank or the trust. A significant decline in the amount of receivables generated could result in the occurrence of a pay out event for one or more series. If a pay out event occurs for your series, you could receive payment of principal sooner than expected. The banks' ability to compete in the current industry environment will affect its ability to generate new receivables and might also affect payment patterns on the receivables. In addition to other factors discussed above in this "Risk Factors" section, changes in finance charges can alter the monthly payment rates of accountholders. A significant decrease in monthly payment rates could slow the return or accumulation of principal during a controlled amortization period or accumulation period. The sellers' ability to change terms of the receivables could affect payment patterns. The sellers transfer the receivables to the trust but continue to own the accounts. As owners of the accounts, the sellers retain the right to change various account terms (including the periodic interest rate, fees and the required monthly minimum payment). A pay out event could occur if a seller reduced the periodic interest rate and any fees, resulting in a corresponding decrease in the collection of finance charges. In addition, changes in the account terms may alter payment patterns. If payment rates decrease significantly at a time when you are scheduled to receive principal, you might receive principal more slowly than expected. A seller ordinarily will not reduce the interest rate it charges on the receivables or any fees if that action would result in a pay out event, unless that seller is required by law to do so or it determines that such reduction is necessary to maintain its credit card business on a competitive basis. A seller may change the terms of the accounts or its servicing practices (including the reduction of the required minimum monthly payment and the calculation of the amount or the timing of periodic interest rates, fees and charge offs) if it takes the same action on its other substantially similar accounts. A seller has no restrictions on its ability to change the terms of the accounts except as described above or in the accompanying prospectus supplement. Changes in relevant law, changes in the marketplace, including other credit card issuers lowering interest rates, or prudent business practices could impel a seller to change account terms. 12 Certificateholders of other series or classes may take actions which are opposed to your interests. In some circumstances, the consent or approval of a specified percentage of certificateholders of all outstanding series or by each class of a series is required. As a result, the certificateholders of any one series or class may control notwithstanding the concerns of other series or classes. Such circumstances include: . requiring the appointment of a successor servicer following a servicer default; . amending the pooling agreement and directing a reassignment of the entire portfolio of accounts; . voting, by an aggregate of more than 50% of the certificateholders or by each class of a series, to direct the trustee not to sell or liquidate the receivables, following an insolvency event for the bank. Optional repurchase of your certificates by a seller may result in an early return of principal and a reinvestment risk. When the amount of certificates of a series is reduced to a stated percentage of such series' original amount, a seller (so long as that seller is the servicer or its affiliate) may repurchase the remaining certificates. It is possible that the repurchase option could be exercised when 5% or more of the principal amount of your series remains outstanding. Such repurchase may result in an early return of your investment. It is not expected that the trust or the applicable seller will pay any premium if a seller exercises the repurchase option, and there can be no assurance that you will be able to invest such early repayment amount at a similar rate of return. 13 The Banks' Credit Card and Consumer Lending Business Business Overview The banks are engaged in secured and unsecured consumer lending in the United States and internationally. The Bank Portfolio consists primarily of unsecured consumer loans for which the credit extension vehicle is principally a credit card or an access check. The banks are members of both the VISA and MasterCard associations. References in this section to the "bank" shall, unless the context otherwise requires, mean Signet Bank prior to November 22, 1994. The "banks" refer collectively to Capital One Bank (including, if the context requires, its predecessor) and Capital One, F.S.B. The receivables conveyed initially and to be conveyed by the banks to the trust pursuant to the pooling agreement have been and will be generated from transactions made by holders of selected VISA and MasterCard credit card accounts, including premium accounts and standard accounts. Generally, both premium and standard accounts undergo a similar credit analysis, but premium accounts have higher initial credit limits. In addition, premium accounts offer a wider variety of services to accountholders. The growth achieved by the banks has been largely due to general industry dynamics that have existed over the past several years and the success of the information-based strategy ("IBS") adopted by the bank in 1988. IBS is designed to differentiate customers based on credit risk, usage, customer preference and other characteristics and to capture profitable opportunities by effectively matching client characteristics with attractive product offerings. Through IBS, the banks are able to design and test many products and subsequently target customized solicitations at various customer segments, thereby enhancing customer response levels and the returns on solicitation expenditures within given underwriting parameters. The banks have applied IBS to other areas of their businesses, including account management, credit line management, pricing strategies, usage stimulation, collections, Recoveries and account and balance retention. Management believes that IBS has allowed the banks to gain market share in a highly competitive environment. The banks have been innovators of strategies designed to attract customers. Their initial strategy was to offer credit card products with low introductory rates and a balance transfer option. Faced with increased competition for these products, the banks expanded their product offerings to include secured card and low fixed-rate products and other customized credit cards, including affinity and co-branded, student and other accounts. These strategies, combined with the segmenting and targeting capabilities of IBS, have contributed to the growth in recent periods of the banks' account originations and account balances. The banks and their affiliates currently service the Bank Portfolio through facilities in Richmond, Virginia, Fredericksburg, Virginia, Tampa, Florida, Dallas, Texas, Seattle, Washington and Boise, Idaho. The banks' underwriting, customer service and collection procedures, described below, are subject to change as the competitive environment, industry practice, legal requirements or the banks' business objectives may require. In addition, the banks or their affiliates may acquire accounts originated by third parties from time to time in the future. Underwriting Procedures The banks originate accounts through: . applications mailed directly to prospective accountholders, . direct mail and telemarketing solicitations for accounts from individuals whose creditworthiness was prescreened, . arrangements with affinity groups, . conversion of existing non-premium accounts to premium accounts, . applications taken over the telephone or through the internet from prospective accountholders, . newspaper, magazine, radio and television advertisements, and . location or event marketing. 14 For account originations and solicitation activity since 1990, the banks have focused largely on prescreened direct mail and telemarketing targeted to multiple customer segments with varying combinations of product structure and pricing. In general, the banks' prescreening and underwriting criteria are intended to identify and avoid potential losses. These procedures are based on limited information, however, and it is not possible for the banks to identify all potential losses. The following describes the process by which the banks originate accounts. Generally, the credit risk of each applicant is evaluated by use of a credit scoring system, which is intended to provide a general indication, based on the information available, of the applicant's willingness and ability to repay his or her obligations. Most applications are scored based on the information received on the application as well as data obtained from an independent credit reporting agency. In select cases, based on certain criteria, including likelihood of fraud, and in accordance with criteria established by the banks' management, further verification of information by telephone or in writing may be required. Credit limits, and with respect to the secured credit card program, collateral amounts, are determined based on information obtained from the application and the independent credit reporting agency. Accountholder requests for increased credit limits are evaluated based on a current credit reporting agency report, updated application data and prior account performance. The banks' accounts are grouped by solicitation for purposes of administrative convenience. A solicitation represents a group of accounts established from replies to a specific mailing, telemarketing program or advertisement program. Each program has a discrete set of underwriting criteria corresponding to it. Product information for a particular solicitation is mailed within a discrete period. The banks' prescreened account solicitation processes generally use information from credit reporting agencies to identify consumers who are likely to respond and be approved for a credit card account. In the prescreening process, credit reporting agencies provide the applicable bank with a list of potential customers whose credit meets or exceeds underwriting standards determined by that bank in advance. This list of names is further refined through the use of additional criteria developed internally by that bank. Every name on the resulting list then receives by direct mail, a firm offer of credit. The underwriting criteria used to prescreen potential applicants varies over time in accordance with the relevant bank's established lending guidelines relating to the operation of its consumer revolving lending business, as such guidelines may be changed from time to time, and include various models, including risk models, designed to predict the credit risk of potential cardholders. In order to confirm approval and establish the amount of the customer's credit line, returned applications are subject to the back-end verification process. Each customer whose credit request meets all of the underwriting criteria is generally offered a line of credit in excess of a minimum level, which is currently $200, although lower levels may also be offered. For non-prescreened solicitations, the banks acquire names from a variety of sources, including list vendors, "take one" applications, internet advertising and other media venues. Using internal and external sources to ensure quality and accuracy, prospective customers are mailed solicitations. Each bank approves or declines respondents based on both the characteristics drawn from the application and a credit reporting agency report. The banks track and continually test the results of each mailing. Extensive management information systems and processes enable management to monitor continuously the effectiveness of prescreening and underwriting criteria. Criteria are periodically modified based on the results obtained from this process. Each account is subject to certain terms and conditions, including the right of the applicable bank to change or terminate any terms, conditions, services or features of the account (including increasing or decreasing periodic rate finance charges, other charges, minimum payments or, with respect to secured credit card accounts, the amount of the related deposit). The terms of the lending agreements are governed by Virginia and federal law. Credit limits are adjusted periodically based upon the applicable bank's continuing evaluation of an accountholder's overall credit behavior. 15 Under the banks' secured credit card programs, an accountholder provides the applicable bank with a sum of money in the form of a check or money order as security for such accountholder's payment obligations arising under the secured credit card. Such funds secure payment equal to all, or a portion, of the credit limit available to the accountholder. The applicable bank deposits the funds, on behalf of the accountholder, in a Deposit Account. Pursuant to a security agreement, each such accountholder pledges and assigns to that bank all of its right, title and interest in any and all funds delivered by the accountholder to that bank and in the Deposit Account to secure the full performance and payment of the obligations of such accountholder. If a secured credit card account becomes delinquent, that bank may immediately withdraw funds from such Deposit Account to satisfy the accountholder's payment obligations. Notwithstanding this right to immediately withdraw funds, the banks typically will not withdraw funds until shortly before the secured credit card account is charged off as uncollectible. See "--Delinquencies and Collections--Collection Efforts" in this prospectus. Customer Service The banks began providing their customers access to on-line account servicing via the internet in 1999. In addition, voice response units and customer service representatives are currently available 24 hours a day, seven days a week through a toll free telephone number dedicated to customer service. Customer service representatives have access to the customer's account history in order to resolve immediately the majority of questions. When a customer initiates a payment inquiry or disputes a charge, the banks' current policy is to credit the accountholder's monthly billing statement in the amount of such claim or dispute. If the claim or dispute is resolved so that the customer accepts the charge, it is re-billed to the customer's account. However, finance charges are not applied retroactively on any such balances. Multiple tracking and reporting systems are employed to ensure that service standards are achieved and maintained. Most customers are eligible for on-line account servicing. An increasing number of customers have been signing up for on-line account servicing including, bill presentment, bill payment and customer service support in the form of help screens. Billing and Payments The accounts in the Bank Portfolio currently have various billing and payment characteristics, including varying periodic rate finance charges and fees. Currently, monthly billing statements are sent by the banks to accountholders who either (a) have balances at the end of each billing period, (b) make a purchase, balance transfer or cash advance payment during the billing period or (c) make a complete or partial payment during the billing period. Generally, with some exceptions, each month an accountholder must make a minimum payment equal to the greater of (a) the sum of (i) the greater of a percentage (either 2% or 3%) of the outstanding balance (including purchases, cash advances, finance charges and fees posted to the account) or $10.00 plus (ii) any past due amounts and (b) the amount that the account is overlimit. If the accountholder's outstanding balance is less than $10.00, then the minimum monthly payment equals the amount of the outstanding balance. With certain exceptions, accountholders are also permitted to make payments in advance for up to three months. A periodic rate finance charge is assessable on most of the accounts in the Bank Portfolio. Accounts may have different periodic rates for the purchase, cash advance and balance transfer segment of an account. Finance charges begin to accrue from the date that a purchase, cash advance or balance transfer is made and are calculated for each day during the billing cycle by multiplying the daily periodic rate applicable to the purchase, cash advance, or balance transfer segment of an account times the daily balance of each segment of the account during the billing cycle. The products of such daily calculations are then added together to determine the total finance charge. No periodic rate finance charges are assessed on new purchases, however, if the accountholder's balance from the preceding billing cycle is paid in full by the due date and if new purchases are paid in full by the next statement cycle date. The banks do not currently offer products that have no grace period for purchases. 16 The banks assess annual membership fees on certain accounts although under various marketing and other programs these fees may be waived or rebated. For most credit card accounts, the banks also assess late, overlimit and returned check charges. The banks generally assess a fee on cash advances and certain purchase transactions. There can be no assurance that periodic rate finance charges, fees and other charges on accounts in the trust will remain at current levels. See "Risk Factors" in this prospectus. Currently, payments by accountholders to the banks are processed at credit card operations centers in Richmond, Virginia and Seattle, Washington. While the banks employ a number of different payment methodologies, payments generally are applied first to finance charges assessed, then to any fees billed to the account and then allocated among the applicable balance segments outstanding at the end of such billing period. See "The Pooling Agreement Generally--Collection and Other Servicing Procedures" in this prospectus. Delinquencies and Collections--Collection Efforts Each bank generally considers an account delinquent if a minimum payment due thereunder is not received by the accountholder's payment due date. Each bank makes use of behavioral scoring models designed to predict the probability of an account charging off. Based on the behavioral score and certain other factors, the applicable bank determines the timing of the collection activity to be implemented for the account. Delinquent accounts are currently referred for contact by phone between seven and 60 days after contractual delinquency, depending on the accountholder's risk profile. In any event, the accountholder's statement reflects the request for payment of past due amounts. Efforts to collect delinquent credit card accounts are generally made by the applicable bank's regular collection group, supplemented in certain cases by collection agencies. The focus of each bank's response to an early stage delinquency is rehabilitation and identification of the causes for delinquency. Each bank's policies and procedures are designed to encourage accountholders to pay delinquent amounts; for example, once a delinquent account has re-established a payment pattern with three consecutive minimum monthly payments, it can be re- aged as current. An account generally can be re-aged once in the life of the account. Each bank reserves the right to suspend charging privileges at any time after an account enters the collections process. In most cases, an account is restricted and charging privileges are suspended no later than 105 days after contractual delinquency. Each bank may also, at its discretion, enter into arrangements with delinquent accountholders to extend or otherwise change payment schedules. During the fourth quarter of 1997, each bank modified its methodology for charging off credit card accounts. The banks now charge off an account (net of collateral) at 180 days past due. The banks' prior practice had been to charge off as uncollectible an account in the next billing cycle after the account became 180 days past due. In connection with a secured credit card account, except as set forth below, funds will generally be withdrawn from the Deposit Account by the servicer shortly before the secured credit card account is charged off as uncollectible in an amount equal to the lesser of (i) all principal receivables plus all finance charge receivables related to such secured credit card account and (ii) the amount of funds for such secured credit card account in the Deposit Account. Each bank generally charges off bankrupt customers' accounts by the end of the next full billing cycle after it receives the bankruptcy petition. Each bank charges off accounts of deceased accountholders within two full billing cycles of receiving proper notice if no estate exists against which a proof of claim can be filed, no other parties remit payments or no other responsible party is available. The credit evaluation, servicing and charge-off policies and collection practices of each bank may change over time in accordance with the business judgment of its management, applicable law and guidelines established by applicable regulatory authorities. 17 Interchange Credit card issuers participating in the VISA and MasterCard associations receive certain fees called interchange as partial compensation for taking credit risk, absorbing fraud losses, funding receivables and servicing accountholders for a limited period prior to initial billing. Under the VISA and MasterCard systems, interchange in connection with accountholder charges for merchandise and services is collected by either the VISA or MasterCard system and subsequently paid to the credit card-issuing banks. Interchange ranges from approximately 1% to 2% of the transaction amount, although VISA and MasterCard may from time to time change the amount of interchange reimbursed. Interchange paid to the banks will be allocated to the trust for each Monthly Period on the basis of the percentage equivalent of the ratio that the amount of accountholder sales charges in the related accounts bears to the total amount of accountholder sales charges for all accounts in the Bank Portfolio, in each case for such Monthly Period. This percentage is an estimate of the actual interchange paid to the banks from time to time in respect of the accounts and may be greater or less than the actual amount of interchange so paid. The banks will be required, pursuant to the terms of the pooling agreement, to transfer to the trust for the benefit of the certificateholders the percentage of the interchange allocable to the certificates. All or a portion of interchange allocable to the certificates as specified in the related prospectus supplement for a series will be used exclusively to pay the servicer part of its Monthly Servicing Fee. See "Description of the Certificates--Servicing Compensation and Payment of Expenses" in this prospectus. Interchange, if any, in excess of the portion required to be used exclusively to pay the servicer part of its Monthly Servicing Fee will be included in finance charge receivables pursuant to the pooling agreement for purposes of determining the amount of finance charge receivables and allocating collections and payments to the certificateholders. Interchange (including the portion used exclusively to pay the servicer a portion of its Monthly Servicing Fee) will be included in finance charge receivables for purposes of calculating the average yield on the portfolio of accounts included in the trust applicable to any series as specified in the related series supplement. The Accounts The receivables arise in certain Eligible Accounts selected by a seller from the Bank Portfolio. The banks and Capital One Bank's predecessor have identified a pool of accounts, from which the initial accounts were selected, based on the eligibility and other criteria specified in the pooling agreement. The banks have transferred and will transfer to the trust all receivables existing in these selected accounts and any Funds Collateral on the date of transfer to the trust, and all receivables and any Funds Collateral generated in these accounts after such date. All monthly calculations for such accounts are computed based on activity occurring during the related Monthly Period. Some receivables have been charged off as uncollectible prior to their addition to the trust in accordance with a seller's normal servicing policies and lending guidelines. On the date when any receivable in an account becomes a Defaulted Receivable, the trust automatically transfers the Defaulted Receivables to the applicable seller together with all monies due or to become due with respect thereto, all proceeds thereof and any insurance proceeds. Pursuant to the pooling agreement, a seller has the right, and in certain cases the obligation (subject to certain limitations and conditions described below), to designate from time to time additional qualifying secured or unsecured VISA or MasterCard consumer revolving credit card accounts and other consumer revolving credit accounts to be included as accounts and to transfer to the trust all receivables in such Additional Accounts, whether such receivables are then existing or thereafter created. These Additional Accounts must be Eligible Accounts as of the date a seller designates its receivables and Funds Collateral to be included in the trust. Accounts in the trust also include certain charged-off accounts with zero balances, the recoveries on which will be treated as collections of finance charge receivables. A seller may add such zero balance accounts to the trust from time to time. Since the Trust Cut-Off Date, the sellers have transferred receivables to the trust in certain Additional Accounts in accordance with the provisions of the pooling agreement. In addition, as of the Trust Cut-Off Date (or as of the addition date for any account in the Trust Portfolio) and on the date any new receivables are created, each seller will represent and warrant to the trust that each of the receivables in any account in the 18 Trust Portfolio or Additional Account which is transferred by that seller to the trust on such day meets the eligibility requirements specified in the pooling agreement. See "The Pooling Agreement Generally--Representations and Warranties" in this prospectus. However, there can be no assurance that all the accounts will continue to meet the applicable eligibility requirements throughout the life of the trust. The pooling agreement also provides that a seller may transfer participations in receivables to the trust, which may have different eligibility requirements, characteristics and risks than the accounts designated by a seller. See "Description of the Certificates--Addition of Trust Assets" in this prospectus. Accounts designated by a seller may also include any related account or accounts having the following characteristics: (i) such related accounts were established in compliance with that seller's lending guidelines pursuant to a lending agreement; (ii) the accountholder or accountholders with respect to such related accounts are the same person or persons as the accountholder or accountholders of the designated account; (iii) such related account is originated: (a) as a result of the credit card for the designated account being lost or stolen; (b) as a result of the accountholder requesting a change in his or her billing cycle; (c) as a result of the accountholder requesting the discontinuance of responsibility for a designated account; (d) as a result of the accountholder requesting a product change; or (e) for any other reasons permitted by that seller's lending guidelines; and (iv) such related accounts can be traced or identified by reference to or by way of the computer or other records of that seller. Subject to certain limitations and restrictions, a seller may also designate certain accounts the receivables and Funds Collateral in which will be removed from the trust. In such case, the receivables and Funds Collateral in such accounts will be reassigned to that seller. Throughout the term of the trust, the accounts designated by a seller will consist of the initial accounts designated by that seller, and any Additional Accounts and participations in receivables added to the trust, less any removed accounts. Additional Accounts designated by a seller might not be accounts of the same type or with the same characteristics as those the receivables in which were previously transferred to the trust. Therefore, there can be no assurance that such Additional Accounts will be of the same credit quality as the initial accounts or the Additional Accounts the receivables in which have been transferred previously to the trust. Moreover, such Additional Accounts may contain receivables that consist of fees, charges and amounts that are different from the fees, charges and amounts described in this prospectus. Such Additional Accounts may also be subject to different credit limits, balances and ages. Consequently, there can be no assurance that the accounts designated by a seller will continue to have the characteristics described in this prospectus as Additional Accounts are added. In addition, the inclusion in the trust of Additional Accounts with lower periodic rate finance charges may have the effect of reducing the average yield of the portfolio of accounts in the trust. A seller may add participations in receivables to the trust from time to time without the approval of certificateholders of any series. In addition to the periodic reports otherwise required to be filed by the banks with the SEC pursuant to the Securities Exchange Act of 1934, as amended, the sellers intend to file, on behalf of the trust, a report on Form 8-K with respect to any addition of accounts which would have a material effect on the composition of the portfolio of accounts in the trust or any addition of participations in receivables. The Banks Capital One Bank Capital One Bank is a Virginia banking corporation. It is a subsidiary of Capital One Financial Corporation and a member of the Federal Reserve System the deposits of which are insured up to applicable limits by the FDIC. Capital One Bank (i) engages only in credit card operations, (ii) does not accept demand deposits or 19 deposits that the depositor may withdraw by check or similar means for payment to third parties or others, (iii) does not accept any savings or time deposit of less than $100,000 other than as permitted as collateral for extension of credit, (iv) maintains only one office that accepts deposits and (v) does not engage in the business of making commercial loans. Prior to November 24, 1994, Capital One Bank conducted its operations as a division of Signet Bank, a wholly-owned subsidiary of Signet Banking Corporation. Its main office is currently located at 11011 West Broad Street, Glen Allen, Virginia 23060. Capital One Bank's telephone number is (804) 967- 1000. Capital One Bank (through its predecessor) is one of the oldest continually operating bank card issuers in the United States, having commenced operations in 1953, the same year as the formation of what is now MasterCard. Capital One, F.S.B. Capital One, F.S.B. is a federal savings bank. It is a subsidiary of Capital One Financial Corporation and a member of the Federal Home Loan Bank System the deposits of which are insured up to applicable limits by the FDIC. Capital One, F.S.B. was established in June 1996, and currently takes deposits and offers a variety of credit card products and services to existing cardholders and other households. Its main office currently is located at 2980 Fairview Park Drive, Falls Church, Virginia 22042, and its telephone number is (703) 205-1000. Assumption of a Seller's Obligations The pooling agreement permits a transfer of all of a seller's consumer revolving credit card accounts and other revolving credit accounts and the receivables arising thereunder, which may include all, but not less than all, of the portfolio of accounts in the trust and that seller's remaining interest in the receivables arising thereunder, its interest in participations in receivables and its interest in the trust, together with all servicing functions and other obligations under the pooling agreement or relating to the transactions contemplated thereby, to another entity which may or may not ultimately be affiliated with that seller. Pursuant to the pooling agreement, each seller is permitted to assign, convey and transfer these assets and obligations to such other entity, without the consent or approval of any certificateholders, if the following conditions, among others, are satisfied: (i) the entity, the sellers and the trustee have entered into an assumption agreement providing for the entity's assumption of the applicable seller's obligations under the pooling agreement, including the assumption of the obligation to transfer the receivables arising under the portfolio of accounts in the trust and the receivables arising under any Additional Accounts to the trust, (ii) each provider of Series Enhancement, if any, has consented to the transfer and assumption, (iii) all filings required to perfect the interest of the trustee in the receivables arising under such accounts have been duly made and copies thereof will have been delivered by each seller to the trustee, (iv) if the assuming entity is a savings and loan association, a national banking association, a bank or other entity that is not subject to Title 11 of the United States Code, the sellers have delivered notice of such transfer and assumption to each Rating Agency (in which case there is no requirement that such transfer and assumption will not have a Ratings Effect) or, if the assuming entity is not any of those entities, the sellers have received written notice from each Rating Agency that such transfer and assumption will not have a Ratings Effect, (v) the trustee has received an opinion of counsel about clause (iii) above and as to certain other matters specified in the pooling agreement, and (vi) the trustee has received a Tax Opinion. The pooling agreement provides that the sellers, the assuming entity and the trustee may enter into amendments to the pooling agreement to permit the transfer and assumption described above without the consent of the holders of any certificates. After any permitted transfer and assumption, the assuming entity will be considered to be a "seller" for all purposes hereof, and the applicable seller will have no further liability or obligation under the pooling agreement. It was pursuant to this provision of the pooling agreement that Capital One Bank assumed the roles of seller and servicer under the trust. See "Prospectus Summary--The Bank" in this prospectus. 20 Use of Proceeds Unless otherwise specified in the related prospectus supplement, the net proceeds from the sale of the certificates of any series offered hereby will be paid to the banks and will be used for general corporate purposes. The Trust The trust, as a master trust, previously has issued other series of asset backed certificates and is expected to issue additional series from time to time. The trust has not engaged and will not engage in any business activity other than acquiring and holding trust assets and proceeds therefrom, issuing series of certificates and the Seller Certificate and making payments thereon and related activities. As a consequence, the trust does not and is not expected to have any source of capital resources other than the trust assets. The trust is formed under and administered in accordance with the laws of the State of New York. Each seller has conveyed to the trust, without recourse, its interest in all receivables arising under the portfolio of accounts in the trust. The receivables consist of all amounts charged by accountholders for goods and services and cash advances, called principal receivables, and all related periodic rate finance charges, annual membership fees, cash advance fees, late charge fees, returned check charges, overlimit fees and any other fees and charges billed on the accounts from time to time, collectively called finance charge receivables. The trust assets consist of such receivables, all monies due or to become due thereunder, the proceeds of such receivables, Recoveries (net of collection expenses) received by the servicer including proceeds from the sale or securitization of Defaulted Receivables and proceeds of credit insurance policies relating to such receivables, the right to receive certain interchange attributed to accountholder charges for merchandise and services in the portfolio of accounts in the trust, all monies on deposit in the Collection Account and in certain accounts maintained for the benefit of the certificateholders, Funds Collateral relating to secured accounts and any Series Enhancements. The trust assets are expected to change over the life of the trust as secured and unsecured consumer revolving credit card accounts, other consumer revolving credit accounts and related assets become subject to the trust and as accounts are closed, charged off or removed and are no longer subject to the trust. The pooling agreement provides that, subject to certain limitations and conditions, trust assets may also include participations in receivables. Pursuant to the pooling agreement, a seller will have the right (subject to certain limitations and conditions), and in some circumstances will be obligated, to designate as trust assets receivables arising in Additional Accounts or, in lieu thereof or in addition thereto, participations in receivables. See "Description of the Certificates--Addition of Trust Assets" in this prospectus. In addition, a seller will have the right to remove from the trust its receivables arising in designated accounts as described under "Description of the Certificates-- Removal of Accounts" in this prospectus. The trust was originated by Signet Bank in 1993 as Signet Master Trust. As permitted by the pooling agreement: (i) Signet Bank transferred to Capital One Bank, and Capital One Bank accepted and assumed, all of Signet Bank's rights and obligations under the pooling agreement, (ii) Capital One Bank became seller and servicer of the trust, (iii) Signet Bank was released from any continuing obligations under the pooling agreement, (iv) the trust's name was changed to Capital One Master Trust, and (v) Signet Bank and Capital One Bank filed with the appropriate governmental authorities Uniform Commercial Code financing statements and amendments to financing statements reflecting the transfer to and assumption by Capital One Bank. 21 Description of the Certificates General The certificates of a series will be issued pursuant to the pooling agreement and a series supplement to the pooling agreement relating to such certificates, each among Capital One Bank, as seller of the interests in receivables and servicer of the accounts, Capital One, F.S.B., as seller of the interests in receivables, and the trustee. See "Description of the Certificates--New Issuances" in this prospectus. Each series will consist of one or more classes of certificates. The trustee will provide a copy of the pooling agreement (without exhibits or schedules), including any series supplements, to certificateholders upon written request. The following summary describes certain terms generally applicable to the certificates of each series. Unless otherwise specified in a prospectus supplement, the certificates of each series offered by this prospectus will initially be represented by one or more certificates registered in the name of the nominee of The Depository Trust Company, or Clearstream or Euroclear, except as set forth below. DTC has informed the sellers that DTC's nominee will be Cede & Co. Unless otherwise specified in the related prospectus supplement, the certificates of each series offered by this prospectus will be available for purchase in minimum denominations of $1,000 and in integral multiples thereof in book-entry form. See "The Pooling Agreement Generally--Book-Entry Registration" and "-- Definitive Certificates" in this prospectus. Each series of certificates offered hereby will represent an undivided interest in the trust assets, including the right to receive from such trust assets funds up to (but not in excess of) amounts required to make payments of interest and principal with respect to such series, as set forth in the related prospectus supplement. Each series of certificates represents an interest in the trust assets other than the interests represented by other series of certificates issued by the trust and the Sellers' Interest. Interest Interest will accrue on the Invested Amount of the certificates of a series or class offered hereby at the per annum rate either specified in or determined in the manner specified in the related prospectus supplement. If the prospectus supplement for a series of certificates so provides, the interest rate and interest payment dates applicable to each certificate of that series may be subject to adjustment from time to time. Any such interest rate adjustment would be determined by reference to one or more indices or by a remarketing firm, in each case as described in the prospectus supplement for such series. Except as otherwise provided in this prospectus or in the related prospectus supplement, collections of finance charge receivables and certain other amounts allocable to the series offered hereby will be used to make interest payments to certificateholders of such series on each interest payment date specified in the related prospectus supplement; provided that if an Early Amortization Period begins for such series, thereafter interest will be distributed to such certificateholders monthly on each Special Payment Date. If the interest payment dates for a series or class occur less frequently than monthly, such collections or other amounts (or the portion thereof allocable to such class) will be deposited in one or more interest funding accounts and used to make interest payments to certificateholders of such series or class on the following interest payment date. If a series has more than one class of certificates, each such class may have a separate interest funding account. Funds on deposit in an interest funding account will be invested in Eligible Investments. Interest with respect to the certificates of each series offered hereby will accrue and be calculated on the basis described in the related prospectus supplement. Principal The method for payment of principal for each series of certificates offered by this prospectus will be described in the prospectus supplement for such series. Generally, the principal for a series will be scheduled to be paid either in full on the expected final payment date, in which case such series will have an Accumulation Period as described below, or in installments each month beginning on the principal commencement date, in which case such series will have a Controlled Amortization Period as described below. If a series has more 22 than one class of certificates, a different method of paying principal, expected final payment date or principal commencement date, may be assigned to each class. The payment of principal on the certificates of a series or class may start earlier than the expected final payment date or principal commencement date if a Pay Out Event or Principal Payment Event happens with respect to such series or class. See "Risk Factors" in this prospectus for a description of factors that may affect the timing of principal payments on certificates. The certificates of each series will have a Revolving Period. During the Revolving Period, collections of principal receivables and certain other amounts otherwise allocable to the series, including Miscellaneous Payments so allocated, will not be paid to the certificateholders, but instead will be treated as Shared Principal Collections and will be distributed to, or for the benefit of, the certificateholders of other series, if the series supplement therefor so provides, or the bank or deposited in the Excess Funding Account. Unless an Early Amortization Period begins for a series, following the Revolving Period for such series, to the extent specified in the related prospectus supplement, such series will have either an Accumulation Period or a Controlled Amortization Period. The certificates of any series or class may have an Accumulation Period. During the Accumulation Period for a series or any class, collections of principal receivables and certain other amounts allocable to such series or such class (including Miscellaneous Payments and, if the series supplement so provides, Shared Principal Collections, if any, allocable to such series or such class) will be deposited on each Distribution Date in a principal funding account established for the benefit of the certificateholders of such series or such class and used to make principal distributions to the certificateholders of such series or such class when due on the applicable expected final payment date. The amount to be deposited in a principal funding account for any series or any class thereof on any Distribution Date may, but will not necessarily, be limited to a controlled accumulation amount specified in the related prospectus supplement. If a series has more than one class of certificates that has an Accumulation Period, each class may have a separate principal funding account and controlled accumulation amount. In addition, the related prospectus supplement may describe certain priorities among such classes such distributions. The certificates of any series or class may have a Controlled Amortization Period. During the Controlled Amortization Period for a series or any class, collections of principal receivables and certain other amounts allocable to such series or such class (including Miscellaneous Payments and, if the series supplement so provides, Shared Principal Collections, if any, allocable to such series or such class) will be used on each Distribution Date to make principal distributions to any class of certificateholders then scheduled to receive such distributions. The amount to be distributed to certificateholders of any series or any class of certificates offered by this prospectus on any Distribution Date may, but will not necessarily, be limited to a controlled amortization amount specified in the related prospectus supplement. If a series has more than one class of certificates, each class may have a separate controlled amortization amount. In addition, the related prospectus supplement may describe certain priorities among such classes with respect to such distributions. If a series is designated an extendable series in its prospectus supplement, the certificateholders of that series may receive payments of principal earlier than the expected final payment date or principal commencement date if the servicer elects not to extend the initial principal payment date. The first initial principal payment date will be a Distribution Date specified in the prospectus supplement, and will be automatically extended to the next Distribution Date (which will then automatically become the current initial principal payment date) each month unless the servicer, at least 30 days before a Distribution Date, elects to stop the automatic extensions of the initial principal payment date. Upon the occurrence of a Principal Payment Event, the Revolving Period, the Controlled Amortization Period or the Accumulation Period, as applicable, will end and the Principal Payment Period will begin. During the Principal Payment Period, interest will be payable on each Distribution Date (if interest had previously been payable less frequently) and collections of principal receivables and certain other amounts allocable to such series (including Miscellaneous Payments and, if the series supplement so provides, Shared Principal Collections, if any, allocable to such series) will be distributable as principal payments to the certificateholders 23 monthly on each Distribution Date starting with the initial principal payment date. During the Principal Payment Period, distributions of principal will not be limited to any controlled accumulation amount or controlled amortization amount. In addition, any funds on deposit in a principal funding account for such series will be paid to the certificateholders of the relevant class or classes on the initial principal payment date. No prepayment premium will be payable to the certificateholders of a series that experiences a Principal Payment Event unless the prospectus supplement specifically provides otherwise. There can be no assurance that any prepayment of principal that a certificateholder receives as a result of a Principal Payment Event could be reinvested at a rate equivalent to the rate being earned on the certificates held by such certificateholder. During the Early Amortization Period, collections of principal receivables and certain other amounts allocable to the applicable series (including Miscellaneous Payments and, if the series supplement so provides, Shared Principal Collections, if any, allocable to such series) will be distributed as principal payments to the applicable certificateholders monthly beginning with the first Special Payment Date. During the Early Amortization Period for a series, distributions of principal to certificateholders of such series will not be limited to any controlled accumulation amount or controlled amortization amount. In addition, upon the start of the Early Amortization Period, any funds on deposit in a principal funding account for such series will be paid to the certificateholders of the relevant class or series on the first Special Payment Date. See "Description of the Certificates--Pay Out Events" in this prospectus for a discussion of the events which might lead to the start of the early amortization period for a series. Funds on deposit in any principal funding account established for a class or series offered by this prospectus will be invested in Eligible Investments, and may be subject to a guarantee or guaranteed investment contract or other mechanism specified in the related prospectus supplement intended to assure a minimum rate of return on the investment of such funds. In order to enhance the likelihood of the payment in full of the principal amount of a class of certificates at the end of its Accumulation Period, such class may be subject to a maturity liquidity facility or other similar mechanism specified in the relevant prospectus supplement. A maturity liquidity facility is a financial contract that generally provides that sufficient principal will be available to retire the certificates on a certain date. Certificates of a series may also be subject to purchase from time to time, generally at their respective principal amounts, in connection with a remarketing, under the terms of a liquidity facility established for the benefit of such series or in the event that the Sellers' Interest is less than the Required Sellers' Interest on the last business day of any Monthly Period, in each case if so specified in the related prospectus supplement. A purchase of certificates of such a series, depending on the circumstances giving rise to such purchase, may result in a decrease in the outstanding principal amount of such series prior to the start of any Controlled Amortization Period, Accumulation Period or Early Amortization Period. The prospectus supplement for any series subject to purchase as described in this paragraph will describe the conditions to and procedures for any such purchase. The proceeds of any such purchase would be paid to the holders of the certificates so purchased. Addition of Trust Assets A seller will have the right to designate for the trust, from time to time, Additional Accounts to be included as accounts transferred to the trust, subject to certain conditions described below. In addition, a seller will be required to designate Additional Accounts if, as of the last business day of any Monthly Period, the Sellers' Interest is less than the Required Sellers' Interest or the amount of principal receivables in the Trust is less than the Required Principal Balance. In such event, a seller will, on or before the Required Designation Date (unless the Sellers' Interest exceeds the Required Sellers' Interest as of the end of any business day during the period between the last business day of the prior Monthly Period and such designation date), make an addition to the trust in a sufficient amount so that, after giving effect to such addition, the Sellers' Interest will at least equal the Required Sellers' Interest and the amount of principal receivables is at least equal to the Required Principal Balance. A seller may also from time to time, at its sole discretion, designate certain types of Eligible Accounts approved by the Rating Agencies to be included as automatic Additional Accounts, subject to the limitations specified in this paragraph. Unless each Rating Agency otherwise consents, the number of automatic Additional 24 Accounts plus the number of accounts added to maintain the Sellers' Interest as specified above, without prior Rating Agency notice, will not exceed the Aggregate Addition Limit. On or before March 31, June 30, September 30 and December 31 of each calendar year, or more frequently if required by any Rating Agency, the applicable seller shall have delivered to the trustee, each Rating Agency and certain providers of Series Enhancement an opinion of counsel about the automatic Additional Accounts included as accounts during the preceding three-month period that confirms the validity and perfection of each transfer of such automatic Additional Accounts. Such opinion of counsel shall be provided by outside counsel. If such opinion of counsel for any automatic Additional Accounts is not so received, the ability of that seller to designate automatic Additional Accounts will be suspended until such time as each Rating Agency otherwise consents in writing or such accounts are removed from the trust. The addition to the trust of receivables in automatic Additional Accounts will be subject to the further condition that revolving credit card accounts and other revolving credit accounts either (i) not originated by a seller or (ii) not of a type included in the accounts at the time of their addition may only be designated as automatic Additional Accounts upon compliance with the conditions described below about additions. Additions of participations in receivables must also comply with such conditions. In addition to or in lieu of Additional Accounts, a seller is permitted to add to the trust participations representing interests in a pool of assets primarily consisting of receivables arising under consumer revolving credit card accounts owned by that seller or any of its affiliates and collections thereon. Participations may be evidenced by one or more certificates of ownership issued under a separate pooling and servicing or similar agreement entered into by such seller or an affiliate of such seller that entitles the certificateholder to receive percentages of collections generated by the pool of assets subject to such participation agreement from time to time and to certain other rights and remedies specified therein. Participations may have their own credit enhancement, pay out events, servicing obligations and servicer defaults, all of which are likely to be enforceable by a separate trustee under the participation agreement and may be different from those described in this prospectus. The rights and remedies of the trust as the holder of a such participation (and therefore the certificateholders) will be subject to all the terms and provisions of the participation agreement. In connection with an addition, a seller will convey to the trust the receivables arising in Additional Accounts and participations in receivables subject to the following conditions, among others (provided that the following conditions (other than the delivery of a written assignment and a computer file or microfiche list as described in clause (b)) shall not apply to the transfer to the trust of receivables in automatic Additional Accounts): (a) that seller shall have given the trustee, the servicer, each Rating Agency and certain providers of Series Enhancement written notice that the Additional Accounts or participations in receivables will be included as trust assets; (b) that seller shall have delivered to the trustee a written assignment and a computer file or microfiche list containing a true and complete list of the related Additional Accounts or participations in receivables specifying for each such account its account number, the collection status, the aggregate amount outstanding in such account, the aggregate amount of principal receivables outstanding in such account or comparable information in the case of participations in receivables and, for any Funds Collateral relating to such account, the account number for, and the amount of funds on deposit in, the applicable Deposit Account; (c) that seller shall have delivered to the trustee copies of all filings necessary to perfect the trust's interest in the receivables in Additional Accounts; (d) in the case of an addition other than a required addition, that seller shall have received written notice from each Rating Agency that such addition will not have a Ratings Effect; (e) in the case of a required addition during any of the three consecutive Monthly Periods beginning in January, April, July and October of each calendar year, if applicable, that seller shall have received, to the extent not previously received, not later than twenty days following the last business day of the 25 relevant three consecutive Monthly Periods, written notice from each Rating Agency that such addition will not have a Ratings Effect and shall have delivered copies of each such written notice to the servicer and the trustee; provided, however, that in the case of a required addition that exceeds the Aggregate Addition Limit, that seller shall have provided each Rating Agency with 15 days prior written notice and each Rating Agency shall have notified that seller in writing that such addition will not have a Ratings Effect; (f) that seller shall have delivered to the trustee, each Rating Agency and any provider of Series Enhancement entitled thereto an opinion of counsel that for federal income tax purposes and Virginia income and franchise tax purposes (or, if there has been a transfer and assumption as described under "Assumption of a Seller's Obligations" in this prospectus, for income and franchise tax purposes of the jurisdiction in which the assuming entity engages in its principal servicing activities, if other than Virginia), such addition will not cause a taxable event to the holders of the certificates and certain other opinions of counsel; and (g) prior to or on the date any such receivables or participations in receivables are added to the trust, that seller shall have delivered to the trustee and certain providers of Series Enhancement a certificate of an authorized officer to the effect that any related Additional Accounts are Eligible Accounts and that, in the reasonable belief of that seller: (i) such addition will not, based on the facts known to such officer at the time, cause a Pay Out Event or an event that, after the giving of notice or lapse of time, would cause a Pay Out Event, to occur with respect to any series, and (ii) in the case of Additional Accounts, no selection procedure was utilized by that seller that would result in a selection of Additional Accounts (from the available Eligible Accounts owned by that seller) that would be materially adverse to the interests of the certificateholders of any series as of the date of the addition. Affiliates of a seller may originate or acquire portfolios of revolving credit card accounts or other revolving credit accounts the receivables in which may be participated to that seller and sold to the trust. Such a sale of receivables to the trust will be subject to the conditions described above relating to additions. Additional Accounts may include accounts originated using criteria different from those which were applied to the initial accounts because such accounts were originated at a different date or were part of a portfolio of revolving credit card accounts or other revolving credit accounts which were not part of the Bank Portfolio as of the Trust Cut-Off Date or which were acquired from another institution. Moreover, Additional Accounts may not be accounts or assets of the same type or having the same characteristics as those previously included in the trust. See "The Pooling Agreement Generally--Representations and Warranties" in this prospectus. Consequently, there can be no assurance that such Additional Accounts will be of the same credit quality or have the same payment characteristics as the initial accounts or the Additional Accounts previously included in the trust. Additional Accounts of a type different than the initial accounts may contain receivables that consist of fees, charges and amounts that are different from the fees, charges and amounts that have been designated as finance charge receivables and principal receivables in this prospectus and participations in receivables may be added to the trust as additions. In either case, the servicer will designate the portions of funds collected or to be collected in respect of such receivables to be treated for purposes of the pooling agreement as principal receivables and finance charge receivables. The pooling agreement provides that a seller may add participations to the trust that may have characteristics substantially different than those of accounts or Additional Accounts, including substantially different eligibility requirements, payment characteristics and risks. 26 Removal of Accounts On any day of any Monthly Period, each seller will have the right to require the reassignment to it or its designee of all the trust's right, title and interest in, to and under the receivables and the related Funds Collateral, if any, then existing and thereafter created, all monies due or to become due and all amounts received with respect thereto and all proceeds thereof in or with respect to the removed accounts owned and designated by that seller, upon satisfaction of the following conditions: (a) that seller shall have given the trustee, the servicer, each Rating Agency and certain providers of Series Enhancement written notice of such removal specifying the date for removal of the removed accounts; (b) that seller shall have delivered to the trustee a computer file or microfiche list containing a true and complete list of the removed accounts specifying for each such account, as of the Removal Date, its account number, the aggregate amount outstanding in such account and the aggregate amount of principal receivables outstanding in such account and, for any Funds Collateral relating to such account, the account number for, and the amount of funds on deposit in, the applicable Deposit Account; (c) the aggregate amount of principal receivables to be removed shall not equal or exceed 5% of the aggregate amount of principal receivables in the trust; (d) that seller shall have represented and warranted as of each removal date that the list of removed accounts delivered pursuant to clause (b) above, as of the removal date, is true and complete in all material respects; (e) that seller shall have received written notice from each Rating Agency that such removal will not have a Ratings Effect; and (f) as of the Removal Notice Date, either: (i) the removed accounts are not more than 15% delinquent by estimated principal amount and the weighted average delinquency of such removed accounts is not more than 60 days; or (ii) the removed accounts are not more than 7% delinquent by estimated principal amount and the weighted average delinquency of such removed accounts does not exceed 90 days. Such removal could occur for a number of reasons, including a determination by the sellers that the trust contains more receivables than the sellers are obligated to retain in the trust under the pooling agreement and any applicable series supplements and a determination that the sellers do not desire to obtain additional financing at the time through the trust. Upon satisfaction of the above conditions, the trustee shall execute and deliver to the applicable seller a written reassignment and shall be deemed to sell, transfer, assign, set over and otherwise convey to that seller or its designee, without recourse, representation or warranty, all the right, title and interest of the trust in and to the receivables arising in the removed accounts, all monies due and to become due and all amounts received with respect thereto and all proceeds thereof. In addition to the foregoing, on the date when any receivable in an account becomes a Defaulted Receivable (including any related finance charge receivables), the trust shall automatically to transfer, set over and otherwise convey to the applicable seller all right, title and interest of the trust in and to the Defaulted Receivables (including any related finance charge receivables) in such account, all Funds Collateral related thereto, all monies due or to become due with respect thereto, all proceeds thereof and any insurance proceeds relating thereto; provided that Recoveries of such account which include any proceeds of the sale or securitization of such Defaulted Receivables shall be applied as provided in the pooling agreement. See "-- Allocation Percentages" in this prospectus. Furthermore, a Seller's designation of any Account as a Removed Account shall be random, unless that seller's designation of any such Account is in response to a third-party action or decision not to act. 27 New Issuances The pooling agreement provides that, pursuant to one or more series supplements, the sellers may cause the trustee to issue one or more new series of certificates and may define all principal terms of such series. Each series may have different terms and enhancements than any other series. None of the sellers, the servicer, the trustee or the trust is required or intends to obtain the consent of any certificateholder of any other series issued prior to the issuance of a new series. The sellers may offer any series to the public under a prospectus supplement or other disclosure document in transactions either registered under the Securities Act of 1933, as amended, or exempt from registration thereunder directly, through one or more underwriters or placement agents, in fixed-price offerings or in negotiated transactions or otherwise. The sellers intend to offer, from time to time, additional series. Under the pooling agreement, the obligation of the trustee to issue the certificates of a new series and to execute and deliver the related series supplement is subject to the following conditions, among others: (i) on or before the fifth business day immediately preceding the date upon which the new issuance is to occur, the sellers will give to the trustee, the servicer, each Rating Agency and certain providers of Series Enhancement written notice of such new issuance and the date upon which the new issuance is to occur; (ii) the sellers will deliver to the trustee a series supplement, specifying the terms of the series; (iii) the sellers will deliver to the trustee any related Series Enhancement agreement; (iv) the sellers will receive written notice from each Rating Agency that such new issuance will not have a Ratings Effect; (v) each seller will deliver to the trustee and certain providers of Series Enhancement an officer's certificate of that seller to the effect that such issuance will not cause a Pay Out Event to occur with respect to any series; (vi) the sellers will deliver to the trustee, each Rating Agency and certain providers of Series Enhancement a Tax Opinion; and (vii) the sellers' remaining interest in principal receivables will not be less than 2% of the total amount of principal receivables, as of the date upon which the new issuance is to occur after giving effect to such new issuance. Collection Account The servicer has established and maintains for the benefit of the certificateholders of each series, in the name of the trustee, on behalf of the trust, an Eligible Deposit Account called the Collection Account, bearing a designation clearly indicating that the funds deposited therein are held for the benefit of the certificateholders of each series. The Collection Account is maintained with The Bank of New York. If at any time the Collection Account ceases to be an Eligible Deposit Account, the Collection Account must be moved so that it will again be qualified as an Eligible Deposit Account. Funds in the Collection Account generally will be invested in Eligible Investments. Such funds may be invested in debt obligations of Capital One Bank, Capital One, F.S.B. or their affiliates so long as such obligations qualify as Eligible Investments. Any earnings (net of losses and investment expenses) on funds in the Collection Account will be paid to, or at the direction of, the servicer except as otherwise specified in any series supplement. The servicer will have 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 its duties under the pooling agreement and any series supplement. The paying agent shall have the revocable power to withdraw funds from the Collection Account for the purpose of making distributions to the certificateholders. Unless specified otherwise in the related prospectus supplement, the paying agent for each series will be a subsidiary of The Bank of New York. 28 Allocation Percentages Pursuant to the pooling agreement, the servicer will allocate among each series and the Sellers' Interest all amounts collected for finance charge receivables and principal receivables and the Defaulted Amount for any Monthly Period and will allocate among each series all Miscellaneous Payments for any Monthly Period as follows: (a) collections of finance charge receivables and the Defaulted Amount will at all times be allocated to a series based on the Floating Allocation Percentage for such series; (b) collections of principal receivables will at all times be allocated to a series based on the Principal Allocation Percentage for such series; and (c) Miscellaneous Payments will at all times be allocated among each series based on their respective Invested Amounts. Amounts not allocated to any series as described above will be allocated to the Sellers' Interest. Notwithstanding the foregoing, amounts collected as annual membership fees for any Monthly Period will be held in the Collection Account and will be amortized in twelve equal installments over twelve Monthly Periods beginning with the Monthly Period following the Monthly Period in which the annual fee is billed. Each such installment of annual membership fees will be treated as a collection of finance charge receivables in the Monthly Period in which it is amortized and allocated in the manner described above. With respect to Recoveries constituting the proceeds of any sale or initial securitization of Defaulted Receivables, such Recoveries will be treated as finance charge collections and allocated as described above over a period of time. With respect to each Monthly Period, the amount of Recoveries received from the sale or initial securitization of Defaulted Receivables which shall be treated as collections of finance charge receivables for such Monthly Period shall be an amount equal to the total amount of such recoveries collected during the three Monthly Periods ending with such Monthly Period divided by three. Collections of receivables for any Monthly Period will be allocated by the servicer first to annual membership fees billed during the preceding Monthly Period, second to finance charge receivables, to the extent of finance charge receivables billed (or, in the case of annual membership fees, amortized) during the preceding Monthly Period, and third to principal receivables. The servicer will, to the extent it is required to make daily deposits into the Collection Account, make an estimated allocation of collections between annual membership fees, finance charge receivables and principal receivables on each deposit date and will deposit amounts into the Collection Account as set forth above in accordance with such allocation. Deposits in Collection Account For as long as Capital One Bank remains the servicer under the pooling agreement and either: (i) Capital One Bank provides to the trustee a letter of credit covering collection risk of the servicer acceptable to each Rating Agency (as evidenced by a letter from each such Rating Agency), or (ii) if the Collection Account is maintained with Capital One Bank, Capital One Bank has and maintains a certificate of deposit rating of at least A-1 and P-1 (or their equivalent) by each Rating Agency, Capital One Bank, as the servicer, may use for its own benefit all collections received on the receivables in each Monthly Period until the business day before the related Distribution Date or, in the case of any collections consisting of interchange, not later than 12:00 noon, Richmond, Virginia time, on each Distribution Date, at which time it will deposit all such collections, to the extent described below, into the Collection Account. Capital One Bank, as the servicer, will make the deposits and payments to the accounts and parties described in this prospectus and in the related prospectus supplement on the date of such deposit. However, if Capital One Bank is no longer the servicer or fails to maintain the required letter of credit covering collection risk or certificate of deposit rating, the servicer will make such deposits, as described below, not later than 2 29 Business Days after the Date of Processing or, in the case of collections consisting of interchange, not later than 12:00 noon, Richmond, Virginia time, on each Distribution Date. The servicer will only be required to deposit collections into the Collection Account up to the aggregate amount of collections required to be deposited into an account established for any series or, without duplication, distributed on or prior to the related Distribution Date to certificateholders of any series or to the issuer of any Series Enhancement pursuant to the terms of any series supplement or Series Enhancement agreement plus the aggregate amount of the unamortized portion of any collections of annual membership fees plus the aggregate amount of the unamortized portion of any collections representing Recoveries. If at any time prior to such Distribution Date the amount of collections deposited in the Collection Account exceeds the amount required to be deposited as described in the sentence above, the servicer will be permitted to withdraw such excess from the Collection Account. Unless otherwise agreed by each Rating Agency, if at any time Capital One Bank or another eligible affiliate of Capital One Bank is not the servicer, the Collection Account will be moved from Capital One Bank, if then maintained there. On the earlier of: (i) the second Business Day after the Date of Processing, and (ii) the day any such deposit is made into the Collection Account or, in the case of any collections consisting of interchange, not later than 12:00 noon, Richmond, Virginia time, on each Distribution Date, the servicer will pay to the holder of the Sellers' Interest: (a) the portion of collections on principal receivables allocated to the Sellers' Interest; provided that the Sellers' Interest in principal receivables on such day (after giving effect to any new receivables transferred to the trust on such day) exceeds the Required Sellers' Interest and the aggregate amount of principal receivables exceeds the Required Principal Balance and otherwise such amounts will be deposited into the Excess Funding Account; and (b) the portion of collections on finance charge receivables allocated to the Sellers' Interest. Shared Principal Collections; Excess Shared Principal Collections The prospectus supplement for any series offered by this prospectus will designate whether a series is a principal sharing series. Collections on principal receivables and certain other amounts, including Miscellaneous Payments, for any Monthly Period allocated to any series offered by this prospectus will first be used to cover certain amounts described in the related prospectus supplement (including any required deposits into a principal funding account or required distributions to certificateholders of such series). If a series is a principal sharing series, the servicer will then determine the amount of collections of principal receivables for any Monthly Period (plus Miscellaneous Payments and certain other amounts described in the related prospectus supplement) allocated to such series remaining after covering such required deposits and distributions and any similar amount remaining for any other principal sharing series, collectively called Shared Principal Collections, and will allocate the Shared Principal Collections to cover any principal distributions to certificateholders and deposits to principal funding accounts for any principal sharing series which are either scheduled or permitted and which have not been covered out of the investor principal collections and Miscellaneous Payments and certain other amounts for such series; provided that all or a portion of such shortfall may be subordinated as described below if a series is a subordinated excess principal series. If such principal shortfalls exceed Shared Principal Collections for any Monthly Period, Shared Principal Collections will be allocated pro rata among the principal sharing series based on the respective principal shortfalls of such series. To the extent that Shared Principal Collections exceed principal shortfalls, the balance will be allocated to the sellers; provided, however, that such Shared Principal Collections will be distributed to the sellers only if the Sellers' Interest on such Distribution Date exceeds the Required Sellers' Interest and the aggregate amount of principal receivables exceeds the Required Principal Balance and otherwise such amounts will be deposited into the Excess Funding Account. 30 The prospectus supplement for any series offered by this prospectus will designate whether a principal sharing series is a subordinated excess principal series. If a principal sharing series is a subordinated excess principal series, then the Excess Shared Principal Collections will also be allocated to each such series in an amount equal to the lesser of: (i) the subordinated excess principal shortfall for such series (as defined in the series supplement and described in the prospectus supplement for such series), and (ii) the product of (x) the Excess Shared Principal Collections and (y) a fraction, the numerator of which is the subordinated excess principal shortfall for such series and the denominator of which is the sum of subordinated excess principal shortfalls for all subordinated excess principal series. Any such reallocation of collections of principal receivables and other amounts will not result in a reduction in the Invested Amount of the series to which such collections were initially allocated. There can be no assurance that there will be any Shared Principal Collections or Excess Shared Principal Collections for any Monthly Period. Excess Funding Account If on any date the Sellers' Interest is less than or equal to the Required Sellers' Interest or the aggregate amount of principal receivables is less than the Required Principal Balance, the servicer will not distribute to the sellers any Shared Principal Collections that otherwise would be distributed to the sellers, but will deposit such funds in an Eligible Deposit Account, called the Excess Funding Account, established and maintained by the servicer for the benefit of the certificateholders of each series, in the name of the trustee, on behalf of the trust, and bearing a designation clearly indicating that the funds deposited therein are held for the benefit of the certificateholders of each series. Funds on deposit in the Excess Funding Account will be withdrawn and paid to the sellers on any Business Day to the extent that the Sellers' Interest exceeds the Required Sellers' Interest and the aggregate amount of principal receivables exceeds the Required Principal Balance; provided, however, that if an Accumulation Period, Controlled Amortization Period, Principal Payment Period or Early Amortization Period starts for any principal sharing series, any funds on deposit in the Excess Funding Account will be treated as Shared Principal Collections to the extent needed to cover principal payments due to or for the benefit of such series. Funds on deposit in the Excess Funding Account will be invested by the trustee, at the direction of the servicer, in Eligible Investments. Any earnings (net of losses and investment expenses) earned on amounts on deposit in the Excess Funding Account during any Monthly Period will be withdrawn from the Excess Funding Account and treated as collections of finance charge receivables for such Monthly Period. Sharing of Excess Finance Charges Any series offered by this prospectus may be included in a group of series called a Group. Each series in a specific group will be entitled to share Excess Finance Charges in the manner, and to the extent, described below with each other series, if any, in such group. The prospectus supplement for a series offered by this prospectus will specify whether such series will be included in a Group and whether any previously issued series have been included in such Group. Subsequently issued series may also be included in such Group. Collections of finance charge receivables and certain other amounts allocable to any series that are included in a Group in excess of the amounts necessary to make required payments for such series (including payments to the provider of any related Series Enhancement) that are payable out of collections of finance charge receivables, called Excess Finance Charges, will be applied to cover any shortfalls in amounts payable from collections of finance charge receivables allocable to any other series included in such Group, pro rata based upon the amount of the shortfall, if any, for each other series in such Group; provided, however, that the sharing of Excess Finance Charges among series in any Group will continue only until such time, if any, at which each seller shall deliver to the trustee a certificate of an authorized officer to the effect that the continued sharing of Excess Finance 31 Charges among series in any Group would have adverse regulatory implications for either bank. Following the delivery by the sellers of any such certificates to the trustee, there will not be any further sharing of Excess Finance Charges among the series in any Group. In all cases, any Excess Finance Charges remaining after covering shortfalls for all outstanding series in a Group will be paid to the sellers. While any series offered hereby may be included in a Group, there can be no assurance that: (i) any other series will be included in such Group, (ii) there will be any Excess Finance Charges for such Group for any Monthly Period, or (iii) the sellers will not at any time deliver certificates as described above. While the sellers do not believe that, based upon applicable rules and regulations as currently in effect, the sharing of Excess Finance Charges among series in a Group will have adverse regulatory implications for them, there can be no assurance that this will continue to be true in the future. Funding Period For any series, the related prospectus supplement may specify that during a Funding Period, the aggregate amount of principal receivables in the trust allocable to such series may be less than the aggregate principal amount of the certificates of such series. If so specified in the related prospectus supplement, the amount of such deficiency, called the Prefunded Amount, will be held in a prefunding account pending the transfer of additional receivables to the trust or pending the reduction of the certificateholders' interests of other series issued by the trust. The related prospectus supplement will specify the initial certificateholders' interest for such series, the initial invested amount and the date by which the certificateholders' interest is expected to equal the initial invested amount. The certificateholders' interest will increase as receivables are delivered to the trust or as the certificateholders' interests of other series of the trust are reduced. The certificateholders' interest may also decrease due to charge-offs or the occurrence of a Pay Out Event with respect to such series as provided in the related prospectus supplement. During the Funding Period, funds on deposit in a trust account established with the trustee for the benefit of certificateholders of such series, called the prefunding account, for a series will be withdrawn and paid to the sellers to the extent of any increases in the certificateholders' interest. In the event that the certificateholders' interest does not for any reason equal the initial Invested Amount of such series by the end of the Funding Period, any amount remaining in the prefunding account and any additional amounts specified in the related prospectus supplement will be payable to the certificateholders of such series in the manner and at such time as set forth in the related prospectus supplement. If so specified in the related prospectus supplement, monies in the prefunding account will be invested by the trustee in Eligible Investments or will be subject to a guaranteed rate or investment agreement or other similar arrangement, and, in connection with each Distribution Date during the Funding Period, investment earnings on funds in the prefunding account during the related Monthly Period will be withdrawn from the prefunding account and deposited, together with any applicable payment under a guaranteed rate or investment agreement or other similar arrangement, into the Collection Account for distribution of interest on the certificates of the related series in the manner specified in the related prospectus supplement. Paired Series If so provided in the prospectus supplement for a series, a series of certificates may be paired with another series issued by the trust. As the certificateholders' interest of the series having a paired series is reduced, the certificateholders' interest in the trust of the paired series may increase by an equal amount. If a Pay Out Event occurs with respect to the series having a paired series or with respect to the paired series when the series is in a Controlled Amortization Period, the Principal Allocation Percentage in respect of collections of principal receivables for the series and the Principal Allocation Percentage for the paired series may be reset as provided in the related prospectus supplement. 32 Defaulted Receivables; Rebates and Fraudulent Charges; Recoveries The current policy of the banks is to charge off as uncollectible an account at 180 days past due. The banks generally charge off a bankrupt customer's account within 30 days after receiving the bankruptcy petition. The banks charge off accounts of deceased accountholders within 60 days after receiving proper notice if no estate exists against which a proof of claim can be filed, no other parties remit payments or no other responsible party is available. Generally, shortly before a secured credit card account is charged off as uncollectible or in the case of a bankruptcy, after the bankruptcy automatic stay is lifted, the servicer will withdraw funds from the Deposit Account in an amount equal to the lesser of: (i) all principal receivables plus all finance charge receivables related to such secured credit card account, and (ii) the amount of funds for such secured credit card account in the Deposit Account, and the servicer will allocate such amount for treatment as collections of principal receivables and finance charge receivables. On the date when any receivable in an account becomes a Defaulted Receivable (including any related finance charge receivables), the trust will automatically transfer to the applicable seller all right, title and interest of the trust in and to the Defaulted Receivables (including any related finance charge receivables) in such account, all monies due or to become due with respect thereto, all proceeds thereof and any insurance proceeds relating thereto; provided that Recoveries of such account shall be applied as provided in the pooling agreement. See "--Allocation Percentages" in this prospectus. If the servicer adjusts downward the amount of any principal receivable (other than Ineligible Receivables which have been, or are to be, reassigned to the sellers) because of a rebate, refund, counterclaim, defense, error, fraudulent charge or counterfeit charge to an accountholder or such principal receivable was created in respect of merchandise which was refused or returned by an accountholder, or, if the servicer otherwise adjusts downward the amount of any principal receivable without receiving collections therefor or charging off such amount as uncollectible, the amount of the principal receivables in the trust with respect to the Monthly Period in which such adjustment takes place will be reduced by the amount of the adjustment. Furthermore, in the event that the exclusion of any such receivables would cause the Sellers' Interest in principal receivables at such time to be a negative number, the sellers shall be required to make an Adjustment Payment in an amount equal to such deficiency into the Collection Account on such Distribution Date. Credit Enhancement General For any series, credit enhancement may be provided with respect to one or more classes thereof. Credit enhancement for one or more classes of a series offered by this prospectus may include a letter of credit, the establishment of a cash collateral guaranty or account, a surety bond, an insurance policy, a spread account, a reserve account, a subordinated interest in the receivables or certain cash flows in respect of the receivables, or another form of credit enhancement described in the related prospectus supplement or any combination of the foregoing. Credit enhancement may also be provided to a series or class or classes of a series by subordination provisions that require that distributions of principal and/or interest be made for the certificates of such series or such class or classes before distributions are made to one or more series or one or more classes of such series, if the supplements so provide. If so specified in the related prospectus supplement, any form of credit enhancement may be structured so as to be available to more than one class or series to the extent described therein. The presence of credit enhancement for a class is intended to enhance the likelihood of receipt by certificateholders of such class of the full amount of principal and interest and to decrease the likelihood that such certificateholders will experience losses. However, unless otherwise specified in the prospectus supplement for a series offered by this prospectus, the credit enhancement, if any, for a series will not provide protection 33 against all risks of loss and will not guarantee repayment of the entire principal balance of the certificates and interest thereon. If losses occur that exceed the amount covered by the credit enhancement or that are not covered by the credit enhancement, certificateholders will bear their allocable share of deficiencies. In addition, if specific credit enhancement is provided for the benefit of more than one class or series, certificateholders of any such class or series will be subject to the risk that such credit enhancement will be exhausted by the claims of certificateholders of other classes or series. If credit enhancement is provided for a series offered hereby, the accompanying prospectus supplement will include a description of: (a) the amount payable under such credit enhancement, (b) any conditions to payment thereunder not otherwise described in this prospectus, (c) the conditions (if any) under which the amount payable under such credit enhancement may be reduced and under which such credit enhancement may be terminated or replaced, and (d) any material provisions of any agreement relating to such credit enhancement. Additionally, in certain cases, the related prospectus supplement may set forth certain information about the provider of any credit enhancement, including: (i) a brief description of its principal business activities, (ii) its principal place of business, place of incorporation and the jurisdiction under which it is chartered or licensed to do business, (iii) if applicable, the identity of regulatory agencies that exercise primary jurisdiction over the conduct of its business, and (iv) its total assets, and its stockholders' equity or policyholders' surplus, if applicable, as of a date specified in the prospectus supplement. If so described in the related prospectus supplement, credit enhancement for a series offered by this prospectus may be available to pay principal of the certificates of such series following the occurrence of certain Pay Out Events with respect to such series. In such event and in certain other instances described in the related prospectus supplement, the credit enhancement provider may have a subordinated interest in the receivables or certain cash flows in respect of the receivables to the extent described in such prospectus supplement, called the enhancement invested amount. Subordination One or more series or one or more classes of a series offered by this prospectus may be subordinated to one or more other series or one or more classes of such series. If so specified in the related prospectus supplement, the rights of the holders of the subordinated certificates to receive distributions of principal and/or interest on any Payment Date will be subordinated to the rights of the holders of the certificates that are senior to the subordinated certificates to the extent set forth in the related prospectus supplement. The related prospectus supplement will also set forth information concerning the amount of subordination of a series or class or classes of subordinated certificates in a series, the circumstances in which such subordination will be applicable, the manner, if any, in which the amount of subordination will decrease over time, and the conditions under which amounts available from payments that would otherwise be made to holders of such subordinated certificates will be distributed to the holders of certificates that are senior to such subordinated certificates. The amount of subordination will decrease whenever amounts otherwise payable to the holders of subordinated certificates are paid to the holders of the certificates that are senior to such subordinated certificates. Letter of Credit A letter of credit for a series or class of certificates offered by this prospectus may be issued by a bank or financial institution specified in the related prospectus supplement. Subject to the terms and conditions specified in the related prospectus supplement, the issuer of the letter of credit will be obligated to honor drawings under 34 such letter of credit in an aggregate dollar amount (which may be fixed or may be reduced as described in the related prospectus supplement), net of unreimbursed payments thereunder, equal to the amount described in the related prospectus supplement. The amount available under a letter of credit will be reduced to the extent of the unreimbursed payments thereunder. Cash Collateral Guaranty or Cash Collateral Account Support for the certificates of any class or series offered by this prospectus may be provided by: (i) a cash collateral guaranty issued by a cash collateral trust or similar entity and secured by the deposit of cash or certain Eligible Investments in a cash collateral guaranty account owned by the beneficiaries of the cash collateral trust, or (ii) a cash collateral account of the trust. A cash collateral account for a class or series will be funded by cash or certain Eligible Investments on the series issuance date. The amount available pursuant to the cash collateral guaranty or the cash collateral account will be the lesser of the amount on deposit in the cash collateral guaranty account or the cash collateral account, as the case may be, and an amount specified in the related prospectus supplement. The related prospectus supplement will set forth the circumstances under which payments are made to beneficiaries of the cash collateral guaranty from the cash collateral trust or funds are to be released from the cash collateral account, as the case may be. The servicer will determine on each Determination Date whether a deficiency exists in the payment of interest and/or principal on the certificates so enhanced. If the servicer determines that a deficiency exists, it will instruct the trustee to draw an amount equal to such deficiency from the cash collateral account or cash collateral guaranty account, as the case may be, up to the maximum amount available thereunder. Surety Bond or Insurance Policy Insurance for series or class of certificates offered by this prospectus may be provided by one or more insurance companies. Such insurance will guarantee, with respect to one or more classes of the related series, distributions of interest or principal in the manner and amount specified in the related prospectus supplement. If so specified in the related prospectus supplement, a surety bond may be purchased for the benefit of the holders of any series or class of certificates to assure distributions of interest or principal with respect to such series or class of certificates in the manner and amount specified in the related prospectus supplement. Spread Account Support for a series or one or more classes of a series offered by this prospectus may be provided by the periodic deposit of certain available excess cash flow from the trust assets into a spread account intended to assure the subsequent distributions of interest and principal on the certificates of such class or series in the manner specified in the related prospectus supplement. Reserve Account Support for a series or one or more classes thereof will be provided by the establishment of a reserve account. The reserve account may be funded, to the extent provided in the related prospectus supplement, by an initial cash deposit, the retention of certain periodic distributions of principal or interest or both otherwise payable to one or more classes of certificates or the provision of a letter of credit, guarantee, insurance policy or other form of credit enhancement or any combination thereof. The reserve account will be established to assist with the subsequent distribution of principal or interest on the certificates of such series or class thereof in the manner provided in the related prospectus supplement. 35 Swap Agreement The trustee, on behalf of the trust, may enter into one or more interest rate swap agreements for the benefit of a class or series, the terms of which will be specified in the related prospectus supplement. Discount Option The pooling agreement provides that the sellers may at any time and from time to time designate a fixed or variable percentage of the amount of principal receivables arising in the accounts on and after the date such designation becomes effective to be treated as finance charge receivables, which will be called Discount Option Receivables. Although there can be no assurance that the sellers will do so, such designation may occur because the sellers determine that the exercise of the discount option is needed to provide a sufficient yield on the receivables to cover interest and other amounts due and payable from finance charge receivables or to avoid the occurrence of a Pay Out Event relating to the reduction of the average yield on the portfolio of accounts in the trust, if the series supplement for a series provides for such a Pay Out Event. After any such designation, pursuant to the pooling agreement, the sellers, without notice to or the consent of certificateholders, from time to time reduce or eliminate the percentage of receivables subject to such designation or reduction; provided, however, that such reduction or elimination will only occur at such time, if any, at which each seller delivers to the trustee an officer's certificate to the effect that such reduction or elimination would not have adverse regulatory or other accounting implications for that seller. The sellers must provide 30 days prior written notice to the servicer, the trustee, each Rating Agency and any credit enhancement provider of any such designation or reduction, and such designation or reduction will become effective on the date specified therein only if: (i) each seller shall have delivered to the trustee and certain providers of Series Enhancement an officer's certificate to the effect that such seller reasonably believes that such designation or reduction will not at the time of its occurrence cause a Pay Out Event or an event which with notice or the lapse of time would constitute a Pay Out Event, to occur with respect to any series, and (ii) the sellers shall have received written notice from each Rating Agency that such designation or reduction will not have a Ratings Effect. On the Date of Processing of any collections on or after the date the exercise of the discount option takes effect, the product of: (i) a fraction, the numerator of which is the amount of the Discount Option Receivables and the denominator of which is the sum of the principal receivables (other than Discount Option Receivables) plus the discount option receivables in each case (for both numerator and denominator) at the end of the prior Monthly Period, and (ii) collections of principal receivables that arise in the accounts on such day that otherwise would be principal receivables, will be deemed Discount Option Receivables Collections. An amount equal to the product of: (i) the aggregate Floating Allocation Percentages with respect to all series of certificates issued and outstanding, and (ii) the aggregate amount of such Discount Option Receivables collections processed in such day, will be deposited by the servicer into the Collection Account and an amount equal to the balance of such Discount Option Receivables Collections will be paid to the sellers. The amount deposited into the Collection Account will be applied as provided in this prospectus regarding payments of collections of finance charge receivables. 36 The pooling agreement also provides that the sellers may at any time and from time to time designate an amount of principal receivables in Additional Accounts to be treated as finance charge receivables; provided, however, that the sellers may not make such designation unless: (i) the sellers have received written notice from each Rating Agency that such designation will not have a Ratings Effect and have delivered copies of each such written notice to the servicer and the trustee, and (ii) each seller has delivered to the trustee and certain providers of Series Enhancement an officer's certificate of that seller, to the effect that such designation will not then cause a Pay Out Event or any event that, after the giving of notice or the lapse of time, would constitute a Pay Out Event to occur with respect to any series. On or prior to each Determination Date after such designation is made, the servicer will deliver to the trustee a certificate setting forth: (a) the amount of additional discount receivables to be included as collections of finance charge receivables with respect to the preceding Monthly Period, as calculated in accordance with the formula set forth in the applicable assignment of receivables or accretion designation letter delivered to the trustee, and (b) the portion of such additional discount receivables which have not been treated as collections of finance charge receivables for the preceding Monthly Period. Pay Out Events As described above, the Revolving Period for a series will continue until the start of the Accumulation Period or the Controlled Amortization Period, which will continue until the Invested Amount of such series shall have been paid in full or the series termination date for such series occurs, unless a Pay Out Event occurs with respect to such series prior to any of such dates. A Pay Out Event with respect to a series refers to any of the following events and any other events specified as such in the related prospectus supplement: (a) the occurrence of certain events of bankruptcy, insolvency or receivership relating to either seller (including any additional seller), provided that, at the time such events occur, the trust includes receivables transferred by that seller; or (b) the trust becomes an investment company within the meaning of the Investment Company Act of 1940, as amended. In the case of either event described above, a Pay Out Event with respect to all series will be deemed to have occurred immediately upon the occurrence of such event without any notice or other action on the part of the trustee or the certificateholders of any series. The Early Amortization Period for a series will begin at the close of business on the day immediately preceding the day on which a Pay Out Event occurs with respect thereto. Distributions of principal to the certificateholders of such series will begin on the Special Payment Date in the Monthly Period following the Monthly Period in which such Pay Out Event occurs. Any amounts on deposit in a principal funding account or an interest funding account for such series at such time will be distributed on such first Special Payment Date to the certificateholders of such series. If a series has more than one class of certificates, each class may have different Pay Out Events which, in the case of any series of certificates offered hereby, will be described in the related prospectus supplement. In addition to the consequences of a Pay Out Event discussed above, if a conservator or receiver were appointed for Capital One Bank or if certain other events relating to the bankruptcy, insolvency or receivership of Capital One Bank occur, pursuant to the pooling agreement, on the day of such event, Capital One Bank will immediately cease to transfer principal receivables to the trust and promptly give notice to the trustee of such event. So long as any series issued prior to April 1, 2001 is outstanding, within 15 days the trustee will publish a notice of the occurrence of such event stating that the trustee intends to sell, dispose of or otherwise liquidate the receivables by the solicitation of competitive bids and on terms equivalent to the best purchase offer as determined by the trustee, unless within 90 days from the date such notice is published each other 37 holder of the Sellers' Interest, the holders of certificates of each series or, if a series includes more than one class, each class of such series evidencing more than 50% of the aggregate unpaid principal amount of each such series or class (and, to the extent provided in the related series supplement, any credit enhancement provider for such series) instruct the trustee not to dispose of or liquidate the receivables and to continue transferring principal receivables as before such event. The proceeds from any such sale, disposition or liquidation of the receivables will be deposited in the Collection Account and allocated as described in the pooling agreement and each series supplement. If the sum of (a) the portion of such proceeds allocated to any series and (b) the proceeds of any collections on the receivables in the Collection Account allocated to such series is not sufficient to pay the Invested Amount of the certificates of such series in full, the related certificateholders will incur a loss. In addition to the consequences of a Pay Out Event discussed above, if a conservator or receiver were appointed for Capital One, F.S.B. or an additional seller or if certain other events relating to bankruptcy, insolvency or receivership of Capital One, F.S.B. or that additional seller, as the case may be, occur, pursuant to the pooling agreement, on the day of such event, Capital One, F.S.B. or that additional seller, as the case may be, will immediately cease to transfer principal receivables to the trust and promptly give notice to the trustee of such event. Servicing Compensation and Payment of Expenses The servicer's compensation for its servicing activities and reimbursement for its expenses for any Monthly Period will be a Servicing Fee payable monthly in an amount equal to one-twelfth of the product of: (a) the weighted average of the applicable Servicing Fee rates for each series outstanding (based upon the applicable Servicing Fee rate for each series and the outstanding principal amount of each series), and (b) the amount of principal receivables outstanding on the last day of the prior Monthly Period. The servicing fee will be allocated among the Sellers' Interest, each series and the interest represented by the enhancement invested amount, if any, for such series. The share of the Servicing Fee allocable to a particular series for any Monthly Period, called the Monthly Servicing Fee, will be determined in accordance with the relevant supplement. A portion of the Servicing Fee as specified in the related prospectus supplement will be paid solely from interchange allocable to such series, before such interchange is used for any other purpose. A portion of the Servicing Fee as specified in the related prospectus supplement will be paid from collections of finance charge receivables allocable to certificateholders of a series. The portion of the Servicing fee not so allocated to a series or payable from interchange will be paid by the sellers and in no event will the trust, the trustee or the certificateholders of any series be liable for the share of the Servicing Fee to be paid by the sellers or from interchange. Except as otherwise provided in any supplement, in the case of the first Distribution Date for any series, the Servicing Fee and the Monthly Servicing Fee will accrue from the series issuance date for such series. The Monthly Servicing Fee will be paid on the Distribution Date for each Monthly Period from the Collection Account (unless such amount has been netted against deposits to the Collection Account). The servicer will pay from its servicing compensation certain expenses incurred in connection with servicing the receivables including, without limitation, expenses related to the enforcement of the receivables, payment of the fees and disbursements of the trustee and independent accountants and other fees that are not expressly stated in the pooling agreement to be payable by the trust, the certificateholders of a series or the sellers (other than federal, state, local and foreign income, franchise or other taxes based on income, if any, or any interest or penalties with respect thereto, imposed upon the trust). In the event that Capital One Bank is acting as servicer and fails to pay the fees and disbursements of the trustee, the trustee will be entitled to receive the portion of the Servicing Fee that is equal to such unpaid amounts. In no event will the certificateholders of a series be liable to the trustee for the servicer's failure to pay such amounts, and any such amounts so paid to the trustee will be treated as paid to the servicer for all other purposes of the pooling agreement. 38 Record Date Payments on the certificates of a series offered hereby will be made as described in this prospectus and in the relevant prospectus supplement to the certificateholders in whose names the certificates were registered (expected to be Cede, as nominee of DTC) at the close of business on the related Record Date. However, the final payment on the certificates of a series offered hereby will be made only upon presentation and surrender of such certificates. Distributions will be made to DTC in immediately available funds. See "The Pooling Agreement Generally--Book-Entry Registration" in this prospectus. Optional Termination; Final Payment of Principal If specified in the prospectus supplement for any series offered by this prospectus and subject to any conditions described therein, on any day occurring on or after the day that the Invested Amount of the certificates of a series and the enhancement invested amount, if any, for such series is reduced to a percentage of the initial outstanding aggregate principal amount of the certificates of such series set forth in such prospectus supplement, a seller (so long as that seller is the servicer or its affiliate) will have the option to repurchase the certificateholders' interest of such series. The purchase price will equal the sum of: (i) the Invested Amount of such series, plus (ii) the enhancement invested amount, if any, for such series, plus (iii) accrued and unpaid interest on the unpaid principal amount of the certificates and, if applicable, on the enhancement invested amount (and accrued and unpaid interest for interest amounts that were due but not paid on a prior Payment Date), each at the applicable certificate rate, through: (a) if the day on which such repurchase occurs is a Distribution Date, the day preceding such Distribution Date, or (b) if the day on which such repurchase occurs is not a Distribution Date, the day preceding the Distribution Date following such day, minus (iv) the amount, if any, on deposit in any principal funding account for such series. Following any such repurchase and the deposit of the aggregate purchase price into the collection account, the certificateholders of such series will have no further rights with respect to the receivables. In the event that the sellers shall fail for any reason to deposit the aggregate purchase price for the certificateholders' interest of a series offered hereby, payments would continue to be made to the certificateholders of such series as described in this prospectus and in the related prospectus supplement. In any event, the last payment of principal and interest on the certificates of a series offered hereby will be due and payable not later than the series termination date specified in the related prospectus supplement. In the event that the Invested Amount of the certificates of such series or the enhancement invested amount is greater than zero on the series termination date, the trustee will sell or cause to be sold interests in the principal receivables or certain principal receivables, together in each case with related finance charge receivables, as specified in the pooling agreement and the related series supplement, in an amount equal to the sum of the Invested Amount and the enhancement invested amount, if any, for such series at the close of business on the series termination date. The net proceeds of such sale will be deposited in the Collection Account and allocated to the certificateholders of such series or the enhancement invested amount after such certificateholders are paid in full, as provided in the pooling agreement and the related series supplement. Reports No later than the third Business Day prior to each Distribution Date, the servicer will forward to the trustee, the paying agent, each Rating Agency and certain providers of Series Enhancement for a series a monthly report prepared by the servicer setting forth certain information about the trust and the certificates of such series (unless otherwise indicated), as specified in the related prospectus supplement. 39 For each Payment Date as the case may be, the monthly report for any series will include the following additional information about the certificates of such series: (a) the total amount distributed; (b) the amount of such distribution allocable to principal on the certificates; (c) the amount of such distribution allocable to interest on the certificates; and (d) the amount, if any, by which the unpaid principal balance of the certificates exceeds the Invested Amount as of the Record Date for such Payment Date. On each Distribution Date, the paying agent, on behalf of the trustee, will make available for inspection upon request to each Certificate Owner of record a copy of the monthly report. 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 a statement containing the information required to be provided by an issuer of indebtedness under the Internal Revenue Code for such preceding calendar year or the applicable portion thereof during which such person was a certificateholder, together with such other customary information as is necessary to enable the certificateholders to prepare their tax returns. See "Federal Income Tax Consequences" in this prospectus. The Pooling Agreement Generally Book-Entry Registration Certificateholders may hold their certificates through DTC (in the United States) or Clearstream or Euroclear (in Europe) if they are participants of such systems, or indirectly through organizations that are participants in such systems. Cede, as nominee for DTC, will be the registered holder of the global certificates. Clearstream and Euroclear will hold omnibus positions on behalf of the Clearstream customers and Euroclear participants, respectively, through customers' securities accounts in Clearstream's and Euroclear's names on the books of their respective Depositaries, which in turn will hold such positions in customers' securities accounts in the Depositaries' names on the books of DTC. DTC is a limited-purpose trust company organized under the laws of the State of New York, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934, as amended. DTC was created to hold securities for its participants and facilitate the clearance and settlement of securities transactions between its participants through electronic book-entry changes in accounts of its participants, thereby eliminating the need for physical movement of certificates. Participants include securities brokers and dealers, (who may include the underwriters of any series), banks, trust companies and clearing corporations and may include certain other organizations. Indirect access to the DTC system also is available to others such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a participant, either directly or indirectly. Transfers between DTC participants will occur in accordance with DTC rules. Transfers between Clearstream customers and Euroclear participants will occur in the ordinary way in accordance with their applicable rules and operating procedures. Cross-market transfers between persons holding directly or indirectly through DTC, on the one hand, and directly or indirectly through Clearstream customers or Euroclear participants, on the other, will be effected in DTC in accordance with DTC rules on behalf of the relevant European international clearing system by its 40 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. Clearstream customers and Euroclear participants may not deliver instructions directly to the Depositaries. Because of time-zone differences, credits of securities received in Clearstream or Euroclear as a result of a transaction with a DTC participant will be made during 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 Clearstream customer or Euroclear participant on such business day. Cash received in Clearstream or Euroclear as a result of sales of securities by or through a Clearstream customer or a Euroclear participant to a DTC participant will be received with value on the DTC settlement date but will be available in the relevant Clearstream or Euroclear cash account only as of the business day following settlement in DTC. For additional information regarding clearance and settlement procedures for the certificates, see Annex I included at the end of this prospectus and for information with respect to tax documentation procedures relating to the certificates, see Annex I included at the end of this prospectus and "Federal Income Tax Consequences--Foreign Certificate Owners" in this prospectus. Certificate owners who are not DTC participants or indirect DTC participants but desire to purchase, sell or otherwise transfer ownership of, or other interests in, certificates may do so only through DTC participants and indirect DTC participants. In addition, Certificate Owners will receive all distributions of principal of and interest on the certificates from the paying agent or the trustee through DTC participants who in turn will receive them from DTC. Under a book-entry format, Certificate Owners may experience some delay in their receipt of payments, since such payments will be forwarded by the trustee to Cede, as nominee for DTC. DTC will forward such payments to its participants which thereafter will forward them to indirect participants or Certificate Owners. It is anticipated that the only "certificateholder" will be Cede, as nominee of DTC. Certificate Owners will not be recognized by the trustee as "certificateholders," as such term is used in the pooling agreement and the series supplements. Certificate Owners will only be permitted to exercise the rights of certificateholders under the pooling agreement and the series supplements indirectly through the DTC participants who in turn will exercise their rights of certificateholders through DTC. Under the rules, regulations and procedures creating and affecting DTC and its operations, DTC is required to make book-entry transfers among participants on whose behalf it acts with respect to the certificates and is required to receive and transmit distributions of principal and interest on the certificates. Participants and indirect participants with which Certificate Owners have accounts with respect to the certificates similarly are required to make book-entry transfers and receive and transmit such payments on behalf of their respective Certificate Owners. Accordingly, although Certificate Owners will not possess certificates, Certificate Owners will receive payments and will be able to transfer their interests. Because DTC can only act on behalf of its participants, who in turn act on behalf of indirect participants and certain banks, the ability of a Certificate Owner to pledge certificates to persons or entities that do not participate in the DTC system, or otherwise take action in respect of such certificates, may be limited due to the lack of a physical certificate for such certificates. DTC has advised the bank that it will take any action permitted to be taken by a certificateholder under the pooling agreement or the series supplements only at the direction of one or more participants to whose account with DTC the certificates are credited. Additionally, DTC has advised the bank that it will take such actions with respect to specified percentages of the certificateholders' interest only at the direction of and on behalf of participants whose holdings include interests that satisfy such specified percentages. DTC may take conflicting actions with respect to other interests to the extent that such actions are taken on behalf of participants whose holdings include such interests. 41 Clearstream is incorporated under the laws of Luxembourg. Clearstream holds securities for its customers and facilitates the clearance and settlement of securities transactions between Clearstream customers through electronic book- entry changes in accounts of Clearstream customers, thereby eliminating the need for physical movement of certificates. Transactions may be settled in Clearstream in any of 36 currencies, including United States dollars. Clearstream provides to its Clearstream customers, among other things, services for safekeeping, administration, clearance and settlement of internationally traded securities and securities lending and borrowing. Clearstream also deals with domestic securities markets in over 30 countries through established depository and custodial relationships. Clearstream is registered as a bank in Luxembourg, and as such is subject to regulation by the Commission de Surveillance du Secteur Financier, which supervises Luxembourg banks. Clearstream's customers are world-wide financial institutions including underwriters, securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations and may include the underwriters of any series of certificates. Clearstream's U.S. customers are limited to securities brokers and dealers and banks. Currently, Clearstream has approximately 2,000 customers located in over 80 countries, including all major European countries, Canada and the United States. Indirect access to Clearstream is also available to other institutions that clear through or maintain a custodial relationship with an account holder of Clearstream. Clearstream has established an electronic bridge with Euroclear Bank S.A./N.V. as the operator of the Euroclear System in Brussels to facilitate settlement of trades between Clearstream and Euroclear. Euroclear was created in 1968 to hold securities for participants of the Euroclear System and to clear and settle transactions between Euroclear participants through simultaneous electronic book-entry delivery against payment, thereby eliminating the need for physical movement of certificates and any risk from lack of simultaneous transfers of securities and cash. Transactions may now be settled in any of 40 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 above. The Euroclear System is operated by Euroclear Bank S.A./N.V. as the Euroclear operator. All operations are conducted by the Euroclear operator, and all Euroclear securities clearance accounts and Euroclear cash accounts are accounts with the Euroclear operator. The Euroclear operator establishes policy for the Euroclear Systems 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 of any series of certificates. 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. 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. These rules and laws govern transfers of securities and cash within the Euroclear System, withdrawals 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 these rules and laws only on behalf of Euroclear participants, and has no record of or relationship with persons holding through Euroclear participants. Distributions with respect to certificates held through Clearstream or Euroclear will be credited to the cash accounts of Clearstream customers 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" in this prospectus. Clearstream or the Euroclear operator, as the case may be, will take any other action permitted to be taken by a certificateholder under the pooling agreement or the relevant series supplement on behalf of a Clearstream customer or Euroclear participant only in accordance with its relevant rules and procedures and subject to its Depositary's ability to effect such actions on its behalf through DTC. Although DTC, Clearstream and Euroclear have agreed to the foregoing procedures in order to facilitate transfers of certificates among participants of DTC, Clearstream and Euroclear, they are under no obligation to perform or continue to perform such procedures and such procedures may be discontinued at any time. 42 Definitive Certificates The certificates of a series offered by this prospectus will be issued as definitive certificates to certificateholders, rather than to DTC or its nominee only if: (i) the sellers advise the trustee in writing that DTC is no longer willing or able to discharge properly its responsibilities as depository with respect to the certificates, and the trustee or the sellers are unable to locate a qualified successor, (ii) the sellers, at their option, elect to terminate the book-entry system through DTC, or (iii) after the occurrence of a Servicer Default, certificateholders evidencing not less than 50% of the aggregate unpaid principal amount of the certificates of any class of such series advise the trustee and DTC through participants in writing that the continuation of a book-entry system through DTC (or a successor thereto) is no longer in the best interests of the certificateholders. Upon the occurrence of any of these events, DTC is required to notify all participants of the availability through DTC of definitive certificates. Upon surrender by DTC of the definitive certificates representing the certificates and instructions for re-registration, the trustee will issue such certificates in the form of definitive certificates, and thereafter the trustee will recognize the holders of such definitive certificates as holders of certificates under the pooling agreement and the relevant series supplement. Distribution of principal and interest on the certificates will be made by the paying agent or the trustee directly to the holders of definitive certificates in accordance with the procedures set forth in this prospectus and in the pooling agreement and the relevant series supplement. Distributions will be made by check mailed to the address of each holder as it appears on the register maintained by the trustee. The final payment on any certificate (whether definitive certificates or the certificates registered in the name of Cede representing the certificates) will be made only upon presentation and surrender of such certificate on the date for such final payment at such office or agency as is specified in the notice of final distribution to certificateholders. The trustee will provide such notice to registered certificateholders not later than the fifth day of the month of the final distribution. Definitive certificates will be transferable and exchangeable at the offices of the transfer agent and registrar, which is a subsidiary of The Bank of New York. 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. The Bank Certificate; Additional Sellers The pooling agreement provides that a seller may exchange a portion of the Bank Certificate or its uncertificated interest in the Sellers' Interest, if any, for a Supplemental Certificate or an uncertificated interest in the Sellers' Interest for transfer or exchange to a person designated by the sellers upon the execution and delivery of a supplement to the pooling agreement (which supplement will be subject to the amendment section of the pooling agreement to the extent that it amends any of the terms of the pooling agreement; see "--Amendments" in this prospectus), provided that prior to such transfer or exchange: (a) the applicable seller shall have received written notice from each Rating Agency that such transfer or exchange will not have a Ratings Effect, and (b) the applicable seller shall have delivered to the other sellers, the trustee, each Rating Agency and certain providers of Series Enhancement a Tax Opinion about the transfer or exchange. Any transfer or exchange of a Supplemental Certificate or an uncertificated interest in the Sellers' Interest is subject to the conditions set forth in the preceding sentence. See "Assumption of a Seller's Obligations" in this prospectus. Capital One Bank has amended the pooling agreement to provide that a Bank Certificate and any Supplemental Certificates may be in certificated or uncertificated form. 43 A seller may designate one or more of its affiliates to be included as an additional seller under the pooling agreement (by means of an amendment to the pooling agreement that will not require the consent of any certificateholder; see "--Amendments" in this prospectus). It was pursuant to this provision of the pooling agreement that Capital One, F.S.B. was included as an additional seller. Any additional seller may cease to transfer newly arising Receivables to the Trust upon written notice from each Rating Agency that such cessation will not have a Ratings Effect. In connection with such designation, that seller will surrender its Bank Certificate to the trustee in exchange for a newly issued Bank Certificate modified to reflect such additional Sellers' Interest in the Sellers' Interest; provided, however, that: (i) the conditions set forth in the preceding paragraph for the issuance of a Supplemental Certificate shall have been satisfied for the designation of an additional seller, and (ii) any applicable conditions described in "Description of the Certificates--Addition of Trust Assets" in this prospectus shall have been satisfied for the transfer of receivables or participations in receivables by any additional seller to the trust. Following the inclusion of an additional seller, the additional seller will be treated in the same manner as the sellers described herein and references herein to the sellers shall be references to each seller. Defeasance If the deposit referred to in this sentence is funded solely from collections of receivables or, if funded from any other sources, if so provided in the applicable supplement, then pursuant to the pooling agreement, a seller may terminate its substantive obligations in respect of a series or the pooling agreement by depositing with the trustee, under the terms of an irrevocable trust agreement satisfactory to the trustee, from amounts representing or acquired with collections on the receivables (allocable to such series and available to purchase additional receivables) monies or Eligible Investments sufficient to make all remaining scheduled interest and principal payments on such series on the dates scheduled for such payments and to pay all amounts owing to any provider of Series Enhancement. To achieve that end, a seller has the right to use collections on receivables to purchase Eligible Investments rather than additional receivables. Prior to the first exercise of its right to substitute monies or Eligible Investments for receivables, the sellers shall deliver to the trustee a Tax Opinion about such deposit and termination of obligations and to the servicer and the trustee written notice from each Rating Agency that such transaction will not have a Ratings Effect. In addition, the sellers must comply with certain other requirements set forth in the pooling agreement, including requirements that the sellers deliver to the trustee an opinion of counsel to the effect that the deposit and termination of obligations will not require the trust to register as an "investment company" within the meaning of the Investment Company Act of 1940, as amended, and that each seller deliver to the trustee and certain providers of Series Enhancement an officer's certificate stating that such deposit and termination of obligations will not at the time of its occurrence cause a Pay Out Event or an event that, after the giving of notice of the lapse of time, would constitute a Pay Out Event, to occur with respect to any series. If a seller discharges its substantive obligations in respect of such series, any Series Enhancement for the affected series might no longer be available to make payments. Termination of Trust The trust termination date will occur on the earliest of: (a) the day following the Distribution Date on which the aggregate Invested Amounts and enhancement invested amounts, if any, of all series is zero, (b) September 1, 2014, or (c) if the receivables are sold, disposed of or liquidated following the occurrence of an event of bankruptcy, insolvency or receivership of either bank as described under "Description of the Certificates--Pay Out Events" in this prospectus, immediately following such sale, disposition or liquidation. Upon termination of the trust, all right, title and interest in the receivables and other funds of the trust (other than amounts in accounts maintained by the trust for the final payment of principal and interest to certificateholders) will be conveyed and transferred to the sellers. 44 Conveyance of Receivables Pursuant to the pooling agreement, each seller has sold and assigned to the trust its interest in all receivables in certain MasterCard and Visa consumer credit card accounts outstanding as of the Trust Cut-Off Date and will sell and assign all receivables in the Additional Accounts as of the applicable additional cut-off Date, all receivables thereafter created under the accounts, any participations in receivables added to the trust and the proceeds of all of the foregoing. In connection with the transfer of any receivables to the trust, a seller is required to indicate in its computer records that the receivables have been conveyed to the trust. In addition, each seller has provided or will provide to the trustee a computer file or a microfiche list containing a true and complete list showing for each initial account, as of the Trust Cut-Off Date, and for each Additional Account, as of the applicable additional cut-off date: (i) its account number, (ii) the collection status, and (iii) the aggregate amount outstanding and the aggregate amount of principal receivables in such account. Capital One Bank, 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 relating to the accounts and the receivables will not be segregated from those relating to other revolving credit accounts and receivables, and the physical documentation relating to the accounts or receivables will not be stamped or marked to reflect the transfer of receivables to the trust. The banks have filed and are required to file UCC financing statements for the sale of the receivables to the trust meeting the requirements of applicable state law. See "Certain Legal Aspects of the Receivables" in this prospectus. Representations and Warranties As of the series issuance date specified in the related prospectus supplement, a seller will make representations and warranties to the trust about the accounts, the receivables and, if any, the Funds Collateral, to the effect, among other things, that: (a) as of the Trust Cut-Off date (or as of the additional cut-off date) each account or each Additional Account was an Eligible Account, (b) as of the Trust Cut-Off Date (or as of the additional cut-off date), each of the receivables then existing in any account or Additional Account is an Eligible Receivable, (c) thereafter, as of the date of creation of any new receivable, such receivable is an Eligible Receivable, and (d) each of the receivables, and all Funds Collateral, if any, have been transferred to the trust free and clear of any lien other than: (i) liens for municipal or other local taxes if such taxes shall not at the time be due and payable or if that seller 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, and (ii) with respect to Funds Collateral, liens granted in favor of a seller by secured credit card accountholders. If a seller breaches any representation and warranty described in this paragraph and such breach remains uncured for 60 days, or such longer period, not in excess of 150 days, as may be agreed to by the trustee, after the earlier to occur of the discovery of such breach by a seller or receipt of written notice of such breach by a seller, and such breach has a material adverse effect on the certificateholders' interest of all series in any receivable (which determination shall be made without regard to the availability of funds under any credit enhancement), the certificateholders' interest in such Ineligible Receivables will be reassigned to the applicable 45 seller on the terms and conditions set forth below and the related account shall no longer be included as an account in the trust portfolio. An Ineligible Receivable will be reassigned to the applicable seller on or before the end of the Monthly Period in which such reassignment obligation arises by that seller directing the servicer to deduct the portion of such Ineligible Receivable that is a principal receivable from the aggregate amount of the principal receivables used to calculate the Sellers' Interest. In the event that the exclusion of an Ineligible Receivable from the calculation of the Sellers' Interest would cause the Sellers' Interest to be a negative number, on the Distribution Date following the Monthly Period in which such reassignment obligation arises, a seller will make a deposit in immediately available funds in an amount equal to the principal portion and the interest portion of the amount by which the Sellers' Interest would be reduced below zero into the Excess Funding Account and the Collection Account, respectively. Any amount deposited into the Excess Funding Account and the Collection Account, respectively, in connection with the reassignment of an Ineligible Receivable, called a Transfer Deposit Amount shall be considered a payment in full of the Ineligible Receivable. The reassignment of any Ineligible Receivable to the applicable seller is the sole remedy respecting any breach of the representations and warranties described in the preceding paragraph about such receivable available to certificateholders of any series (or the trustee on behalf of such certificateholders) or any provider of Series Enhancement. Capital One Bank will also make representations and warranties to the trust to the effect, among other things, that as of each series issuance date: (a) it is a Virginia banking corporation validly existing under the laws of the Commonwealth of Virginia, it has, in all material respects, full power and authority to consummate the transactions contemplated by the pooling agreement and the related series supplement and each of the pooling agreement and the related series supplement constitutes a valid, binding and enforceable agreement of the bank, and (b) the pooling agreement constitutes: (i) a valid sale, transfer and assignment to the trust (subject to Section 9-306 of the UCC, as such transfer pertains to proceeds, and subject to certain tax liens) of all right, title and interest of the bank in the receivables, whether then existing or thereafter created and the proceeds thereof (including proceeds in any of the accounts established for the benefit of the certificateholders), or (ii) the grant of a first priority perfected security interest in such receivables and the proceeds thereof (including proceeds in any of the accounts established for the benefit of the certificateholders) under the UCC as in effect in Virginia and in any other state where the filing of a financing statement is required to perfect the trust's interest in the receivables and the proceeds thereof, which is effective as to each receivable then existing on the applicable series issuance date or, as to each receivable arising thereafter, upon the creation thereof and until termination of the trust. Capital One, F.S.B. will also make representations and warranties to the trust to the effect, among other things, that as of each series issuance date: (a) it is a federal savings bank validly existing under the laws of the United States of America, it has, in all material respects, full power and authority to consummate the transactions contemplated by the pooling agreement and the related series supplement and each of the pooling agreement and the related series supplement constitutes a valid, binding and enforceable agreement of the savings bank, and (b) the pooling agreement constitutes: (i) a valid sale, transfer and assignment to the trust (subject to Section 9-306 of the UCC, as such transfer pertains to proceeds, and subject to certain tax liens) of all right, title and interest of the savings bank in the receivables, whether then existing or thereafter created and the proceeds thereof (including proceeds in any of the accounts established for the benefit of the certificateholders), or 46 (ii) the grant of a first priority perfected security interest in such receivables and the proceeds thereof (including proceeds in any of the accounts established for the benefit of the certificateholders) under the UCC as in effect in Virginia and in any other state where the filing of a financing statement is required to perfect the trust's interest in the receivables and the proceeds thereof, which is effective as to each receivable then existing on the applicable series issuance date or, as to each receivable arising thereafter, upon the creation thereof and until termination of the trust. In the event that the breach of any of the representations and warranties described in the above paragraphs has a material adverse effect on the certificateholders' interest of all series in the receivables transferred to the trust by any seller, either the trustee or the holders of certificates evidencing not less than 50% of the aggregate unpaid principal amount of the certificates of all series, by written notice to the sellers and the servicer (and the trustee if given by the holders of the requisite percentage of certificates of all series), may direct the applicable seller to accept the reassignment of the receivables if such breach and any material adverse effect caused by such breach is not cured within 60 days of such notice (or within such longer period, not in excess of 150 days, as may be specified in such notice). Each seller will be obligated to accept the reassignment of its receivables on the Distribution Date following the Monthly Period in which such reassignment obligation arises. Such reassignment will not be required to be made, however, if: (i) at the end of such applicable period, the representations and warranties shall then be true and correct in all material respects as if made on such day, and (ii) the applicable seller shall have delivered to the trustee an officer's certificate describing the nature of such breach and the manner in which the relevant representation and warranty became true and correct and the breach of such representation and warranty shall no longer materially adversely affect the certificateholders and any material adverse effect caused by such breach shall have been cured. The price for such reassignment will generally be equal to the aggregate Invested Amounts and enhancement invested amounts of all series on the Distribution Date on which the purchase is scheduled to be made plus accrued and unpaid interest on the unpaid principal amount of all series and any interest amounts that were due but not paid on a prior date and interest on such overdue interest amounts (if the applicable series supplement so provides) at the applicable certificate rates through the day preceding such Distribution Date. The payment of such reassignment price, in immediately available funds, will be considered a payment in full of all receivables and the principal portion of such funds and the interest portion of such funds will be deposited in the Excess Funding Account and the Collection Account, respectively. If the trustee or the requisite percentage of certificateholders of all series gives a notice as provided above, the obligation of the sellers to make any such deposit will constitute the sole remedy respecting a breach of the representations and warranties available to certificateholders of all series (or the trustee on behalf of such certificateholders) or any provider of Series Enhancement. It is not required or anticipated that the trustee will make any initial or periodic general examination of any documents or records related to the receivables or the accounts for the purpose of establishing the presence or absence of defects, compliance with a seller'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 pooling agreement or for any other purpose. The servicer, however, will deliver to the trustee on or before April 30 of each calendar year an opinion of counsel with respect to the validity of the interest of the trust in and to the receivables and certain other components of the trust. Indemnification The pooling agreement provides that the servicer will indemnify the trust and the trustee from and against any loss, liability, expense, damage or injury suffered or sustained arising out of the servicer's actions or omissions with respect to the trust pursuant to the pooling agreement. 47 Under the pooling agreement, the sellers have agreed to be liable directly to an injured party for the entire amount of any losses, claims, damages or liabilities (other than those incurred by a certificateholder in the capacity of an investor in the certificates or those which arise from any action on the part of any certificateholder) arising out of or based on the arrangement created by the pooling agreement as though such agreement created a partnership under the Uniform Partnership Act in which either seller was a general partner. If a successor servicer is appointed, the successor servicer will indemnify and hold harmless the sellers for any losses, claims, damages and liabilities of the sellers as described in this paragraph arising from the actions or omissions of such successor servicer. Except as provided in the two preceding paragraphs, the pooling agreement provides that none of the sellers or any of their directors, officers, employees or agents will be under any other liability to the trust, the trustee, the certificateholders, any provider of Series Enhancement or any other person for any action taken, or for refraining from taking any action, in good faith in their capacities as a seller or the servicer, as the case may be, pursuant to the pooling agreement. However, none of the sellers, 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 pooling 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 pooling agreement. The servicer may, in its sole discretion, undertake any such legal action which it may deem necessary or desirable for the benefit of the certificateholders with respect to the pooling agreement and the rights and duties of the parties thereto and the interest of such certificateholders thereunder. Collection and Other Servicing Procedures Pursuant to the pooling agreement, the servicer is responsible for servicing, collecting, enforcing and administering the receivables, including the Funds Collateral, if any, in accordance with its customary and usual procedures for servicing receivables comparable to the receivables and the lending guidelines. Servicing activities to be performed by the servicer include collecting and recording payments, communicating with accountholders, investigating payment delinquencies, evaluating the increase of credit limits and the issuance of credit cards, providing billing and tax records to accountholders and maintaining internal records with respect to each account. 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 pooling 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 of any series and on behalf of the trustee. Pursuant to the pooling agreement, Capital One Bank, as servicer, has the right to delegate its duties as servicer to any person who agrees to conduct such duties in accordance with the pooling agreement and the bank's lending guidelines. Capital One Bank has contracted with Capital One Services, Inc., an affiliate of Capital One Bank, to act as sub-servicer and to perform its servicing activities. Notwithstanding any such delegation to Capital One Services, Inc., the servicer will continue to be liable for all of its obligations under the pooling agreement. In certain circumstances, however, Capital One Bank could be relieved of its duties as servicer upon the assumption of such duties by another entity. Servicer Covenants In the pooling agreement, the servicer has covenanted as to each receivable and related account that: (a) it will duly fulfill all obligations on its part to be fulfilled under or in connection with the receivables or accounts, and will maintain in effect all qualifications required in order to service the receivables 48 or accounts the failure to comply with which would have a material adverse effect on the certificateholders or any provider of Series Enhancement; (b) it will not permit any rescission or cancellation of a receivable except as ordered by a court of competent jurisdiction or other governmental authority in accordance with the sellers' lending guidelines; (c) it will take no action which, nor omit to take any action the omission of which, would substantially impair the rights of the certificateholders in the receivables, the Funds Collateral, if any, or the accounts; (d) it will not reschedule, revise or defer collections due on the receivable except in accordance with its ordinary course of business and the sellers' lending guidelines; and (e) except in connection with its enforcement or collection of an account, it will take no action to cause or permit any receivables to be evidenced by any instrument (as defined in the UCC) and if any receivable is so evidenced, it shall be reassigned or assigned to the servicer as provided below. Under the terms of the pooling agreement, in the event any of the representations, warranties or covenants of the servicer contained in clauses (a) through (e) above with respect to any receivable or the related account is breached, and such breach has a material adverse effect on the certificateholders' interest of all series in such receivable (which determination shall be made without regard to the availability of funds under any credit enhancement) and is not cured within 60 days (or such longer period, not in excess of 150 days, as may be agreed to by the trustee) 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, then all receivables in the account or accounts to which such event relates shall be reassigned or assigned to the servicer on the terms and conditions set forth below; provided, however, that such receivables will not be reassigned or assigned to the servicer if, on any day prior to the end of such 60-day or longer period: (i) the relevant representation and warranty shall be true and correct, or the relevant covenant shall have been complied with, in all material respects, and (ii) the servicer shall have delivered to the trustee an officer's certificate describing the nature of such breach and the manner in which such breach was cured. If Capital One Bank is the servicer, such reassignment will be made on or before the Distribution Date following the Monthly Period in which such reassignment obligation arises by the servicer deducting the portion of any such receivable which is a principal receivable from the aggregate amount of principal receivables used to calculate the Sellers' Interest. In addition, if the deduction of such principal receivables would reduce the Sellers' Interest below zero, Capital One Bank as the servicer will deposit into the Collection Account the applicable Transfer Deposit Amount described above under "-- Representations and Warranties." If Capital One Bank is not the servicer, such assignment and transfer will be made when the servicer deposits an amount equal to the amount of such receivable in the Collection Account on the business day preceding the Distribution Date following the Monthly Period during which such obligation arises. The amount of such deposit will be deemed a Transfer Deposit Amount under the pooling agreement. This reassignment or transfer and assignment to the servicer constitutes the sole remedy available to the certificateholders of any series if such covenant or warranty of the servicer is not satisfied and the trust's interest in any such reassigned receivables shall be automatically assigned to the servicer. Certain Matters Regarding the Servicer The servicer may not resign from its obligations and duties under the pooling agreement, except upon determination that such duties are no longer permissible under applicable law. 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 pooling agreement. Notwithstanding the foregoing, Capital One Bank may transfer its servicing obligations to another entity and be relieved of its obligations and duties under the pooling agreement and related agreements. 49 Any person into which, in accordance with the pooling agreement, the servicer may be merged or consolidated or any person resulting from any merger or consolidation to which the servicer is a party, or any person succeeding to the business of the servicer, will be the successor to Capital One Bank, as servicer, or other servicer, as the case may be, under the pooling agreement. Servicer Default In the event of any Servicer Default, either the trustee or certificateholders holding certificates evidencing more than 50% of the aggregate unpaid principal amount of all outstanding series, by written termination notice to the servicer (and to the trustee and certain providers of Series Enhancement, if given by the certificateholders), may terminate all of the rights and obligations of the servicer, as servicer, under the pooling agreement. If the trustee within 60 days of receipt of such termination notice is unable to obtain any bids from eligible servicers and the sellers deliver officers' certificates to the effect that the servicer cannot in good faith cure the Servicer Default which gave rise to such termination notice, then the trustee shall, except when the Servicer Default is caused by the occurrence of certain events of bankruptcy, insolvency, conservatorship or receivership of the servicer, offer the sellers a right of first refusal to purchase the certificateholders' interest for all series. The purchase price for such a purchase shall be paid on a Distribution Date and shall generally be equal to, with respect to each series, the higher of: (a) the sum of the Invested Amount plus the enhancement Invested Amount, if any, of such series on such Distribution Date (less the amount, if any, on deposit in any principal funding account with respect to such series) plus accrued and unpaid interest at the applicable certificate rate (together with, if applicable, interest on interest amounts that were due and not paid on a prior date), through the last day of the calendar month preceding such Distribution Date; and (b) the sum of the average bid price quoted by two recognized dealers for similar securities rated in the same rating category as the initial rating of the certificates of such series with a remaining maturity approximately equal to the remaining maturity of the certificates of such series plus the enhancement invested amount, if any, of such series. The trustee shall, as promptly as possible after giving a termination notice, appoint 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 rights, authority, power and obligations of the servicer under the pooling agreement shall pass to and be vested in the trustee. Prior to any appointment of a successor servicer, the trustee will seek to obtain bids from potential servicers meeting certain eligibility requirements set forth in the pooling agreement to serve as a successor servicer for servicing compensation not in excess of the Servicing Fee. The rights and interest of Capital One Bank under the pooling agreement and any series supplement in the Sellers' Interest will not be affected by any termination notice or appointment of a successor servicer. Upon the occurrence of any Servicer Default the servicer shall not be relieved from using its best efforts to perform its obligations in a timely manner in accordance with the terms of the pooling agreement and any series supplement and the servicer shall provide the trustee, each holder of the Seller Certificate, any provider of Series Enhancement and the certificateholders of each series an officer's certificate giving prompt notice of such failure or delay by it, together with a description of its efforts to so perform its obligations. Evidence as to Compliance The pooling agreement provides that on or before May 31 of each calendar year the servicer will cause a firm of nationally recognized independent public accountants (who may also render other services to the servicer or the banks) to furnish a report to the effect that they have attested to the assertion of authorized officers of the servicer that the servicing was conducted in compliance with certain applicable provisions of the pooling agreement and each series supplement in all material respects. 50 In addition, on or before May 31 of each calendar year such accountants will also furnish a report to the effect they have applied certain procedures agreed upon with the servicer to compare the mathematical calculations of certain amounts contained in the monthly servicer's certificates delivered during the preceding calendar year with the servicer's computer reports that generated such amounts, and will deliver a report to the trustee, the servicer and each Rating Agency reporting all material discrepancies revealed by such comparison. The pooling agreement provides for delivery to the trustee, each Rating Agency and certain providers of Series Enhancement on or before May 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 pooling agreement throughout the preceding year or, if there has been a default in the performance of any such obligation in any material respect, specifying the nature and status of the default. Copies of all statements, certificates and reports furnished to the trustee may be obtained by a request in writing delivered to the trustee. Amendments The pooling agreement and any series supplement may be amended from time to time, including in connection with: . the assumption of the banks' obligations under the pooling agreement by another party, . the provision of additional Series Enhancement for the benefit of certificateholders of any series, . the issuance of a Supplemental Certificate, . the addition of participations in receivables to the trust, or . the designation of an additional seller. Amendments to the pooling agreement and any series supplement may be made by agreement of the trustee, the sellers and the servicer without the consent of the certificateholders of any series or the consent of the provider of any Series Enhancement provided that: (i) the sellers have received written notice from each Rating Agency that such amendment will not have a Ratings Effect, (ii) each seller delivers to the trustee and each provider of Series Enhancement an officer's certificate to the effect that such amendment will not have a material adverse effect on the interests of the certificateholders, (iii) in the case of an amendment relating to the assumption of a seller's or the servicer's obligations under the pooling agreement by another party, all other conditions to such assumption specified in the pooling agreement have been satisfied (see "Assumption of a Seller's Obligations" and "--Certain Matters Regarding the Servicer" in this prospectus), (iv) all conditions to such amendment specified in the pooling agreement have been satisfied, and (v) the amendment will not cause a significant change in the permitted activities of the trust. The pooling agreement and any series supplement may also be amended from time to time by the sellers, the servicer and the trustee (a) with the consent of the holders of certificates evidencing not less than 50% of the aggregate unpaid principal amount of the certificates for all outstanding series affected for the purpose of effecting a significant change in the permitted activities of the trust and (b) in all other cases with the consent of the holders of certificates evidencing not less than 66 2/3% of the aggregate unpaid principal amount of the certificates of all adversely affected series for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of the pooling agreement or any series supplement or of modifying in any manner the rights of such certificateholders. No such amendment specified in clause (b) above, however, may: . reduce in any manner the amount of or delay the timing of any distributions to be made to certificateholders or deposits of amounts to be so distributed or the amount available under any Series Enhancement without the consent of each affected certificateholder; 51 . change the definition or the manner of calculating the interest of any certificateholder without the consent of each affected certificateholder; . reduce the percentage required to consent to any such amendment without the consent of each certificateholder; or . adversely affect the rating of any series or class by any Rating Agency without the consent of the holders of certificates of such series or class evidencing not less than 66 2/3% of the aggregate unpaid principal amount of the certificates of such series or class. Promptly following the execution of any such amendment (other than an amendment described in the first paragraph), the trustee will furnish notice of the substance of such amendment to each certificateholder. Trustee The Bank of New York is the trustee under the pooling agreement. The Corporate Trust Department of The Bank of New York is located at 101 Barclay Street, New York, New York 10286. The banks, the servicer and their respective affiliates may from time to time enter into normal banking and trust relationships with the trustee and its affiliates. The trustee, the banks, the servicer and any of their respective affiliates may hold certificates of any series 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 such certificateholders as a group. In addition, for purposes of meeting the legal requirements of certain local jurisdictions, the trustee shall have the power to appoint a co-trustee or separate trustees of all or any part of the trust. In the event of such appointment, all rights, powers, duties and obligations shall be conferred or imposed upon the trustee and such separate trustee or co-trustee jointly, or, in any jurisdiction in which the trustee shall be incompetent or unqualified to perform certain acts, singly upon 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 sellers 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 pooling 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. Certain Legal Aspects of the Receivables Transfer of Receivables Each seller has represented and warranted in the pooling agreement that the transfer of receivables by it to the trust is either a valid sale and assignment to the trust of all right, title and interest of that seller in and to such receivables, except for the interest of that seller as a holder of the Sellers' Interest (or the interests of transferees, if any, of a portion of the Seller Certificate), or a grant to the trust of a security interest in such receivables. Each seller also represents and warrants in the pooling agreement that, in the event the transfer of receivables by that seller to the trust is deemed to create a security interest under the UCC, there will exist in favor of the trust a first priority perfected security interest in receivables created after the designation of the related accounts to the trust on and after their creation, except for certain governmental liens. For a discussion of the trust's rights arising from a breach of these warranties, see "The Pooling Agreement Generally--Representations and Warranties" in this prospectus. Certain receivables may be added to the trust from time to time with respect to which the related accountholders have provided a seller with Funds Collateral as security for such accountholder's obligations to that seller. The Funds Collateral is expected to be held by a depositary selected by each seller. Each seller will take certain actions that it believes are required or reasonably requested under applicable state law to perfect its 52 security interest in the Funds Collateral. The perfection of a security interest in the Funds Collateral may not be governed by the UCC, and existing common law authority does not definitively establish what steps are necessary to perfect such a lien. This uncertainty exists both with respect to the grant of a security interest in the Funds Collateral by accountholders to a seller and with respect to the grant of a security interest in that seller's interest in the Funds Collateral by such seller to the trust. While not free from doubt, a Virginia court properly presented with the issue should determine that such a seller has taken sufficient action and has adequately divested the accountholders of control over the Funds Collateral so as to perfect a security interest therein. In connection with the transfer of a seller's interest in the receivables to the trust, that seller will also sell and assign to the trust its interest as secured party in the related Funds Collateral, if any. Because possession of such Funds Collateral will be maintained by a depositary and will not be transferred to the trustee, the trust will not have a direct claim to the Funds Collateral. Each seller represents and warrants in the pooling agreement that the transfer of its interest in the Funds Collateral, if any, to the trust is either a valid sale and assignment of that seller's interest in such Funds Collateral to the trust or the grant to the trust of a security interest in that seller's interest in such Funds Collateral. Each seller also represents and warrants in the pooling agreement that in the event the transfer of its interest in the related Funds Collateral, if any, to the trust is deemed to create a security interest, there will exist a first priority perfected security interest in that seller's interest in the Funds Collateral, if any, except for certain governmental liens. Although each seller has taken steps it believes appropriate to perfect interests given to the trust, and on the basis of its belief has made the related representations and warranties, the legal uncertainty in these matters is such that no definitive assurance can be given that a first priority perfected security interest in that seller's interest in the Funds Collateral either does or will exist for the benefit of the trust. For a discussion of the trust's rights arising from a breach of these warranties, see "The Pooling Agreement Generally--Representations and Warranties" in this prospectus. Each seller has represented as to previously conveyed receivables and the related Funds Collateral, and will represent as to receivables and the related Funds Collateral, if any, to be conveyed, that its interest in the receivables and the related Funds Collateral, if any, are "accounts" or "general intangibles" for purposes of the UCC. Both the sale of accounts and the transfer of accounts as security for an obligation are treated under Article 9 of the UCC as subject to its provisions, and the filing of appropriate financing statements is required to perfect the security interest of the trust. If a transfer of general intangibles is deemed to create a security interest, the UCC applies and the filing of appropriate financing statements is also required in order to perfect the trust's security interest in the receivables and the related Funds Collateral, if any. Financing statements covering the receivables and the related Funds Collateral, if any, have been and will be filed with the appropriate state and local governmental authorities to protect the interests of the trust in the receivables and the related Funds Collateral, if any. If a transfer of general intangibles is deemed to be a sale, the filing of a financing statement is not required to protect the trust's interest from third parties. Although the priority of a sale of general intangibles arising after the formation of the trust is not as clear under the laws of the Commonwealth of Virginia as the priority of interests governed by the UCC, the sellers believe that it would be inconsistent for a court to afford the trust less favorable treatment if the transfer of the receivables and the related Funds Collateral, if any, is deemed to be a sale than if it were deemed to be a security interest and that a court should conclude that a sale of receivables and the related Funds Collateral, if any, consisting of general intangibles would be deemed to have occurred as of the date of execution of the pooling agreement or the applicable date receivables arising in Additional Accounts have been conveyed to the trust. Nonetheless, a court could conclude that some other action under applicable law is required to perfect such a sale against the interest of third parties. In connection with the transfer of a seller's interest in the receivables and the related Funds Collateral, if any, to the trust, that seller is required to indicate in its computer records that its interest in such receivables and such Funds Collateral has been conveyed to the trust. In addition, that seller has provided or will provide to the trustee a computer file or a microfiche list containing a true and complete list showing for each initial 53 account, as of the Trust Cut-Off Date, and for each Additional Account, as of the applicable additional cut-off date: (i) its account number, (ii) the collection status, and (iii) the aggregate amount outstanding, the aggregate amount of principal receivables in such account and the amount of the related Funds Collateral, if any. Capital One Bank, as initial servicer, will retain and will not deliver to the trustee any other records or agreements relating to the accounts, the receivables or the Funds Collateral. Except as set forth above, the records and agreements relating to the accounts, the receivables and the Funds Collateral will not be segregated from those relating to other revolving credit accounts and receivables, and the physical documentation relating to the accounts, the receivables or the Funds Collateral will not be stamped or marked to reflect the transfer of the receivables and the Funds Collateral to the trust. Capital One Bank has filed and each seller is required to file UCC financing statements with respect to the transfer of the receivables and the Funds Collateral and the proceeds thereof to the trust meeting the requirements of applicable state law. With respect to the Funds Collateral, a depositary or a person unaffiliated with the accountholders has obtained and will maintain continuous possession and control of such Funds Collateral. There are certain limited circumstances under the UCC in which a prior or subsequent transferee of receivables and the related Funds Collateral, if any, coming into existence after the date of the pooling agreement could have an interest in such receivables and the related Funds Collateral, as applicable, with priority over the trust's interest. Under the pooling agreement, however, each seller has represented and warranted that it transferred the receivables to the trust, and will represent and warrant that it will transfer its interest in the receivables and the related Funds Collateral, if any, to the trust, free and clear of the lien of any third party except for certain governmental liens. In addition, each seller has covenanted and will covenant that it will not sell, pledge, assign, transfer or grant any lien on any receivable or any related Funds Collateral (or any interest therein) other than to the trust. Nonetheless, a tax or governmental lien or other nonconsensual lien arising prior to the time a receivable comes into existence may have priority over the interest of the trust in such receivable and any related Funds Collateral. In addition, through fraud or negligence of the applicable seller, a subsequent transferee of the receivables or the Funds Collateral may also have priority over the interests of the trust. Furthermore, if the FDIC were appointed as a conservator or receiver of either bank, the conservator's or receiver's administrative expenses may also have priority over the interest of the trust in the receivables and related Funds Collateral. In addition, while Capital One Bank is the servicer, cash collections held by Capital One Bank may, subject to certain conditions, be commingled and used for the benefit of Capital One Bank prior to the date on which such collections are required to be deposited in the Collection Account. In the event of insolvency or similar proceedings being commenced by or against Capital One Bank or, in certain circumstances, the lapse of certain time periods, the trust may not have a perfected interest in such collections and, in such event, the trust may suffer a loss of all or part of such collections, which may result in a loss to certificateholders. Certain Matters Relating to Conservatorship and Receivership Capital One Bank is chartered under the laws of Virginia. In Virginia, the Virginia State Corporation Commission, which supervises and examines Capital One Bank, may apply to any Virginia court having jurisdiction over the appointment of receivers to appoint a receiver upon determination that certain events relating to Capital One Bank's financial condition have occurred. The Virginia State Corporation Commission is authorized, but not required, to apply for the appointment of the FDIC as receiver and, as a matter of federal law, the FDIC would be authorized, but not obligated, to accept such appointment. The Virginia State Corporation Commission has informally indicated that it would seek to have the FDIC appointed as receiver in any receivership proceeding involving a bank such as Capital One Bank. Virginia law sets forth certain powers 54 that could be exercised by the FDIC upon its appointment as receiver. There are no Virginia statutory provisions governing the appointment of a conservator for a Virginia-chartered bank. In addition, the FDIC could be appointed as receiver or conservator of Capital One Bank as a matter of federal law if certain events occur relating to Capital One Bank's financial condition or the propriety of its actions. Capital One, F.S.B. is chartered as a federal savings bank and is regulated and supervised by the Office of Thrift Supervision, which is authorized to appoint the FDIC as conservator or receiver for Capital One, F.S.B. if certain events occur relating to its financial condition or the propriety of its actions. In addition, the FDIC could appoint itself as conservator or receiver for Capital One, F.S.B. Although each bank will treat its transfer of receivables to the trust as a sale for accounting purposes, the transfer may constitute the grant of a security interest under general applicable law. Nevertheless, the FDIC has issued regulations surrendering certain rights under the FDIA to reclaim, recover, or recharacterize a financial institution's transfer of financial assets such as the receivables if (i) the transfer involved a securitization of the financial assets and meets specified conditions for treatment as a sale under relevant accounting principles, (ii) the financial institution received adequate consideration for the transfer, (iii) the parties intended that the transfer constitute a sale for accounting purposes, and (iv) the financial assets were not transferred fraudulently, in contemplation of the financial institution's insolvency, or with the intent to hinder, delay, or defraud the financial institution or its creditors. The pooling agreement and the transfer of the receivables by the banks to the trust are intended to satisfy all of these conditions. If a condition required under the FDIC's regulations were found not to have been met, however, the FDIC could reclaim, recover, or recharacterize the transfer of the receivables a bank. FDIC staff positions taken prior to the passage of the 1989 amendment to the FDIA do not suggest that the FDIC would interrupt the timely transfer to the trust of payments collected on the receivables. If the FDIC were to assert a different position, the FDIA would limit the trust's damages in this event to its "actual direct compensatory damages" determined as of the date that the FDIC was appointed as conservator or receiver for that bank. The FDIC, moreover, could delay its decision whether to reclaim, recover, or recharacterize the transfer of the receivables by that bank for a reasonable period following its appointment as conservator or receiver for that bank. Therefore, if the FDIC were to reclaim, recover, or recharacterize the transfer of the receivables by a bank, payments to certificateholders could be delayed or reduced. Even if the conditions set forth in the regulations were satisfied and the FDIC did not reclaim, recover, or recharacterize the transfer of the receivables by a bank, certificateholders could suffer a loss on their investment if (i) the pooling agreement or the transfer of the receivables by a bank were found to violate the regulatory requirements of the FDIC, (ii) the trustee were required to comply with the claims process established under the FDIA in order to collect payments on the receivables, (iii) the FDIC were to request a stay of any action by the trust or the trustee to enforce the pooling agreement or the certificates, or (iv) the FDIC were to repudiate other parts of the pooling agreement, such as any obligation to collect payments on or otherwise service the receivables. In addition, regardless of the terms of the pooling agreement or the instructions of those authorized to direct the trustee's actions, the FDIC may have the power (i) to prevent or require the commencement of an early amortization period, (ii) to prevent, limit, or require the early liquidation of the receivables and termination of the trust, or (iii) to require, prohibit, or limit the continued transfer of receivables to the trust. The FDIC, moreover, could prevent the trustee or the certificateholders from appointing a successor servicer under the pooling agreement. If any of these events were to occur, payments to certificateholders could be delayed or reduced. Each bank will establish a Deposit Account and maintain records regarding each accountholder's beneficial interest in the funds deposited as security for such accountholders' payment obligations arising under secured credit cards sufficient to afford each accountholder federal deposit insurance up to applicable limits. In 55 the event that a conservator or receiver is appointed for the depositary with which such Deposit Accounts are held, however, a delay or reduction in the payment of such funds to the accountholder or to the trust could result. Consumer Protection Laws The relationship between an accountholder and consumer lender is extensively regulated by federal, state and local consumer protection laws. With respect to consumer revolving credit accounts owned by the banks, the most significant federal laws include the federal Truth-in-Lending, Equal Credit Opportunity, Fair Credit Reporting and Fair Debt Collection Practices Acts. These statutes impose disclosure requirements before and when an account is opened and at the end of monthly billing cycles and, in addition, limit accountholder liability for unauthorized use, prohibit certain discriminatory practices in extending credit, impose certain limitations on the type of account-related charges that may be issued and regulate collection practices. In addition, accountholders are entitled under these laws to have payments and credits applied to their accounts 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 or the Funds Collateral, if any, either as assignee from the banks with respect to obligations arising before transfer of the receivables or the Funds Collateral, if any, to the trust or as the party directly responsible for obligations arising after the transfer. In addition, an accountholder may be entitled to assert such violations by way of setoff against the obligation to pay the amount of receivables owing. See "Risk Factors" in this prospectus. All receivables, including any Funds Collateral, that were not created or serviced in compliance in all material respects with the requirements of such laws, subject to certain conditions described under "The Pooling Agreement Generally--Representations and Warranties" in this prospectus, will be reassigned to the applicable seller. The servicer has also agreed in the pooling agreement to indemnify the trust, among other things, for any liability arising from such servicing 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 "The Pooling Agreement Generally-- Representations and Warranties" in this prospectus. The Soldiers' and Sailors' Civil Relief Act of 1940 allows individuals on active duty in the military to cap the interest rate on debts incurred before the call to active duty at 6%. In addition, subject to judicial discretion, any action or court proceeding in which an individual in military service is involved may be stayed if the individual's rights would be prejudiced by denial of such a stay. Application of federal and state bankruptcy and debtor relief laws would affect the interests of certificateholders in the receivables if such laws result in any receivables being charged off as uncollectible when there are no funds available from Series Enhancement or other sources and could delay realization on any related Funds Collateral or otherwise affect the ability of the banks to realize on such Funds Collateral. See "Description of the Certificates--Defaulted Receivables; Rebates and Fraudulent Charges; Recoveries" in this prospectus. Federal Income Tax Consequences General The following is a general discussion of material federal income tax consequences relating to the purchase, ownership and disposition of a certificate offered hereunder. This discussion is based on current law, which is subject to changes that could prospectively or retroactively modify or adversely affect the tax consequences summarized below. The discussion does not address all of the tax consequences relevant to a particular Certificate Owner in light of that Certificate Owner's circumstances, and some Certificate Owners may be subject to special tax rules and limitations not discussed below. Each prospective Certificate Owner is cautioned to consult its own tax advisor in determining the federal, state, local and foreign income and any other tax consequences of the purchase, ownership and disposition of a certificate. 56 For purposes of this discussion, "U.S. person" means a citizen or resident of the United States, a corporation or partnership organized in or under the laws of the United States, any state thereof, or any political subdivision of either (including the District of Columbia), or an estate or trust the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source. The term "U.S. Certificate Owner" means any U.S. person and any other person to the extent that the income attributable to its interest in a certificate is effectively connected with that person's conduct of a U.S. trade or business. Treatment of the Certificates as Debt The banks express in the pooling agreement the intent that for federal, state and local income and franchise tax purposes, the certificates will be debt of the banks secured by the receivables. The banks, by entering into the pooling agreement, and each investor, by the acceptance of a beneficial interest in a certificate, will agree to treat the certificates as debt of the banks for federal, state and local income and franchise tax purposes. However, the pooling agreement generally refers to the transfer of receivables as a "sale," and because different criteria are used in determining the non-tax accounting treatment of the transaction, the banks will treat the pooling agreement for certain non-tax accounting purposes as causing a transfer of an ownership interest in the receivables and not as creating a debt obligation. A basic premise of federal income tax law is that the economic substance of a transaction generally determines its tax consequences. The form of a transaction, while a relevant factor, is not conclusive evidence of its economic substance. In appropriate circumstances, the courts have allowed taxpayers as well as the Internal Revenue Service to treat a transaction in accordance with its economic substance, as determined under federal income tax law, even though the participants in the transaction have characterized it differently for non-tax purposes. The determination of whether the economic substance of a purchase of an interest in property is instead a loan secured by the transferred property has been made by the Internal Revenue Service and the courts on the basis of numerous factors designed to determine whether the seller has relinquished (and the purchaser has obtained) substantial incidents of ownership in the property. Among those factors, the primary ones examined are whether the purchaser has the opportunity to gain if the property increases in value, and has the risk of loss if the property decreases in value. Except to the extent otherwise specified in the related prospectus supplement, Orrick, Herrington & Sutcliffe LLP, special counsel to the banks, will deliver its opinion generally to the effect that, under current law as in effect on the series issuance date, although no transaction closely comparable to that contemplated in this prospectus has been the subject of any Treasury regulation, revenue ruling or judicial decision, for federal income tax purposes the certificates offered hereunder will not constitute an ownership interest in the receivables but will properly be characterized as debt. Except where indicated to the contrary, the following discussion assumes that the certificates offered hereunder are debt for federal income tax purposes. Treatment of the Trust General The pooling agreement permits the issuance of certificates and certain other interests in the trust (including certain undivided interests in the trust, or collateral indebtedness interests or Class C interests such as may be described in the related prospectus supplement), each of which may be treated for federal income tax purposes either as debt or as equity interests in the trust. If all of the certificates and other interests in the trust (other than the Bank Certificate) were characterized as debt, the trust might be characterized as a security arrangement for debt collateralized by the receivables and issued directly by the banks (or other holder of the Seller Certificate). Under such a view, the trust would be disregarded for federal income tax purposes. Alternatively, if some of the Seller Certificate, the certificates and other interests in the trust were characterized as equity, the trust might be characterized as a separate entity owning the receivables, issuing its own debt, and jointly owned by the banks (or other holders of the Bank Certificate) and any other holders of equity interests in the trust. However, special counsel is of the opinion that, under current law as in effect on the series issuance date, any such entity constituted by the trust will not be an association or publicly traded partnership taxable as a corporation. 57 Possible Treatment of the Trust as a Partnership or a Publicly Traded Partnership Although, as described above, special counsel will deliver its opinion that the certificates offered by this prospectus will properly be treated as debt and that the trust will not be treated as an association or publicly traded partnership taxable as a corporation for federal income tax purposes, such opinion will not bind the Internal Revenue Service and thus no assurance can be given that such treatment will prevail. If the Internal Revenue Service were to contend successfully that some or all of the Seller Certificate, the certificates or any other interests in the trust were equity in the trust for federal income tax purposes, all or a portion of the trust could be classified as a partnership or a publicly traded partnership taxable as a corporation for such purposes. Because special counsel will deliver its opinion that the certificates offered hereunder will be characterized as debt for federal income tax purposes and because any holder of any other interest in the trust (other than the Bank Certificate) generally will agree to treat that interest as debt for such purposes, no attempt will be made to comply with any tax reporting requirements that would apply as a result of such alternative characterizations. If the trust were treated in whole or in part as a partnership in which some or all holders of interests in the publicly offered certificates were partners, that partnership could be classified as a publicly traded partnership, and so could be taxable as a corporation. Further, regulations published by the Treasury Department under the publicly traded partnership provisions of the Internal Revenue Code could cause the trust to constitute a publicly traded partnership even if all holders of interests in publicly offered certificates are treated as holding debt. The publicly traded partnership regulations generally apply to taxable years beginning after December 31, 1995, and thus could affect the classification of then-existing entities and the ongoing tax treatment of already completed transactions. Although the publicly traded partnership regulations provide for a 10-year grandfather period for a partnership actively engaged in an activity before December 4, 1995, it is not clear whether the trust would qualify for this grandfather provision. If the trust were classified as a publicly traded partnership, whether by reason of the treatment of publicly offered certificates as equity or by reason of the publicly traded partnership regulations, it would avoid taxation as a corporation if its income was not derived in the conduct of a "financial business," however, whether the income of the trust would be so classified is unclear. Under the Internal Revenue Code and the publicly traded partnership regulations, a partnership will be classified as a publicly traded partnership if equity interests therein are traded on an "established securities market," or are "readily tradable" on a "secondary market" or its "substantial equivalent." The banks have taken and intend to take measures designed to reduce the risk that the trust could be classified as a publicly traded partnership by reason of interests in the trust other than the publicly traded certificates. However, certain of the actions that may be necessary for avoiding the treatment of such interests as "readily tradable on a secondary market (or the substantial equivalent thereof)" are not fully within the control of the banks, and certain series predating the publicly traded partnership regulations may not conform to their requirements. As a result, there can be no assurance that the measures the banks have taken and intend to take will in all circumstances be sufficient to prevent the trust from being classified as a publicly traded partnership under the regulations. If the trust was treated as a partnership but nevertheless was not treated as a publicly traded partnership taxable as a corporation, that partnership would not be subject to federal income tax. Rather, each item of income, gain, loss and deduction of the partnership generated through the ownership of the related receivables would be taken into account directly in computing taxable income of the banks (or the holders of the Seller Certificate) and any Certificate Owners treated as partners in accordance with their respective partnership interests therein. The amounts and timing of income reportable by any Certificate Owners treated as partners would likely differ from that reportable by such Certificate Owners had they been treated as owning debt. In addition, if the trust were treated in whole or in part as a partnership other than a publicly traded partnership, income derived from the partnership by any Certificate Owner that is a pension fund or other tax-exempt entity may be treated as unrelated business taxable income. Partnership characterization also may have adverse state and local income or franchise tax consequences for a Certificate Owner. If the trust were treated in whole or in 58 part as a partnership and the number of holders of interests in the publicly offered certificates and other interests in the trust treated as partners equaled or exceeded 100, the banks may cause the trust to elect to be an "electing large partnership." The consequence of such election to investors could include the determination of certain tax items at the partnership level and the disallowance of otherwise allowable deductions. No representation is made as to whether such election will be made. If the arrangement created by the pooling agreement were treated in whole or in part as a publicly traded partnership taxable as a corporation, that entity would be subject to federal income tax at corporate tax rates on its taxable income generated by ownership of the related receivables. That tax could result in reduced distributions to Certificate Owners. No distributions from the trust would be deductible in computing the taxable income of the corporation, except to the extent that any certificates were treated as debt of the corporation and distributions to the related Certificate Owners were treated as payments of interest thereon. In addition, distributions to Certificate Owners not treated as holding debt would be dividend income to the extent of the current and accumulated earnings and profits of the corporation (and Certificate Owners may not be entitled to any dividends received deduction in respect of such income). Taxation of Interest Income of U.S. Certificate Owners General Stated interest on a beneficial interest in a certificate will be includible in gross income in accordance with a U.S. Certificate Owner's method of accounting. Original Issue Discount It is not expected that the certificates will be issued with original issue discount. If the certificates are issued with original issue discount, the provisions of Sections 1271 through 1273 and 1275 of the Internal Revenue Code will apply to the certificates. Under those provisions, a U.S. Certificate Owner (including a cash basis holder) generally would be required to accrue the original issue discount on its interest in a certificate in income for federal income tax purposes on a constant yield basis, resulting in the inclusion of original issue discount in income in advance of the receipt of cash attributable to that income. In general, a certificate will be treated as having original issue discount to the extent that its "stated redemption price" exceeds its "issue price," if such excess equals or exceeds 0.25 percent multiplied by the weighted average life of the certificate (determined by taking into account only the number of complete years following issuance until payment is made for any partial principal payments). Under Section 1272(a)(6) of the Internal Revenue Code, special provisions apply to debt instruments on which payments may be accelerated due to prepayments of other obligations securing those debt instruments. However, no regulations have been issued interpreting those provisions, and the manner in which those provisions would apply to the certificates is unclear. Additionally, the Internal Revenue Service could take the position based on Treasury Department regulations that none of the interest payable on a certificate is "unconditionally payable" and hence that all of such interest should be included in the certificate's stated redemption price at maturity. If sustained, such treatment should not significantly affect the tax liability of most Certificate Owners, but prospective U.S. Certificate Owners are cautioned to consult their own tax advisors concerning the impact to them in their particular circumstances. Except where indicated to the contrary, this discussion assumes that the interest payable on a certificate is "unconditionally payable." Market Discount A U.S. Certificate Owner who purchases an interest in a certificate at a discount that exceeds any unamortized original issue discount may be subject to the "market discount" rules of Sections 1276 through 1278 of the Internal Revenue Code. These rules provide, in part, that gain on the sale or other disposition of a certificate and partial principal payments on a certificate are treated as ordinary income to the extent of accrued market discount. The market discount rules also provide for deferral of interest deductions with respect to debt incurred to purchase or carry a certificate that has market discount. 59 Market Premium A U.S. Certificate Owner who purchases an interest in a certificate at a premium may elect to offset the premium against interest income over the remaining term of the certificate in accordance with the provisions of Section 171 of the Internal Revenue Code. Sale or Exchange of Certificates Upon a disposition of an interest in a certificate, a U.S. Certificate Owner generally will recognize gain or loss equal to the difference between the amount realized on the disposition and the U.S. Certificate Owner's adjusted basis in its interest in the certificate. The adjusted basis in the interest in the certificate will equal its cost, increased by any original issue discount or market discount includible in income with respect to the interest in the certificate prior to its sale and reduced by any payments of principal or original issue discount previously received with respect to the interest in the certificate and any amortized premium. Subject to the market discount rules, gain or loss will be capital gain or loss if the interest in the certificate was held as a capital asset. Capital losses generally may be used only to offset capital gains. Foreign Certificate Owners In general, a non-U.S. Certificate Owner who, for United States federal income tax purposes, is a nonresident alien individual or a foreign corporation (a "foreign person"), will not be subject to U.S. federal income tax on interest (including original issue discount) on a beneficial interest in a certificate unless: (i) the foreign person actually or constructively owns 10 percent or more of the total combined voting power of all classes of stock of either bank entitled to vote (or of a profits or capital interest in the trust if characterized as a partnership), (ii) the foreign person is a controlled foreign corporation that is related to the banks (or the trust if treated as a partnership) through stock ownership, (iii) the foreign person is a bank receiving interest described in Internal Revenue Code Section 881(c)(3)(A), (iv) such interest is described in the applicable prospectus supplement as contingent interest described in Internal Revenue Code Section 871(h)(4), or (v) the foreign person bears certain relationships to any holder of either (x) the Bank Certificate (other than the banks) or (y) any other interest in the trust not properly characterized as debt. To qualify for the exemption from taxation, the withholding agent, who generally is the last U.S. person in the chain of payment prior to payment to a foreign person, must have received (in the year in which a payment of interest or principal occurs or in either of the two preceding years) a statement that: (i) is signed by the foreign person under penalties of perjury, (ii) certifies that the foreign person is not a U.S. person, and (iii) provides the name and address of, and certain additional information concerning, the foreign person. The statement may be made on a Form W-8BEN or substantially similar substitute form, and the foreign person must inform the withholding agent of any change in the information on the statement within 30 days of the change. If a certificate is held through a securities clearing organization or certain other financial institutions, the organization or institution may provide a signed statement to the withholding agent. However, in that case, the signed statement must be accompanied by Form W-8BEN or substitute form provided by the foreign person to the organization or institution holding the certificate on behalf of the foreign person. Special rules apply to partnerships, estates and trusts, and in certain circumstances certifications as to foreign status and other matters may be required to be provided by partners and beneficiaries thereof. 60 Generally, any gain or income realized by a foreign person upon retirement or disposition of an interest in a certificate will not be subject to U.S. federal income tax; provided that: (i) in the case of a Certificate Owner that is an individual, such Certificate Owner is not present in the United States for 183 days or more during the taxable year in which such retirement or disposition occurs, and (ii) in the case of gain representing accrued interest, the conditions for exemption from withholding described above are satisfied. The U.S. Treasury Department has recently issued final Treasury regulations which revise various procedural matters relating to withholding taxes. Certificate Owners are cautioned to consult their tax advisors regarding the procedures whereby they may establish an exemption from withholding. If the certificates were treated as an interest in a partnership, the recharacterization could cause a non-U.S. Certificate Owner to be treated as engaged in a trade or business in the United States. In that event, the non- U.S. Certificate Owner would be required to file a federal income tax return and, in general, would be subject to U.S. federal income tax (including the branch profits tax) on its net income from the partnership. Further, certain withholding obligations apply with respect to income allocable or distributions made to a foreign partner. That withholding may be at a rate as high as 39.6 percent. If some or all of the certificates were treated as stock in a corporation, any related dividend distributions to a non-U.S. Certificate Owner generally would be subject to withholding of tax at the rate of 30 percent, unless that rate were reduced by an applicable tax treaty. Backup Withholding and Information Reporting Payments of principal and interest, as well as payments of proceeds from the sale, retirement or other disposition of a certificate, may be subject to "backup withholding" tax under the Internal Revenue Code at a rate of 31 percent if a recipient of such payments fails to furnish to the payor certain identifying information. Any amounts deducted and withheld would be allowed as a credit against such recipient's United States federal income tax, provided appropriate proof is provided under rules established by the Internal Revenue Service. Furthermore, certain penalties may be imposed by the Internal Revenue Service on a recipient of payments that is required to supply information but that does not do so in the proper manner. Backup withholding will not apply with respect to payments made to certain exempt recipients, such as corporations and financial institutions. Information may also be required to be provided to the Internal Revenue Service concerning payments, unless an exemption applies. Certificate Owners are cautioned to consult their tax advisors regarding their qualification for exemption from backup withholding and information reporting and the procedure for obtaining such an exemption. State and Local Taxation The discussion above does not address the taxation of the trust or the tax consequences of the purchase, ownership or disposition of an interest in the certificates under any state or local law. Each investor is cautioned to consult its own tax advisor regarding state or local tax consequences. ERISA Considerations Section 406 of the Employee Retirement Income Security Act of 1974, as amended, and Section 4975 of the Internal Revenue Code prohibit Plans from engaging in certain transactions involving "plan assets" with persons that are "parties in interest" under ERISA or "disqualified persons" under the Internal Revenue Code, collectively, "parties in interest," with respect to the Plan. A violation of these "prohibited transaction" rules may generate excise tax and other liabilities under ERISA and Section 4975 of the Internal Revenue Code for such persons, unless a statutory, regulatory or administrative exemption is available. Plans that are governmental plans (as defined in Section 3(32) of ERISA) and certain church plans (as defined in Section 3(33) of ERISA) are not subject to ERISA requirements. 61 A violation of the prohibited transaction rules could occur if certificates or any class or series were to be purchased with "plan assets" of any Plan if the sellers, the trustee, any underwriters of such class or series or any of their affiliates were a party in interest with respect to such Plan, unless a statutory, regulatory, or administrative exemption is available or an exception applies under a plan asset regulation issued by the Department of Labor. The sellers, the trustee, any underwriters of a class or series and their affiliates are likely to be parties in interest with respect to many Plans. Before purchasing certificates, a Plan fiduciary or other Plan investor should consider whether a prohibited transaction might arise by reason of the relationship between the Plan and the sellers, the trustee, any underwriters of such class or series or any of their affiliates and consult their counsel regarding the purchase in light of the considerations described below. The Department of Labor has issued five class exemptions that may apply to otherwise prohibited transactions arising from the purchase or holding of the certificates: Department of Labor Prohibited Transaction Class Exemptions 96-23 (Class Exemption for Plan Asset Transactions Determined by In-House Asset Managers), 95-60 (Class Exemption for Certain Transactions Involving Insurance Company General Accounts), 91-38 (Class Exemption for Certain Transactions Involving Bank Collective Investment Funds), 90-1 (Class Exemption for Certain Transactions Involving Insurance Company Pooled Separate Accounts) and 84-14 (Class Exemption for Plan Asset Transactions Determined by Independent Qualified Professional Asset Managers). Under certain circumstances, the Department of Labor plan asset regulation treats the assets of an entity in which a Plan holds an equity interest as "plan assets" of such Plan. Because the certificates will represent beneficial interests in the trust, and despite the agreement of the seller and the certificateholders to treat each class of certificates as debt instruments, the certificates are likely to be considered equity interests in the trust for purposes of the Department of Labor plan asset regulation, with the result that the assets of the trust are likely to be treated as "plan assets" of the investing Plans for purposes of ERISA and Section 4975 of the Internal Revenue Code and result in non-exempt prohibited transactions, unless one of the following exceptions applies. The first exception applies to a "publicly-offered security." A publicly- offered security is a security that is: (a) freely transferable, (b) part of a class of securities that is owned, immediately subsequent to the initial offering, by 100 or more investors who were independent of the issuer and of one another, and (c) either is: (i) part of a class of securities registered under Section 12(b) or 12(g) of the Securities Exchange Act of 1934, as amended, or (ii) 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, as amended, and the class of securities of which such security is a part is registered under the Securities Exchange Act of 1934, as amended, within 120 days (or such later time as may be allowed by the SEC) after the end of the fiscal year of the issuer during which the offering of such securities to the public occurred. For purposes of the 100 independent investor criterion, except to the extent otherwise disclosed in the accompanying prospectus supplement, each class of certificates should be deemed to be a "class" of securities that would be tested separately from any other securities that may be issued by the trust. A second exception applies if equity participation in the entity by "benefit plan investors" (i.e., Plans and other employee benefit plans not subject to ERISA, such as governmental or foreign plans, as well as entities holding assets deemed to be "plan assets") is not "significant." Benefit plan investors' equity participation in the trust is not significant on any date on which any series of certificates is issued and outstanding if, immediately after the most recent acquisition of any equity interest in the trust, less than 25% of the value of each class of equity interests in the trust (excluding interests held by the sellers, the trustee or their affiliates) is 62 held by benefit plan investors. No assurance can be given by the sellers as to whether the value of each class of equity interests in the trust held by benefit plan investors will be "significant" upon completion of the offering of any series of certificates or thereafter, and no monitoring or other measures will be taken with respect to the satisfaction of the conditions to this exception. If so specified in the related prospectus supplement, a third exception may also be available. On October 28, 1998, the Department of Labor authorized Capital One Bank or an affiliate to rely upon the exemptive relief from certain of the prohibited transaction provisions of ERISA and Section 4975 of the Internal Revenue Code available under Department of Labor Prohibited Transaction Class Exemption 96-62 relating to (1) the initial purchase, the holding and the subsequent resale by Plans of classes of senior certificates representing an undivided interest in a credit card trust with respect to which Capital One Bank or an affiliate is the sponsor; and (2) the servicing, operation and management of such trust, provided that the general conditions and certain other conditions set forth in the authorization are satisfied. The authorization will apply to the acquisition, holding and resale of the senior certificates by, on behalf of, or with "plan assets" of a Plan, provided that certain conditions (certain of which are described below) are met. Among the conditions which must be satisfied for the authorization to apply are the following: (1) the acquisition of the senior certificates by a Plan is on terms (including the price for such senior certificates) that are at least as favorable to the investing Plan as they would be in an arm's-length transaction with an unrelated party; (2) the rights and interests evidenced by the senior certificates acquired by the Plan are not subordinated to the rights and interests evidenced by other certificates of the trust; (3) the senior certificates acquired by the Plan have received a rating at the time of such acquisition that is either in one of the two highest generic rating categories from a Rating Agency or for senior certificates of one year or less, the highest short-term generic rating category from a Rating Agency; provided that, notwithstanding such rating, credit support is provided to the senior certificates through a senior-subordinated structure or other form of third-party credit support which, at a minimum, represents 5% of the outstanding principal balance of the senior certificates at the time of such acquisition; (4) the trustee is not an affiliate of any member of the restricted group (as defined below); (5) the sum of all payments made to and retained by the underwriters in connection with the distribution of the senior certificates represents not more than reasonable compensation for underwriting such senior certificates; the consideration received by the sellers as a consequence of the assignment of receivables to the trust, to the extent allocable to the senior certificates, represents not more than the fair market value of such receivables; and the sum of all payments made to and retained by the servicer, to the extent allocable to the senior certificates, represents not more than reasonable compensation for the servicer's services under the pooling agreement and reimbursement of the servicer's reasonable expenses in connection therewith; (6) the Plan investing in the senior certificates is an "accredited investor" as defined in Rule 501(a)(1) of Regulation D of the SEC under the Securities Act of 1933, as amended; (7) the trustee is a substantial financial institution or trust company experienced in trust activities, is familiar with its duties, responsibilities and liabilities as a fiduciary under ERISA and, as the legal owner of (or holder of a perfected security interest in) the receivables, enforces all the rights created in favor of the certificateholders, including Plans; (8) prior to the issuance of any new series, confirmation is received from the Rating Agencies that such issuance will not result in the reduction or withdrawal of the then current rating of the senior certificates held by any Plan pursuant to the authorization; (9) to protect against fraud, chargebacks or other dilution of the receivables, the pooling agreement and the Rating Agencies require the sellers to maintain a Sellers' Interest of not less than 2% of the principal balance of the receivables contained in the trust; 63 (10) each receivable is an Eligible Receivable, based on criteria of the Rating Agencies and as specified in the pooling agreement, and the pooling agreement requires that any change in the terms of the cardholder agreements must be made applicable to the comparable segment of accounts owned or serviced by the bank which are part of the same program or have the same or substantially similar characteristics; (11) the pooling agreement limits the number of newly originated accounts to be designated to the trust, unless the Rating Agencies otherwise consent in writing, to the following: (a) with respect to any three-month period, 15% of the number of existing accounts designated to the trust as of the first day of such period, and (b) with respect to any twelve-month period, 20% of the number of existing accounts designated to the trust as of the first day of such twelve-month period; (12) the pooling agreement requires the sellers to deliver an opinion of counsel semi-annually confirming the validity and perfection of the transfer of receivables in newly originated accounts to the trust if such an opinion is not delivered with respect to each interim Addition; and (13) the pooling agreement requires the sellers and the trustee to receive confirmation from each Rating Agency that such Rating Agency will not reduce or withdraw its then current rating of the senior certificates as a result of: (a) a proposed transfer of receivables in newly originated accounts to the trust, or (b) the transfer of receivables in all newly originated accounts added to the trust during the preceding three-month period (beginning at quarterly intervals specified in the pooling agreement and ending in the calendar month prior to the date such confirmation is issued); provided that a Rating Agency confirmation shall not be required under clause (b) for any three-month period in which any Additions of receivables in newly originated accounts occurred only after receipt of prior Rating Agency confirmation pursuant to clause (a). The trust also must meet the following requirements: (a) the corpus of the trust must consist only of receivables of the type which have been included in other investment pools; (b) certificates evidencing interests in such other investment pools have been rated in one of the two highest generic rating categories by at least one of the Rating Agencies for at least one year prior to the Plan's acquisition of senior certificates; and (c) certificates evidencing an interest in such other investment pools have been purchased by investors other than Plans for at least one year prior to any Plan's acquisition of senior certificates. Moreover, the authorization provides relief from certain self- dealing/conflict of interest prohibited transactions that may occur when a Plan fiduciary causes a Plan to acquire senior certificates if the fiduciary (or its affiliate) is an obligor on the receivables held in the trust; provided that among other requirements: (a) in the case of an acquisition in connection with the initial issuance of senior certificates, at least 50% of each class of certificates in which Plans have invested is acquired by persons independent of the restricted group and at least 50% of the aggregate interest in the trust is acquired by persons independent of the restricted group; (b) such fiduciary (or its affiliate) is an obligor with respect to 0.5% or less of the fair market value of the obligations contained in the trust; (c) the Plan's investment in senior certificates does not exceed 25% of all of the senior certificates outstanding after the acquisition; and (d) no more than 25% of the assets of the Plan are invested in securities representing an interest in one or more trusts containing assets sold or serviced by the same entity. The authorization does not apply to Plans sponsored by the "restricted group" which consists of the sellers, any underwriter of the senior certificates, the trustee, the servicer, any obligor with respect to 64 obligations included in the trust constituting more than 0.5% of the fair market value of the aggregate undivided interest in the trust allocated to the senior certificates of a series, determined on the date of the initial issuance of such series, or any affiliate of any such party. The Department of Labor has designated the authorization as an "underwriter exemption." As a result, an insurance company investing solely assets of its general account may be able to acquire and hold certain subordinated certificates of a series; provided that (i) the senior certificates of that series are eligible for relief under the authorization and (ii) such acquisition and holding satisfies the conditions applicable under Sections I and III of Department of Labor Prohibited Transaction Class Exemption 95-60. If none of the foregoing exceptions under the Department of Labor plan asset regulation were satisfied with respect to the trust and the trust were considered to hold "plan assets" of Plans, transactions involving the trust and parties in interest with respect to a Plan that is a certificateholder might be prohibited under Section 406 of ERISA and/or Section 4975 of the Internal Revenue Code and result in excise tax and other liabilities under ERISA and Section 4975 of the Internal Revenue Code unless an exemption were available. The five Department of Labor class exemptions mentioned above may not provide relief for all transactions involving the assets of the trust even if they would otherwise apply to the purchase of a certificate by a Plan. The certificates of any series may not be purchased with "plan assets" of a Plan if the sellers, the servicer, the trustee or any of their affiliates: (a) has investment or administrative discretion with respect to such plan assets; (b) has authority or responsibility to give, or regularly gives, investment advice with respect to such plan assets, for a fee and pursuant to an agreement or understanding that such advice (i) will serve as a primary basis for investment decisions with respect to such plan assets, and (ii) will be based on the particular investment needs of such Plan; or (c) unless Department of Labor Prohibited Transaction Class Exemption 95- 60, 91-38 or 90-1 applies, is an employer maintaining or contributing to such Plan. In light of the foregoing, fiduciaries or other persons contemplating purchasing the certificates on behalf or with "plan assets" of any Plan are cautioned to consult their own counsel regarding whether the trust assets represented by the certificates would be considered "plan assets," the consequences that would apply if the trust assets were considered "plan assets," and the availability of exemptive relief from the prohibited transaction rules under the bank's authorization or otherwise. Finally, Plan fiduciaries and other Plan investors should consider the fiduciary standards under ERISA or other applicable law in the context of the Plan's particular circumstances before authorizing an investment of a portion of the Plan's assets in the certificates. Accordingly, among other factors, Plan fiduciaries and other Plan investors should consider whether the investment: (i) satisfies the diversification requirement of ERISA or other applicable law, (ii) is in accordance with the Plan's governing instruments, and (iii) is prudent in light of other factors discussed in this prospectus and in the accompanying prospectus supplement. Plan of Distribution The sellers may sell certificates in any of three ways: (i) through underwriters or dealers; (ii) directly to one or more purchasers; or (iii) through agents. The related prospectus supplement will set forth the terms of the offering of any certificates offered hereby, including, without limitation, the names of any underwriters, the purchase price of such certificates and the proceeds to the sellers from such sale, any underwriting discounts and other items constituting underwriters' compensation, any initial public offering price and any discounts or concessions allowed or reallowed or paid to dealers. The trust may issue a new series in the immediate future, the terms of which are not yet known. 65 If underwriters are used in a sale of any certificates of a series offered by this prospectus, such certificates will be acquired by the underwriters for their own account and may be resold from time to time in one or more transactions, including negotiated transactions, at a fixed public offering price or at varying prices to be determined at the time of sale or at the time of commitment therefor. Such certificates may be offered to the public either through underwriting syndicates represented by managing underwriters or by underwriters without a syndicate. Unless otherwise set forth in the related prospectus supplement, the obligations of the underwriters to purchase such certificates will be subject to certain conditions precedent, and the underwriters will be obligated to purchase all of such certificates if any of such certificates are purchased. Any initial public offering price and any discounts or concessions allowed or reallowed or paid to dealers may be changed from time to time. Certificates of a series offered hereby may also be offered and sold, if so indicated in the related prospectus supplement, in connection with a remarketing upon their purchase, in accordance with a redemption or repayment pursuant to their terms, by one or more remarketing firms acting as principals for their own accounts or as agents for the sellers. Any remarketing firm will be identified and the terms of its agreement, if any, with the sellers and its compensation will be described in the related prospectus supplement. Remarketing firms may be deemed to be underwriters in connection with the certificates remarketed thereby. Certificates may also be sold directly by the sellers or through agents designated by the sellers from time to time. Any agent involved in the offer or sale of certificates will be named, and any commissions payable by the sellers to such agent will be set forth in the related prospectus supplement. Unless otherwise indicated in the related prospectus supplement, any such agent will act on a best efforts basis for the period of its appointment. Any underwriters, agents or dealers participating in the distribution of certificates may be deemed to be underwriters, and any discounts or commissions received by them on the sale or resale of certificates may be deemed to be underwriting discounts and commissions, under the Securities Act of 1933, as amended. Certain agents and underwriters may be entitled under agreements entered into with the sellers to indemnification by the sellers against certain civil liabilities, including liabilities under the Securities Act of 1933, as amended, or to contribution with respect to payments that the agents or underwriters may be required to make in respect thereof. Agents and underwriters may be customers of, engage in transactions with, or perform services for, the sellers or their respective affiliates in the ordinary course of business. Legal Matters Certain legal matters relating to the certificates will be passed upon for the banks and the trust by Orrick, Herrington & Sutcliffe LLP, Washington, D.C., and McGuireWoods, Richmond, Virginia and for any underwriters, agents or dealers by counsel named in the applicable prospectus supplement. Certain federal income tax matters will be passed upon for the banks by Orrick, Herrington & Sutcliffe LLP. Reports to Certificateholders The servicer will prepare monthly and annual reports that will contain information about the trust. The financial information contained in the reports will not be prepared in accordance with generally accepted accounting principles. Unless and until definitive certificates are issued, the reports will be sent to Cede, as the nominee of DTC and the registered holder of the certificates. No financial reports will be sent to you. 66 Where You Can Find More Information We filed a registration statement relating to the certificates with the SEC. This prospectus is part of the registration statement, but the registration statement includes additional information. The servicer will file with the SEC all required annual, monthly and special SEC reports and other information about the trust. You may read and copy any reports, statements or other information we file at the SEC's public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549. You can request copies of these documents, upon payment of a duplicating fee, by writing to the SEC. Please call the SEC at (800) SEC-0330 for further information on the operation of the public reference rooms. Our SEC filings are also available to the public on the SEC Internet site (http://www.sec.gov). The SEC allows us to "incorporate by reference" information we file with it, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is considered to be part of this prospectus. Information that we file later with the SEC will automatically update the information in this prospectus. In all cases, you should rely on the later information over different information included in this prospectus or the accompanying prospectus supplement. We incorporate by reference any future annual, monthly and special reports for the SEC and proxy materials filed by or on behalf of the trust until we terminate our offering of the certificates. As a recipient of this prospectus, you may request a copy of any document we incorporate by reference, except exhibits to the documents (unless the exhibits are specifically incorporated by reference), at no cost, by writing us at: Capital One Bank and Capital One, F.S.B., in care of Capital One Services, Inc., 8000 Jones Branch Drive, McLean, Virginia 22102, attention: Treasury Department or calling us at (703) 875-1311. 67 Glossary of Defined Terms Many of the terms defined below contain terms defined elsewhere in this glossary. "Accumulation Period," for any applicable series or class of such series, begins on a date certain or on a date determined in the manner described in the related prospectus supplement and will continue until the earliest of: (i) the start of an Early Amortization Period or Principal Payment Period for such series, (ii) the payment in full of the certificates of such series or class, or (iii) the series termination date for such series. "Additional Accounts" are automatic additional accounts and any accounts in the Bank Portfolio that are designated to the trust pursuant to an addition. "Adjustment Payment" means a payment by a seller into the Collection Account on any applicable Distribution Date in an amount equal to the amount by which the Sellers' Interest has been reduced below zero as a result of the exclusion of principal receivables (other than Ineligible Receivables which have been or will be reassigned to the applicable seller or the servicer) from the trust that have been adjusted downward by the servicer. "Aggregate Addition Limit" means the number of accounts included in the trust which would either: (i) for any three consecutive Monthly Periods, equal 15% of the number of accounts designated to the trust at the end of the ninth Monthly Period before the start of such three Monthly Periods, or (ii) for any twelve Monthly Periods, equal 20% of the number of accounts designated to the trust as of the first day of such twelve Monthly Periods. "Bank Certificate" means an exchangeable certificate evidencing all or part of the Sellers' Interest, if a seller elects to evidence the Sellers' Interest in a certificated form. "Bank Portfolio" is the consumer revolving receivables portfolio of Capital One Bank and Capital One, F.S.B., consisting primarily of unsecured consumer loans for which the principal credit extension vehicle is a credit card or an access check. "Certificate Owner" is an owner of a beneficial interest in a certificate. "Collateral Interest" means, for any applicable series, an uncertificated interest in the trust assets that is subordinated to, and serves as credit enhancement for, the certificates of such series. "Collection Account" means the account established as described under "Description of the Certificates--Collection Account" in this prospectus. "Controlled Amortization Period," for any applicable series or class of such series, begins on a date certain or on a date determined in the manner described in the related prospectus supplement and will continue until the earliest of: (i) the start of an Early Amortization Period or Principal Payment Period for such series, (ii) the payment in full of the certificates of such series or class, or (iii) the series termination date for such series. "Date of Processing," for any transaction, is the day a record of such transaction is first recorded on the servicer's or a seller's computer files of consumer revolving accounts (without regard to the effective date of such recordation). 68 "Defaulted Amount" for any Monthly Period means an amount (not less than zero) equal to: (a) the amount of principal receivables that became Defaulted Receivables for such Monthly Period, minus (b) the sum of: (i) the amount of any Defaulted Receivables for which a seller or the servicer became obligated to accept reassignment or assignment during such Monthly Period (unless an event of bankruptcy, insolvency or receivership of a seller or the servicer has occurred, in which event the amount of such Defaulted Receivables will not be added to the sum so subtracted), and (ii) the excess, if any, for the immediately preceding Monthly Period of the sum computed pursuant to this clause (b) for such Monthly Period over the amount of principal receivables that became Defaulted Receivables in such Monthly Period. "Defaulted Receivables" for any Monthly Period are principal receivables that were charged off as uncollectible in such Monthly Period in accordance with the applicable seller's lending guidelines and the servicer's customary and usual servicing procedures for servicing consumer revolving credit card and other consumer revolving credit account receivables comparable to the receivables other than due to any Adjustment Payment. For purposes of this definition, a principal receivable in any account becomes a Defaulted Receivable on the day it is recorded as charged-off on the servicer's computer master file of consumer revolving credit accounts. "Deposit Account" means the applicable FDIC-insured deposit account at an FDIC-insured depositary institution, which may be Capital One, F.S.B., an affiliate thereof or an unaffiliated depository, as selected by the applicable seller where funds are deposited as security for an accountholder's payment obligations arising under a secured credit card issued by a seller. "Depositary" means, with respect to Clearstream and Euroclear, the respective depositaries with whom Clearstream and Euroclear hold omnibus positions on behalf of Clearstream customers and Euroclear participants, respectively. "Determination Date" occurs on or about the fourth business day preceding each Distribution Date, when the servicer calculates the amounts to be allocated to the certificateholders of each class or series, the servicer and the sellers for the related Distribution Date. "Discount Option Receivables" has the meaning described in "Description of the Certificates--Credit Enhancement--Discount Options" in this prospectus. "Discount Option Receivables Collections" has the meaning described in "Description of the Certificates--Credit Enhancement--Discount Options" in this prospectus. "Distribution Date" is the 15th day of each calendar month (or, if any such 15th day is not a business day, the following business day). "Early Amortization Period," for an applicable series, begins at the close of business on the business day immediately preceding the day on which a Pay Out Event occurs with respect to such series and ends upon the earlier to occur of (i) the payment in full of the Invested Amount of such series or (ii) the series termination date for such series. 69 "Eligible Account" means a MasterCard or Visa consumer revolving credit card account or other consumer revolving credit account owned by a seller, which as of the Trust Cut-Off Date with respect to an initial account or as of the related addition date with respect to an Additional Account: (i) is in existence and maintained with that seller or any affiliate thereof on the Trust Cut-Off Date or the addition date, as the case may be; (ii) is payable in United States dollars; (iii) has not been identified as an account the credit cards or checks, if any, with respect to which have been reported to that seller as having been lost or stolen; (iv) the accountholder of which has provided, as his or her current billing address, an address located in the United States (or its territories or possessions or a military address); (v) has not been, and does not have any receivables which have been, sold, pledged, assigned or otherwise conveyed to any person (except pursuant to the pooling agreement); (vi) except as provided below, does not have any receivables which are Defaulted Receivables; (vii) does not have any receivables which have been identified by that seller or the relevant accountholder as having been incurred as a result of fraudulent use of any related credit card or check; (viii) relates to an accountholder who is not identified by that seller in its computer files as being the subject of a voluntary or involuntary bankruptcy proceeding; and (ix) is not an account with respect to which the accountholder has requested discontinuance of responsibility. Eligible Accounts may include accounts, the receivables of which have been charged off; provided that: (i) the balance of all receivables included in such accounts is reflected on the books and records of the applicable seller (and is treated for purposes of the pooling agreement) as "zero," and (ii) charging privileges with respect to all such accounts have been canceled in accordance with the applicable seller's lending guidelines and will not be reinstated by the applicable seller or the servicer. "Eligible Deposit Account" means either: (i) a segregated account with an Eligible Institution, or (ii) a segregated trust account with the corporate trust department of a depository institution organized under the laws of the United States or any one of the states thereof, including the District of Columbia (or any domestic branch of a foreign bank), or a trust company acceptable to each Rating Agency, and acting as a trustee for funds deposited in such account, so long as any of the securities of such depository institution or trust company shall have a credit rating from each Rating Agency in one of its generic credit rating categories that signifies investment grade. "Eligible Institution" means either: (a) a depository institution (which may be the trustee) organized under the laws of the United States or any one of the states thereof (including the District of Columbia), or any domestic branch of a foreign bank, which at all times: (i) has either (x) a long-term unsecured debt rating of A2 or better by Moody's Investors Service, Inc. or (y) a certificate of deposit rating of P-1 by Moody's; (ii) has either (x) a long-term unsecured debt rating of AAA by Standard & Poor's Ratings Services or (y) a certificate of deposit rating of A-1+ by Standard & Poor's; (iii) if rated by Fitch, Inc. has either (x) a long-term unsecured debt rating of A- by Fitch or (y) a certificate of deposit rating of F1 by Fitch; and (iv) is a member of the FDIC; or (b) any other institution that is acceptable to each Rating Agency. 70 "Eligible Investments" means: (i) obligations fully guaranteed by the United States of America, (ii) demand deposits, time deposits or certificates of deposit (having original maturities of no more than 365 days) of depository institutions or trust companies incorporated under the laws of the United States or any one of the states thereof (or a domestic branch of any foreign bank) and subject to supervision and examination by federal or state banking or depository institution authorities; provided that at the time of the trust's investment or contractual commitment to invest therein, the short- term debt rating of such depository institution or trust company shall be in the highest rating category from each Rating Agency, (iii) commercial paper or other short-term investments having, at the time of the trust's investment therein, a rating in the highest rating category from each Rating Agency, (iv) demand deposits, time deposits and certificates of deposit that are fully insured by the FDIC, with an entity the commercial paper of which has a credit rating from each Rating Agency in its highest rating category, (v) notes or bankers' acceptances (having original maturities of no more than 365 days) issued by any depository institution or trust company referred to in (ii) above, (vi) investments in money market funds that have the highest rating from, or have otherwise been approved in writing by, each Rating Agency, (vii) time deposits (having maturities of not more than 30 days) other than as referred to in clause (iv) above, with an entity the commercial paper of which has a credit rating from each Rating Agency in its highest rating category, and (viii) any other investments approved in writing by each Rating Agency. "Eligible Receivable" means each receivable: (i) which has arisen under an Eligible Account; (ii) which was created in compliance in all material respects with the applicable seller's lending guidelines and all requirements of law applicable to the banks, the failure to comply with which would have a material adverse effect on certificateholders, and pursuant to a lending agreement which complies with all requirements of law applicable to the banks, the failure to comply with which would have a material adverse effect on certificateholders; (iii) with respect to which all material consents, licenses, approvals or authorizations of, or registrations or declarations with, any governmental authority required to be obtained or given by each seller in connection with the creation of such receivable or the execution, delivery and performance by a seller of the related lending agreement have been duly obtained or given and are in full force and effect as of the date of the creation of such receivable; (iv) as to which, at the time of its transfer to the trust, the applicable seller or the trust will have good and marketable title free and clear of all liens and security interests (other than any lien for municipal or other local taxes if such taxes are not then due and payable or if the applicable seller is then contesting the validity thereof in good faith by appropriate proceedings and has set aside on its books adequate reserves with respect thereto); (v) which has been the subject of either: (a) a valid transfer and assignment from the applicable seller to the trust of all its right, title and interest therein (including any proceeds thereof), or (b) the grant of a first priority perfected security interest therein (and in the proceeds thereof), effective until the termination of the trust; 71 (vi) which at and after the time of transfer to the trust is the legal, valid and binding payment obligation of the accountholder thereof, legally enforceable against such accountholder in accordance with its terms (with certain bankruptcy and equity-related exceptions); (vii) which constitutes either an "account" or a "general intangible" under Article 9 of the UCC as then in effect in Virginia and in any other state where the filing of a financing statement is required to perfect the trust's interest in the receivables and the proceeds thereof; (viii) which, at the time of its transfer to the trust, has not been waived or modified except as permitted by the pooling agreement; (ix) which, at the time of its transfer to the trust, is not subject to any right of rescission, setoff, counterclaim or other defense of the accountholder (including the defense of usury), other than certain bankruptcy and equity-related defenses and adjustments required by the pooling agreement to be made by the servicer; (x) as to which, at the time of its transfer to the trust, the sellers have satisfied all obligations to be fulfilled at the time it is transferred to the trust; and (xi) as to which, at the time of its transfer to the trust, neither seller has taken any action which, or failed to take any action the omission of which would, at the time of its transfer to the trust, impair in any material respect the rights of the trust or certificateholders therein. "Excess Finance Charges" has the meaning described in "Description of the Certificates--Sharing of Excess Finance Charges" in this prospectus. "Excess Funding Account" means the account established as described under "Description of the Certificates--Reserve Account" in this prospectus. "Excess Shared Principal Collections" means the excess of the Shared Principal Collections over the principal shortfalls for all principal sharing series. "Floating Allocation Percentage" for any series will be determined as set forth in the related prospectus supplement. "Funding Period" means, for the applicable series, a period beginning on the series issuance date for such series and ending on a specified date before the start of the Controlled Amortization Period or Accumulation Period for such series. "Funds Collateral" means, under the banks' secured credit card programs, the funds accountholders deposit as security for such accountholders' payment obligations arising under secured credit cards, and the Deposit Accounts. "Group" means a series each offered by this prospectus and a related prospectus supplement. "Ineligible Receivables" means all receivables with respect to an affected account that has been reassigned to a seller as a result of that seller's breach of certain representations and warranties described in "The Pooling Agreement Generally--Representations and Warranties" in this prospectus. "Invested Amount" for any series means such series Invested Amount in the trust. "Miscellaneous Payments" means all Adjustment Payments and Transfer Deposit Amounts for any Monthly Period. "Monthly Period" means, for any Distribution Date, a period of approximately 30 days, that: (a) contains a full set of processing cycles with respect to the related accounts, as defined by the servicer, (b) commences on the day immediately succeeding the last day of the immediately preceding Monthly Period, and (c) ends prior to the Determination Date for that Distribution Date, provided that the initial Monthly Period for any series will commence on the series cut-off date for such series. 72 "Monthly Servicing Fee" has the meaning described in "Description of the Certificates--Servicing Compensation and Payment of Expenses" in this prospectus. "Pay Out Events" with respect to a series are the events described in "Description of the Certificates--Pay Out Events" in this prospectus and any other events specified as such in the related prospectus supplement. "Payment Date" means each interest payment date or Special Payment Date. "Plans" means certain pension, profit sharing or other employee benefit plans, individual retirement accounts or annuities and employee annuity plans and Keogh plans regulated under Section 406 of ERISA and Section 4975 of the Internal Revenue Code. "Prefunded Amount" has the meaning described in "Description of the Certificates--Funding Period" in this prospectus. "Principal Allocation Percentage" for any series means the percentage determined as set forth in the related prospectus supplement. "Principal Payment Event" occurs if the servicer elects to stop the automatic extensions of the initial principal payment date. "Principal Payment Period" has the meaning described in "Description of the Certificates--Principal" in this prospectus. "Rating Agency" is a nationally recognized statistical rating organization selected by the sellers to rate a series. "Ratings Effect" is the reduction or withdrawal of the rating of the certificates of any outstanding series by a Rating Agency. "Record Date" means, for any date of payment interest on or principal of a certificate, the last day of the calendar month preceding such date. "Recoveries" means all amounts, excluding insurance proceeds, received by the servicer with respect to receivables which have previously become Defaulted Receivables (including any related finance charge receivables), net of any out- of-pocket costs and expenses of collection (including attorneys' fees and expenses) deducted therefrom, plus the net proceeds of any sale or securitization of such Defaulted Receivables (plus any related finance charge receivables), plus any residual payments from any such securitization, but excluding any interest, principal and servicing fees or other fees payable with respect to the securitization of such Defaulted Receivables and the related finance charge receivables. "Removal Notice Date" means the fifth business day immediately preceding the date upon which removed accounts are to be removed from the trust. "Required Designation Date" means the tenth business day following the last business day of the prior Monthly Period. "Required Principal Balance" means an amount, as of any date of determination, equal to: (a) the sum of the initial invested amount (as defined in the relevant series supplement) of the certificates of each series outstanding on such date, plus the aggregate amounts of any increases in the Invested Amounts of each prefunded series outstanding (in each case, other than any series or portion thereof which is designated in the relevant series supplement as being an excluded series), minus 73 (b) the principal amount on deposit in the Excess Funding Account on such date; provided, however, that if at any time the only series outstanding are excluded series and a Pay Out Event has occurred with respect to one or more such series, the Required Principal Balance shall mean the sum of the invested amount (as defined in the relevant series supplement) of each such excluded series as of the earliest date on which any such Pay Out Event is deemed to have occurred minus the principal amount on deposit in the Excess Funding Account. "Required Sellers' Interest" means an amount equal the product of the Required Sellers' Percentage and the aggregate amount of principal receivables in the trust. "Required Sellers' Percentage" is equal to 5%. However, the sellers may, upon 30 days prior notice to the trustee, each Rating Agency and certain providers of Series Enhancement, reduce the Required Sellers' Percentage; provided that: (i) the sellers have received written notice from each Rating Agency that such reduction will not result in a Ratings Effect, and (ii) each seller has delivered to the trustee and certain providers of Series Enhancement a certificate of an authorized officer to the effect that, based on the facts known to such officer at the time, in the reasonable belief of such seller, such reduction will not at the time of its occurrence cause a Pay Out Event or an event that, after the giving of notice or the lapse of time, would constitute a Pay Out Event, to occur with respect to any series; and provided further that the Required Sellers' Percentage will never be less than 2%. "Revolving Period," for any series of certificates, begins on the series cut- off date described in the related prospectus supplement and continues until the earlier of (a) the beginning of the Early Amortization Period or Principal Payment Period and (b) the date specified in the prospectus supplement as the end of the Revolving Period. "Seller Certificate" means the Bank Certificate and any Supplemental Certificate. "Sellers' Interest" means the interest in the trust assets not allocated to any series. "Series Enhancement" means any credit enhancement for the benefit of the particular certificateholders of a particular series or class. "Servicer Default" means any of the following events: (i) 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, on or before the date the servicer is required to do so under the pooling agreement or any series supplement, which is not cured within a 10 business day grace period; (ii) failure on the part of the servicer duly to observe or perform in any material respect any other covenants or agreements of the servicer in the pooling agreement or any series supplement which has a material adverse effect on the certificateholders of any series or class (determined without regard to the availability of funds under any Series Enhancement) and which continues unremedied for a period of 60 days after written notice, or the servicer assigns or delegates its duties under the pooling agreement, except as specifically permitted thereunder; (iii) any representation, warranty or certification made by the servicer in the pooling agreement or any series supplement or in any certificate delivered pursuant to the pooling agreement or any series supplement proves to have been incorrect when made, which has a material adverse effect on the rights of the certificateholders of any series or class (determined without regard to the availability of funds under any Series Enhancement), and which material adverse effect continues for a period of 60 days after written notice; or 74 (iv) the occurrence of certain events of bankruptcy, insolvency or receivership with respect to the servicer. Notwithstanding the foregoing, a delay in or failure of performance referred to under clause (i) above for an additional period of five business days or referred to under clause (ii) or (iii) above for an additional period of 60 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 other similar occurrence. "Servicing Fee" has the meaning described in "Description of the Certificates--Servicing Compensation and Payment of Expenses" in this prospectus. "Shared Principal Collections" has the meaning described in "Description of the Certificates--Shared Principal Collections; Excess Shared Principal Collections" in this prospectus. "Special Payment Date" means any Distribution Date in a Monthly Period following a Monthly Period in which a Pay Out Event occurs, including any Distribution Date following a Principal Payment Event. "Subordinated Excess Principal Collections" for any subordinated excess principal series will be defined in the related series supplement and described in the related prospectus supplement for such series. "Supplemental Certificate" means any certificate that is received by the banks in exchange for a portion of the Bank Certificate as described in "Description of the Certificates--The Bank Certificate; Additional Sellers" in this prospectus. "Tax Opinion" means, with respect to any action taken by the trust, an opinion of counsel acceptable to the trustee that for federal income tax purposes and Virginia income and franchise tax purposes (and, for any transaction described in "Assumption of a Seller's Obligations" in the prospectus, for income and franchise tax purposes of the jurisdiction in which the assuming entity engages in its principal servicing activities, if different from Virginia) (x) following such action the trust will not be deemed to be an association (or publicly traded partnership) taxable as a corporation and (y) such action will not affect the tax characterization as debt of certificates of any outstanding series or class that were characterized as debt at the time of their issuance and will not cause a taxable event to the holders of the certificates. "Transfer Deposit Amount" means any amount deposited into the Excess Funding Account or the Collection Account in the connection with the reassignment of an Ineligible Receivable. "Trust Cut-Off Date" means June 30, 1993. "Trust Termination Date" has been the meaning described in "The Pooling Agreement Generally-- Termination of Trust" in this prospectus. 75 Annex I 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. Unless otherwise specified in a prospectus supplement for a series, investors in the global securities may hold such global securities through any of DTC, Clearstream or Euroclear. The global securities will be tradeable as home market instruments in both the European and U.S. domestic markets. Initial settlement and all secondary trades will settle in same-day funds. Secondary market trading between investors holding global securities through Clearstream 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 Clearstream or Euroclear and DTC participants holding global securities will be effected on a delivery-against- payment basis through the respective Depositaries of Clearstream and Euroclear (in such capacity) and DTC participants. Non-U.S. holders of global securities will be exempt from U.S. withholding taxes, provided that 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, Clearstream and Euroclear will hold positions on behalf of their participants through their respective Depositaries, which in turn will hold such positions in accounts as DTC participants. Investors electing to hold their global securities through DTC (other than through accounts in Clearstream or Euroclear) will follow the settlement practices applicable to U.S. corporate debt obligations. Investor securities custody accounts will be credited with their holdings against payment in same- day funds on the settlement date. Investors electing to hold their global securities through Clearstream or Euroclear accounts will follow the settlement procedures applicable to conventional eurobonds in registered form. Global securities will be credited to the securities custody accounts on the settlement date against payment for value on the settlement date. Secondary Market Trading Because the purchaser determines the place of delivery, it is important to establish at the time of the 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 (other than the Depositaries for Clearstream and Euroclear) will be settled using the procedures applicable to U.S. corporate debt obligations in same-day funds. Trading between Clearstream Customers and/or Euroclear Participants. Secondary market trading between Clearstream customers or Euroclear participants will be settled using the procedures applicable to conventional eurobonds in same-day funds. A-1 Trading between DTC seller and Clearstream or Euroclear purchaser. When global securities are to be transferred from the account of a DTC participant (other than the Depositaries for Clearstream and Euroclear) to the account of a Clearstream customer or a Euroclear participant, the purchaser must send instructions to Clearstream or Euroclear, as the case may be, prior to settlement date 12:30. Clearstream or Euroclear, as the case may be, will instruct the respective Depositary to receive the global securities for payment. Payment will then be made by the respective 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 respective clearing system and by the clearing system, in accordance with its usual procedures, to the Clearstream customer's or Euroclear participant's account. Credit for the global securities 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 Clearstream or Euroclear cash debit will be valued instead as of the actual settlement date. Clearstream customers and Euroclear participants will need to make available to the respective clearing systems the funds necessary to process same-day funds settlement. The most direct means of doing so is to preposition funds for settlement, either from cash on hand or existing lines of credit, as they would for any settlement occurring within Clearstream or Euroclear. Under this approach, they may take on credit exposure to Clearstream or Euroclear until the global securities are credited to their accounts one day later. As an alternative, if Clearstream or Euroclear has extended a line of credit to them, Clearstream customers or Euroclear participants can elect not to preposition funds and allow that credit line to be drawn upon to finance settlement. Under this procedure, Clearstream customers or Euroclear participants purchasing global securities would incur overdraft charges for one day, assuming they cleared the overdraft when the global securities were credited to their accounts. However, interest on the global securities would accrue from the value date. Therefore, in many cases the investment income on the global securities earned during that one-day period may substantially reduce or offset the amount of such overdraft charges, although this result will depend on each Clearstream customer's or Euroclear participant's particular cost of funds. Since the settlement is taking place during New York business hours, DTC participants can employ their usual procedures for sending global securities to the respective European Depositary for the benefit of Clearstream customers or Euroclear participants. The sale proceeds will be available to the DTC seller on the settlement date. Thus, to the DTC participant a cross-market transaction will settle no differently than a trade between two DTC participants. Trading between Clearstream or Euroclear seller and DTC purchaser. Due to time zone differences in their favor, Clearstream customers and Euroclear participants may employ their customary procedures for transactions in which global securities are to be transferred by the respective clearing system, through the respective Depositary, to another DTC participant. The seller will send instructions to Clearstream or Euroclear, as the case may be, prior to settlement date 12:30. In these cases, Clearstream or Euroclear will instruct the respective Depositary, as appropriate, to credit the global securities to the DTC participant's account against payment. The payment will then be reflected in the account of the Clearstream customer or Euroclear participant the following day, and receipt of the cash proceeds in the Clearstream customer's or Euroclear participant's account would be back-valued to the value date (which would be the preceding day, when settlement occurred in New York). If the Clearstream customer or Euroclear participant has a line of credit with its respective clearing system and elects to draw on such line of credit in anticipation of receipt of the sale proceeds in its account, the back-valuation may substantially reduce or offset any overdraft charges incurred over that one-day period. If settlement is not completed on the intended value date (i.e., the trade fails), receipt of the cash proceeds in the Clearstream customer's or Euroclear participant's account would instead be valued as of the actual settlement date. Certain U.S. Federal Income Tax Documentation Requirements A beneficial owner of global securities holding securities through Clearstream 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 A-2 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 appropriate steps to obtain an exemption or reduced tax rate. See "Federal Income Tax Consequences" in this prospectus. A-3 [LOGO OF CAPITAL ONE APPEARS HERE] Capital One Master Trust Issuer Capital One Bank Seller and Servicer Capital One, F.S.B. Seller $ Class A Floating Rate Asset Backed Certificates $ Class B Floating Rate Asset Backed Certificates SERIES 2001- ---------------- PROSPECTUS SUPPLEMENT ---------------- Underwriters of the Class A certificates A Co. B Co. C Co. Underwriters of the Class B certificates A Co. B Co. You should rely only on the information contained or incorporated by reference in this prospectus supplement and the accompanying prospectus. We have not authorized anyone to provide you with different information. We are offering the Class A certificates and Class B certificates only in states where the offer is permitted. We claim the accuracy of the information in this prospectus supplement and the accompanying prospectus as of the dates stated on their respective covers only. Dealers will deliver a prospectus supplement and prospectus when acting as underwriters of the Class A certificates and Class B certificates and with respect to their unsold allotments or subscriptions. In addition, until the date which is 90 days after the date of this prospectus supplement, all dealers selling the Class A certificates and Class B certificates will deliver a prospectus supplement and prospectus. PART II Item 14. Other Expenses of Issuance and Distribution. The following is an itemized list of the estimated expenses to be incurred in connection with the offering of the securities being offered hereunder other than underwriting discounts and commissions. Registration Fee............................................ $ 4,043,167** Printing and Engraving Expenses............................. 1,125,000* Trustee's Fees and Expenses................................. 162,000* Legal Fees and Expenses..................................... 2,013,000* Blue Sky Fees and Expenses.................................. 270,000* Accountants' Fees and Expenses.............................. 648,000* Rating Agency Fees.......................................... 7,875,000* Miscellaneous Fees and Expenses............................. 108,000* ----------- Total $16,244,167* ===========
- -------- * Estimated ** Actual Item 15. Indemnification of Directors and Officers. Capital One Bank The General Corporation Law of Delaware (Section 145) gives Delaware corporations, such as Capital One Financial Corporation (the "Corporation") broad powers to indemnify their present and former directors and officers and those of affiliated corporations, such as Capital One Bank, against expenses incurred in the defense of any lawsuit to which they are made parties by reason of being or having been such directors or officers, subject to specified conditions and exclusions; gives a director or officer who successfully defends an action the right to be so indemnified; and authorizes said corporation to buy directors' and officers' liability insurance. Such indemnification is not exclusive of any other right to which those indemnified may be entitled under any bylaw, agreement, vote of stockholders or otherwise. Article VI, Section 6.7 of the Restated Bylaws of the Corporation provides for the indemnification and insurance of directors and officers of Capital One Bank and others as follows: (A)Each person who was or is made a party or is threatened to be made a party to or is involved in any action, suit, or proceeding, whether civil, criminal, administrative or investigative (hereinafter a "proceeding"), by reason of the fact that he or she or a person of whom he or she is the legal representative is or was a director, officer or employee of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee or agent of any other corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, whether the basis of such proceeding is alleged action in an official capacity as a director, officer, employee or agent or in any other capacity while serving as a director, officer, employee or agent, shall be indemnified and held harmless by the Corporation to the fullest extent authorized by the General Corporation Law of the State of Delaware as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than said law permitted the Corporation to provide prior to such amendment), against all expense, liability and loss (including, without limitation, attorneys' fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid in settlement) reasonably incurred by such person in connection therewith and such indemnification shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of his or II-1 her heirs, executors and administrators; provided, however, that except as provided in paragraph (B) of Section 6.7 of this Bylaw with respect to proceedings seeking to enforce rights to indemnification, the Corporation shall indemnify any such person seeking indemnification in connection with a proceeding (or part thereof) initiated by such person only if such proceeding (or part thereof) initiated by such person was authorized by the Board of Directors of the Corporation. (B)If a claim under paragraph (A) of this Bylaw is not paid in full by the Corporation within thirty days after a written claim has been received by the Corporation, the claimant may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim and, if successful in whole or in part, the claimant shall be entitled to be paid also the expense of prosecuting such claim. It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in defending any proceeding in advance of its final disposition where the required undertaking, if any is required, has been tendered to the Corporation) that the claimant has not met the standards of conduct which make it permissible under the General Corporation Law of the State of Delaware for the Corporation to indemnify the claimant for the amount claimed, but the burden of proving such defense shall be on the Corporation. Neither the failure of the Corporation (including its Board of Directors, independent legal counsel or stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he or she has met the applicable standard of conduct set forth in the General Corporation Law of the State of Delaware, nor an actual determination by the Corporation (including its Board of Directors, independent legal counsel or stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct. (C)Following any "change in control" of the Corporation of the type required to be reported under Item 1 of Form 8-K promulgated under the Securities Exchange Act of 1934, as amended, any determination as to entitlement to indemnification shall be made by independent legal counsel selected by the claimant which independent legal counsel shall be retained by the Board of Directors on behalf of the Corporation. (D)The right to indemnification and the payment of expenses incurred in defending a proceeding in advance of its final disposition conferred in this Bylaw shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, provision of the Certificate of Incorporation, Bylaws, agreement, vote of stockholders or disinterested directors or otherwise. (E)The Corporation may maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the Corporation or another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the General Corporation Law of the State of Delaware. (F)The Corporation may, to the extent authorized from time to time by the Board of Directors, grant rights to indemnification, and rights to be paid by the Corporation the expenses incurred in defending any proceeding in advance of its final disposition, to any agent of the Corporation to the fullest extent of the provisions of this Bylaw with respect to the indemnification and advancement of expenses of directors, officers and employees of the Corporation. (G)The right to indemnification conferred in this Bylaw shall be a contract right and shall include the right to be paid by the Corporation the expenses incurred in defending any such proceeding in advance of its final disposition; provided, however, that if the General Corporation Law of the State of Delaware requires, the payment of such expenses incurred by a director or officer in his or her capacity as a director or officer (and not in any other capacity in which service was or is rendered by such person while a director or officer, including, with limitation, service to an employee benefit plan) in advance of the final disposition of a proceeding, shall be made only upon delivery to the Corporation of an undertaking by or on behalf of such director or officer, to repay all amounts so advanced if it shall ultimately be determined that such director or officer is not entitled to be indemnified under this Bylaw or otherwise. II-2 (H)Any amendment or repeal of this Article VI shall not adversely affect any right or protection existing hereunder in respect of any act or omission occurring prior to such amendment or repeal. Capital One, F.S.B. Because Capital One, F.S.B. is a federal savings association, the terms and conditions for Capital One, F.S.B. to indemnify its directors, officers, and employees are prescribed by Section 545.121 of Title 12 of the Code of Federal Regulations ("Section 545.121") as follows: (a)For purposes of Section 545.121, the following definitions and rules of construction apply: (1)Definitions (i) Action. The term "action" means any judicial or administrative proceeding, or threatened proceeding, whether civil, criminal, or otherwise, including any appeal or other proceeding for review; (ii) Court. The term "court" includes, without limitation, any court to which or in which any appeal or any proceeding for review is brought. (iii) Final judgment. The term "final judgment" means a judgment, decree or order which is not appealable or as to which the period for appeal has expired with no appeal taken. (iv) Settlement. The term "settlement" includes entry of a judgment by consent or confession or a plea of guilty or nolo contendere. (2)Use of References. References in Section 545.121 to any individual or other person, including any association, shall include legal representatives, successors, and assigns thereof. (b)General. Subject to paragraphs (c) and (g) below, a federal savings bank such as Capital One F.S.B. shall indemnify any person against whom an action is brought or threatened because that person is or was a director, officer, or employee of the association, for: (1)Any amount for which that person became liable under a judgment in such action; and (2)Reasonable costs and expenses, including reasonable attorney's fees, actually paid or incurred by that person in defending or settling such action, or in enforcing his or her rights under Section 545.121 if he or she attains a favorable judgment in such enforcement action. (c)Requirements. Indemnification shall be made "to" such person under paragraph (b) above only if: (1)Final judgment on the merits is in his or her favor, or (2)In case of: (i) Settlement; (ii) Final judgment against him or her, or (iii) Final judgment in his or her favor other than on the merits, if a majority of the disinterested directors of a federal savings bank such as Capital One, F.S.B. determine that he or she was acting in good faith within the scope of his or her employment or authority as he or she could reasonably have perceived it under the circumstances and for a purpose he or she could reasonably have believed under the circumstances was in the best interests of the federal savings bank or its members. However, no indemnification shall be made unless a federal savings bank such as Capital One, F.S.B. gives the Office of Thrift Supervision (the "OTS") at least 60 days' notice of its intention to make such indemnification. Such notice shall state the facts on which the action arose, the terms of any settlement, and any other disposition of the action by a court. Such notice, a copy thereof, and a certified copy of the resolution containing the required determination by the board of directors shall be sent to the OTS "regional" director, who shall promptly acknowledge receipt thereof. The notice period shall run from the date of such receipt. No such indemnification shall be made if the OTS advises the federal savings bank in writing, within such notice period, of its objection thereto. II-3 (d)Insurance. A federal savings bank such as Capital One, F.S.B. may obtain insurance to protect it and its directors, officers, and employees from potential losses arising from claims against any of them for alleged wrongful acts, or wrongful acts, committed in their capacity as directors, officers, or employees. However, no federal savings bank may obtain insurance which provides for payment of losses of any person as incurred as a consequence of his or her willful or criminal conduct. (e)Payment of expenses. If a majority of directors of a federal savings bank such as Capital One, F.S.B. concludes that, in connection with an action, any person ultimately may become entitled to indemnification under this section, the directors may authorize payment of reasonable costs and expenses, including reasonable attorneys' fees, arising from the defense or settlement of such action. Nothing in this paragraph (e) shall prevent the directors of a federal savings bank such as Capital One, F.S.B. from imposing such conditions on a payment of expenses as they deem warranted and in the interests of such federal savings bank. Before making an advance payment of expenses under this paragraph (e), a federal savings bank such as Capital One, F.S.B. shall obtain an agreement that such federal savings bank will be repaid if the person, on whose behalf payment is made, is later determined not to be entitled to such indemnification. (f)Exclusiveness of provisions. A federal savings bank such as Capital One, F.S.B. shall not indemnify any person referred to in paragraph (b) above or obtain insurance referred to in paragraph (d) above other than in accordance with Section 545.121. (g)Applicability of section 11(n) of the Federal Deposit Insurance Act. The indemnification provided for in paragraph (b) of Section 545.121 is subject to and qualified by 12 U.S.C. Section 1821(k), a director or officer of an insured depository institution such as Capital One, F.S.B. may be held personally liable for monetary damages in certain civil actions by, on behalf of, or at the request or direction of the Federal Deposit Insurance Corporation (the "FDIC"). Section 1821(k) provides that nothing therein shall impair or affect any right of the FDIC under other applicable law. Capital One, F.S.B. is a federally insured depository institution. In that regard, it is subject to further regulation by the FDIC, including limits and/or prohibitions on the ability of Capital One, F.S.B. to enter into contracts to pay and to make indemnification payments to its directors or officers. (a)Under 12 C.F.R. Chapter 3, Part 359.0(c), the limitations on indemnification payments apply to all insured depository institutions such as Capital One F.S.B., their subsidiaries and affiliated depository institution holding companies regardless of their financial health. Generally, insured depository institutions such as Capital One, F.S.B., their subsidiaries and affiliated depository institution holding companies are prohibited from indemnifying a director or officer for that portion of the costs sustained with regard to an administrative or civil enforcement action commenced by any federal banking agency which results in a final order or settlement pursuant to which the director or officer is assessed a civil monetary penalty, removed from office, prohibited from participating in the affairs of an insured depository institution or required to cease and desist from or take an affirmative action described in section 8(b) (12 U.S.C. 1818(b)) of the Federal Deposit Insurance Act. However, there are exceptions to this general provision as follows: (1)An institution or holding company may purchase commercial insurance to cover such expenses, except judgments and penalties; (2)The institution or holding company may advance legal and other professional expenses to a director or officer directly (except judgments and penalties) if its board of directors makes certain specific findings and the director or officer agrees in writing to reimburse the institution if it is ultimately determined that the director or officer violated a law, regulation or other fiduciary duty. II-4 Item 16. Exhibits. 1.1 -- Form of Underwriting Agreement for the Certificates (incorporated by reference to Exhibit 1.1 to the registrant's Amendment No. 1 to Form S-3 (File Nos. 333-66335 and 333-66335-01) filed with the Securities and Exchange Commission on January 28, 1999). 4.1 -- Pooling and Servicing Agreement, dated as of September 30, 1993, as amended and restated as of April 9, 2001, among Capital One Bank, as a Seller and the Servicer, Capital One, F.S.B., as a Seller, and The Bank of New York, as the Trustee. 4.2 -- Form of Transfer and Assumption Agreement, dated as of November 22, 1994, by and among Signet Bank/Virginia, Capital One Bank, as Assuming Entity, The Bank of New York, as Trustee and the other parties thereto (incorporated by reference to Exhibit 4.5 to the registrant's Current Report on Form 8-K (File No. 0-23750) filed with the Securities and Exchange Commission on January 13, 1995). 4.3 -- Form of Series Supplement (including form of Certificates) (incorporated by reference to Exhibit 4.7 to the registrant's Amendment No. 1 to Form S-3 (File Nos. 333-66335 and 333-66335-01) filed with the Securities and Exchange Commission on January 28, 1999). 5.1 -- Opinion of Orrick, Herrington & Sutcliffe LLP with respect to legality.* 8.1 -- Opinion of Orrick, Herrington & Sutcliffe LLP with respect to federal tax matters.* 23.1 -- Consent of Orrick, Herrington & Sutcliffe LLP (included in its opinion filed as Exhibit 5.1).* 23.2 -- Consent of Orrick, Herrington & Sutcliffe LLP (included in its opinion filed as Exhibit 8.1).* 24.1 -- Powers of Attorney.*
- -------- * Previously filed. Item 17. Undertakings. The undersigned Registrants on behalf of the Capital One Master Trust (the "Trust") hereby undertake as follows: (a) (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement: (i) to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) to reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Securities and Exchange Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective 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 to such information in the Registration Statement; provided, however, that (a)(1)(i) and (a)(1)(ii) will not apply if the information required to be included in a post-effective amendment thereby is contained in periodic reports filed pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in this Registration Statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering hereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered that remain unsold at the termination of the offering. II-5 (b) That, for purposes of determining any liability under the Securities Act of 1933, each filing of each Registrants' annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (c) That insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrants pursuant to the provisions described under Item 15 above, or otherwise, the Registrants have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrants of expenses incurred or paid by a director, officer or controlling person of the Registrants 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 Registrants will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue. II-6 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, each Co-Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3, reasonably believes that the security rating requirement contained in Transaction Requirement B.5 of Form S- 3 will be met by the time of sale of the securities registered hereunder and has duly caused this Amendment No. 1 to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Falls Church, Virginia, on April 13, 2001. CAPITAL ONE BANK, as originator of the Trust and Co-Registrant and as Servicer on behalf of the Trust as Co-Registrant By: /s/ David M. Willey ------------------- David M. Willey Executive Vice President, Chief Financial Officer and Director Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 1 to the Registration Statement has been signed on April 13, 2001 by the following persons in the capacities indicated.
Signature Title --------- ----- /s/ Richard D. Fairbank* Chairman of the Board of ________________________________________________ Directors and Chief Executive Richard D. Fairbank Officer /s/ Nigel W. Morris* President, Chief Operating ________________________________________________ Officer and Director Nigel W. Morris /s/ David M. Willey Executive Vice President, ________________________________________________ Chief Financial Officer and David M. Willey Director (Principal Financial Officer and Principal Accounting Officer) /s/ James A. Flick, Jr.* Director ________________________________________________ James A. Flick, Jr. /s/ James V. Kimsey* Director ________________________________________________ James V. Kimsey /s/ Stanley I. Westreich* Director ________________________________________________ Stanley I. Westreich
By: /s/ David M. Willey Name:David M. Willey Title:Executive Vice President, Chief Financial Officer and Director *Note: Powers of Attorney appointing John G. Finneran, Jr., Frank R. Borchert III, David M. Willey and Susanna K. Tisa, or any of them acting singly, to execute the Registration Statement, any amendments thereto and any registration statement for additional Asset Backed Certificates that is to be effective on filing pursuant to Rule 462(b) under the Securities Act of 1933, as amended, on behalf of the above-named individuals, were previously filed with the Securities and Exchange Commission. II-7 CAPITAL ONE, F.S.B., as originator of the Trust and Co-Registrant By: /s/ David M. Willey ------------------- David M. Willey President, Chief Financial Officer and Director Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 1 to the Registration Statement has been signed on April 13, 2001 by the following persons in the capacities indicated.
Signature Title --------- ----- /s/ Richard D. Fairbank* Chairman of the Board of ________________________________________________ Directors Richard D. Fairbank /s/ Nigel W. Morris* Director ________________________________________________ Nigel W. Morris /s/ David M. Willey President, Chief Financial ________________________________________________ Officer and Director David M. Willey (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer) /s/ James A. Flick, Jr.* Director ________________________________________________ James A. Flick, Jr. /s/ W. Ronald Dietz* Director ________________________________________________ W. Ronald Dietz /s/ Patrick W. Gross* Director ________________________________________________ Patrick W. Gross
By: /s/ David M. Willey Name:David M. Willey Title:President, Chief Financial Officer and Director *Note: Powers of Attorney appointing John G. Finneran, Jr., Frank R. Borchert III, David M. Willey and Susanna K. Tisa, or any of them acting singly, to execute the Registration Statement, any amendments thereto and any registration statement for additional Asset Backed Certificates that is to be effective on filing pursuant to Rule 462(b) under the Securities Act of 1933, as amended, on behalf of the above-named individuals, were previously filed with the Securities and Exchange Commission. II-8 EXHIBIT INDEX
Exhibit Number Description ------- ----------- 1.1 -- Form of Underwriting Agreement for the Certificates (incorporated by reference to Exhibit 1.1 to the registrant's Amendment No. 1 to Form S-3 (File Nos. 333-66335 and 333-66335-01) filed with the Securities and Exchange Commission on January 28, 1999). 4.1 -- Pooling and Servicing Agreement, dated as of September 30, 1993, as amended and restated as of April 9, 2001, among Capital One Bank, as a Seller and the Servicer, Capital One, F.S.B., as a Seller, and The Bank of New York, as the Trustee. 4.2 -- Form of Transfer and Assumption Agreement, dated as of November 22, 1994, by and among Signet Bank/Virginia, Capital One Bank, as Assuming Entity, The Bank of New York, as Trustee and the other parties thereto (incorporated by reference to Exhibit 4.5 to the registrant'sCurrent Report on Form 8-K (File No. 0-23750) filed with the Securities and Exchange Commission on January 13, 1995). 4.3 -- Form of Series Supplement (including form of Certificates) (incorporated by reference to Exhibit 4.7 to the registrant's Amendment No. 1 to Form S-3 (File Nos. 333-66335 and 333-66335-01) filed with the Securities and Exchange Commission on January 28, 1999). 5.1 -- Opinion of Orrick, Herrington & Sutcliffe LLP with respect to legality.* 8.1 -- Opinion of Orrick, Herrington & Sutcliffe LLP with respect to federal tax matters.* 23.1 -- Consent of Orrick, Herrington & Sutcliffe LLP (included in its opinion filed as Exhibit 5.1).* 23.2 -- Consent of Orrick, Herrington & Sutcliffe LLP (included in its opinion filed as Exhibit 8.1).* 24.1 -- Powers of Attorney.*
- -------- *Previously filed. EX-4.1 2 0002.txt POOLING AND SERVICING AGREEMENT Exhibit 4.1 - -------------------------------------------------------------------------------- CAPITAL ONE BANK as a Seller and the Servicer, CAPITAL ONE, F.S.B. as a Seller, and THE BANK OF NEW YORK, as the Trustee CAPITAL ONE MASTER TRUST POOLING AND SERVICING AGREEMENT Dated as of September 30, 1993, as amended and restated on April 9, 2001 - -------------------------------------------------------------------------------- EXHIBITS Exhibit A Form of Bank Certificate Exhibit B Form of Assignment of Receivables in Additional Accounts Exhibit C Form of Reassignment of Receivables in Removed Accounts Exhibit D Form of Annual Servicer's Certificate Exhibit E-1 Private Placement Legend Exhibit E-2 Representation Letter Exhibit E-3 ERISA Legend Exhibit F Form of Depositary Agreement Exhibit G-1 Form of Certificate of Foreign Clearing Agency Exhibit G-2 Form of Alternate Certificate to be delivered to Foreign Clearing Agency Exhibit G-3 Form of Certificate to be delivered to Foreign Clearing Agency Exhibit H-1 Form of Opinion of Counsel with respect to Amendments Exhibit H-2 Form of Opinion of Counsel with respect to Accounts Exhibit I Form of Assumption Agreement SCHEDULES Schedule 1 List of Accounts [Deemed Incorporated] vi TABLE OF CONTENTS
Page ARTICLE I Definitions............................................................................................... 1 Section 1.01 Definitions........................................................................................ 1 Section 1.02 Other Definitional Provisions and Rules of Construction............................................ 21 ARTICLE II Transfer of Receivables................................................................................... 22 Section 2.01 Transfer of Receivables............................................................................ 22 Section 2.02 Acceptance by Trustee.............................................................................. 24 Section 2.03 Representations and Warranties of Each Seller Relating to Such Seller.............................. 24 Section 2.04 Representations and Warranties of Each Seller Relating to the Agreement and Any Supplement and the Receivables....................................................................................... 26 Section 2.05 Reassignment of Ineligible Receivables............................................................. 28 Section 2.06 Reassignment of Receivables in Trust Portfolio..................................................... 29 Section 2.07 Covenants of Each Seller........................................................................... 30 Section 2.08 Addition of Accounts............................................................................... 32 Section 2.09 Removal of Accounts................................................................................ 36 Section 2.10 Account Allocations................................................................................ 38 Section 2.11 Discount Option.................................................................................... 38 ARTICLE III Administration and Servicing of Receivables............................................................... 39 Section 3.01 Acceptance of Appointment and Other Matters Relating to the Servicer............................... 39 Section 3.02 Servicing Compensation............................................................................. 40 Section 3.03 Representations, Warranties and Covenants of the Servicer.......................................... 41 Section 3.04 Reports and Records for the Trustee................................................................ 44 Section 3.05 Annual Certificate of Servicer..................................................................... 45 Section 3.06 Annual Servicing Report of Independent Public Accountants; Copies of Reports Available............. 45 Section 3.07 Tax Treatment...................................................................................... 45 Section 3.08 Notices to the Banks............................................................................... 46 Section 3.09 Adjustments........................................................................................ 46 Section 3.10 Reports to the Commission.......................................................................... 46 ARTICLE IV Rights of Certificateholders and Allocation and Application or Collections............................... 47 Section 4.01 Rights of Certificateholders....................................................................... 47
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Page Section 4.02 Establishment of Collection Account and Excess Funding Account..................................... 47 Section 4.03 Collections and Allocations........................................................................ 50 Section 4.04 Shared Principal Collections....................................................................... 52 Section 4.05 Excess Finance Charges............................................................................. 52 ARTICLE V Distributions and Reports to Certificateholders........................................................... 52 ARTICLE VI The Certificates.......................................................................................... 52 Section 6.01 The Certificates................................................................................... 53 Section 6.02 Authentication of Certificates..................................................................... 53 Section 6.03 New Issuances...................................................................................... 53 Section 6.04 Registration of Transfer and Exchange of Certificates.............................................. 55 Section 6.05 Mutilated, Destroyed, Lost or Stolen Certificates.................................................. 58 Section 6.06 Persons Deemed Owners.............................................................................. 58 Section 6.07 Appointment of Paying Agent........................................................................ 59 Section 6.08 Access to List of Registered Certificateholders' Names and Addresses............................... 59 Section 6.09 Authenticating Agent............................................................................... 60 Section 6.10 Book-Entry Certificates............................................................................ 61 Section 6.11 Notices to Clearing Agency......................................................................... 61 Section 6.12 Definitive Certificates............................................................................ 61 Section 6.13 Global Certificate; Exchange Date.................................................................. 62 Section 6.14 Meetings of Certificateholders..................................................................... 63 ARTICLE VII Other Matters Relating to Each Seller..................................................................... 65 Section 7.01 Liability of each Seller........................................................................... 65 Section 7.02 Merger or Consolidation of, or Assumption of the Obligations of, a Seller.......................... 65 Section 7.03 Limitations on Liability of Each Seller............................................................ 66 Section 7.04 Liabilities........................................................................................ 67 Section 7.05 Assumption of a Seller's Obligations............................................................... 67 ARTICLE VIII Other Matters Relating to the Servicer.................................................................... 68 Section 8.01 Liability of the Servicer.......................................................................... 68 Section 8.02 Merger or Consolidation of, or Assumption of the Obligations of, the Servicer...................... 68
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Page Section 8.03 Limitation on Liability of the Servicer and Others................................................. 69 Section 8.04 Servicer Indemnification of the Trust and the Trustee.............................................. 69 Section 8.05 The Servicer Not To Resign......................................................................... 69 Section 8.06 Access to Certain Documentation and Information Regarding the Receivables.......................... 70 Section 8.07 Delegation of Duties............................................................................... 70 Section 8.08 Examination of Records............................................................................. 70 ARTICLE IX Pay Out Events............................................................................................ 71 Section 9.01 Pay Out Events..................................................................................... 71 Section 9.02 Additional Rights upon the Occurrence of Certain Events............................................ 71 ARTICLE X Servicer Defaults......................................................................................... 72 Section 10.01 Servicer Defaults................................................................................. 72 Section 10.02 Trustee To Act; Appointment of Successor.......................................................... 75 Section 10.03 Notification to Certificateholders................................................................ 76 ARTICLE XI The Trustee............................................................................................... 76 Section 11.01 Duties of Trustee................................................................................. 76 Section 11.02 Certain Matters Affecting the Trustee............................................................. 78 Section 11.03 Trustee Not Liable for Recitals in Certificates................................................... 79 Section 11.04 Trustee May Own Certificates...................................................................... 79 Section 11.05 The Servicer To Pay Trustee's Fees and Expenses................................................... 79 Section 11.06 Eligibility Requirements for Trustee.............................................................. 79 Section 11.07 Resignation or Removal of Trustee................................................................. 80 Section 11.08 Successor Trustees................................................................................ 80 Section 11.09 Merger or Consolidation of Trustee................................................................ 81 Section 11.10 Appointment of Co-Trustee or Separate Trustee..................................................... 81 Section 11.11 Tax Returns....................................................................................... 82 Section 11.12 Trustee May Enforce Claims Without Possession of Certificates..................................... 82 Section 11.13 Suits for Enforcement............................................................................. 82 Section 11.14 Rights of Certificateholders To Direct Trustee.................................................... 83 Section 11.15 Representations and Warranties of Trustee......................................................... 84 Section 11.16 Maintenance of Office or Agency................................................................... 84 Section 11.17 Confidentiality................................................................................... 84
-iii-
Page ARTICLE XII Termination............................................................................................... 85 Section 12.01 Termination of Trust.............................................................................. 85 Section 12.02 Final Distribution................................................................................ 85 Section 12.03 Seller's Termination Rights....................................................................... 86 Section 12.04 Defeasance........................................................................................ 86 ARTICLE XIII Miscellaneous Provisions.................................................................................. 87 Section 13.01 Amendment; Waiver of Past Defaults................................................................ 87 Section 13.02 Protection of Right, Title and Interest to Trust.................................................. 89 Section 13.03 Limitation on Rights of Certificateholders........................................................ 90 Section 13.04. GOVERNING LAW..................................................................................... 91 Section 13.05. Notices; Payments................................................................................. 91 Section 13.06. Rule 144A Information............................................................................. 92 Section 13.07. Severability of Provisions........................................................................ 92 Section 13.08. Assignment........................................................................................ 92 Section 13.09. Certificates Nonassessable and Fully Paid......................................................... 92 Section 13.10. Further Assurances................................................................................ 92 Section 13.11. Nonpetition Covenant.............................................................................. 93 Section 13.12. No Waiver; Cumulative Remedies.................................................................... 93 Section 13.13. Counterparts...................................................................................... 93 Section 13.14. Third-Party Beneficiaries......................................................................... 93 Section 13.15. Actions by Certificateholders..................................................................... 93 Section 13.16. Merger and Integration............................................................................ 93 Section 13.17. Headings.......................................................................................... 94 Section 13.18. Construction of Agreement......................................................................... 94
-iv- POOLING AND SERVICING AGREEMENT, dated as of September 30, 1993, as amended and restated on April 9, 2001, among CAPITAL ONE BANK, a Virginia banking corporation, as a Seller and the Servicer, CAPITAL ONE, F.S.B., a federal savings bank, as a Seller, and THE BANK OF NEW YORK, a New York banking corporation, as the Trustee. In consideration of the mutual agreements herein contained, each party agrees as follows for the benefit of the other parties, the Certificateholders and any Series Enhancer to the extent provided herein and in any Supplement: 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 each Initial Account and each Additional Account, ------- but shall exclude any Account all the Receivables in which are either reassigned or assigned to a Seller or its designee or the Servicer in accordance with the terms of this Agreement. The definition of Account shall include any "MasterCard"(R) or "VISA"(R)/*/ account or accounts (each, a "Related Account") --------------- having the following characteristics: (a) such Related Account was established in compliance with the Lending Guidelines pursuant to a Lending Agreement; (b) the Obligor or obligors with respect to such Related Account are the same Person or Persons as the Obligor or Obligors of the Account; (c) such Related Account is originated (i) as a result of the credit card with respect to the Account being lost or stolen; (ii) as a result of the Obligor requesting a change in his billing cycle; (iii) as a result of the Obligor requesting the discontinuance of responsibility with respect to an Account; (iv) as a result of the Obligor requesting a product change; or (v) for any other reasons permitted by the Lending Guidelines; and (d) such Related Account can be traced or identified by reference to or by way of the computer or other records of a Seller. From and after the date on which an Account replaced by a Related Account is removed from the computer records of a Seller, such Account shall no longer be an Account hereunder. The term "Account" shall be deemed to refer to an Additional Account only from and after the Addition Date with respect thereto, and the term "Account" shall be deemed to refer to any Removed Account only prior to the Removal Date with respect thereto. "Accumulation Period" shall mean, with respect to any Series, the ------------------- period, if any, specified as such in the related Supplement. "Act" shall mean the Securities Act of 1933, as amended. --- "Addition" shall mean the designation of additional Eligible Accounts -------- to be included as Accounts or Participation Interests to be included as Trust Assets pursuant to Section 2.08(a), (b) or (c). - --------- /*/ MasterCard and VISA are registered trademarks of Master Card International Incorporated and of VISA USA, Inc., respectively. 1 "Addition Date" shall mean (i) with respect to Additional Accounts, ------------- the date on which the Receivables in such Additional Accounts are conveyed to the Trust pursuant to Section 2.08(a), (b) or (c), and (ii) with respect to Participation Interests, the date from and after-which such Participation Interests are to be included as Trust Assets pursuant to Section 2.08(a) or (b). "Addition Discount Receivables" shall mean, as of any applicable ----------------------------- Additional Cut-Off Date, the amount of Principal Receivables in Additional Accounts designated by a Seller to be treated as Finance Charge Receivables; provided, however, that a Seller may not make such designation unless (i) such - -------- ------- Seller shall have received written notice from each Rating Agency that such designation will not have a Ratings Effect and shall have delivered copies of each such written notice to the Servicer and the Trustee and (ii) such Seller shall have delivered to the Trustee and any Series Enhancer entitled thereto pursuant to the relevant Supplement an Officer's Certificate of such Seller, to the effect that such Seller reasonably believes that such designation will not, based on the facts known to such officer at the time of such certification, then cause a Pay Out Event or any event that, after the giving of notice or the lapse of time, would constitute a Pay Out Event to occur with respect to any Series. "Additional Account" shall mean each consumer revolving credit card ------------------ account or other consumer revolving credit account established pursuant to a Lending Agreement, which account is designated pursuant to Section 2.08(a), (b) or (c) to be included as an Account and is identified in a computer file or microfiche list delivered to the Trustee by the Sellers pursuant to Sections 2.01 and 2.08(g). "Additional Cut-off Date" shall mean the date as of which, any ----------------------- Additional Accounts or Participation Interests are to be included in the Trust, as specified in the related Assignment. "Additional Seller" shall have the meaning specified in Section ----------------- 2.08(f). "Adjustment Payment" shall have the meaning specified in Section ------------------ 3.09(a). "Affiliate" shall mean, with respect to any specified Person, any --------- other Person controlling or controlled by or under common control with such specified Person. For the purposes of this definition, "control" when used with respect to any Specified Person shall mean the power to direct the management and policies of a Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "Aggregate Addition Limit" shall mean the number of accounts ------------------------ designated as Automatic Additional Accounts, without prior Rating Agency consent, and designated as Additional Accounts pursuant to Section 2.08(a), without the prior Rating Agency notice described under Section 2.08(d)(v), which would either (x) with respect to any three (3) consecutive Monthly Periods, commencing with the three (3) Monthly Periods ending December 1993, equal 15% of the number of Accounts at the end of the ninth Monthly Period preceding the commencement of such three (3) Monthly Periods (or, the Trust Cut-Off Date, whichever is later) and (y) with respect to any twelve (12) Monthly Periods, equal 20% of the number of 2 Accounts as of the first day of such twelve (12) Monthly Periods (or, the Trust Cut-Off Date, whichever is later). "Agreement" shall mean this Pooling and Servicing Agreement, as --------- amended and restated, and all amendments hereof and supplements hereto, including, with respect to any Series or Class, the related Supplement. "Applicants" shall have the meaning specified in Section 6.08. ---------- "Appointment Date" shall have the meaning specified in Section ---------------- 9.02(a). "Assignment" shall have the meaning specified in Section 2.08(g). ---------- "Assumption Agreement" shall have the meaning specified in Section -------------------- 7.05. "Assuming Entity" shall have the meaning specified in Section 7.05. --------------- "Authorized Newspaper" shall mean any newspaper or newspapers of -------------------- general circulation (including The Bond Buyer or The Wall Street Journal) in the Borough of Manhattan, The City of New York, printed in the English language (and, with respect to any Series or Class, if and so long as the Investor Certificates of such Series or Class are listed on the Luxembourg Stock Exchange and such exchange shall so require, in Luxembourg, printed in any language satisfying the requirements of such exchange) and customarily published on each Business Day at such place, whether or not published on Saturdays, Sundays or holidays. "Automatic Additional Account" shall mean each consumer revolving ---------------------------- credit card account or other consumer revolving credit account established pursuant to a Lending Agreement, which account is designated pursuant to Section 2.08(c) to be included as an Account and is identified in a computer file or microfiche list delivered to the Trustee by the Sellers pursuant to Sections 2.01 and 2.08(g). "Bank Certificates" shall mean, if either Bank or any Additional ----------------- Seller elects to evidence its interest in the Sellers' Interest in certificated form pursuant to Section 6.01, a certificate executed by such Bank or any Additional Seller, as the case may be, and authenticated by or on behalf of the Trustee, substantially in the form of Exhibit A, as the same may be modified in --------- accordance with Section 2.08(f). "Banks" shall together mean Capital One Bank and Capital One, F.S.B. ----- or, if the conditions of Section 7.05 hereof are satisfied with respect to a transfer of the Accounts, upon the satisfaction of such conditions, the Assuming Entity, and "Bank" shall mean any of them. "Bearer Certificates" shall have the meaning specified in Section ------------------- 6.01. "Benefit Plan" shall have the meaning specified in Section 6.04(c). ------------ "Book-Entry Certificates" shall mean beneficial interests in the ----------------------- Investor Certificates, ownership and transfers of which shall be made through book entries by a Clearing Agency as described in Section 6.10. 3 "Business Day" shall mean any day other than (a) a Saturday or Sunday ------------ or (b) any other day on which national banking associations or state banking institutions in New York, New York, Richmond, Virginia, Falls Church, Virginia, or, if an Assuming Entity shall be a Bank or any Additional Seller designated pursuant to Section 2.08(f), any other State in which the principal executive offices of such Assuming Entity or Additional Seller are located, are authorized or obligated by law, executive order or governmental decree to be closed. "Cash Advance Fees" shall mean fees or charges for cash advances, as ----------------- specified in the Lending Agreement applicable to each Account. "Certificate" shall mean any one of the Investor Certificates or the ----------- Seller Certificates. "Certificate Owner" shall mean, with respect to a Book-Entry ----------------- Certificate, the Person who is the owner of 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 (directly or as an indirect participant, in accordance with the rules of such Clearing Agency). "Certificate Rate" shall mean, with respect to any Series or Class, ---------------- the certificate rate specified therefor in the related Supplement. "Certificate Register" shall mean the register maintained pursuant to -------------------- Section 6.04, providing for the registration of the Registered Certificates and the Seller Certificates and transfers and exchanges thereof. "Certificateholder" or "Holder" shall mean an Investor ----------------- ------ Certificateholder, a Person in whose name a Seller Certificate is registered in the Certificate Register, or any Person recorded as the owner of any part of an interest in the Sellers' Interest. "Certificateholders' Interest" shall have the meaning specified in ---------------------------- Section 4.01. "Class" shall mean, with respect to any Series, any one of the classes ----- of Investor Certificates of that Series. "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 pursuant to the rules and regulations of such Clearing Agency. "Clearstream" shall mean Clearstream Banking, societe anonyme, a ----------- professional depository incorporated under the laws of Luxembourg, and any successor thereto. "Closing Date" shall mean, with respect to any Series, the closing ------------ date specified in the related Supplement. 4 "Code" shall mean the Internal Revenue Code of 1986, as amended from ---- time to time. "Collection Account" shall have the meaning specified in Section 4.02. ------------------ "Collections" shall mean (a) all payments by or on behalf of obligors ----------- (including Insurance Proceeds) received in respect of the Receivables, in the form of cash, checks, wire transfers, electronic transfers, ATM transfers or any other form of payment in accordance with the related Lending Agreement in effect from time to time, (b) amounts, if any, withdrawn from a Deposit Account in accordance with an Assignment and (c) with respect to any Monthly Period, (i) a portion, determined pursuant to Section 2.07(i), of the Interchange paid to the Sellers through "VISA" and "MasterCard" with respect to such Monthly Period, (ii) all Recoveries received during such Monthly Period and (iii) all payments of annual membership fees (including in the case of the first Monthly Period the unamortized portion of annual membership fees relating to the period prior to the Trust Cut-Off Date determined in accordance with Section 3.04(d) hereof) with respect to the Accounts during such Monthly Period. "Commission" shall have the meaning specified in Section 3.01(b). ---------- "Controlled Amortization Period" shall mean, with respect to any ------------------------------ Series, the period, if any, specified as such in the related Supplement. "Corporate Trust Office" shall have the meaning specified in Section ---------------------- 11.16. "Coupon" shall have the meaning specified in Section 6.01. ------ "Date of Processing" shall mean, with respect to any transaction, the ------------------ date on which such transaction is first recorded under the Servicer's (or, in the case of a Seller, such Seller's) computer file of consumer revolving accounts (without regard to the effective date of such recordation). "Defaulted Amount" shall mean, with respect to any Monthly Period, an ---------------- amount (which shall not be less than zero) equal to (a) the amount of Principal Receivables which became Defaulted Receivables in such Monthly Period, minus (b) the sum of (i) the amount of any Defaulted Receivables included in any Account the Receivables in which a Seller or the Servicer became obligated to accept reassignment or assignment in accordance with the terms of this Agreement during such Monthly Period and (ii) the excess, if any, for the immediately preceding Monthly Period of the sum computed pursuant to this clause (b) for such Monthly Period over the amount of Principal Receivables which became Defaulted Receivables in such Monthly Period; provided, however, that, if an Insolvency -------- ------- Event occurs with respect to a Seller, the amount of such Defaulted Receivables which are subject to reassignment to such Seller in accordance with the terms of this Agreement shall not be added to the sum so subtracted and, if any of the events described in Section 10.01(d) occur with respect to the Servicer, the amount of such Defaulted Receivables which are subject to reassignment or assignment to the Servicer in accordance with the terms of this Agreement shall not be added to the sum so subtracted. "Defaulted Receivables" shall mean, with respect to any Monthly --------------------- Period, all Principal Receivables in any Account which are charged off as uncollectible in such Monthly 5 Period in accordance with the Lending Guidelines and the Servicer's customary and usual servicing procedures for servicing consumer revolving credit card and other consumer revolving credit account receivables comparable to the Receivables other than due to any Adjustment Payment. For purposes of this definition, a Principal Receivable in any Account shall become a Defaulted Receivable on the day on which such Principal Receivable is recorded as charged off on the Servicer's computer master file of consumer revolving credit accounts. "Defeasance" shall have the meaning specified in Section 12.04. ---------- "Defeased Series" shall have the meaning specified in Section 12.04. --------------- "Definitive Certificates" shall have the meaning specified in Section ----------------------- 6.10. "Definitive Euro-Certificates" shall have the meaning specified in ---------------------------- Section 6.13. "Deposit Account" shall mean the deposit account or accounts at the --------------- Depository into which Funds are deposited by or on behalf of an Obligor pursuant to the Deposit Documents, together with all money, instruments, investment property, documents, certificates of deposit, general intangibles and other properties on deposit therein or credited to such account, and all interest, dividends, earnings, income and other distributions from time to time received, receivable or otherwise distributed to or in respect thereof. "Deposit Date" shall mean each day on which the Servicer deposits ------------ Collections in the Collection Account. "Deposit Documents" shall mean the Security Agreement, the ----------------- Supplemental Deposit Agreement and all other documents, books, credit files, records, and other information (including, without limitation, computer programs, tapes, discs, punch cards, data processing software and related property and rights) maintained with respect to the Deposit Account and the Funds. "Depositaries" shall mean the Person specified in the applicable ------------ Supplement, in its capacity as depositary for the respective accounts of any Clearing Agency or any Foreign Clearing Agencies. "Depositary Agreement" shall mean, with respect to any Series or -------------------- Class, the agreement among the Sellers, the Trustee and the initial Clearing Agency substantially in the form of Exhibit F. --------- "Depository" shall mean Capital One, F.S.B. and/or any such other ---------- depositary institution selected by a Seller (which may be a Seller) organized under the laws of the United States or any one of the states thereof, including the District of Columbia (or any domestic branch of a foreign bank), which at all times is a member of the FDIC. "Determination Date" shall mean the fourth Business Day prior to each ------------------ Distribution Date. "Discount Option Receivables" shall have the meaning specified in --------------------------- Section 2.11. 6 "Discount Option Receivables Collections" shall mean on any Date of --------------------------------------- Processing on and after the date on which a Seller'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 the Discount Option Receivables and the denominator of which is the sum of the Principal Receivables (other than Discount Option Receivables) and the Discount Option Receivables in each case (for both numerator and denominator) at the end of the prior Monthly Period and (b) collections of Principal Receivables that arise in the Accounts on such day on or after the date such option is exercised that would otherwise be Principal Receivables. "Discount Percentage" shall have the meaning specified in Section ------------------- 2.11. "Distribution Date" shall mean the 15th day of each calendar month ----------------- during the term hereof, or, if such 15th day is not a Business Day, the next succeeding Business Day. "Document Delivery Date" shall mean the first Closing Date in the case ---------------------- of Initial Accounts and the day that is on or prior to the tenth Business Day after the Addition Date in the case of Additional Accounts or Participation Interests added to the Trust. "Early Amortization Period" shall mean, with respect to any Series, ------------------------- the period beginning at the close of business on the Business Day immediately preceding the day on which a Pay Out Event is deemed to have occurred with respect to such Series, and ending upon the earlier to occur of (i) the payment in full to the Investor Certificateholders of such Series of the Invested Amount with respect to such Series and the payment in full to any applicable Series Enhancer with respect to such Series of the Enhancement Invested Amount, if any, with respect to such Series and (ii) the Series Termination Date with respect to such Series. "Eligible Account" shall mean a "MasterCard" or "VISA" consumer ---------------- revolving credit card account or other consumer revolving credit account owned by a Seller which as of the Trust Cut-Off Date with respect to an Initial Account or as of the related Addition Date with respect to an Additional Account: (a) is in existence and maintained with such Seller on the Trust Cut- Off Date or the Addition Date, as the case may be; (b) is payable in United States dollars; (c) has not been identified as an account the credit cards or checks, if any, with respect to which have been reported to such Seller as having been lost or stolen; (d) the Obligor of which has provided, as his or her current billing address, an address located in the United States (or its territories or possessions or a military address); (e) has not been, and does not have any Receivables which have been, sold, pledged, assigned or otherwise conveyed to any Person (except pursuant to this Agreement); (f) except as provided below, does not have any Receivables which are Defaulted Receivables; (g) does not have any Receivables which have been identified by such Seller or the relevant Obligor as having been incurred as a result of fraudulent use of any related credit card or check; (h) relates to an Obligor who is not identified by such Seller in its computer files as being the subject of a voluntary or involuntary bankruptcy proceeding; and (i) is not an account with respect to which the Obligor has requested discontinuance of responsibility. Eligible Accounts may include accounts, the receivables of which have been written off; provided that (a) the balance of all receivables included in such -------- accounts is reflected on the books and records of such Seller (and is treated for purposes of this Agreement) as "zero," and (b) charging privileges with respect to all such accounts have been 7 canceled in accordance with the Lending Guidelines of such Seller and will not be reinstated by such Seller or the Servicer. "Eligible Deposit Account" shall mean either (a) a segregated account ------------------------ with an Eligible Institution or (b) a segregated trust account with the corporate trust department of a depository institution organized under the laws of the United States or any one of the states thereof, including the District of Columbia (or any domestic branch of a foreign bank), or a trust company acceptable to each Rating Agency, and acting as a trustee for funds deposited in such account, so long as any of the securities of such depository institution or trust company shall have a credit rating from each Rating Agency in one of its generic credit rating categories which signifies investment grade. "Eligible Institution" shall mean (a) a depository institution (which -------------------- may be the Trustee) organized under the laws of the United States or any one of the states thereof, including the District of Columbia (or any domestic branch of a foreign bank), which at all times (i) has either (x) a long-term unsecured debt rating of A2 or better by Moody's or (y) a certificate of deposit rating of P-1 by Moody's, (ii) has either (x) a long-term unsecured debt rating of AAA by Standard & Poor's or (y) a certificate of deposit rating of A-l+ by Standard & Poor's, (iii) has either (x) if rated by Fitch, a long-term unsecured debt rating of A- by Fitch or (y) a certificate of deposit rating of F1 by Fitch and (iv) is a member of the FDIC or (b) any other institution that is acceptable to Moody's, Standard & Poor's and Fitch. "Eligible Investments" shall mean book-entry securities, negotiable -------------------- instruments or securities represented by instruments in bearer or registered form which evidence: (a) direct obligations of, and obligations fully guaranteed as to timely payment of principal and interest by, the United states of America; (b) demand deposits, time deposits or certificates of deposit (having original maturities of no more than 365 days) of depository institutions or trust companies incorporated under the laws of the United States of America or any one of the states thereof, including the District of Columbia (or any domestic branch of a foreign bank), and subject to supervision and examination by federal or state banking or depository institution authorities; provided that at the time of the Trust's investment or -------- contractual commitment to invest therein, the short-term debt rating of such depository institution or trust company shall be in the highest ratings investment category of each Rating Agency; (c) commercial paper or other short-term obligations having, at the time of the Trust's investment or contractual commitment to invest therein, a rating from each Rating Agency in its highest ratings investment category; (d) demand deposits, time deposits and certificates of deposit which are fully insured by the FDIC, with a Person the commercial paper of which has a credit rating from each Rating Agency in its highest ratings investment category; (e) notes or bankers' acceptances (having original maturities of no more than 365 days) issued by any depository institution or trust company referred to in (b) above; 8 (f) investments in money market funds rated in the highest ratings investment category by each Rating Agency or otherwise Approved in writing by each Rating Agency; (g) time deposits (having maturities of not more than thirty (30) days), other than as referred to in clause (d) above, with a Person the commercial paper of which has a credit rating from each Rating Agency in its highest ratings investment category; or (h) any other investments approved in writing by each Rating Agency. "Eligible Receivable" shall mean each Receivable: ------------------- (a) which has arisen under an Eligible Account; (b) which was created in compliance in all material aspects with the Lending Guidelines and all Requirements of Law applicable to the Seller, the failure to comply with which would have a material adverse effect on Investor Certificateholders, and pursuant to a Lending Agreement which complies with all Requirements of Law applicable to the applicable Seller, the failure to comply with which would have a material adverse effect on Investor Certificateholders; (c) with respect to which all material consents, licenses, approvals or authorizations of, or registrations or declarations with, any Governmental Authority required to be obtained, effected or given by a Seller in connection with the creation of such Receivable or the execution, delivery and performance by such Seller of its obligations, if any, under the related Lending Agreement have been duly obtained, effected or given and are in full force and effect as of such date of creation of such Receivable; (d) as to which, at the time of its transfer to the Trust, the applicable Seller or the Trust will have good and marketable title, free and clear of all Liens (other than any Lien for municipal or other local taxes if such taxes are not then due and payable or if such Seller is then contesting the validity thereof in good faith by appropriate proceedings and has set aside on its books adequate reserves with respect thereto); (e) which has been the subject of either a valid transfer and assignment from a Seller to the Trust of all of such Seller's right, title and interest therein (including any proceeds thereof), or the grant of a first priority perfected security interest therein (and in the proceeds thereof), effective until the termination of the Trust; (f) which at and after the time of transfer to the Trust is the legal, valid and binding payment obligation of the obligor thereon, legally enforceable against such obligor in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, receivership, conservatorship 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) or matters as to which the Servicer is required by Section 3.09 to make an adjustment; 9 (g) which constitutes either an "account" or a "general intangible" under and as defined in Article 9 of the UCC; (h) which, at the time of its transfer to the Trust, has not been waived or modified except as permitted in accordance with Section 3.03(h); (i) which, at the time of its transfer to the Trust, is not subject to any right of rescission, setoff, counterclaim or any other defense of the Obligor (including the defense of usury), other than defenses arising out of applicable bankruptcy, insolvency, reorganization, moratorium, receivership, conservatorship 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 matters as to which the Servicer is required by Section 3.09 to make an adjustment; (j) as to which, at the time of its transfer to the Trust, the applicable Seller has satisfied all obligations on its part to be fulfilled at the time it is transferred to the Trust; and (k) as to which, at the time of its transfer to the Trust, the applicable Seller has not taken any action which, or failed to take any action the omission of which, would, at the time of its transfer to the Trust, impair in any material respect the rights of the Trust or the Certificateholders therein. "Eligible Servicer" shall mean the Trustee, a wholly-owned subsidiary ----------------- of the Trustee, or an entity which, at the time of its appointment as Servicer, (a) is servicing a portfolio of consumer revolving credit card accounts or other consumer revolving credit accounts, (b) is legally qualified and has the capacity to service the Accounts, (c) is qualified (or licensed) 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, (d) has, in the reasonable judgment of the Trustee, demonstrated the ability to professionally and competently service a portfolio of similar accounts in accordance with customary standards of skill and care and (e) has a net worth of at least $50,000,000 as of the end of its most recent fiscal quarter. "Enhancement Agreement" shall mean any agreement, instrument or --------------------- document governing the terms of any Series Enhancement or pursuant to which any Series Enhancement is issued or outstanding. "Enhancement Invested Amount," with respect to any Series, shall have --------------------------- the meaning specified in the related Supplement. "ERISA" shall mean the Employee Retirement Income Security Act of ----- 1974, as amended. "Euroclear Operator" shall mean Euroclear Bank S.A./N.V., as operator ------------------ of the Euroclear System, and any successor thereto. "Excess Finance Charges" shall have the meaning specified in Section ---------------------- 4.05. 10 "Excess Funding Account" shall have the meaning specified in Section ---------------------- 4.02. "Exchange Date" shall mean, with respect to any Series, any date that ------------- is after the related Series Issuance Date, in the case of Definitive Euro- Certificates in registered form, or upon presentation of certification of non- United States beneficial ownership (as described in Section 6.13), in the case of Definitive Euro-Certificates in bearer form. "Excluded Series" shall mean any Series designated as such in the --------------- relevant Supplement. "FDIC" shall mean the Federal Deposit Insurance Corporation or any ---- successor thereto. "Finance Charge Receivables" shall mean, with respect to any Monthly -------------------------- Period, all amounts billed to the Obligors on any Account at the beginning of such Monthly Period and in respect of (i) Periodic Rate Finance Charges, (ii) Cash Advance Fees, (iii) Late Charge Fees, (iv) Overlimit Fees, (v) Returned Check Charges, (vi) Discount Option Receivables, if any, and (vii) all other incidental and miscellaneous fees and charges (other than annual membership fees) billed on the Accounts from time to time. Collections of Finance Charge Receivables with respect to any Monthly Period shall include (i) a portion, determined pursuant to Section 2.07(i), of the Interchange paid to the Sellers through "VISA" and "MasterCard" with respect to such Monthly Period, (ii) all Recoveries received during such Monthly Period, (iii) the portion, determined pursuant to Section 3.04(d), of annual membership fees amortized (rather than billed) with respect to the Accounts during such Monthly Period and (iv) the portion, determined pursuant to Section 3.04(e), of Addition Discount Receivables to be deposited into the Collection Account with respect to such Monthly Period. "Finance Charge Shortfalls" shall have the meaning specified in ------------------------- Section 4.05. "FIRREA" shall mean the Financial Institutions Reform, Recovery and ------ Enforcement Act of 1989, as amended. "Fitch" shall mean Fitch, Inc., or any successor thereto. ----- "Floating Allocation Percentage" shall mean, with respect to any ------------------------------ Series, the floating allocation percentage specified in the related Supplement. "Foreign Clearing Agency" shall mean Clearstream and the Euroclear ----------------------- Operator. "Funds" shall mean the money, instruments and other properties ----- provided by an Obligor from time to time under the Security Agreement. "Funds Collateral" shall mean (a) the Deposit Account and the Funds; ---------------- (b) each Deposit Document, including, without limitation, all monies due or to become due to a Seller under or in connection with such related Deposit Document, and all rights, remedies, powers, privileges, benefits and claims of such Seller under or with respect to such related Deposit Document (whether arising pursuant to the terms of such related Deposit Document or otherwise available at law or in equity; (c) all guarantees, indemnities, warranties, insurance policies and 11 proceeds and premium refunds and other arrangements of whatever character from time to time under or with respect to the Funds, the Secured Account, the Deposit Account or the Deposit Documents; (d) all other security interests or liens from time to time purporting to secure an Obligor's obligations under or with respect to the Secured Account; and (e) all substitutions for and proceeds or any of the foregoing. "Global Certificate" shall have the meaning specified in Section ------------------ 6.13(a). "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 and having jurisdiction over the applicable Person. "Group" shall mean, with respect to any Series, the group of Series, ----- if any, in which the related Supplement specifies such Series is to be included. "Ineligible Receivables" shall have the meaning specified in Section ---------------------- 2.05(a). "Initial Account" shall mean each "MasterCard" and "VISA" account, in --------------- each case established pursuant to a Lending Agreement, chosen from Eligible Accounts of the Sellers and identified in the computer file or microfiche list delivered to the Trustee by the Sellers on or prior to the first Closing Date pursuant to Section 2.01. "Insolvency Event" shall have the meaning specified in Section ---------------- 9.01(a). "Insolvency Proceeds" shall have the meaning specified in Section ------------------- 9.02(c). "Insurance Proceeds" shall mean any amounts recovered by the Servicer ------------------ pursuant to any credit life, credit disability or unemployment insurance policies covering any Obligor with respect to Receivables under such Obligor's Account. "Interchange" shall mean interchange fees received by a Seller, in its ----------- capacity as credit card-issuing bank, from VISA, MasterCard or any other similar entity or organization with respect to any other type of revolving credit card accounts included as Accounts (except as otherwise provided in the initial Assignment with respect to any such other type of Accounts), in connection with cardholder charges for goods and services. "Invested Amount" shall mean, with respect to any Series and for any --------------- date, an amount equal to the invested amount specified in the related Supplement. "Investment Company Act" shall mean the Investment Company Act of ---------------------- 1940, as amended. "Investor Certificateholder" shall mean, subject to Section 6.06, the -------------------------- Person in whose name a Registered Certificate is registered in the Certificate Register or the bearer of any Bearer Certificate (or the Global Certificate, as the case may be) or Coupon. 12 "Investor Certificates" shall mean any one of the certificates --------------------- (including the Bearer Certificates, the Registered Certificates or any Global Certificate) executed by the Sellers and authenticated by or on behalf of the Trustee, substantially in the form attached to the related Supplement, other than the Seller Certificates. "Late Charge Fees" shall have the meaning specified in the Lending ---------------- Agreement applicable to each Account for late payment fees or similar terms with respect to such Account. "Lending Agreement" shall mean, with respect to an Account, the ----------------- agreements between a Seller and the related Obligor, governing the terms and conditions of such Account, as such agreements may be amended, modified or otherwise changed from time to time in conformance with all Requirements of Law, the failure to comply with which would have a material adverse effect on interests hereunder of Investor Certificateholders, and as distributed (including any amendments and revisions thereto) to holders of such Accounts. "Lending Guidelines" shall mean each Seller's established policies and ------------------ procedures relating to the operation of its credit card business, which are applicable to its entire portfolio of "VISA" and "MasterCard" and other consumer revolving accounts and are consistent with reasonably prudent practice, including the established policies and procedures for determining the creditworthiness of credit card or other revolving credit account customers, and the extension of credit to credit card and other revolving credit account customers and relating to the maintenance of credit card and other revolving credit accounts and collection of receivables with respect thereto, as such policies and procedures may be amended, modified, or otherwise changed from time to time in conformance with all Requirements of Law, the failure to comply with which would have a material adverse effect on interests hereunder of Investor Certificateholders. "Lien" shall mean any mortgage, deed of trust, pledge, hypothecation, ---- assignment, participation or equity interest, deposit arrangement, encumbrance, lien (statutory or other), preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever, including 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 (other than any such financing statement filed for informational purposes only) or comparable law of any jurisdiction to evidence any of the foregoing, excluding any lien or filing pursuant to this Agreement; provided, however, that any assignment or transfer pursuant to -------- ------- Section 6.03(c), Section 7.02 or Section 7.05 shall not be deemed to constitute a Lien. "Manager" shall mean the lead manager, manager or co-manager or person ------- performing a similar function with respect to an offering of Definitive Euro- Certificates. "MasterCard" shall mean MasterCard International Incorporated or any ---------- successor thereto. "Miscellaneous Payments" shall mean, with respect to any Monthly ---------------------- Period, the sum of Adjustment Payments and Transfer Deposit Amounts deposited in the Collection Account with respect to such Monthly Period. 13 "Monthly Period" shall mean, with respect to each Distribution Date, a -------------- period of approximately thirty (30) days, that (a) contains a full set of processing cycles with respect to the Accounts, as defined by the Servicer, (b) commences on the day immediately succeeding the last day of the immediately preceding Monthly Period and (c) ends prior to the Determination Date for such Distribution Date; provided, however, that the initial Monthly Period with -------- ------- respect to any Series will commence on the Cut-Off Date with respect to such Series. "Monthly Servicing Fee" shall have the meaning specified in Section --------------------- 3.02. "Moody's" shall mean Moody's Investors Service, Inc., or any successor ----- thereto. "Non-Code Entity" shall mean a savings and loan association, a --------------- national banking association, a bank or other entity that is not subject to Title 11 of the United States Code. "Notices" shall have the meaning specified in Section 13.05(a). ------- "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. "Officer's Certificate" shall mean, unless otherwise specified in this --------------------- Agreement, a certificate delivered to the Trustee signed by any Vice President or more senior officer of a Seller or the Servicer, as the case may be, or, in the case of a Successor Servicer, a certificate signed by any Vice President or more senior officer or 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 for, or an employee of, the Person providing the opinion and who shall be reasonably acceptable to the Trustee. "Overlimit Fees" shall have the meaning specified in the Lending -------------- Agreement applicable to each Account. "Participation Interests" shall mean participations representing ----------------------- undivided interests in a pool of assets primarily consisting of revolving credit card accounts or other revolving credit accounts owned by a Seller or any Affiliate thereof and collections thereon. "Pay Out Event" shall mean, with respect to any Series, each event ------------- specified in Section 9.01 and each additional event, if any, specified in the relevant Supplement as a Pay Out Event with respect to such Series. "Paying Agent" shall mean any paying agent and co-paying agent ------------ appointed pursuant to Section 6.07, which shall be, as of the date hereof, The Bank of New York. "Periodic Rate" shall mean the periodic rate or rates determined in ------------- the manner described in the Lending Agreement applicable to each Account. 14 "Periodic Rate Finance Charges" shall mean finance charges based on ----------------------------- the Periodic Rate or any similar term specified in the Lending Agreement applicable to each Account. "Permitted Activities" means the primary activities of the Trust, -------------------- which are: (a) holding Receivables and the other Trust Assets, which assets cannot be contrary to the status of the Trust as a qualified special purpose entity under existing accounting literature, including passive derivative financial instruments that pertain to beneficial interests issued or sold to parties other than the Sellers, their affiliates or their agents; (b) issuing Certificates and other interests in the Trust; (c) receiving Collections and making payments on such Certificates and interests in accordance with the terms of this Agreement and any Supplement; and (d) engaging in other activities that are necessary or incidental to accomplish these limited purposes, which activities cannot be contrary to the status of the Trust as a qualified special purpose entity under existing accounting literature. "Person" shall mean any legal person, including any individual, ------ corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization, Governmental Authority or other entity of similar nature. "Principal Allocation Percentage" shall mean, with respect to any ------------------------------- Series, the principal allocation percentage specified in the related Supplement. "Principal Receivables" shall mean all amounts, other than amounts --------------------- which represent Finance Charge Receivables, billed to the obligors on any Account in respect of (a) purchase of goods and services and (b) cash advances, but shall not include Defaulted Receivables or amounts billed as annual membership fees. In calculating the aggregate amount of Principal Receivables on any day, the amount of Principal Receivables shall be reduced by the aggregate amount of credit balances in the Accounts on such day. Any Principal Receivables which a Seller is unable to transfer as provided in Section 2.10 shall not be included in calculating the aggregate amount of Principal Receivables, except to the extent so provided in Section 2.10. "Principal Sharing Series" shall mean a Series that, pursuant to the ------------------------ Supplement therefor, is entitled to, receive Shared Principal Collections. "Principal Shortfalls" shall have the meaning specified in Section -------------------- 4.04. "Principal Terms" shall mean, with respect to any Series, (i) the name --------------- or designation; (ii) the initial principal amount (or method for calculating such amount) and the Invested Amount of such Series; (iii) the Certificate Rate (or method for the determination thereof) and the manner, if any, in which such rate may be adjusted from time to time; (iv) the interest payment date or dates and the manner, if any, in which the interest payment date or dates 15 may be reset from time to time and the date or dates from which interest shall accrue; (v) the method for allocating collections to Certificateholders of such Series; (vi) the designation of any Series Accounts and the terms governing the operation of any such Series Accounts; (vii) the method of calculating the servicing fee with respect thereto; (viii) the provider and the terms of any form of Series Enhancement with respect thereto; (ix) the terms on which the Investor Certificates of such Series may be exchanged for Investor Certificates of another Series, repurchased by the Banks or remarketed to other investors; (x) the Series Termination Date; (xi) the number of Classes of Investor Certificates of such Series and, if such Series consists of more than one Class, the rights and priorities of each such Class; (xii) the extent to which the Investor Certificates of such Series will be issuable in temporary or permanent global form (and, in such case, the depositary for such Global Certificate or Certificates, the terms and conditions, if any, upon which such Global Certificate may be exchanged, in whole or in part, for Definitive Certificates, and the manner in which any interest payable on a temporary or Global Certificate will be paid); (xiii) whether the Investor Certificates of such Series may be issued as Bearer Certificates and any limitations imposed thereon; (xiv) the priority of such Series with respect to any other Series; (xv) the Rating Agency or Rating Agencies, if any, rating the Series; (xvi) the name of the Clearing Agency, if any; (xvii) the base rate applicable to any Series; (xviii) the minimum amount of Principal Receivables required to be maintained through the designation of Additional Accounts; (xix) any deposit into any account maintained for the benefit of Certificateholders; (xx) the rights of the holders of the Sellers' Interest that have been transferred to the holders of such Series; (xxi) the Group, if any, to which such Series belongs; (xxii) whether or not such Series is a Principal Sharing Series; and (xxiii) any other terms of such Series. "Rating Agency" shall mean, with respect to any outstanding Series or ------------- Class, each statistical rating agency, as specified in the applicable Supplement, selected by the Sellers to rate the Investor Certificates of such Series or Class. "Ratings Effect" shall mean, with respect to any action and any Rating -------------- Agency, that such action will hot result in such Rating Agency reducing or withdrawing its rating of any outstanding Series or Class of Certificates with respect to which it is a Rating Agency. "Reassignment" shall have the meaning specified in Section 2.09. ------------ "Receivables" shall mean all amounts shown on the Servicer's records ----------- as amounts payable by obligors on any Account, from time to time, including amounts payable for Principal Receivables and amounts payable for Finance Charge Receivables; provided, however, that such amounts shall not be included as or -------- ------- deemed Receivables on and after the day on which they become Defaulted Receivables; provided further, however, that for purposes of determining the -------- ------- ------- amount of Principal Receivables in the Trust and the deduction of the principal amount of (x) Ineligible Receivables from such total amount of Principal Receivables as required by subsection 2.05(b) and (y) Defaulted Receivables from such total amount of Principal Receivables as required by Section 3.03, the foregoing proviso shall not apply. "Record Date" shall mean, with respect to any Distribution Date, the ----------- last Business Day of the preceding Monthly Period, except as otherwise provided with respect to a Series in the related Supplement. 16 "Recoveries" shall mean all amounts, excluding Insurance Proceeds, ---------- received by the Servicer with respect to Receivables which have previously become Defaulted Receivables (including any related Finance Charge Receivables), net of any out-of-pocket costs and expenses of collection (including attorneys' fees and expenses) deducted therefrom, plus the net proceeds of any sale or securitization of such Defaulted Receivables (plus any related Finance Charge Receivables), plus any residual payments from any such securitization, but excluding any interest, principal and servicing fees or other fees payable with respect to the securitization of such Defaulted Receivables and the related Finance Charge Receivables. "Registered Certificateholder" shall mean the Holder of a Registered ---------------------------- Certificate. "Registered Certificates" shall have the meaning specified in Section ----------------------- 6.01. "Related Account" shall have the meaning specified in the definition --------------- of "Account." "Removal Date" shall have the meaning specified in Section 2.09(a). ------------ "Removal Notice Date" shall have the meaning specified in Section ------------------- 2.09(a). "Removed Accounts" shall have the meaning specified in Section 2.09. ---------------- "Required Designation Date" shall have the meaning specified in ------------------------- Section 2.08(a). "Required Principal Balance" shall mean, as of any date of -------------------------- determination, (a) the sum of the "Initial Invested Amount" (as defined in the relevant Supplement) of the Investor Certificates of each Series outstanding on such date plus, as of such date of determination, the aggregate amounts of any increases in the Invested Amounts of each prefunded Series outstanding (in each case, other than any Series or portion thereof which is designated in the relevant Supplement as then being an Excluded Series) minus (b) the principal amount on deposit in the Excess Funding Account on such date; provided, however, -------- ------- if at any time the only Series outstanding are Excluded Series and a Pay Out Event has occurred with respect to one or more of such Series, the Required Principal Balance shall mean (a) the sum of the "Invested Amount" (as defined in the relevant Supplement) of each such Excluded Series as of the earliest date on which any such Pay Out Event is deemed to have occurred, minus (b) the principal amount on deposit in the Excess Funding Account. "Required Sellers' Interest" shall mean, with respect to any date, an -------------------------- amount equal to the product of the Required Sellers' Percentage and the aggregate amount of Principal Receivables in the Trust. "Required Sellers' Percentage" shall mean 5%; provided, however, that ---------------------------- -------- ------- the Sellers may reduce the Required Sellers' Percentage upon (w) thirty (30) days prior notice to the Trustee, each Rating Agency and any Series Enhancer entitled to receive such notice pursuant to the relevant Supplement, (x) receipt of written notice by the Sellers from each Rating Agency that such reduction will not have a Ratings Effect, (y) delivery by the Sellers of copies of each such written notice to the Servicer and the Trustee and (z) delivery to the Trustee and each such Series Enhancer of an Officer's Certificate of each Seller stating that such Seller reasonably 17 believes that such reduction will not, based on the facts known to such officer at the time of such certification, then cause a Pay Out Event or any event that, after the giving of notice or the lapse of time, would constitute a Pay Out Event to occur with respect to any Series; provided further that the Required ---------------- Sellers' Percentage shall not at any time be less than the Specified Percentage. "Requirements of Law" with respect to any Person shall mean the ------------------- certificate of incorporation or articles of association 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 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" shall mean any Vice President, any Assistant ------------------- Vice President, any Assistant Secretary, any Assistant Treasurer, or any other officer of the Trustee customarily performing functions similar to those performed by any of the above-designated officers and also, with respect to a particular matter, any other officer to whom such matter is referred because of such officer's knowledge of and familiarity with the particular subject. "Returned Check Charges" shall mean the charges specified in the ---------------------- Lending Agreement payable for returned payment checks drawn on an Account. "Revolving Period" shall mean, with respect to any Series, the period ---------------- specified as such in the related Supplement. "Rule 144A" shall mean Rule 144A under the Act, as such Rule may be --------- amended from time to time. "Secured Account" shall mean an Account owned by a Seller under which --------------- the payment obligations of the Obligor are secured by the Funds Collateral. "Security Agreement" shall mean each security agreement between a ------------------ Seller and an Obligor of a Secured Account pursuant to which such Obligor pledges the Funds, the Deposit Account and any other Funds Collateral to secure its obligations to such Seller under its Secured Account, as amended, supplemented or otherwise modified from time to time. "Sellers" shall mean the Banks and any Additional Seller. ------- "Seller Certificates" shall mean, collectively, the Bank Certificates ------------------- and any outstanding Supplemental Certificates. "Sellers' Interest" shall have the meaning specified in Section 4.01. ----------------- "Sellers' Participation Amount" shall mean at any time of ----------------------------- determination an amount equal to the total amount of Principal Receivables and the principal amount on deposit in the Excess Funding Account and any Principal Funding Account (as defined in any Supplement) in the Trust at such time minus the aggregate Invested Amounts and Enhancement Invested Amounts, if any, for all outstanding Series at such time. 18 "Series" shall mean any series of Investor Certificates established ------ pursuant to a Supplement. "Series Account" shall mean any deposit, trust, escrow or similar -------------- account maintained for the benefit of the Investor Certificateholders of any Series or Class, as specified in any Supplement. "Series Enhancement" shall mean the rights and benefits provided to ------------------ the Investor Certificateholders of any Series or Class pursuant to any letter of credit, surety bond, cash collateral guaranty, cash collateral account, insurance policy, spread account, reserve account, guaranteed rate agreement, maturity liquidity facility, tax protection agreement, interest rate swap agreement, interest rate cap agreement, currency exchange agreement, other derivative securities agreement or other similar arrangement. The subordination of any Class or Series to another Class or Series shall be deemed to be a Series Enhancement. "Series Enhancer" shall mean the Person or Persons providing any --------------- Series Enhancement, other than the Investor Certificateholders of any Class or Series which is subordinated to another Class or Series. "Series Issuance Date" shall mean, with respect to any Series, the -------------------- date on which the Investor Certificates of such Series are to be originally issued in accordance with Section 6.03 and the related Supplement. "Series Termination Date" shall mean, with respect to any Series, the ----------------------- termination date specified in the related Supplement. "Service Transfer" shall have the meaning specified in Section 10.01. ---------------- "Servicer" shall mean Capital One Bank, in its capacity as Servicer -------- pursuant to this Agreement, and, after any Service Transfer, the Successor Servicer. "Servicer Default" shall have the meaning specified in Section 10.01. ---------------- "Servicing Fee" shall have the meaning specified in Section 3.02. ------------- "Servicing Fee Rate" shall mean, with respect to any Series, the ------------------ servicing fee rate specified in the related Supplement. "Servicing Officer" shall mean any officer or duly appointed attorney- ----------------- in-fact of the Servicer who in either case is involved in, or responsible for, the administration and servicing of the Receivables and 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. "Shared Principal Collections" shall have the meaning specified in ---------------------------- Section 4.04. "Specified Percentage" shall mean 2%. -------------------- 19 "Standard & Poor's" shall mean Standard & Poor's Ratings Services, or ----------------- any successor thereto. "Successor Servicer" shall have the meaning specified in Section ------------------ 10.02(a). "Supplement" shall mean, with respect to any Series, a Supplement to ---------- this Agreement, executed and delivered in connection with the original issuance of the Investor Certificates of such Series pursuant to Section 6.03, and all amendments thereof and supplements thereto. "Supplemental Certificate" shall have the meaning specified in Section ------------------------ 6.03(c). "Supplemental Deposit Agreement" shall mean an agreement with respect ------------------------------ to the Deposit Account at the Depository, substantially in the form of Exhibit A to any Assignment, or such other form as may be acceptable to the Sellers, as amended, supplemented or otherwise modified from time to time. "Tax Opinion" shall meant with respect to any action, an Opinion of ----------- Counsel to the effect that, for federal and Virginia income and franchise tax purposes (and, if there has been an assumption of a Seller's obligations pursuant to Section 7.05, for income and franchise tax purposes of the jurisdiction in which the Assuming Entity engages in its principal servicing activities, if other than Virginia) (a) such action will not affect the tax characterization as debt of Investor Certificates of any outstanding Series or Class that were characterized as debt at the time of their issuance, (b) following such action the Trust will not be deemed to be an association (or publicly traded partnership) taxable as a corporation and (c) such action will not cause a taxable event to any Investor Certificateholders. "Termination Notice" shall have the meaning specified in Section ------------------ 10.01. "Transfer Agent and Registrar" shall have the meaning specified in ---------------------------- Section 6.04. "Transfer Date" shall mean the Business Day immediately preceding each ------------- Distribution Date. "Transfer Deposit Amount" shall mean, with respect to any Distribution ----------------------- Date, the amount, if any, deposited into the Collection Account on such Distribution Date in connection with the reassignment of an Ineligible Receivable pursuant to Section 2.05 or 2.07(a) or the reassignment or assignment of a Receivable pursuant to Section 3.03. "Transfer Restriction Event" shall have the meaning specified in -------------------------- Section 2.10. "Trust" shall mean the Capital One Master Trust created by this ----- Agreement. "Trust Assets" shall have the meaning specified in Section 2.01. ------------ "Trust Cut-Off Date" shall mean July 30, 1993. ------------------ 20 "Trustee" shall mean The Bank of New York in its capacity as trustee ------- on behalf of the Trust, or its successor in interest, or any successor trustee appointed as herein provided. "UCC" shall mean the Uniform Commercial Code, as amended from time to --- time, as in effect in the Commonwealth of Virginia and in any other state where the filing of a financing statement is required to perfect the Trust's interest in the Receivables and the proceeds thereof or in any other specified jurisdiction. "Unallocated Principal Collections" shall have the meaning specified --------------------------------- in Section 4.03(c). "unamortized annual membership fees" shall have the meaning specified ---------------------------------- in Section 3.04(d). "United States" shall mean the United States of America (including any ------------- one of the states thereof and the District of Columbia), its territories, its possessions and other areas subject to its jurisdiction. "U.S. Alien" or "United States Alien" shall mean any corporation, ---------- ------------------- partnership, individual or fiduciary that, as to the United States, and for United States income tax purposes, is (i) a foreign corporation, (ii) a foreign partnership one or more of the members of which is, as to the United States, a foreign corporation, a nonresident alien individual or a nonresident alien fiduciary of a foreign estate or trust, (iii) a nonresident alien individual or (iv) a nonresident alien fiduciary of a foreign estate or trust. "U.S. person" or "United States person" shall mean a citizen or ----------- -------------------- resident of the United States, a corporation, partnership or other entity created or organized in or under the laws of the United States, or an estate or trust the income of which is subject to United States Federal income taxation regardless of its source. "VISA" shall mean VISA U.S.A., Inc., or any successor thereto. ---- Section 1.02. Other Definitional Provisions and Rules of Construction. ------------------------------------------------------- (a) With respect to any Series, all terms used herein and not otherwise defined herein shall have meanings ascribed to them in the related Supplement. (b) All terms defined in this Agreement shall have the defined meanings when used in any certificate or other document made or delivered pursuant hereto unless otherwise defined therein. (c) As used in this Agreement and in any certificate or other document made or delivered pursuant hereto or thereto, accounting terms not defined in this Agreement or in any such certificate or other document, and accounting terms partly defined in this Agreement or in any such certificate or other document to the extent not defined, shall have the respective meanings given to them under generally accepted accounting principles or regulatory accounting principles, as applicable. To the extent that, the definitions of accounting terms in this Agreement or in any such certificate or other document are inconsistent with the meanings of 21 such terms under generally accepted accounting principles or regulatory accounting principles, the definitions contained in this Agreement or in any such certificate or other document shall control. (d) The agreements, representations and warranties of Capital One Bank, Capital One, F.S.B. and any Additional Seller in this Agreement in each of their respective capacities as Sellers and, in the case of Capital One Bank, as Servicer, shall be deemed to be the agreements, representations and warranties of Capital One Bank, Capital One, F.S.B. and such Additional Seller solely in each such capacity for so long as Capital One Bank, Capital One, F.S.B. and such Additional Seller act in each such capacity under this Agreement. (e) The words "hereof," "herein" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement; references to any Section, Schedule or Exhibit are references to Sections, Schedules and Exhibits in or to this Agreement unless otherwise specified; and the term "including" means "including without limitation." (f) All references herein to laws, statutes, acts and regulations shall mean such laws, statutes, acts and regulations as amended or recodified from time to time. (g) All references herein (including the terms defined in Section 1.01) to the singular shall include the plural and vice versa, unless the context requires otherwise. (h) All references herein to the masculine, feminine or neuter gender shall include all other genders. ARTICLE II Transfer of Receivables ----------------------- Section 2.01. Transfer of Receivables. By execution of this Agreement, ----------------------- each Seller hereby sells, transfers, assigns, sets over and otherwise conveys to the Trustee, on behalf of the Trust, for the benefit of the Certificateholders, all of its right, title and interest in, to and under the Receivables existing at the close of business on the Trust Cut-Off Date, in the case of Receivables arising in the Initial Accounts, and on each Additional Cut-Off Date, in the case of Receivables arising in the Additional Accounts, and in each case thereafter created from time to time until the termination of the Trust, the Funds Collateral relating to any Account, all monies due or to become due and all amounts received or receivable with respect thereto and all proceeds (including "proceeds" as defined in the UCC and including Insurance Proceeds and Recoveries) thereof, and all its right, title and interest in, to and under the Interchange payable pursuant to Section 2.07(i). Such property, together with all monies and other property on deposit in the Collection Account, the Excess Funding Account, the Series Accounts and any Series Enhancement shall constitute the assets of the Trust (the "Trust Assets"). The foregoing does not constitute ------------ and is not intended to result in the creation or assumption by the Trust, the Trustee, any Investor Certificateholder or any Series Enhancer of any obligation of any Seller, the Servicer or any other Person in connection with the Accounts, the Receivables or the Funds 22 Collateral or under any agreement or instrument relating thereto, including any obligation to Obligors, merchant banks, merchants' clearance systems, VISA, MasterCard or insurers. Each Seller agrees to record and file, at its own expense, financing statements (and continuation statements when applicable) with respect to the Receivables and the Funds Collateral now existing and hereafter created in the Accounts meeting the requirements of applicable state law in such manner and in such jurisdictions as are necessary to perfect, and maintain the perfection of, the sale and assignment of such Receivables and Funds Collateral to the Trust, and to deliver a file stamped copy of each such financing statement or other evidence of such filing (which may, for purposes of this Section 2.01, consist of telephone confirmation of such filing) to the Trustee on or prior to the first Closing Date, in the case of such Receivables arising in the Initial Accounts, and (if any additional filing is so necessary) the applicable Addition Date, in the case of such Receivables and Funds Collateral arising in Additional Accounts. The Trustee shall be under no obligation whatsoever to file such financing or continuation statements or to make any other filing under the UCC in connection with such sale and assignment. Each Seller further agrees, at its own expense, (a) on or prior to (x) the first Closing Date, in the case of the Initial Accounts, (y) the applicable Addition Date, in the case of Additional Accounts, and (z) the applicable Removal Date, in the case of Removed Accounts, to indicate clearly and unambiguously in its computer files, and to cause the Depository to indicate in its files, that Receivables created in connection with, and all Funds Collateral relating to, the Accounts (other than Removed Accounts) have been conveyed to the Trust pursuant to this Agreement for the benefit of the Certificateholders and (b) on or prior to the applicable Document Delivery Date, to deliver to the Trustee a computer file on media and in a file format reasonably acceptable to the Trustee or microfiche list containing a true and complete list of all such Accounts specifying for each such Account, as of the Trust Cut-Off Date, in the case of the Initial Accounts, the applicable Additional Cut-Off Date, in the case of Additional Accounts, and the applicable Removal Date, in the case of Removed Accounts, its account number, the collection status, the aggregate amount outstanding in such Account, the aggregate amount of Principal Receivables outstanding in such Account and any amount on deposit in or credited to any Deposit Account. Such file or list, as supplemented from time to time to reflect Additional Accounts and Removed Accounts, shall be marked as Schedule 1 to this Agreement and is hereby incorporated into and made a part of this Agreement. The parties hereto intend that each transfer of Receivables, any Funds Collateral, and other property pursuant to this Agreement or any Assignment constitute a sale, and not a secured borrowing, for accounting purposes. If the transfer pursuant to this Section 2.01 is not deemed to be a sale, each Seller shall be deemed hereunder to have granted and does hereby grant to the Trustee, on behalf of the Trust and for the benefit of the Certificateholders, a security interest in all of its right, title and interest, whether now owned or hereafter acquired, in, to and under all of the Trust Assets, and this Agreement constitutes a security agreement under the UCC. 23 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 property, 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 Sellers delivered to the Trustee the computer file or microfiche list relating to the Initial Accounts 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 contained in the computer files or microfiche lists marked as Schedule 1 or otherwise delivered to the Trustee from time to time, except (i) to a Successor Servicer or as required by a Requirement of Law applicable to the Trustee, (ii) in connection with the performance of the Trustee's duties hereunder or (iii) in enforcing the rights of Certificateholders. The Trustee agrees to take such measures as shall be reasonably requested by any Seller to protect and maintain the security and confidentiality of such information and, in connection therewith, will allow each Seller to inspect the Trustee's security and confidentiality arrangements from time to time during normal business hours. The Trustee shall provide the applicable Seller with notice thirty (30) days prior to any disclosure pursuant to this Section 2.02. (c) The Trustee shall have no power to create, assume or incur indebtedness or other liabilities in the name of the Trust other than as contemplated in this Agreement or any Supplement. (d) The Trustee hereby agrees not to use any information it obtains pursuant to this Agreement, including any of the account numbers or other information contained in the computer files or microfiche lists marked as Schedule 1 or otherwise delivered by a Seller to the Trustee pursuant to Section 2.01, 2.08, 2.09 or 3.04(c), directly or indirectly, to compete or assist any person in competing with such Seller in its business. Section 2.03. Representations and Warranties of Each Seller Relating ------------------------------------------------------ to Such Seller. Each Seller hereby severally represents and warrants to the ---- ------ Trust as of each Closing Date (but only if it was a Seller on such Closing Date) that: (a) Organization and Good Standing. Such Seller is a Virginia ------------------------------ banking corporation, a state banking association, a national banking association, a federal savings bank or a corporation validly existing under the laws of its jurisdiction of incorporation, and has, in all material respects, full power and authority to own its properties and conduct its consumer revolving lending business as such properties are presently owned and such business is presently conducted, and to execute, deliver and perform its obligations under this Agreement and each Supplement and to execute and deliver to the Trustee the Certificates pursuant hereto. (b) Due Qualification. Such Seller 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 failure to so qualify or to obtain such licenses and approvals would render any Lending Agreement relating to an Account 24 or any Receivable unenforceable by such Seller, the Servicer or the Trustee or would have a material adverse effect on the interests of the Certificateholders hereunder or under any Supplement; provided, however, that no representation or --------- ------- warranty is made with respect to any qualifications, licenses or approvals which the Trustee has or may be required at any time to obtain, if any, in connection with the transactions contemplated hereby. (c) Due Authorization. The execution and delivery of this Agreement ----------------- and each Supplement to which such Seller is a party, the execution and delivery to the Trustee of the Certificates and the consummation of the transactions provided for in this Agreement and each Supplement have been duly authorized by such Seller by all necessary corporate action on the part of such Seller. (d) No Conflict. The execution and delivery by such Seller of this ----------- Agreement, each Supplement and the Certificates, the performance of the transactions contemplated by this Agreement and each Supplement and the fulfillment of the terms hereof and thereof applicable to such Seller will not conflict with or violate the articles of incorporation, articles of association or by-laws of such Seller or conflict with, result in any breach of any of the terms and provisions of, or constitute (with or without notice or lapse of time or both) a material default under, any indenture, contract, agreement, mortgage, deed of trust, or other instrument to which such Seller is a party or by which it or any of its properties are bound. (e) No Violation. The execution and delivery by such Seller of this ------------ Agreement, each Supplement and the Certificates, the performance of the transactions contemplated by this Agreement and each Supplement and the fulfillment of the terms hereof and thereof applicable to such Seller will not conflict with or violate any Requirements of Law applicable to such Seller. (f) No Proceedings. There are no proceedings or investigations -------------- pending or, to the best knowledge of such Seller, threatened against such Seller, before any court, regulatory body, administrative agency, or other tribunal or governmental instrumentality (i) asserting the invalidity of this Agreement, any Supplement or the Certificates, (ii) seeking to prevent the issuance of the Certificates or the consummation by such Seller of any of the transactions contemplated by this Agreement, any Supplement or the Certificates, (iii) seeking any determination or ruling that, in the reasonable judgment of such Seller, would materially and adversely affect the performance of its obligations under this Agreement or any Supplement, (iv) seeking any determination or ruling that would materially and adversely affect the validity or enforceability of this Agreement, any Supplement or the Certificates or (v) seeking to affect adversely the income tax attributes of the Trust under the federal or any state income or franchise tax systems. (g) All Consents Required. All authorizations, consents, orders or --------------------- other actions of any Person or of any Governmental Authority required to be obtained in connection with the execution and delivery of this Agreement, each Supplement and the Certificates, the performance of the transactions contemplated by this Agreement and each Supplement and the fulfillment of the terms hereof and thereof, have been obtained, except such as are required by state securities or "Blue Sky" laws in connection with the distribution of the Certificates. 25 (h) Insolvency. No Insolvency Event with respect to such Seller has ---------- occurred and the transfer of the Receivables by such Seller to the Trust has not been made in contemplation of the occurrence thereof. The representations and warranties set forth in this Section 2.03 shall survive the transfer and assignment of the Receivables to the Trust. Upon discovery by a Seller, the Servicer or the Trustee of a breach of any of the representations and warranties set forth in this Section 2.03, the party discovering such breach shall give prompt written notice to the others and to each Series Enhancer entitled thereto pursuant to the relevant Supplement within three (3) Business Days following such discovery. The applicable Seller agrees to cooperate with the Servicer and the Trustee in attempting to cure any such breach. For purposes of the representations and warranties set forth in this Section 2.03, each reference to a Supplement shall be deemed to refer only to those Supplements in effect as of the relevant Closing Date. Section 2.04. Representations and Warranties of Each Seller Relating to --------------------------------------------------------- the Agreement and Any Supplement and the Receivables. - ---------------------------------------------------- (a) Representations and Warranties. Each Seller hereby severally ------------------------------ represents and warrants to the Trust as of the date of this Agreement and the date of each Supplement, as of each Closing Date and, with respect to Additional Accounts, as of the related Addition Date (but only if, in the case of Capital One, F.S.B. and any other Additional Seller, it was a Seller on such date) that: (i) this Agreement, each Supplement and, in the case of Additional Accounts, the related Assignment, each constitutes a legal, valid and binding obligation of such Seller enforceable against such Seller in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, receivership, conservatorship or other similar laws now or hereafter in effect affecting the enforcement of creditors' rights in general and the rights of creditors of a state banking corporation or a federal savings bank, as the case may be, 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 first Closing Date, as of the related Addition Date, with respect to Additional Accounts, and as of the applicable Removal Date, with respect to the Removed Accounts, Schedule 1 to this Agreement and the related computer file or microfiche list delivered pursuant to this Agreement, as supplemented to such date, is an accurate and complete listing in all material respects of all the Accounts as of the Trust Cut-Off Date, such Additional Cut-Off Date or such Removal Date, as the case may be, and the information contained therein with respect to the identity of such Accounts and the Receivables existing in such Accounts is true and correct in all material respects as of the Trust Cut-Off Date, such Additional Cut-Off Date or such Removal Date, as the case may be; (iii) each Receivable has been transferred to the Trust free and clear of any Lien (other than Liens permitted under subsection 2.07(b)); (iv) with respect to each Receivable, all consents, licenses or approvals of or registrations or declarations with any Governmental Authority required to be obtained, effected 26 or given by such Seller in connection with the transfer by such Seller of Receivables to the Trust have been duly obtained, effected or given and are in full force and effect; (v) subject, in each case pertaining to proceeds, to Section 9- 306 of the UCC, and further subject to any liens permitted under subsection 2.07(b), each of this Agreement and, in the case of Additional Accounts, the related Assignment constitutes a valid sale, transfer and assignment to the Trust of all right, title and interest of such Seller in the Receivables and the proceeds thereof or, if this Agreement or, in the case of Additional Accounts, the related Assignment does not constitute a sale of such property, it constitutes a grant of a "security interest" (as defined in the UCC) 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 Agreement, or, with respect to then existing Receivables in Additional Accounts, as of the applicable Addition Date, and which will be enforceable with respect to such Receivables hereafter and thereafter created and the proceeds thereof upon such creation. Upon the filing of the financing statements pursuant to Section 2.01 and, in the case of 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 and proceeds except for Liens permitted under Section 2.07(b); (vi) except as otherwise expressly provided in this Agreement or any Supplement, neither such Seller nor any Person claiming through or under such Seller has any claim to or interest in the Collection Account, any Series Account or any Series Enhancement; (vii) on the Trust Cut-Off Date, each Account was an Eligible Account and, in the case of Additional Accounts, on the Additional Cut-Off Date with respect thereto, each such Account will be an Eligible Account; (viii) on the Trust Cut-Off Date, each Receivable then existing was an Eligible Receivable and, in the case of Additional Accounts, on the Addition Date with respect thereto, each Receivable contained therein will be an Eligible Receivable; (ix) upon the creation of any new Receivable, such Receivable will be an Eligible Receivable; and (x) no selection procedure reasonably believed by such Seller to be materially adverse to the interests of the Investor Certificateholders were used in selecting the Initial Accounts (from among the available Eligible Accounts originated by such Seller in the solicitations designated by such Seller as "Associate 11" and "Associate 93" and owned by the Seller on the Trust Cut-Off Date). (b) Notice of Breach. The representations and warranties of each ---------------- Seller set forth in this Section 2.04 shall survive the transfer and assignment by such Seller of Receivables to the Trust. Upon discovery by a Seller, the Servicer or the Trustee of a breach of any of the representations and warranties by a Seller set forth in this Section 2.04, the party discovering such breach shall give prompt written notice to the others and to each Series Enhancer entitled thereto pursuant to the relevant Supplement within three (3) Business Days following such discovery. The applicable Seller agrees to cooperate with the Servicer and the Trustee in 27 attempting to cure any such breach. For purposes of the representations and warranties set forth in this Section 2.04, each reference to a Supplement shall be deemed to refer only to those Supplements in effect as of the date of the relevant representations or warranties. Section 2.05. Reassignment of Ineligible Receivables. --------------------------------------- (a) Reassignment of Receivables. In the event (i) any representation --------------------------- or warranty of a Seller contained in Section 2.04(a)(ii), (iii), (iv), (vii), (viii), (ix) or (x) is not true and correct in any material respect as of the date specified therein (individually or together with any other breach or breaches then existing) and such breach has a material adverse effect on the Certificateholders' Interest of all Series in any Receivables transferred to the Trust (which determination shall be made without regard to the availability of funds under any Series Enhancement) and remains uncured for sixty (60) days (or such longer period, not in excess of 150 days, as may be agreed to by the Trustee) after the earlier to occur of the discovery thereof by the Seller that transferred such Receivables to the Trust or receipt by such Seller of notice thereof given by the Trustee, or (ii) it is so provided in Section 2.07(a) with respect to any Receivables transferred to the Trust by such Seller, then such Seller shall accept reassignment of all Receivables in the related Account ("Ineligible Receivables") on the terms and conditions set forth in paragraph - ------------------------ (b) below; provided, however, that such Receivables will not be deemed to be --------- ------- Ineligible Receivables and will not be reassigned to such Seller if, on any day prior to the end of such 60-day or longer period, (x) either (A) in the case of an event described in clause (i) above the relevant representation and warranty shall be true and correct in all material respects as if made on such day or (B) in the case of an event described in clause (ii) above the circumstances causing such Receivable to become an Ineligible Receivable shall no longer exist and (y) such Seller shall have delivered to the Trustee an Officer's Certificate of the Seller describing the nature of such breach and the manner in which the relevant representation and warranty became true and correct. (b) Price of Reassignment. The Servicer shall deduct the portion of --------------------- such Ineligible Receivables reassigned to each Seller which are Principal Receivables from the aggregate amount of Principal Receivables used to calculate the Sellers' Participation Amount, the Sellers' Interest and the Floating Allocation Percentage and the Principal Allocation Percentage applicable to any Series. In the event that, following the exclusion of such Principal Receivables from the calculation of the Sellers' Participation Amount, the Sellers' Participation Amount would be a negative number, not later than 12:00 noon, Richmond, Virginia time, on the first Distribution Date following the Monthly Period in which such reassignment obligation arises, the applicable Seller shall make a deposit in immediately available funds in an amount equal to the principal portion and the interest portion of the amount by which the Sellers' Participation Amount would be below zero (up to the amount of such Principal Receivables) into the Excess Funding Account and the Collection Account, respectively. Any amount deposited into the Excess Funding Account and the Collection Account, respectively, in connection with the reassignment of an Ineligible Receivable shall be considered a Transfer Deposit Amount and shall be applied in accordance with Article IV and the terms of each Supplement. Upon the deposit, if any, required to be made to the Excess Funding Account and the Collection Account, respectively, as provided in this Section 2.05 and the reassignment of Ineligible Receivables, the Trustee, on behalf of the Trust, shall automatically and without 28 further action be deemed to transfer, assign, set-over and otherwise convey to the applicable Seller or its designee, without recourse, representation or warranty, all the right, title and interest of the Trust in and to such Ineligible Receivables, all monies due or to become due with respect thereto and all proceeds thereof. The Trustee shall execute such documents and instruments of transfer or assignment and take such other actions as shall reasonably be requested by such Seller to effect the transfer of such Ineligible Receivables pursuant to this Section 2.05. The obligation of each Seller to accept reassignment of any Ineligible Receivables, and to make the deposits, if any, required to be made to the Excess Funding Account and the Collection Account, respectively, as provided in this Section 2.05, shall constitute the sole remedy respecting the event giving rise to such obligation available to Investor Certificateholders (or the Trustee on behalf of the Investor Certificateholders) or any Series Enhancer. Section 2.06. Reassignment of Receivables in Trust Portfolio. In the ---------------------------------------------- event any representation or warranty of a Seller set forth in Section 2.03 or Section 2.04(a)(i), (v) or (vi) is not true and correct in any material respect and such breach has a material adverse effect on the Certificateholders' Interest of all Series in the Receivables, then either the Trustee or the Holders of Investor Certificates evidencing not less than 50% of the aggregate unpaid principal amount of all outstanding Investor Certificates, by notice then given to such Seller, the Servicer (and the Trustee if given by the Investor Certificateholders), may direct such Seller to accept a reassignment of the Receivables if such breach and any material adverse effect caused by such breach is not cured within sixty (60) days of such notice (or within such longer period, not in excess of 150 days, as may be specified in such notice), and upon those conditions such Seller shall be obligated to accept such reassignment on the terms set forth below; provided, however, that such Receivables will not be -------- ------- reassigned to such Seller if, on any day prior to the end of such 60-day or longer period (i) the relevant representation and warranty shall be true and correct in all material respects as if made on such day and (ii) such Seller shall have delivered to the Trustee an Officer's Certificate of such Seller describing the nature of such breach and the manner in which the relevant representation and warranty became true and correct and the breach of such representation and warranty shall no longer materially adversely affect the interests of the Investor Certificateholders. The applicable Seller shall deposit in the Collection Account in immediately available funds not later than 12:00 noon, Richmond, Virginia time, on the first Distribution Date following the Monthly Period in which such reassignment obligation arises, in payment for such reassignment, an amount equal to the sum of the amounts specified therefor with respect to each outstanding Series in the related Supplement. Notwithstanding anything to the contrary in this Agreement, such amounts shall be distributed on such Distribution Date in accordance with Article IV and the terms of each Supplement. Upon the deposit, if any, required to be made to the Collection Account as provided in this Section 2.06 and the reassignment of the applicable Receivables, the Trustee, on behalf of the Trust, shall automatically and without further action be deemed to sell, transfer, assign, set over and otherwise convey to the Seller or its designee, without recourse, representation or warranty, all the right, title and interest of the Trust in and to such Receivables, all moneys due or to become due and all amounts received with respect thereto and all proceeds thereof. The Trustee shall execute such documents and instruments of transfer or assignment 29 and take such other actions as shall reasonably be requested by such Seller to effect the conveyance of such Receivables pursuant to this Section 2.06. The obligation of each Seller to accept reassignment of any Receivables and to make the deposits, if any, required to be made to the Collection Account as provided in this Section 2.06 shall constitute the sole remedy respecting the event giving rise to such obligation available to the Certificateholders (or the Trustee on behalf of the Certificateholders) or any Series Enhancer. Section 2.07. Covenants of Each Seller. Each Seller hereby covenants as ------------------------ follows: (a) Receivables Not to be Evidenced by Promissory Notes. Each Seller --------------------------------------------------- will take no action to cause or permit any Receivable to be evidenced by any instrument or chattel paper (as defined in the UCC) and, if any such Receivable is so evidenced it shall be deemed to be an Ineligible Receivable in accordance with Section 2.05(a) and shall be reassigned to the Seller in accordance with Section 2.05(b); provided, however, that Receivables evidenced by notes taken -------- ------- from obligors in the ordinary course of business of the Servicer's collection efforts shall not be deemed Ineligible Receivables solely as a result thereof. (b) Security Interests. Except for the conveyances hereunder, such ------------------ Seller 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; such Seller will immediately notify the Trustee of the existence of any Lien on any Receivable; and such Seller 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 such Seller; provided, -------- however, that nothing in this Section 2.07(b) shall prevent or be deemed to - -------- prohibit such Seller 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 such Seller 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) Sellers' Interest. Except for the conveyances hereunder, in ----------------- connection with any transaction permitted by Section 7.02 or 7.05 and as provided in Sections 2.08(f) and 6.03, each Seller agrees not to transfer, assign, exchange or otherwise convey or pledge, hypothecate or otherwise grant a security interest in the Sellers' Interest, whether represented by the Bank Certificate or any Supplemental Certificate or by any uncertificated interest in the Sellers' Interest, and any such attempted transfer, assignment, exchange, conveyance, pledge, hypothecation or grant shall be void; provided, however, -------- ------- that nothing in this Section 2.07(c) shall prevent the recorded owner of an interest in the Sellers' Interest, whether uncertificated or represented by a certificate, from granting to an Affiliate a participation interest or other beneficial interest in the rights to receive cash flows related to the Sellers' Interest, if (i) such interest does not grant such Affiliate any rights hereunder or delegate to such Affiliate any obligations or duties hereunder and (ii) the transferor of such interest obtains the prior written consent of the Sellers and (iii) after giving effect to such transfer, the aggregate interest in the Sellers' Interest owned directly by the Sellers represents an undivided ownership interest in two percent (2.0%) or more of the Trust Assets. 30 (d) Delivery of Collections. In the event that such Seller receives ----------------------- Collections, such Seller agrees to pay the Servicer all such Collections as soon as practicable after receipt thereof but in no event later than two (2) Business Days after the Date of Processing by such Seller. (e) Notice of Liens. Such Seller shall notify the Trustee and each --------------- Series Enhancer entitled to such notice pursuant to the relevant Supplement promptly after becoming aware of any Lien on any Receivable other than the conveyances hereunder or Liens permitted under Section 2.07(b). (f) Periodic Rate Finance Charges And Other Fees. Such Seller hereby -------------------------------------------- agrees that, except as otherwise required by any Requirement of Law, or as is deemed by such Seller to be necessary in order to maintain its lending business on a competitive basis based on a good faith assessment by it of the nature of its competition in the lending business, it shall not at any time reduce the annual percentage rate of the Periodic Rate Finance Charges assessed on the Receivables or other fees charged on any of the Accounts if, as a result of any such reduction, either (i) such Seller's reasonable expectation is that such reduction will cause a Pay Out Event to occur or (ii) such reduction is not also applied to any comparable segment of consumer revolving accounts owned by such Seller which have characteristics the same as, or substantially similar to, such Accounts. (g) Lending Agreements and Guidelines. Such Seller shall comply with --------------------------------- and perform its obligations under the Lending Agreements relating to the Accounts and the Lending Guidelines and all applicable rules and regulations of MasterCard and VISA or their respective substantial equivalents 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, such Seller may change the terms and provisions of the Lending Agreements or the Lending Guidelines with respect to any of the Accounts in any respect (including the calculation of the amount, or the timing, of charge-offs and the Periodic Rate Finance Charges and other fees to be assessed thereon) only if in the reasonable judgment of such Seller such change is made applicable to any comparable segment of the consumer revolving accounts owned by such Seller which have characteristics the same as, or substantially similar to, such Accounts. (h) "MasterCard" and "VISA". Such Seller shall use all commercially ----------------------- reasonable efforts to remain, either directly or indirectly, a member in good standing of the "MasterCard" System, the "VISA" System and any other similar entity's or organization's system relating to any other type of revolving credit card accounts included as Accounts. (i) Interchange. On or prior to each Determination Date, such Seller ----------- shall notify the Servicer of the amount of Interchange to be included as Collections of Finance Charge Receivables with respect to the preceding Monthly Period, which shall be equal to the amount of Interchange paid to such Seller with respect to such Monthly Period multiplied by a fraction the numerator of which is the aggregate amount of cardholder charges for goods and services in the "MasterCard" and "VISA" consumer revolving credit card accounts included in the Accounts with respect to such Monthly Period and the denominator of which is the aggregate amount of cardholder charges for goods and services in all the "MasterCard" and "VISA" consumer 31 revolving credit card accounts (including the Accounts) owned by such Seller with respect to such Monthly Period. (j) Conveyance of Accounts. Such Seller covenants and agrees that it ---------------------- will not convey, assign, exchange or otherwise transfer the Accounts to any Person prior to the termination of this Agreement pursuant to Article XII; provided, however, that such Seller shall not be prohibited hereby from conveying, assigning, exchanging or otherwise transferring the Accounts in connection with a transaction complying with the provisions of Section 7.02. Section 2.08. Addition of Accounts. -------------------- (a) Required Additions. (i) If, as of the close of business on the ------------------ last Business Day of any Monthly Period, (x) the Sellers' Participation Amount is less than the Required Sellers' Interest or (y) the aggregate amount of Principal Receivables is less than the Required Principal Balance, each on such date, the Sellers shall on or prior to the close of business on the tenth Business Day following the last Business Day of such Monthly Period (the "Required Designation Date"), unless the Sellers' Participation Amount exceeds - ------------------------- the Required Sellers' Interest as of the close of business on any day after the last Business Day of such Monthly Period and prior to the Required Designation Date, designate additional Eligible Accounts to be included as Accounts as of the Required Designation Date or any earlier date in a sufficient amount such that, after giving effect to such addition, (x) the Sellers' Participation Amount as of the close of business on the Addition Date is at least equal to the Required Sellers' Interest and (y) the aggregate amount of Principal Receivables equals or exceeds the Required Principal Balance, each on such date. The failure of any condition set forth in paragraph (c) or (d) below, as the case may be, shall not relieve the Sellers of their obligation pursuant to this paragraph; provided, however, that the failure of the Sellers to transfer -------- ------- Receivables to the Trust as provided in this paragraph solely as a result of the unavailability of a sufficient amount of Eligible Receivables shall not constitute a breach of this Agreement; provided further that any such -------- ------- failure which has not been timely cured (as specified in the related Supplement) will nevertheless result in the occurrence of a Pay Out Event with respect to each Series for which, pursuant to the Supplement therefor, a failure by the Sellers to convey Receivables in Additional Accounts or Participation Interests to the Trust by the day on which it is required to convey such Receivables or Participation Interests pursuant to Section 2.08(a) constitutes a "Pay Out -------- Event" (as defined in such Supplement). - ----- (ii) In lieu of, or in addition to, designating Additional Accounts pursuant to clause (i) above, the Sellers may, subject to the conditions specified in paragraph (d) below, convey to the Trust Participation Interests. The addition of Participation Interests in the Trust pursuant to this paragraph (a) or paragraph (b) below shall be effected by an amendment hereto, dated the applicable Addition Date, pursuant to Section 13.01(a). (b) Permitted Additions. Each Seller may from time to time, at its ------------------- sole discretion, subject to the conditions specified in paragraph (c) or (d) below, as the case may be, designate additional Eligible Accounts to be included as Accounts or Participation Interests to be included as Trust Assets, in either case as of the applicable Additional Cut-Off Date. (c) Automatic Additional Accounts. (i) Each Seller may from time to ----------------------------- time, at its sole discretion, subject to and in compliance with the limitations specified in clause (ii) below and the applicable conditions specified in paragraph (d) below, designate Eligible Accounts to be included as Accounts as of the applicable Additional Cut-off Date. For purposes of this paragraph, Eligible Accounts shall be deemed to include only consumer revolving credit card accounts or other consumer revolving credit accounts which are (x) originated by such Seller or any Affiliate of such Seller and (y) of a type included as Initial Accounts or which have 32 previously been included in any Addition which has been effected in accordance with all of the conditions specified in paragraph (d) below. (ii) A Seller shall not be permitted to designate Automatic Additional Accounts pursuant to clause (i) above with respect to any of the three (3) consecutive Monthly Periods commencing in January, April, July and October of each calendar year unless on or before the first Business Day of such three (3) consecutive Monthly Periods, such Seller shall have requested each Rating Agency to notify, and each Rating Agency shall have notified, such Seller, the Servicer and the Trustee of the limitations (other than the limitations described in this Agreement), if any, to the right of such Seller to designate Automatic Additional Accounts during such three (3) consecutive Monthly Periods; provided, however, that on or before twenty (20) days following -------- ------- the last Business Day of such three (3) consecutive Monthly Periods, such Seller shall have received written confirmation from each Rating Agency that each such designation of Automatic Additional Accounts will not have a Ratings Effect and shall have delivered copies of each such confirmation to the Servicer and the Trustee. Unless Standard & Poor's otherwise consents, the number of Automatic Additional Accounts plus the number of Accounts added pursuant to Section 2.08(a), without the prior notice of Standard & Poor's as described under Section 2.08(d)(v), shall not at any time exceed the Aggregate Addition Limit; provided, however, if the Aggregate Addition Limit is exceeded for purposes of - -------- ------- Section 2.08(a), the applicable Seller shall have delivered written notice to Moody's of any such Addition. Unless Moody's otherwise consents, the number of Automatic Additional Accounts added pursuant to Section 2.08(c), without prior notice of Moody's as described under Section 2.08(d)(v), shall not at any time exceed the Aggregate Addition Limit. (iii) On or before March 31, June 30, September 30 and December 31 of each calendar year, commencing on December 31, 1993, the applicable Seller shall have delivered to the Trustee, each Rating Agency and any Series Enhancer entitled thereto pursuant to the relevant Supplement an Opinion of Counsel in accordance with Section 13.02(d), with respect to the Automatic Additional Accounts included as Accounts during the preceding three-month period confirming the validity and perfection of each transfer of such Automatic Additional Accounts; provided, however, if the long-term unsecured debt rating or -------- ------- certificate of deposit rating of such Seller is withdrawn or reduced below BBB- by Standard & Poor's (and only for so long as such rating is below BBB- by Standard & Poor's), such Seller shall have delivered to the Trustee, each Rating Agency and any Series Enhancer entitled thereto pursuant to the relevant Supplement an Opinion of Counsel in accordance with Section 13.02(d) on or before the last Business Day of each calendar month, commencing on the last Business Day of the calendar month immediately following the month in which such withdrawal or reduction occurs, with respect to the Automatic Additional Accounts included as Accounts during the preceding one-month period confirming the validity and perfection of each transfer of such Automatic Additional Accounts. Such Opinion of Counsel shall be provided by outside counsel. If such Opinion of Counsel with respect to any Automatic Additional Accounts is not so received, the ability of the Sellers to designate Automatic Additional Accounts will be suspended until such time as each Rating Agency otherwise consents in writing or such accounts are removed from the Trust. If the applicable Seller is unable to deliver such Opinion of Counsel with respect to any Additional Account which has been the subject of an Automatic Addition, such inability shall be deemed to be a breach of the representation in Section 2.04(a)(viii) with respect to the Receivables in such Additional Account for purposes of Section 2.05. 33 (d) Conditions to Addition. On the Addition Date with respect to any ---------------------- Additional Accounts or Participation Interests, the Trust shall purchase the Receivables in such Additional Accounts (and such Additional Accounts shall be deemed to be Accounts for purposes of this Agreement) or shall purchase such Participation Interests, in each case as of the close of business on the applicable Additional Cut-Off Date, subject to the satisfaction of the following conditions (provided, however, that the conditions set forth in clauses (i), -------- ------- (v), (vi) and (vii) shall not apply to the transfer to the Trust of Receivables in Automatic Additional Accounts which are governed by Section 2.08(c)): (i) on or before the fifth Business Day immediately preceding the Addition Date, the applicable Seller shall have given the Trustee, the Servicer, each Rating Agency and any Series Enhancer entitled thereto pursuant to the relevant Supplement written notice that the Additional Accounts or Participation Interests will be included and specifying the applicable Addition Date, the Additional Cut-Off Date, the approximate number of accounts or other assets expected to be added and the approximate aggregate balances expected to be outstanding in the accounts or other assets to be added; (ii) in the case of Additional Accounts, the applicable Sel ler shall have delivered to the Trustee copies of UCC-1 financing statements covering such Additional Accounts, if necessary to perfect the Trust's interest in the Receivables arising therein; (iii) in the case of Additional Accounts, to the extent required by Section 4.03, the applicable Seller shall have deposited in the Collection Account all Collections with respect to such Additional Accounts since the Additional Cut-Off Date (plus an amount representing unamortized annual membership fees for such Additional Accounts determined as of such Additional Cut-Off Date in accordance with Section 3.04(d)) ; (iv) as of each of the Additional Cut-Off Date and the Addition Date, no Insolvency Event with respect to the applicable Seller shall have occurred nor shall the transfer of the Receivables arising in the Additional Accounts or of the Participation Interests to the Trust have been made in contemplation of the occurrence thereof; (v) (A) except in the case of an Addition pursuant to Section 2.08(a), the applicable Seller shall have received written notice from each Rating Agency that such Addition will not have a Ratings Effect and shall have delivered copies of each such written notice to the Servicer and the Trustee, and (B) in the case of an Addition pursuant to Section 2.08(a) during any of the three (3) consecutive Monthly Periods commencing in January, April, July and October of each calendar year, if applicable, the Sellers shall have received, to the extent not previously received, not later than 20 days following the last Business Day of the relevant three (3) consecutive Monthly Periods, written notice from each Rating Agency that such Addition will not have a Ratings Effect and shall have delivered copies of each such written notice to the Servicer and the Trustee; provided, however, that in the case of an Addition pursuant to -------- ------- Section 2.08(a) which would exceed the Aggregate Addition Limit, the Sellers shall have provided each Rating Agency with at least 15 days prior written notice of such Addition and at or prior to the end of such 15-day period, each Rating Agency shall have notified the Sellers in writing that such Addition will not have a Ratings Effect, and the Sellers shall have delivered copies of such written notice to the Servicer and the Trustee; 34 (vi) the applicable Seller shall have delivered to the Trustee, each Rating Agency and any Series Enhancer entitled thereto pursuant to the relevant Supplement an Opinion of Counsel that for federal and Virginia income and franchise tax purposes (and, if there has been an assumption of a Seller's obligations pursuant to Section 7.05, for income and franchise tax purposes of the jurisdiction in which the Assuming Entity engages in its principal servicing activities, if other than Virginia), such Addition will not cause a taxable event to the holders of the Certificates; (vii) the applicable Seller shall have delivered to the Trustee, each Rating Agency and any Series Enhancer entitled thereto pursuant to the relevant Supplement an Opinion of Counsel, dated the Addition Date, in accordance with Section 13.02(d); (viii) the applicable Seller shall have delivered to the Trustee and any Series Enhancer entitled thereto pursuant to the relevant Supplement an Officer's Certificate of such Seller, dated the Addition Date, to the effect that (A) such Seller reasonably believes that such Addition will not, based on the facts known to such officer at the time of such certification, then cause a Pay Out Event or any event that, after the giving of notice or the lapse of time would constitute a Pay Out Event to occur with respect to any Series and (B) in the case of Additional Accounts no selection procedure was utilized by such Seller that would result in a selection of Additional Accounts (from the available Eligible Accounts owned by such Seller) that would be materially adverse to the interests of the Certificateholders of any Series as of the date of the Addition; and (ix) within ten (10) Business Days of the date on which any such Receivables or Participation Interests are added to the Trust, the applicable Seller shall have delivered to the Trustee a written assignment and a computer file or a microfiche list containing a true and complete list of the related Additional Accounts or Participation Interests specifying for each such Account its account number, the collection status, the aggregate amount outstanding in such Account and the aggregate amount of Principal Receivables outstanding in such Account or comparable information in the case of Participation Interests and, for any Funds Collateral relating to such Account, the account number for, and the amount of funds on deposit in, the applicable Deposit Account. (e) Representations and Warranties. Each Seller hereby represents ------------------------------ and warrants to the Trust as of the related Addition Date as to the matters relating to it set forth in paragraph (d)(iv) and (viii) above and that, in the case of Additional Accounts, the file or list delivered pursuant to paragraph (g) below is, as of the applicable Additional Cut-Off Date, true and complete in all material respects. (f) Additional Sellers. Any Seller may designate Affiliates of such ------------------ Seller to be included as a Seller ("Additional Sellers") under this Agreement by ------------------ an amendment hereto pursuant to Section 13.01(a). Any Additional Seller may cease to transfer newly arising Receivables to the Trust so long as each Rating Agency provides written notice that such cessation will not have a Ratings Effect. If any Seller elects to have all or a portion of its interest in the Sellers' Interest evidenced by the Bank Certificate as provided in Section 6.01 hereof, then in connection with such designation, such Seller shall surrender the Bank Certificate to the Trustee in exchange for a newly issued Bank Certificate modified to reflect such Additional Sellers' Interest. If any Seller elects to have its 35 interest in the Sellers' Interest be uncertificated as provided in Section 6.01, such Seller shall instruct the Trustee in writing to register the Additional Seller as the owner of the appropriate interest in the Sellers' Interest on the books and records of the Trust. Prior to any such designation of an Additional Seller and, if applicable, exchange of certificates, the conditions set forth in Section 6.03(c) shall have been satisfied. (g) Delivery of Documents. In the case of the designation of --------------------- Additional Accounts, the Seller designating such Accounts shall deliver to the Trustee (i) the computer file or microfiche list required to be delivered pursuant to Section 2.01 with respect to such Additional Accounts on the applicable Document Delivery Date and (ii) a duly executed, written Assignment (including an acceptance by the Trustee for the benefit of the Certificateholders), substantially in the form of Exhibit B (the "Assignment"), --------- ---------- o on the Document Delivery Date; and, in the case of an Addition of Participation Interests, the Seller adding such Participation Interests shall deliver comparable information and documents with respect to such Participation Interests, on the Document Delivery Date. Section 2.09. Removal of Accounts. (a) On any day of any Monthly ------------------- Period each Seller shall have the right to require the reassignment to it or its designee of all the Trust's right, title and interest in, to and under the Receivables then existing and thereafter created, all moneys due or to become due and all amounts received with respect thereto and all proceeds thereof in or with respect to the Accounts owned and designated by such Seller (the "Removed ------- Accounts"), upon satisfaction of the following conditions: - -------- (i) on or before the fifth Business Day immediately preceding the Removal Date (the "Removal Notice Date"), such Seller shall have given the ------------------- Trustee, the Servicer, each Rating Agency and any Series Enhancer entitled thereto pursuant to the relevant Supplement written notice of such removal and specifying the date for removal of the Removed Accounts (the "Removal Date"); ------------ (ii) on or prior to the date that is ten (10) Business Days after the Removal Date, such Seller shall have amended Schedule 1 by delivering to the Trustee a computer file or microfiche list containing a true and complete list of the Removed Accounts specifying for each such Account, as of the Removal Date, its account number, the aggregate amount outstanding in such Account, the aggregate amount of Principal Receivables outstanding in such Account and, for any Funds Collateral relating to such Account, the account number for, the amount of funds on deposit in, the applicable Deposit Account; (iii) such Seller shall have represented and warranted as of the Removal Date that the list of Removed Accounts delivered pursuant to paragraph (ii) above, as of the Removal Date, is true and complete in all material respects ; (iv) such Seller shall have received written notice from each Rating Agency that such removal will not have a Ratings Effect and shall have delivered copies of each such written notice to the Servicer and the Trustee; (v) as of the Removal Notice Date, either (A) the Receivables in the Accounts are not more than 15% delinquent by estimated principal amount and the weighted average delinquency of such Receivables is not more than sixty (60) days or (B) the Receivables in the 36 Accounts are not more than 7% delinquent by estimated principal amount and the weighted average delinquency of such Receivables does not exceed ninety (90) days; (vi) such Seller shall have delivered to the Trustee and any Series Enhancer entitled thereto pursuant to the relevant Supplement an Officer's Certificate of such Seller, dated the Removal Date, to the effect that such Seller reasonably believes that such removal will not based on the facts known to such officer at the time of such certification, then cause a Pay Out Event or any event that, after the giving of notice or the lapse of time, would constitute a Pay Out Event to occur with respect to any Series; and (vii) the aggregate amount of Principal Receivables to be removed shall not equal or exceed 5% of the aggregate amount of Principal Receivables in the Trust. (b) Upon satisfaction of the above conditions, the Trustee shall execute and deliver to the applicable Seller a written reassignment in substantially the form of Exhibit C (the "Reassignment") and shall, without --------- ------------ further action, be deemed to sell, transfer, assign, set over and otherwise convey to such Seller or its designee, effective as of the Removal Date, without recourse, representation or warranty, all the right, title and interest of the Trust in and to the Receivables arising in the Removed Accounts and all proceeds thereof. In addition, the Trustee shall execute such other documents and instruments of transfer or assignment and take such other actions as shall reasonably be requested by such Seller to effect the conveyance of Receivables pursuant to this Section 2.09. In addition to the foregoing, on the date when any Receivable in an Account becomes a Defaulted Receivable (including any related Finance Charge Receivables), the Trust shall automatically and without further action or consideration transfer, set over and otherwise convey to the applicable Seller with respect to such Account, without recourse, representation or warranty, all right, title and interest of the Trust in and to the Defaulted Receivables (including any related Finance Charge Receivables) in such Account, all Funds Collateral related thereto, all monies due or to become due with respect thereto, all proceeds thereof and any Insurance Proceeds relating thereto; provided that Recoveries of such Account shall be applied as provided herein. - -------- The Trustee shall execute and deliver such instruments of transfer and assignment (including any UCC termination statements), in each case without recourse, as shall be reasonably requested by the applicable Seller to vest in such Seller or its designee all right, title and interest that the Trust had in such Defaulted Receivables (including any related Finance Charge Receivables). In addition to the foregoing, each Seller may designate Removed Accounts as provided in and subject to the terms and conditions contained in this Section 2.09 if the Removed Accounts are designated in response to a third- party action or decision not to act and not the unilateral action of any Seller. (c) In addition to the foregoing requirements, except for Removed Accounts described in the second paragraph of Section 2.09(b), there shall be no more than one Removal Date in any Monthly Period; for each Removal Date, the Accounts to be designated as Removed Accounts shall be selected at random by the Seller and the Removed Accounts shall not, as of the Removal Notice Date, contain Principal Receivables which in the aggregate exceed 37 an amount equal to the positive difference, if any, between the Sellers' Interest and the Required Sellers' Interest. Section 2.10. Account Allocations. In the event that any Seller is ------------------- unable for any reason to transfer Receivables to the Trust in accordance with the provisions of this Agreement, including by reason of the application of the provisions of Section 9.02 or any binding order of any Governmental Authority (a "Transfer Restriction Event"), then, in any such event, (a) such Seller and the -------------------------- Servicer agree (except as prohibited by any such order) to allocate and pay to the Trust, after the date of such inability, all Collections, including Collections of Receivables transferred to the Trust prior to the occurrence of such event, and all amounts which would have constituted Collections but for such Seller's inability to transfer Receivables (up to an aggregate amount equal to the amount of Receivables in the Trust on such date), (b) such Seller and the Servicer agree that such amounts will be applied as Collections in accordance with Article IV and the terms of each Supplement and (c) for so long as the allocation and application of all Collections and all amounts that would have constituted Collections are made in accordance with clauses (a) and (b) above, Principal Receivables and all amounts which would have constituted Principal Receivables but for such Seller's inability to transfer Receivables to the Trust and Principal Receivables and all amounts which would have constituted Principal Receivables as aforesaid that are written off as uncollectible in accordance with this Agreement shall continue to be allocated in accordance with Article IV and the terms of each Supplement. For the purpose of the immediately preceding sentence, such Seller and the Servicer shall treat the first received Collections with respect to the Accounts as allocable to the Trust until the Trust shall have been allocated and paid Collections in an amount equal to the aggregate amount of Principal Receivables in such Accounts as of the date of the occurrence of such event. If such Seller or the Servicer is unable pursuant to any Requirements of Law to allocate Collections as described above, such Seller and the Servicer agree that, after the occurrence of such event, payments on each Account with respect to the principal balance of such Account shall be allocated first to the oldest principal balance of such Account and shall have such payments applied as Collections in accordance with Article IV and the terms of each Supplement. The parties hereto agree that Finance Charge Receivables, whenever created, accrued in respect of Principal 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 Principal Receivables to the Trust and Collections with respect thereto shall continue to be allocated and paid in accordance with Article IV and the terms of each Supplement. Section 2.11. Discount Option. --------------- (a) The Sellers shall have the option to designate at any time a percentage, which may be a fixed percentage or a variable percentage based on a formula (the "Discount Percentage"), of the amount of Receivables arising in the ------------------- Accounts on or after the date such designation becomes effective that would otherwise constitute Principal Receivables to be treated as Finance Charge Receivables ("Discount Option Receivables"). The Sellers shall also have --------------------------- the option of reducing or withdrawing the Discount Percentage, at any time from time to time, on and after the date such designation becomes effective. The Sellers shall provide to the Servicer, the Trustee, any Series Enhancer and each Rating Agency thirty (30) days prior written notice of such designation (or reduction or withdrawal), and such designation (or reduction or withdrawal) shall become effective on the date designated therein only if (i) each 38 Seller shall have delivered to the Trustee and each Series Enhancer entitled thereto pursuant to the relevant Supplement an Officer's Certificate of such Seller stating that such Seller reasonably believes that such designation (or reduction or withdrawal) will not, based on the facts known to such officer at the time of such certification, then cause a Pay Out Event or any event that, after the giving of notice or the lapse of time, would constitute a Pay Out Event to occur with respect to any Series, (ii) the Sellers shall have received written notice from each Rating Agency that such designation (or reduction or withdrawal) will not have a Ratings Effect and shall have delivered copies of each such written notice to the Servicer and the Trustee and (iii) in the case of a reduction or withdrawal, each Seller shall have delivered to the Trustee an Officer's Certificate to the effect that, in the reasonable belief of such Seller, such reduction or withdrawal shall not have adverse regulatory or other accounting implications for such Seller. (b) On each Date of Processing after the date on which the Sellers' exercise of their discount option takes effect, the Sellers shall, to the extent required by Section 4.03, (i) deposit into the Collection Account in immediately available funds an amount equal to the product of (a) the aggregate Floating Allocation Percentages with respect to all Series and (b) the aggregate amount of the Discount Option Receivable Collections processed on such day and (ii) pay to the Holders of the Seller Certificates, and if any owner of an interest in the Sellers' Interest elects to have such interest be uncertificated as provided in Section 6.01 hereof, then to the recorded owner of such uncertificated interest in the Sellers' Interest, the balance of such Discount Option Receivables Collections. The deposit made by the Sellers 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 Receivables in accordance with Article IV and the terms of each Supplement. ARTICLE III Administration and Servicing of Receivables ------------------------------------------- Section 3.01. Acceptance of Appointment and Other Matters Relating to ------------------------------------------------------- the Servicer. - ------------ (a) Capital One Bank agrees to act as the Servicer under this Agreement and the Certificateholders by their acceptance of Certificates consent to Capital One Bank acting as Servicer. (b) The Servicer shall service and administer the Receivables, shall collect payments due under the Receivables and shall charge off as uncollectible Receivables, all in accordance with its customary and usual servicing procedures for servicing consumer credit card and other consumer revolving credit receivables comparable to the Receivables and in accordance with the Lending Guidelines. The Servicer shall have full power and authority, acting alone or through any Person 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, subject to Section 10.01 and provided Capital One Bank is the Servicer, the Servicer or its designee (other than the Trustee) is hereby authorized and empowered (i) to make withdrawals and payments or to instruct the Trustee to make withdrawals and payments from the Collection Account and any Series Account, as set 39 forth in this Agreement or any Supplement, and (ii) to take any action required or permitted under any Series Enhancement, as set forth in this Agreement or any Supplement. Without limiting the generality of the foregoing and subject to Section 10.01, the Servicer or its designee is hereby authorized and empowered to make any filings, reports, notices, applications and registrations with, and to seek any consents or authorizations from, the Securities and Exchange Commission (the "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 laws or reporting requirements. The Trustee shall furnish, within a reasonable period of time, the Servicer with any powers of attorney or other documents necessary or appropriate to enable the Servicer to carry out its servicing and administrative duties hereunder. (c) 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 and consumer revolving credit receivables. (d) The Servicer shall comply with and perform its servicing obligations with respect to the Accounts and Receivables in accordance with the Lending Agreements relating to the Accounts and the Lending Guidelines and all applicable rules and regulations of VISA, MasterCard and any other similar entity or organization relating to any other type of revolving credit card accounts included as Accounts, except insofar as any failure to so comply or perform would not materially and adversely affect the Trust or the Investor Certificateholders. (e) The Servicer shall pay out of its own funds, without reimbursement, all expenses incurred in connection with the Trust and the servicing activities hereunder including expenses related to enforcement of the Receivables, fees and disbursements of the Trustee, any Paying Agent and any Transfer Agent and Registrar (including the reasonable fees and expenses of its counsel) in accordance with Section 11.05, fees and disbursements of independent accountants and all other fees and expenses, including the costs of filing UCC continuation statements and the costs and expenses relating to obtaining and maintaining the listing of any Investor Certificates on any stock exchange, that are not expressly stated in this Agreement to be payable by the Trust or a Seller (other than federal, state, local and foreign income, franchise and other taxes, if any, or any interest or penalties with respect thereto, assessed on the Trust). (f) The Servicer agrees that upon a request by the Sellers it will use its best efforts to obtain and maintain the listing of the Investor Certificates of any Series or Class on any specified securities exchange. If any such request is made, the Servicer shall give notice to the Sellers and the Trustee on the date on which such Investor Certificates are approved for such listing and within three (3) Business Days following receipt of notice by the Servicer of any actual, proposed or contemplated delisting of such Investor Certificates by any such securities exchange. The Trustee or the Servicer, each in its sole discretion, may terminate any listing on any such securities exchange at any time subject to the notice requirements set forth in the preceding sentence. Section 3.02. Servicing Compensation. As full compensation for its ---------------------- servicing activities hereunder and as reimbursement for any expense incurred by it in connection therewith, the Servicer shall be entitled to receive a servicing fee (the "Servicing Fee") with ------------- 40 respect to each Monthly Period, payable monthly on the related Distribution Date, in an amount equal to one-twelfth of the product of (a) the weighted average of the Servicing Fee Rates with respect to each outstanding Series (based upon the Servicing Fee Rate for each Series and the outstanding principal amount of each Series) and (b) the amount of Principal Receivables on the last day of the prior Monthly Period. The share of the Servicing Fee allocable to (i) the Certificateholders' Interest of a particular Series with respect to any Monthly Period (the "Monthly Servicing Fee") and (ii) the Enhancement Invested --------------------- Amount, if any, of a particular Series with respect to any Monthly Period will each be determined in accordance with the relevant Supplement. The portion of the Servicing Fee with respect to any Monthly Period not so allocated to the Certificateholders' Interest or the Enhancement Invested Amount, if any, of a particular Series shall be paid by the Sellers on the related Distribution Date and in no event shall the Trust, the Trustee, the Investor Certificateholders of any Series or any Series Enhancer be liable for the share of the Servicing Fee with respect to any Monthly Period to be paid by the Sellers. Section 3.03. Representations, Warranties and Covenants of the ------------------------------------------------ Servicer. Capital One Bank, as Servicer, hereby makes, and any Successor - -------- Servicer by its appointment hereunder shall make, on each Closing Date (and on the date of any such appointment), the following representations, warranties and covenants: (a) Organization and Good Standing. The Servicer is a state banking ------------------------------ corporation validly existing under the laws of the Commonwealth of Virginia or another state, a state banking association, a national banking association or a corporation validly existing under the laws of its jurisdiction of incorporation and has, in all material respects, full power and authority to execute, deliver and perform its obligations under this Agreement and each Supplement and to own its properties and conduct its consumer revolving lending 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 servicing of the Receivables as required by the Agreement requires such qualification except where failure to so qualify or to obtain such licenses and approvals would not have a material adverse effect on its ability to perform its obligations hereunder or under any Supplement. (c) Due Authorization. The execution, delivery, and performance of ----------------- this Agreement, each Supplement and the other agreements and instruments executed or to be executed by the Servicer as contemplated hereby, have been duly authorized by the Servicer by all necessary corporate action on the part of the Servicer and this Agreement and each Supplement will remain, from the time of its execution, an official record of the Servicer. (d) Binding Obligation. This Agreement and each Supplement ------------------ constitutes a legal, valid and binding obligation of the Servicer, enforceable in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, receivership, conservatorship or other similar laws now or hereinafter in effect, affecting the enforcement of creditors' rights in general and, if applicable, the rights of creditors 41 of state banking corporations or associations or national banking associations and to general principles of equity. (e) No Conflict and No Violation. The execution and delivery of this ---------------------------- Agreement and each Supplement by the Servicer, and the performance of the transactions contemplated by this Agreement and each Supplement and the fulfillment of the terms hereof and thereof applicable to the Servicer, will not conflict with or violate or result in any breach of, or constitute (with or without notice or lapse of time or both) a default under, any indenture, contract, agreement, mortgage, deed of trust or other instrument to which the Servicer is a party or by which it or any of its properties are bound. The execution and delivery of this Agreement by the Servicer, the performance by the Servicer of the transactions contemplated by this Agreement and the fulfillment of the terms hereof applicable to the Servicer will not conflict with or violate any Requirements of Law applicable to the Servicer. (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 Governmental Authority seeking to prevent the issuance of the Certificates or the consummation of any of the transactions contemplated by this Agreement or any Supplement, seeking any determination or ruling that would materially and adversely affect the performance by the Servicer of its obligations under this Agreement or any Supplement. (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 and the related Accounts, will maintain in effect all qualifications required under Requirements of Law in order to properly service the Receivables and the related Accounts and will comply in all material respects with all other Requirements of Law in connection with servicing the Receivables and the related Accounts, the failure to comply with which would have a material adverse effect on the interests of the Certificateholders. (h) No Rescission or Cancellation. The Servicer shall not permit any ----------------------------- rescission or cancellation of a Receivable except as ordered by a court of competent jurisdiction or other Governmental Authority or in accordance with the Lending Guidelines. (i) Protection of Certificateholders' Rights. The Servicer shall ---------------------------------------- take no action which, nor omit to take any action the omission of which, would substantially impair the rights of Certificateholders in any Receivable or Account, nor shall it, except in the ordinary course of its business and in accordance with the Lending Guidelines, reschedule, revise or defer Collections due on the Receivables. (j) Receivables Not To Be Evidenced by Promissory Notes. The --------------------------------------------------- Servicer will take no action to cause or permit any Receivable to be evidenced by any instrument (as defined in the UCC) and, if any Receivable is so evidenced it shall be deemed to be an Ineligible Receivable and shall be reassigned or assigned to the servicer as provided in this Section 3.03; provided, however, that Receivables evidenced by notes taken from obligors in the - ------- ordinary course of the Servicer's collection efforts shall not be deemed of Ineligible Receivables solely as a result thereof. 42 (k) All Consents. All approvals, authorizations, consents, orders or ------------ other actions of any Person or of any Governmental Authority required to be obtained by the Servicer in connection with the execution and delivery by the Servicer of this Agreement and each Supplement, the performance by the Servicer of the transactions contemplated by this Agreement and each Supplement and the fulfillment by the Servicer of the terms hereof and thereof, have been obtained. For purposes of the representations and warranties set forth in this Section 3.03, each reference to a Supplement shall be deemed to refer only to those Supplements in effect as of the relevant Closing Date or the date of appointment of a Successor Servicer, as applicable. In the event any of the representations, warranties or covenants of the Servicer contained in paragraph (g), (h), (i) or (j) with respect to any Receivable or the related Account is breached, and such breach has a material adverse effect on the Certificateholders' Interest of all Series in the Receivables (which determination shall be made without regard to the availability of funds under any Series Enhancement) and remains uncured for sixty (60) days (or such longer period, not in excess of 150 days, as may be agreed to by the Trustee) from 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, all Receivables in the Account or Accounts to which such event relates shall be reassigned or assigned to the Servicer on the terms and conditions set forth below; provided, however, that such Receivables will -------- ------- not be reassigned or assigned to the Servicer if, on any day prior to the end of such 60-day or longer period, (i) the relevant representation and warranty shall be true and correct, or the relevant covenant shall have been complied with, in all material respects and (ii) the Servicer shall have delivered to the Trustee a certificate of an authorized officer describing the nature of such breach and the manner in which such breach was cured. If Capital One Bank is the Servicer, such reassignment or assignment shall be accomplished in the manner set forth in Section 2.05(b) as if the reassigned or assigned Receivables were Ineligible Receivables (including the requirement, if applicable, to reduce the aggregate amount of Principal Receivables used to calculate the Sellers' Participation Amount, the Sellers' Interest, the Floating Allocation Percentage and the Principal Allocation Percentage applicable to any Series and to make deposits into the Collection Account) and any amounts deposited into the Collection Account in connection with such reassignment or assignment pursuant to this Section 3.03 shall be considered a Transfer Deposit Amount and shall be applied in accordance with Article IV and the terms of each Supplement. If Capital One Bank is not the Servicer, the Servicer shall effect such assignment by making a deposit into the Collection Account in immediately available funds on the Transfer Date following the Monthly Period in which such assignment obligation arises in an amount equal to the amount of such Receivables, which deposit shall be considered a Transfer Deposit Amount and shall be applied in accordance with Article IV and the terms of each Supplement. Upon each such reassignment or assignment to the Servicer, the Trustee, on behalf of the Trust, shall automatically and without further action be deemed to sell, transfer assign, 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 Receivables, all moneys due or to become due and all amounts received with respect thereto and all proceeds thereof. The Trustee 43 shall execute such documents and instruments of transfer or, assignment and take such other actions as shall be reasonably requested by the Servicer to effect the transfer of any such Receivables pursuant to this Section 3.03. The obligation of the Servicer to accept reassignment or assignment and transfer of any such Receivables, and to make the deposits, if any, required to be made to the Collection Account as provided in the preceding paragraph, shall constitute the sole remedy respecting the event giving rise to such obligation available to Investor Certificateholders (or the Trustee on behalf of Certificateholders) or any Series Enhancer, except as provided in Section 8.04. Section 3.04. Reports and Records for the Trustee. ----------------------------------- (a) Daily Records. On each Business Day, the Servicer shall make or ------------- cause to be made available at the office of the Servicer during normal business hours for inspection by the Trustee upon request a record setting forth (i) the Collections in respect of Principal Receivables and in respect of Finance Charge Receivables processed by the Servicer on the second preceding Business Day in respect of the Accounts and (ii) the amount of Receivables as of the close of business on the second preceding Business Day in each Account. 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 shall make available to the Trustee at the office of the Servicer on any Business Day during normal business hours any computer programs necessary to make such identification. (b) Monthly Servicer's Certificate. Not later than the third ------------------------------ Business Day preceding each Distribution Date, the Servicer shall, with respect to each outstanding Series, deliver to the Trustee, the Paying Agent, each Rating Agency and each Series Enhancer entitled thereto pursuant to the relevant Supplement a certificate of a Servicing Officer in substantially the form set forth in the related Supplement. (c) Related Accounts. The Servicer covenants and agrees hereby to ---------------- deliver to the Trustee, within a reasonable time period after any Related Account is created, but in any event not later than 15 days after the end of the month within which the Related Account is created, a notice specifying the new account number for any Related Account. (d) Annual Membership Fees. On or prior to each Determination Date, ---------------------- the Servicer shall deliver to the Trustee a certificate of a Servicing Officer setting forth (or shall set forth in the Monthly Servicer's Certificate) (a) the amount of annual membership fees to be included as Collections of Finance Charge Receivables with respect to the preceding Monthly Period, which shall be equal to the amount of annual membership fees billed during the preceding 12 Monthly Periods (or during the equivalent monthly periods occurring prior to the first Monthly Period) divided by 12 and (b) the portion of such annual membership fees ("unamortized annual membership fees") which have not been treated as - ------------------------------------- Collections of Finance Charge Receivables with respect to the preceding Monthly Period. (e) Addition Discount Receivables. On or prior to each Determination ----------------------------- Date, the Servicer shall deliver to the Trustee a certificate of a Servicing Officer setting forth (or shall set forth in the Monthly Servicer's Certificate) (a) the amount of Addition Discount Receivables to be included as Collection of Finance Charge Receivables with respect to the preceding 44 Monthly Period, as calculated in accordance with the formula set forth in the applicable Assignment or accretion designation letter delivered to the Trustee and (b) the portion of such Addition Discount Receivables which have not been treated as Collections of Finance Charge Receivables with respect to the preceding Monthly Period. (f) Certain Recoveries. On or prior to each Determination Date, the ------------------ Servicer shall deliver to the Trustee a certificate of a Servicing Officer setting forth (or shall set forth in the Monthly Servicer's Certificate) (a) the amount of Recoveries equal to the net proceeds of any sale or initial securitization (excluding any residual payments from such securitization) of Defaulted Receivables (including the related Finance Charge Receivables) to be included as Collections of Finance Charge Receivables with respect to the preceding Monthly Period, which shall be equal to the amount of any such Recoveries received during the preceding three (3) Monthly Periods divided by three (3) and (b) the portion of any such Recoveries ("unamortized Recoveries") ---------------------- which have not been treated as Collections of Finance Charge Receivables with respect to the preceding Monthly Period. Section 3.05. Annual Certificate of Servicer. The Servicer shall ------------------------------ deliver to the Trustee, each Rating Agency and each Series Enhancer entitled thereto pursuant to the relevant Supplement, on or before May 31 of each calendar year, beginning with May 31, 1994, an Officer's Certificate (with appropriate insertions) substantially in the form of Exhibit D. --------- Section 3.06. Annual Servicing Report of Independent Public --------------------------------------------- Accountants; Copies of Reports Available. - ---------------------------------------- (a) On or before May 31 of each calendar year, beginning with May 31, 1995, the Servicer shall cause a firm of nationally recognized independent public accountants (who may also render other services to the Servicer or the Banks) to furnish a report (addressed to the Trustee) to the Trustee, the Servicer and each Rating Agency to the effect that they have attested to the assertion of authorized officers of the Servicer that the Servicer is in compliance with the terms and conditions set forth in Sections 3.02, 3.04, 3.09, 4.02, 4.03, 4.04, 4.05 and 8.08 of the Agreement and the applicable provisions of each Supplement and such assertion is fairly stated in all material respects. A copy of such report shall be delivered by the Servicer to each Series Enhancer entitled thereto pursuant to the relevant Supplement . (b) On or before May 31 of each calendar year, beginning with May 31, 1995, the Servicer shall cause a firm of nationally recognized independent public accountants (who may also render other services to the Servicer or the Banks) to furnish a report to the Trustee, the Servicer and each Rating Agency to the effect that they have applied certain procedures agreed upon with the Servicer to compare the mathematical calculations of certain amounts set forth in the Servicer's certificates delivered pursuant to Section 3.04(b) during the period covered by such report with the Servicer's computer reports, which were the source of such amounts and report all differences regardless of materiality. A copy of such report shall be delivered by the Servicer to each Series Enhancer entitled thereto pursuant to the relevant Supplement. Section 3.07. Tax Treatment. The Sellers have entered into this ------------- Agreement, and the Certificates will be issued, with the intention that, for federal, state and local income and franchise tax purposes only, the Investor Certificates of each Series which are characterized as 45 indebtedness at the time of their issuance will qualify as indebtedness of the Sellers secured by the Receivables. The Sellers, by entering into this Agreement, and each Certificateholder, by the acceptance of any such Certificate (and each Certificate Owner, by its acceptance of an interest in the applicable Certificate), agree to treat such Investor Certificates for federal, state and local income and franchise tax purposes as indebtedness of the Sellers. Section 3.08. Notices to the Banks. In the event that Capital One Bank -------------------- is no longer acting as Servicer, any Successor Servicer shall deliver to the Banks each certificate and report required to be provided thereafter pursuant to Section 3.04(b), 3.05 or 3.06. Section 3.09. Adjustments. ----------- (a) If the Servicer adjusts downward the amount of any Principal Receivable (other than any Ineligible Receivable to be reassigned or assigned to a Seller or the Servicer pursuant to this Agreement) because of a rebate, refund, unauthorized charge or billing error to an accountholder, or because such Principal Receivable was created in respect of merchandise which was refused or returned by an accountholder, or if the Servicer otherwise adjusts downward the amount of any Principal Receivable without receiving Collections therefor or charging off such amount as uncollectible, then, in any such case, the amount of Principal Receivables used to calculate the Sellers' Participation Amount, the Sellers' Interest and the Floating Allocation Percentage and the Principal Allocation Percentage applicable to any Series will be reduced by the amount of the adjustment. Similarly, the amount of Principal Receivables used to calculate the Sellers' Participation Amount, the Sellers' Interest and the Floating Allocation Percentage and the Principal Allocation Percentage applicable to any Series will be reduced by the amount of any Principal Receivable which was discovered as having been created through a fraudulent or counterfeit charge. Any adjustment required pursuant to either of the two (2) preceding sentences shall be made on or prior to the end of the Monthly Period in which such adjustment obligation arises. In the event that, following the exclusion of such Principal Receivables from the calculation of the Sellers' Participation Amount, the Sellers' Participation Amount would be a negative number, not later than 12:00 noon, Richmond, Virginia time, on the Distribution Date following the Monthly Period in which such adjustment obligation arises, the Seller shall make a deposit into the Collection Account in immediately available funds in an amount equal to the amount by which the Sellers' Participation Amount would be below zero (up to the amount of such Principal Receivables). Any amount deposited into the Collection Account pursuant to the preceding sentence shall be considered an "Adjustment Payment" and shall be applied in accordance with Article IV and the terms of each Supplement. (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 than 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. 46 Section 3.10. Reports to the Commission. The Servicer shall, on behalf ------------------------- of the Trust, cause to be filed with the Commission any periodic reports required to be filed under the provisions of the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission thereunder. The Banks shall, at the expense of the Servicer, cooperate in any reasonable request of the Servicer in connection with such filings. ARTICLE IV Rights of Certificateholders and Allocation and Application or Collections ------------------------------ Section 4.01. Rights of Certificateholders. The Investor Certificates ---------------------------- shall represent fractional undivided interests in the Trust, which, with respect to each Series, shall consist of the right to receive, to the extent necessary to make the required payments with respect to such Series at the times and in the amounts specified in the related Supplement, the portion of Collections allocable to such Series pursuant to this Agreement and such Supplement, funds on deposit in the Collection Account or the Excess Funding Account allocable to such Series pursuant to this Agreement and such Supplement, funds on deposit in any related Series Account and funds available pursuant to any related Series Enhancement (collectively, with respect to all Series, the "Certificateholders' ------------------- Interest"), it being understood that the Investor Certificates of any Series or - -------- Class shall not represent any interest in any Series Account or Series Enhancement for the benefit of any other Series or Class. The Seller Certificates shall represent the ownership interest in the remainder of the Trust Assets not allocated pursuant to this Agreement or any Supplement to the Certificateholders' Interest, including the right to receive Collections with respect to the Receivables and other amounts at the times and in the amounts specified in this Agreement or any Supplement to be paid to the Sellers on behalf of all of the holders of the Seller Certificates (the "Sellers' -------- Interest"); provided, however, that if any Seller or any Additional Seller - --------- -------- ------- elects to have all or a portion of its interest in the Sellers' Interest be uncertificated as provided in Section 6.01 hereof, then such uncertificated interest, together with any Seller Certificates, shall represent the "Sellers' Interest"; provided further that the Seller Certificates, or any uncertificated ---------------- interest in the Sellers' Interest, shall not represent any interest in the Collection Account, the Excess Funding Account, any Series Account or any Series Enhancement, except as specifically provided in this Agreement or any Supplement; provided further that the foregoing shall not be construed to limit ---------------- the Trustee's obligation to make payments to the Sellers and the Servicer as and when required under this Agreement and any Supplement. Section 4.02. Establishment of Collection Account and Excess Funding ------------------------------------------------------ Account. The Servicer, for the benefit of the Certificateholders, shall - ------- establish and maintain in the name of the Trustee, on behalf of the Trust, an Eligible Deposit Account bearing a designation clearly indicating that the funds deposited therein are held for the benefit of the Certificateholders (the "Collection Account"). The Collection Account currently is maintained with The - ------------------- Bank of New York. 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. Except as expressly provided in this Agreement, the Servicer agrees that it shall have no right of setoff or banker's lien against, and no right to otherwise deduct from, any funds held in the 47 Collection Account for any amount owed to it by the Trustee, the Trust, any Certificateholder or any Series Enhancer. If, at any time, the Collection Account ceases to be an Eligible Deposit Account, the Trustee (or the Servicer on its behalf) shall within ten (10) Business Days (or such longer period, not to exceed thirty (30) calendar days, as to which each Rating Agency may consent) establish a new Collection Account meeting the conditions specified above, 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." Unless otherwise agreed by each Rating Agency, if at any time neither Capital One Bank nor any other Affiliate of Capital One Bank is the Servicer, the Collection Account will be moved from Capital One Bank if then maintained there. Funds on deposit in the Collection Account (other than amounts deposited pursuant to Section 2.06, 9.02, 10.01 or 12.02) shall at the direction of the Servicer be invested by the Trustee in Eligible Investments selected by the Servicer. All such Eligible Investments shall be held by the Trustee for the benefit of the Certificateholders. The Trustee shall (i) hold each Eligible Investment that constitutes investment property through a securities intermediary, which securities intermediary shall agree with the Trustee that (A) such investment property shall at all times be credited to a securities account of the Trustee, (B) such securities intermediary shall treat the Trustee as entitled to exercise the rights that comprise each financial asset credited to such securities account, (C) all property credited to such securities account shall be treated as a financial asset, (D) such securities intermediary shall comply with entitlement orders originated by the Trustee without the further consent of any other person or entity, (E) such securities intermediary shall not agree with any person or entity other than the Trustee to comply with entitlement orders originated by such other person or entity, (F) such securities accounts and the property credited thereto shall not be subject to any lien or encumbrance on, security interest in, or right of set-off in favor of such securities intermediary or anyone claiming through it (other than the Trustee), and (G) such agreement shall be governed by the laws of the State of New York; and (ii) maintain possession of each other Eligible Investment not described in clause (i) above in the State of New York. Terms used in clause (i) above that are defined in the New York UCC and not otherwise defined herein shall have the meaning set forth in the New York UCC. Investments of funds representing Collections collected during any Monthly Period shall be invested in Eligible Investments that will mature so that all funds will be available at the close of business on the Transfer Date following such Monthly Period. No Eligible Investment shall be disposed of prior to its maturity. Unless directed by the Servicer, 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. 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 or at the direction of the Sellers, except as otherwise specified in any Supplement. For purposes of determining the availability of funds or the balances in the Collection Account for any reason under this Agreement, all investment earnings net of investment expenses and losses on such funds shall be deemed not to be available or on deposit. The Servicer, for the benefit of the Certificateholders, shall establish and maintain in the name of the Trustee, on behalf of the Trust, an Eligible Deposit Account bearing a designation clearly indicating that the funds deposited therein are held for the benefit of the 48 Certificateholders (the "Excess Funding Account"). The Excess Funding Account ----------------------- currently is maintained with The Bank of New York. The Trustee shall possess all right, title and interest in all funds on deposit from time to time in the Excess Funding Account and in all proceeds thereof. The Excess Funding Account shall be under the sole dominion and control of the Trustee for the benefit of the Certificateholders. Except as expressly provided in this Agreement, the Servicer agrees that it shall have no right of setoff or banker's lien against, and no right to otherwise deduct from, any funds held in the Excess Funding Account for any amount owed to it by the Trustee, the Trust, any Certificateholder or any Series Enhancer. If, at any time, the Excess Funding Account ceases to be an Eligible Deposit Account, the Trustee (or the Servicer on its behalf) shall within ten (10) Business Days (or such longer period, not to exceed thirty (30) calendar days, as to which each Rating Agency may consent) establish a new Excess Funding Account meeting the conditions specified above, transfer any cash and/or any investments to such new Excess Funding Account and from the date such new Excess Funding Account is established, it shall be the "Excess Funding Account." Unless otherwise agreed by each Rating Agency, if at any time neither Capital One Bank nor any other Affiliate of Capital One Bank is the Servicer, the Excess Funding Account will be moved from Capital One Bank if then maintained there. Funds on deposit in the Excess Funding Account shall at the direction of the Servicer be invested by the Trustee in Eligible Investments selected by the Servicer. All such Eligible Investments shall be held by the Trustee for the benefit of the Certificateholders. The Trustee shall (i) hold each Eligible Investment that constitutes investment property through a securities intermediary, which securities intermediary shall agree with the Trustee that (A) such investment property shall at all times be credited to a securities account of the Trustee, (B) such securities intermediary shall treat the Trustee as entitled to exercise the rights that comprise each financial asset credited to such securities account, (C) all property credited to such securities account shall be treated as a financial asset, (D) such securities intermediary shall comply with entitlement orders originated by the Trustee without the further consent of any other person or entity, (E) such securities intermediary shall not agree with any person or entity other than the Trustee to comply with entitlement orders originated by such other person or entity, (F) such securities accounts and the property credited thereto shall not be subject to any lien or encumbrance on, security interest in, or right of set-off in favor of such securities intermediary or anyone claiming through it (other than the Trustee), and (G) such agreement shall be governed by the laws of the State of New York; and (ii) maintain possession of each other Eligible Investment not described in clause (i) above in the State of New York. Terms used in clause (i) above that are defined in the New York UCC and not otherwise defined herein shall have the meaning set forth in the New York UCC. Funds on deposit in the Excess Funding Account on any Distribution Date will be invested in Eligible Investments that will mature so that all funds will be available at the close of business on the Transfer Date following such Monthly Period. No Eligible Investment shall be disposed of prior to its maturity. Unless directed by the Servicer, funds deposited in the Excess Funding Account on a Transfer Date with respect to the next following Distribution Date are not required to be invested overnight. On each Distribution Date, all interest and other investment earnings (net of losses and investment expenses) on funds on deposit in the Excess Funding Account shall be treated as Collections of Finance Charge Receivables with respect to the last day of the related Monthly Period. Funds on deposit in the Excess Funding Account will be withdrawn and paid to the Sellers on any Business Day to the extent that the Sellers' Participation Amount exceeds the Required Sellers' Interest and the aggregate amount of 49 Principal Receivables exceeds the Required Principal Balance on such date; provided, however, that, if an Accumulation Period, Controlled Amortization - -------- ------- Period or Early Amortization Period has commenced and is continuing with respect to one or more outstanding Series, any funds on deposit in the Excess Funding Account shall be treated as Shared Principal Collections and shall be allocated and distributed in accordance with Section 4.04 and the terms of the Supplements for the Principal Sharing Series. For purposes of determining the availability of funds or the balances in the Excess Funding Account for any reason under this Agreement, all investment earnings net of investment expenses and losses on such funds shall be deemed not to be available or on deposit. Section 4.03. Collections and Allocations. --------------------------- (a) 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 and in each Supplement. Except as otherwise provided below, the Servicer shall deposit Collections into the Collection Account no later than the second Business Day following the Date of Processing of such Collections or, in the case of any Collections consisting of Interchange, not later than 12:00 noon, Richmond, Virginia time, on each Distribution Date. Subject to the express terms of any Supplement, but notwithstanding anything else in this Agreement to the contrary, for so long as Capital One Bank remains the Servicer and (x) maintains a certificate of deposit rating of A-1 or better by Standard & Poor's and P-1 by Moody's, or (y) Capital One Bank has provided to the Trustee a letter of credit covering collection risk of the Servicer acceptable to the Rating Agency (as evidenced by a letter from the Rating Agency), the Servicer need not make the daily deposits of Collections into the Collection Account as provided in the preceding sentence, but may make a single deposit in the Collection Account in immediately available funds not later than 12:00 noon, Richmond, Virginia time, on the Transfer Date immediately preceding the Distribution Date or, in the case of any Collections consisting of Interchange, not later than 12:00 noon, Richmond, Virginia time, on each Distribution Date. Subject to the first proviso in Section 4.04, but notwithstanding anything else in this Agreement to the contrary, with respect to any Monthly Period, whether the Servicer is required to make deposits of Collections pursuant to the first or the second preceding sentence, (i) the Servicer will only be required to deposit Collections into the Collection Account up to (x) the aggregate amount of Collections required to be deposited into any Series Account or, without duplication, distributed on or prior to the related Distribution Date to Investor Certificateholders or to any Series Enhancer pursuant to the terms of any Supplement or Enhancement Agreement plus (y) the aggregate amount of the portion of Collections representing annual membership fees (including any annual membership fees relating to the period prior to the Trust Cut-Off Date) which will not have been amortized in accordance with Section 3.04(d) with respect to the end of such Monthly Period plus (z) the aggregate amount of the portion of Collections representing Recoveries which will not have been amortized in accordance with Section 3.04(f) with respect to the end of such Monthly Period and (ii) if at any time prior to such Distribution Date the amount of Collections deposited in the Collection Account exceeds the amount required to be deposited pursuant to clause (i) above, the Servicer will be permitted to withdraw the excess from the Collection Account. (b) (i) Collections of Finance Charge Receivables will be allocated to the Certificateholders' Interest of a Series in an amount equal to the product of the amount of such Collections and the Floating Allocation Percentage of such Series, (ii) the Defaulted Amount will 50 be allocated to the Certificateholders' Interest of a Series in an amount equal to the product of such Defaulted Amount and the Floating Allocation Percentage of such Series, (iii) Collections of Principal Receivables will be allocated to the Certificateholders' Interest of such Series in an amount equal to the product of the amount of such Collections and the Principal Allocation Percentage of such Series and (iv) Miscellaneous Payments will be allocated to the Certificateholders' Interest of such Series in an amount equal to the product of the amount of such Miscellaneous Payments and a fraction the numerator of which is the Invested Amount and Enhancement Invested Amount, if any, of such Series and the denominator of which is the sum of the Invested Amounts and the Enhancement Invested Amount, if any, for all outstanding Series, in each case for such Monthly Period. Collections of Receivables with respect to any Monthly Period will be allocated by the Servicer first to annual membership fees billed during the preceding Monthly Period, second to Finance Charge Receivables, to the extent of Finance Charge Receivables billed during the preceding Monthly Period, and third to Principal Receivables. Subject to Sections 4.03(c) and 4.04, amounts not allocated to the Certificateholders' Interest of any Series will be allocated to the Sellers' Interest. (c) On the earlier of (A) the second Business Day after the Date of Processing and (B) the day on which the Servicer actually deposits any Collections into the Collection Account or, in the case of any Collections consisting of Interchange, not later than 12:00 noon, Richmond, Virginia time, on each Distribution Date, the Servicer will pay to each Seller (i) such Seller's allocable portion of Collections of Finance Charge Receivables and (ii) such Seller's allocable portion of Collections of Principal Receivables; provided, however, that in the case of Collections of Principal Receivables - -------- ------- allocated to the Sellers' Interest, such amount shall only be paid to each Seller if the Sellers' Participation Amount exceeds the Required Sellers' Interest and the aggregate amount of Principal Receivables exceeds the Required Principal Balance, but otherwise such amounts shall be deposited into the Excess Funding Account. Collections consisting of annual membership fees or Recoveries resulting from the sale or securitization of Defaulted Receivables (including the related Finance Charge Receivables) which have not yet been amortized in accordance with Section 3.04(d) or (e), as the case may be, and which are therefore not treated as Collections of Finance Charge Receivables or Principal Receivables, shall not be paid to the Sellers or allocated to the Certificateholders' Interest. The payments to be made to the Sellers pursuant to this Section 4.03(c) do not apply to deposits to the Collection Account or other amounts that do not represent Collections, including Miscellaneous Payments, payment of the purchase price for Receivables pursuant to Section 2.06 or 10.01, proceeds from the sale, disposition or liquidation of Receivables pursuant to Section 9.02 or 12.02 or payment of the purchase price for the Certificateholders' Interest of a specific Series pursuant to the related Supplement. (d) The Principal Receivables in Additional Accounts added during any Monthly Period having an Additional Cut-Off Date as of any day during the preceding Monthly Period shall be treated as Principal Receivables outstanding on and after such Additional Cut-Off Date for purposes of calculating the Floating Allocation Percentage and Principal Allocation Percentage for the Monthly Period in which such Additional Accounts are added. Any such recalculation of the Floating Allocation Percentage and Principal Allocation Percentage for a Monthly Period shall be effective only on And after the Addition Date, but the Servicer shall determine the amounts of Collections and the Defaulted Amounts which would have been 51 allocated to the Certificateholders' Interest of each Series for the portion of such Monthly Period preceding such Addition Date as if such recalculated Floating Allocation Percentage and Principal Allocation Percentage had been in effect and shall adjust the amounts to be allocated for the remainder of such Monthly Period so that the amounts allocated to the Certificateholders' Interest of each Series and the Sellers' Interest are equal to the amounts which would have been allocated to them if such recalculated percentages had been in effect for the entire Monthly Period. Section 4.04. Shared Principal Collections. On each Distribution Date, ----------------------------- (a) the Servicer shall allocate Shared Principal Collections to each Principal Sharing Series, pro rata, in proportion to the Principal Shortfalls, if any, with respect to each such Series and (b) the Servicer shall withdraw from the Collection Account or the Excess Funding Account and pay to the Sellers an amount equal to the excess, if any, of (x) the aggregate amount for all outstanding Series of Collections of Principal Receivables and Miscellaneous Payments which the related Supplements or this Agreement specify are to be treated as "Shared Principal Collections" for such Distribution Date over (y) the aggregate amount for all outstanding Principal Sharing Series which the related Supplements specify are "Principal Shortfalls" for such Distribution Date; provided, however, that such amounts shall be paid to the Sellers only if -------- ------- the Sellers' Participation Amount for such Distribution Date exceeds the Required Sellers' Interest and the aggregate amount of Principal Receivables exceeds the Required Principal Balance, but otherwise such amounts shall be deposited into the Excess Funding Account. Section 4.05. Excess Finance Charges. On each Distribution Date, (a) ----------------------- the Servicer shall allocate Excess Finance Charges with respect to the Series in a Group to each Series in such Group, pro rata, in proportion to the Finance Charge Shortfalls, if any, with respect to each such Series and (b) the Servicer shall withdraw (or shall instruct the Trustee to withdraw) from the Collection Account and pay to the Sellers an amount equal to the excess, if any, of (x) the aggregate amount for all outstanding Series in a Group of the amounts which the related Supplements specify are to be treated as "Excess Finance Charges" for such Distribution Date over (y) the aggregate amount for all outstanding Series in such Group which the related Supplements specify are "Finance Charge Shortfalls" for such Distribution Date; provided, however, that the sharing of -------- ------- Excess Finance Charges among Series in a Group will continue only until such time, if any, at which each Seller shall deliver to the Trustee an Officer's Certificate to the effect that the continued sharing of Excess Finance Charges among Series in any Group would have adverse regulatory implications with respect to such Seller. Following the delivery by each Seller of such an Officer's Certificate to the Trustee there will not be any further sharing of Excess Finance Charges among Series in any Group. ARTICLE V Distributions and Reports to Certificateholders ----------------------------------------------- Distributions shall be made to, and reports shall be provided to, Certificateholders as set forth in the applicable Supplement. 52 ARTICLE VI The Certificates ---------------- Section 6.01. The Certificates. The Investor Certificates of any ---------------- Series or Class may be issued in bearer form ("Bearer Certificates") with ------------------- attached interest coupons and any other applicable coupon (collectively, the "Coupons") or in fully registered form ("Registered Certificates") and shall be - --------- ----------------------- substantially in the form of the exhibits with respect thereto attached to the applicable Supplement. Any Seller may elect at any time, by written notice to the Trustee, to have all or a portion of its interest in the Sellers' Interest be (i) an uncertificated interest or (ii) evidenced by a certificate. If any Seller elects to have all or a portion of its interest in the Sellers' Interest be uncertificated, it shall deliver to the Trustee for cancellation any Bank Certificate previously issued. If any Seller elects to have all or a portion of its interest in the Sellers' Interest be evidenced by a certificate, the Bank Certificate will be issued in registered form, substantially in the form of Exhibit A, and shall upon issue be executed and delivered by the relevant Bank - --------- to the Trustee for authentication and redelivery as provided in Section 6.02. The Trustee shall keep with the books and records of the Trust a register, in book-entry form, of each Person owning any uncertificated interest in the Sellers' Interest. Except as otherwise provided in Section 6.03 or in any Supplement, Bearer Certificates shall be issued in minimum denominations of $1,000 and Registered Certificates shall be issued in minimum denominations of $1,000 and in integral multiples of $1,000 in excess thereof. If specified in any Supplement, the Investor Certificates of any Series or Class shall be issued upon initial issuance as a single certificate evidencing the aggregate original principal amount of such Series or Class as described in Section 6.13. The Bank Certificate shall be a single certificate and shall initially represent the entire Sellers' Interest. Each Certificate shall be executed by manual or facsimile signature on behalf of each Bank by its respective President or any Vice President. Certificates bearing the manual or facsimile signature of an individual who was, at the time when such signature was affixed, authorized to sign on behalf of such Bank shall not be rendered invalid, notwithstanding that such individual 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 Certificates shall be entitled to any benefit under this Agreement, 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. Bearer Certificates shall be dated the Series Issuance Date. All Registered Certificates and the Seller Certificates shall be dated the date of their authentication. Section 6.02. Authentication of Certificates. The Trustee shall ------------------------------ authenticate and deliver the Investor Certificates of each Series and Class that are issued upon original issuance to or upon the order of the Sellers against payment to the Sellers of the purchase pride therefor. The Trustee shall authenticate and deliver the Bank Certificate to the Sellers simultaneously with its delivery of the Investor Certificates of the first Series to be issued hereunder. If specified in the related Supplement for any Series or Class, the Trustee shall authenticate and deliver outside the United States the Global Certificate that is issued upon original issuance thereof. Section 6.03. New Issuances. ------------- 53 (a) The Sellers may from time to time direct the Trustee, on behalf of the Trust, to authenticate one or more new Series of Investor Certificates. The Investor Certificates of all outstanding Series shall be equally and ratably entitled as provided herein to the benefits of this Agreement without preference, priority or distinction, all in accordance with the terms and provisions of this Agreement and the applicable Supplement except, with respect to any Series or Class, as provided in the related Supplement. (b) On or before the Series Issuance Date relating to any new Series, the parties hereto will execute and deliver a Supplement which will specify the Principal Terms of such new Series. The terms of such Supplement may modify or amend the terms of this Agreement solely as applied to such new Series. The obligation of the Trustee to authenticate the Investor Certificates of such new Series and to execute and deliver the related Supplement is subject to the satisfaction of the following conditions: (i) on or before the fifth Business Day immediately preceding the Series Issuance Date, the Sellers shall have given the Trustee, the Servicer, each Rating Agency and any Series Enhancer entitled thereto pursuant to the relevant Supplement notice of such issuance and the Series Issuance Date ; (ii) the Sellers shall have delivered to the Trustee the related Supplement, in form satisfactory to the Trustee, executed by each party hereto other than the Trustee; (iii) the Sellers shall have delivered to the Trustee any related Enhancement Agreement executed by each of the parties thereto, other than the Trustee; (iv) the Sellers shall have received written notice from each Rating Agency that such issuance will not have a Ratings Effect and shall have delivered copies of each such written notice to the Servicer and the Trustee; (v) each Seller shall have delivered to the Trustee and any Series Enhancer entitled thereto pursuant to the relevant Supplement an Officer's Certificate of such Seller, dated the Series Issuance Date, to the effect that such Seller reasonably believes that such issuance will not, based on the facts known to such officer at the time of such certification, then cause a Pay Out Event or any event that, after the giving of notice or the lapse of time, would constitute a Pay Out Event to occur with respect to any Series; (vi) the Sellers shall have delivered to the Trustee, each Rating Agency and any Series Enhancer entitled thereto pursuant to the relevant Supplement a Tax Opinion, dated the Series Issuance Date, with respect to such issuance; and (vii) each Seller shall have delivered to the Trustee and any Series Enhancer entitled thereto pursuant to the relevant Supplement an Officer's Certificate of such Seller, dated the Series Issuance Date to the effect that the Sellers' Participation Amount (excluding the interest represented by any Supplemental Certificate) shall not be less than the Specified Percentage of the total amount of Principal Receivables, in each case as of the Series Issuance Date, and after giving effect to such issuance. 54 Upon satisfaction of the above conditions, the Trustee shall execute the Supplement and authenticate the Investor Certificates of such Series upon execution thereof by the Sellers. (c) If any Seller elects to have all or a portion of its interest in the Sellers' Interest evidenced by the Bank Certificate as provided in Section 6.01 hereof, then such Seller may surrender the Bank Certificate to the Trustee in exchange for a newly issued Bank Certificate and one or more additional certificates (each, a "Supplemental Certificate"), the terms of which shall be ------------------------ defined in a Supplement (which Supplement shall be subject to Section 13.01(a) to the extent that it amends any of the terms of this Agreement), to be delivered to or upon the order of the Sellers (or the Holder of a Supplemental Certificate, in the case of the transfer or exchange thereof, as provided below), upon satisfaction of the following conditions: (i) the Sellers shall have received written notice from each Rating Agency that such exchange (or transfer or exchange as provided below) will not have a Ratings Effect and shall have delivered copies of each such written notice to the Servicer and the Trustee; and (ii) the Sellers shall have delivered to the Trustee, each Rating Agency and any Series Enhancer entitled thereto pursuant to the relevant Supplement a Tax Opinion dated the date of such exchange (or transfer or exchange as provided in the next sentence), with respect thereto. Any Supplemental Certificate may be transferred or exchanged only upon satisfaction of the conditions set forth in clauses (i) and (ii) above. Notwithstanding anything in this Agreement to the contrary and subject to the related Supplement, any Holder of a Supplemental Certificate that is an Affiliate of any Seller may elect at any time, by written notice to the Trustee, to have its interest in the Sellers' Interest be (i) an uncertificated interest or (ii) evidenced by a certificate. If the Holder of a Supplemental Certificate elects to have its interest in the Sellers' Interest be uncertificated, it shall deliver to the Trustee for cancellation any Supplemental Certificate previously issued and the Trustee shall make the appropriate entry in the books and records of the Trust registering such uncertificated interest in the Sellers' Interest. If the recorded owner of any such uncertificated interest elects to have its interest in the Sellers' Interest be evidenced by a certificate, a Supplemental Certificate will be issued in registered form and in the form provided in the related Supplement. Section 6.04. Registration of Transfer and Exchange of Certificates. ----------------------------------------------------- (a) The Trustee shall cause to be kept at the office or agency to be maintained in accordance with the provisions of Section 11.16 a register (the "Certificate Register") in which, subject to such reasonable regulations as - --------------------- it may prescribe, a transfer agent and registrar (which may be the Trustee) (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 Transfer Agent and Registrar shall be, as of the date hereof, The Bank of New York and any co-transfer agent and co- registrar chosen by the Sellers and acceptable to the Trustee, including if and so long as any Series or Class is listed on the Luxembourg Stock Exchange and such exchange shall so require, a co-transfer agent and co-registrar in Luxembourg. So long as any Investor Certificates are outstanding, the Sellers shall 55 maintain a co-transfer agent and co-registrar in New York City. 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. The Trustee may revoke such appointment and remove any Transfer Agent and Registrar if the Trustee determines in its sole discretion that such Transfer Agent and Registrar failed to perform its obligations under this Agreement in any material respect. Any Transfer Agent and Registrar shall be permitted to resign as Transfer Agent and Registrar upon thirty (30) days notice to the Sellers, the Trustee and the Servicer; provided, however, that such -------- ------- resignation shall not be effective and such Transfer Agent and Registrar shall continue to perform its duties as Transfer Agent and Registrar until the Sellers have appointed a successor Transfer Agent and Registrar reasonably acceptable to the Trustee. Subject to paragraph (c) below, 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, one or more new Registered Certificates (of the same Series and Class) in authorized denominations of like aggregate fractional undivided interests in the Certificateholders' Interest shall be executed, authenticated and delivered, in the name of the designated transferee or transferees. At the option of a Registered Certificateholder, Registered Certificates (of the same Series and Class) may be exchanged for other Registered Certificates of authorized denominations of like aggregate fractional undivided interests in the Certificateholders' Interest, upon surrender of the Registered Certificates to be exchanged at any such office or agency; Registered Certificates, including Registered Certificates received in exchange for Bearer Certificates, may not be exchanged for Bearer Certificates. At the option of the Holder of a Bearer Certificate, subject to applicable laws and regulations, Bearer Certificates may be exchanged for other Bearer Certificates or Registered Certificates (of the same Series and Class) of authorized denominations of like aggregate fractional undivided interests in the Certificateholders' Interest, upon surrender of the Bearer Certificates to be exchanged at an office or agency of the Transfer Agent and Registrar located outside the United States. Each Bearer Certificate surrendered pursuant to this Section shall have attached thereto all unmatured Coupons; provided that any Bearer Certificate, so -------- surrendered after the close of business on the Record Date preceding the relevant payment date or distribution date after the expected final payment date need not have attached the Coupon relating to such payment date or distribution date (in each case, as specified in the applicable Supplement). Whenever any Investor Certificates are so surrendered for exchange, the Sellers shall execute, the Trustee shall authenticate and the Transfer Agent and Registrar shall deliver (in the case of Bearer Certificates, outside the United States) the Investor Certificates which the Investor 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 or the Transfer Agent and Registrar duly executed by the Investor Certificateholder or the attorney-in-fact thereof duly authorized in writing. 56 No service charge shall be made for any registration of transfer or exchange of Investor Certificates, but the Transfer Agent and Registrar may require payment of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any such transfer or exchange. All Investor Certificates (together with any Coupons) surrendered for registration of transfer and exchange or for payment shall be canceled and disposed of in a manner satisfactory to the Trustee. The Trustee shall cancel and destroy any Global Certificate upon its exchange in full for Definitive Euro-Certificates and shall deliver a certificate of destruction to the Sellers. Such certificate shall also state that a certificate or certificates of a Foreign Clearing Agency to the effect referred to in Section 6.13 was received with respect to each portion of the Global Certificate exchanged for Definitive Euro-Certificates. The Sellers shall execute and deliver to the Trustee Bearer Certificates and Registered Certificates in such amounts and at such times as are necessary to enable the Trustee to fulfill its responsibilities under this Agreement, each Supplement and the Certificates. (b) The Transfer Agent and Registrar will maintain at its expense in each of the Borough of Manhattan, the City of New York, and, if and so long as any Series or Class is listed on the Luxembourg Stock Exchange, Luxembourg, an office or agency where Investor Certificates may be surrendered for registration of transfer or exchange (except that Bearer Certificates may not be surrendered for exchange at any such office or agency in the United States). (c) (i) Registration of transfer of Investor Certificates containing a legend substantially to the effect set forth on Exhibit E-1 shall ----------- be effected only if such transfer (x) is made pursuant to an effective registration statement under the Act, or is exempt from the registration requirements under the Act, and (y) is made to a Person which is not an employee benefit plan, trust or account, including an individual retirement account, that is subject to ERISA or that is described in Section 4975(e)(1) of the Code or an entity whose underlying assets include plan assets by reason of a plan's investment in such entity (a "Benefit Plan"). In the event that registration of ------------ a transfer is to be made in reliance upon an exemption from the registration requirements under the Act, the transferor or the transferee shall deliver, at its expense, to the Sellers, the Servicer and the Transfer Agent and Registrar, an investment letter from the transferee, substantially in the form of the investment and ERISA representation letter attached hereto as Exhibit E-2, and ----------- no registration of transfer shall be made until such letter is so delivered. Investor Certificates issued upon registration or transfer of, or Investor Certificates issued in exchange for, Investor Certificates bearing the legend referred to above shall also bear such legend unless the Sellers, the Servicer, the Trustee and the Transfer Agent and Registrar receive an opinion of counsel, satisfactory to each of them, to the effect that such legend may be removed. Whenever an Investor Certificate containing the legend referred to above is presented to the Transfer Agent and Registrar for registration of transfer, the Transfer Agent and Registrar shall promptly seek instructions from the Servicer regarding such transfer and shall be 57 entitled to receive instructions signed by a Servicing Officer prior to registering any such transfer. The Sellers hereby agree to indemnify the Transfer Agent and Registrar and the Trustee and to hold each of them harmless against any loss, liability or expense incurred without negligence or bad faith on their part arising out of or in connection with actions taken or omitted by them in relation to any such instructions furnished pursuant to this clause (i). (ii) Registration of transfer of Investor Certificates containing a legend to the effect set forth on Exhibit E-3 shall be effected only if such ----------- transfer is made to a Person which is not a Benefit Plan. By accepting and holding any such Investor Certificate, an Investor Certificateholder shall be deemed to have represented and warranted that it is not a Benefit Plan. By acquiring any interest in a Book-Entry Certificate which contains such legend, a Certificate Owner shall be deemed to have represented and warranted that it is not a Benefit Plan. (iii) If so requested by the Sellers, the Trustee will make available to any prospective purchaser of Investor Certificates who so requests, a copy of a letter provided to Trustee by or on behalf of the Sellers relating to the transferability of any Series or Class to a Benefit Plan. Section 6.05. Mutilated, Destroyed, Lost or Stolen Certificates. If ------------------------------------------------- (a) any mutilated Certificate (together, in the case of Bearer Certificates, with all unmatured Coupons (if any) appertaining thereto) 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 and the Trustee 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 Sellers shall execute, the Trustee shall authenticate and the Transfer Agent and Registrar shall deliver (in the case of Bearer Certificates, outside the United States), in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Certificate, a new Certificate of like tenor and aggregate fractional undivided interest. In connection with the issuance of any new Certificate under this Section 6.05, 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 charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee and Transfer Agent and Registrar) connected therewith. Any duplicate Certificate issued pursuant to this Section 6.05 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 6.06. Persons Deemed Owners. The Trustee, the Paying Agent, --------------------- the Transfer Agent and Registrar and any agent of any of them may (a) prior to due presentation of a Registered Certificate for registration of transfer, treat the Person in whose name any Registered Certificate is registered as the owner of such Registered Certificate for the purpose of receiving distributions pursuant to the terms of the applicable Supplement and for all other purposes whatsoever, and (b) treat the bearer of a Bearer Certificate or Coupon as the owner of such Bearer Certificate or Coupon for the purpose of receiving distributions pursuant to the terms of the applicable Supplement and for all other purposes whatsoever; and, in any such case, 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, in determining 58 whether the Holders of the requisite Investor Certificates have given any request, demand, authorization, direction, notice, consent or waiver hereunder, certificates owned by any Seller, the Servicer, any other holder of a Seller Certificate, the Trustee or any Affiliate thereof, 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 actually 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 a Seller, the Servicer, any other holder of a Seller Certificate or any Affiliate thereof. Section 6.07. Appointment of Paying Agent. The Paying Agent shall make --------------------------- distributions to Investor Certificateholders from the Collection Account or any applicable Series Account pursuant to the provisions of the applicable Supplement and shall report the amounts of such distributions to the Trustee. Any Paying Agent shall have the revocable power to withdraw funds from the Collection Account or any applicable Series Account for the purpose of making the 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 or any Supplement in any material respect. The Paying Agent shall be, as of the date hereof, The Bank of New York and any co-paying agent chosen by the Sellers and acceptable to the Trustee, including, if and so long as any Series or Class is listed on the Luxembourg Stock Exchange and such exchange so requires, a co-paying agent in Luxembourg or another western European city. Any Paying Agent shall be permitted to resign as Paying Agent upon thirty (30) days notice to the Trustee. In the event that any Paying Agent shall resign, the Sellers shall appoint a successor to act as Paying Agent, reasonably acceptable to the Trustee. The initial and each successor or additional Paying Agent shall execute and deliver to the Trustee an instrument in which such successor or additional Paying Agent shall agree with the Trustee that: (i) it 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 Investor Certificateholders and (ii) during the continuance of any Pay Out Event or Servicer Default, upon the written request of the Trustee, it will forthwith pay to the Trustee all sums held in trust by such Paying Agent for payment in respect of the Investor Certificates. The Paying Agent shall return all unclaimed funds to the Trustee and upon removal shall also return all funds in its possession to the Trustee. If and for so long as the Trustee shall act as Paying Agent, the provisions of Sections 11.01, 11.02, 11.03 and 11.05 shall apply to the Trustee also in its role as Paying Agent. Any reference in this Agreement to the Paying Agent shall include any co- paying agent unless the context requires otherwise. Section 6.08. Access to List of Registered Certificateholders' Names ------------------------------------------------------ and Addresses. The Trustee will furnish or cause to be furnished by the Transfer - --------- Agent and Registrar to the Servicer or the Paying Agent, within five (5) Business Days after receipt by the Trustee of a request therefor, a list in such form as the Servicer or the Paying Agent, may reasonably require, of the names and addresses of the Registered Certificateholders. If any Holder or group of Holders of Investor Certificates of any Series or all outstanding Series, as the case may be, evidencing not less than 10% of the aggregate unpaid principal amount of such Series or all outstanding Series, as applicable (the "Applicants"), apply to the Trustee, and such ---------- 59 application states that the Applicants desire to communicate with other Investor Certificateholders with respect to their rights under this Agreement or any Supplement 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 Registered Certificateholders of such Series or all outstanding Series, as applicable held by the Trustee, within five (5) Business Days after the receipt of such application. Such list shall be as of a date no more than forty-five (45) days prior to the date of receipt of such Applicants' request. Every Registered Certificateholder, by receiving and holding a Registered Certificate, 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 Registered Certificateholders hereunder regardless of the sources from which such information was derived. Section 6.09. 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 certificate of authentication executed on behalf of the Trustee by an authenticating agent. Each authenticating agent must be acceptable to the Sellers and the Servicer. (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 power or any further act on the part of the Trustee or such authenticating agent. An authenticating agent may at any time resign by giving notice of resignation to the Trustee and to the Sellers. 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 Sellers. 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 a Seller, the Trustee promptly may appoint a successor authenticating agent. Any successor authenticating agent upon acceptance of its appointment hereunder shall become vested 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 Sellers. The Sellers agree to pay to each authenticating agent from time to time reasonable compensation for its services under this Section 6.09. The provisions of Sections 11.01, 11.02 and 11.03 shall be applicable to any authenticating agent. (c) Pursuant to an appointment made under this Section 6.09, the Certificates may have endorsed thereon, in lieu of the Trustee's certificate of authentication, an alternate certificate of authentication in substantially the following form: 60 This is one of the Certificates described in the Pooling and Servicing Agreement. ----------------------------------------- ----------------------------------------- as Authenticating Agent for the Trustee by --------------------------------------- Authorized Officer Section 6.10. Book-Entry Certificates. Unless otherwise specified in ----------------------- the related Supplement for any Series or Class, the Investor Certificates, upon original issuance, shall be issued in the form, of one or more typewritten Investor Certificates representing the Book-Entry Certificates, to be delivered to the Clearing Agency, by, or on behalf of, the Sellers. The Investor Certificates shall initially be registered on the Certificate Register in the name of the Clearing Agency or its nominee, and no Certificate Owner will receive a definitive certificate representing such Certificate Owner's interest in the Investor Certificates, except as provided in Section 6.12. Unless and until definitive, fully registered Investor Certificates ("Definitive ---------- Certificates") have been issued to the applicable Certificate owners pursuant to - ------------ Section 6.12 or as otherwise specified in any such Supplement: (a) the provisions of this Section 6.10 shall be in full force and effect; (b) the Sellers, the Servicer and the Trustee may deal with the Clearing Agency and the Clearing Agency Participants for all purposes (including the making of distributions) as the authorized representatives of the respective Certificate owners; (c) to the extent that the provisions of this Section 6.10 conflict with any other provisions of this Agreement, the provisions of this Section 6.10 shall control; and (d) the rights of the respective 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/or the Clearing Agency Participants. Pursuant to the Depositary Agreement, unless and until Definitive Certificates are issued pursuant to Section 6.12, the Clearing Agency will make book-entry transfers among the Clearing Agency Participants and receive and transmit distributions of principal and interest on the related Investor Certificates to such Clearing Agency Participants. For purposes of any provision of this Agreement requiring or permitting actions with the consent of, or at the direction of, Investor Certificateholders evidencing a specified percentage of the aggregate unpaid principal amount of Investor Certificates, such direction or consent may be given by Certificate Owners (acting through the Clearing Agency and the Clearing Agency Participants) owning Investor Certificates evidencing the requisite percentage of principal amount of Investor Certificates. Section 6.11. Notices to Clearing Agency. Whenever any notice or other -------------------------- communication is required to be given to Investor Certificateholders of any Series or Class with respect to which Book-Entry Certificates have been issued, unless and until Definitive 61 Certificates shall have been issued to the related Certificate Owners, the Trustee shall give all such notices and communications to the applicable Clearing Agency. Section 6.12. Definitive Certificates. If Book-Entry Certificates have ----------------------- been issued with respect to any Series or Class and (a) the Sellers advise the Trustee that the Clearing Agency is no longer willing or able to discharge properly its responsibilities under the Depositary Agreement with respect to such Series or Class and the Trustee or the Sellers are unable to locate a qualified successor, (b) the Sellers, at their option, advise the Trustee that they elect to terminate the book-entry system with respect to such Series or Class through the Clearing Agency or (c) after the occurrence of a Servicer Default, Certificate Owners of such Series or Class evidencing not less than 50% of the aggregate unpaid principal amount of such Series or Class advise the Trustee and the Clearing Agency through the Clearing Agency Participants that the continuation of a book-entry system with respect to the Investor Certificates of such Series or Class through the Clearing Agency is no longer in the best interests of the Certificate Owners with respect to such Certificates, then the Trustee shall notify all Certificate Owners of such Certificates, through the 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 any such Certificates by the Clearing Agency, accompanied by registration instructions from the Clearing Agency for registration, the Sellers shall execute and the Trustee shall authenticate and deliver such Definitive Certificates. Neither the Sellers 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. Upon the issuance of such Definitive Certificates all references herein to obligations imposed upon or to be performed by the Clearing Agency shall be deemed to be imposed upon and performed by the Trustee, to the extent applicable with respect to such Definitive Certificates and the Trustee shall recognize the Holders of such Definitive Certificates as Investor Certificateholders hereunder. Section 6.13. Global Certificate; Exchange Date. --------------------------------- (a) If specified in the related supplement for any Series or Class, the Investor Certificates for such Series or Class will initially be issued in the form of a single temporary global Certificate (the "Global ------ Certificate") in bearer form, without interest coupons, in the denomination of - ----------- the entire aggregate principal amount of such Series or Class and substantially in the form set forth in the exhibit with respect thereto attached to the related Supplement. The Global Certificate will be executed by the Bank and authenticated by the Trustee upon the same conditions, in substantially the same manner and with the same effect as the Definitive Certificates. The Global Certificate may be exchanged as described below for Bearer or Registered Certificates in definitive form (the "Definitive Euro-Certificates"). ---------------------------- (b) The Manager shall, upon its determination of the date of completion of the distribution of the Investor Certificates of such Series or Class, so advise the Trustee, the Sellers, the Depositaries, and each Foreign Clearing Agency forthwith. Without unnecessary delay, but in any event not prior to the Exchange Date, the Sellers will execute and deliver to the Trustee at its London office or its designated agent outside the United States definitive Bearer Certificates in an aggregate principal amount equal to the entire aggregate principal amount of such Series or Class. All Bearer Certificates so issued and delivered will have Coupons attached. The Global Certificate may be exchanged for an equal aggregate principal amount of Definitive Euro- Certificates only on or after the Exchange Date. An institutional investor that is a U.S. Person may exchange the portion of the Global Certificate beneficially owned by it only for an equal aggregate principal amount of Registered Certificates bearing the applicable legend set forth in the form of Registered Certificate attached to the related Supplement and having a minimum denomination of $500,000, which may be in temporary form if the Sellers so elect. The Sellers may waive the $500,000 minimum denomination requirement if they so elect. Upon any demand for exchange for Definitive Euro- 62 Certificates in accordance with this paragraph, the Sellers shall cause the Trustee to authenticate and deliver the Definitive Euro-Certificates to the Holder (x) outside the United States, in the case of Bearer Certificates, and (y) according to the instructions of the Holder, in the case of Registered Certificates, but in either case only upon presentation to the Trustee of a written statement substantially in the form of Exhibit G-1 with respect to the ----------- Global Certificate or portion thereof being exchanged signed by a Foreign Clearing Agency and dated on the Exchange Date or a subsequent date, to the effect that it has received in writing or by tested telex a certification substantially in the form of (i) in the case of beneficial ownership of the Global Certificate or a portion thereof being exchanged by a United States institutional investor pursuant to the second preceding sentence, the certificate in the form of Exhibit G-2 signed by the Manager which sold the ----------- relevant Certificates or (ii) in all other cases, the certificate in the form of Exhibit G-3, the certificate referred to in this clause (ii) being ----------- dated on the earlier of the first actual payment of interest in respect of such Certificates and the date of the delivery of such Certificate in definitive form. Upon receipt of such certification, the Trustee shall cause the Global Certificate to be endorsed in accordance with paragraph (d) below. Any exchange as provided in this Section 6.13 shall be made free of charge to the holders and the beneficial owners of the Global Certificate and to the beneficial owners of the Definitive Euro-Certificates issued in exchange, except that a person receiving Definitive Euro-Certificates must bear the cost of insurance, postage, transportation and the like in the event that such person does not receive such Definitive Euro-Certificates in person at the offices of a Foreign Clearing Agency. (c) The delivery to the Trustee by a Foreign Clearing Agency of any written statement referred to above may be relied upon by the Sellers and the Trustee as conclusive evidence that a corresponding certification or certifications has or have been delivered to such Foreign Clearing Agency pursuant to the terms of this Agreement. (d) Upon any such exchange of all or a portion of the Global Certificate for a Definitive Euro-Certificate or Certificates, such Global Certificate shall be endorsed by or on behalf of the Trustee to reflect the reduction of its principal amount by an amount equal to the aggregate principal amount of such Definitive Euro-Certificate or Certificates. Until so exchanged in full, such Global Certificate shall in all respects be entitled to the same benefits under this Agreement as Definitive Euro-Certificates authenticated and delivered hereunder except that the beneficial owners of such Global Certificate shall not be entitled to receive payments of interest on the Certificates until they have exchanged their beneficial interests in such Global Certificate for Definitive Euro-Certificates. Section 6.14. Meetings of Certificateholders. ------------------------------ (a) If at the time any Bearer Certificates are issued and outstanding with respect to any Series or Class to which any meeting described below relates, the Servicer or the 63 Trustee may at any time call a meeting of Investor Certificateholders of any Series or Class or of all Series, to be held at such time and at such place as the Servicer or the Trustee, as the case may be, shall determine, for the purpose of approving a modification of or amendment to, or obtaining a waiver of any covenant or condition set forth in, this Agreement, any Supplement or the Investor Certificates or of taking any other action permitted to be taken by Investor Certificateholders hereunder or under any Supplement. Notice of any meeting of Investor Certificateholders, setting forth the time and place of such meeting and in general terms the action proposed to be taken at such meeting, shall be given in accordance with Section 13.05, the first mailing and publication to be not less than twenty (20) nor more than 180 days prior to the date fixed for the meeting. To be entitled to vote at any meeting of Investor Certificateholders a person shall be (i) a Holder of one or more Investor Certificates of the applicable Series or Class or (ii) a person appointed by an instrument in writing as proxy by the Holder of one or more such Investor Certificates. The only persons who shall be entitled to be present or to speak at any meeting of Investor Certificateholders shall be the persons entitled to vote at such meeting and their counsel and any representatives of the Sellers, the Servicer and the Trustee and their respective counsel. (b) At a meeting of Investor Certificateholders, persons entitled to vote Investor Certificates evidencing a majority of the aggregate unpaid principal amount of the applicable Series or Class or all outstanding Series, as the case may be, shall constitute a quorum. No business shall be transacted in the absence of a quorum, unless a quorum is present when the meeting is called to order. In the absence of a quorum at any such meeting, the meeting may be adjourned for a period of not less than ten (10) days; in the absence of a quorum at any such adjourned meeting, such adjourned meeting may be further adjourned for a period of not less than ten (10) days; at the reconvening of any meeting further adjourned for lack of a quorum, the persons entitled to vote Investor Certificates evidencing at least 25% of the aggregate unpaid principal amount of the applicable Series or Class or all outstanding Series, as the case may be, shall constitute a quorum for the taking of any action set forth in the notice of the original meeting. Notice of the reconvening of any adjourned meeting shall be given as provided above except that such notice must be given not less than five (5) days prior to the date on which the meeting is scheduled to be reconvened. Notice of the reconvening of an adjourned meeting shall state expressly the percentage of the aggregate principal amount of the outstanding applicable Investor Certificates which shall constitute a quorum. (c) Any Investor Certificateholder who has executed an instrument in writing appointing a person as proxy shall be deemed to be present for the purposes of determining a quorum and be deemed to have voted; provided that such -------- Investor Certificateholder shall be considered as present or voting only with respect to the matters covered by such instrument in writing. Subject to the provisions of Section 13.01, any resolution passed or decision taken at any meeting of Investor Certificateholders duly held in accordance with this Section 6.14 shall be binding on all Investor Certificateholders whether or not present or represented at the meeting. (d) The holding of Bearer Certificates shall be proved by the production of such Bearer Certificates or by a certificate, satisfactory to the Servicer, executed by any bank, trust company or recognized securities dealer, wherever situated, satisfactory to the Servicer. Each such certificate shall be dated and shall state that on the date thereof a Bearer Certificate bearing a specified serial number was deposited with or exhibited to such bank, trust company or recognized securities dealer by the person named in such certificate. Any such certificate may be issued in respect of one or more Bearer Certificates specified therein. The holding by the person named in any such certificate of any Bearer Certificate specified therein shall be presumed to continue for a period of one year from the date of such certificate unless at the time of any determination of such holding (i) another certificate bearing a later date issued in respect of the same Bearer Certificate shall be produced, (ii) the Bearer Certificate 64 specified in such certificate shall be produced by some other person or (iii) the Bearer Certificate specified in such certificate shall have ceased to be outstanding. The appointment of any proxy shall be proved by having the signature of the person executing the proxy guaranteed by any bank, trust company or recognized securities dealer satisfactory to the Trustee. (e) The Trustee shall appoint a temporary chairman of the meeting. A permanent chairman and a permanent secretary of the meeting shall be elected by vote of the holders of Investor Certificates evidencing a majority of the aggregate unpaid principal amount of Investor Certificates of the applicable Series or Class or all outstanding Series, as the case may be, represented at the meeting. No vote shall be cast or counted at any meeting in respect of any Investor Certificate challenged as not outstanding and ruled by the chairman of the meeting to be not outstanding. The chairman of the meeting shall have no right to vote except as an Investor Certificateholder or proxy. Any meeting of Investor Certificateholders duly called at which a quorum is present may be adjourned from time to time, and the meeting may be held as so adjourned without further notice. (f) The vote upon any resolution submitted to any meeting of Investor Certificateholders shall be by written ballot on which shall be subscribed the signatures of Investor Certificateholders or proxies and on which shall be inscribed the serial number or numbers of the Investor Certificates held or represented by them. The permanent chairman of the meeting shall appoint two (2) inspectors of votes who shall count all votes cast at the meeting for or against any resolution and who shall make and file with the secretary of the meeting their verified written reports in duplicate of all votes cast at the meeting. A record in duplicate of the proceedings of each meeting of Investor Certificateholders shall be prepared by the secretary of the meeting and there shall be attached to said record the original reports of the inspectors of votes on any vote by ballot taken thereat and affidavits by one or more persons having knowledge of the facts setting forth a copy of the notice of the meeting and showing that said notice was published as provided above. The record shall be signed and verified by the permanent chairman and secretary of the meeting and one of the duplicates shall be delivered to the Servicer and the other to the Trustee to be preserved by the Trustee, the latter to have attached thereto the ballots voted at the meeting. Any record so signed and verified shall be conclusive evidence of the matters therein stated. ARTICLE VII Other Matters Relating to Each Seller ------------------------------------- Section 7.01. Liability of each Seller. Each Seller shall be ------------------------ severally, and not jointly, liable in all respects for the obligations, covenants, representations and warranties of such 65 Seller arising under or related to this Agreement or any Supplement. Each Seller shall be liable only to the extent of the obligations specifically undertaken by it in its capacity as a Seller. Section 7.02. Merger or Consolidation of, or Assumption of the ------------------------------------------------ Obligations of, a Seller. - ------------------------ (a) No Seller shall 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) (x) the corporation formed by such consolidation or into which the applicable Seller is merged or the Person which acquires by conveyance or transfer the properties and assets of such Seller substantially as an entirety shall be, if such Seller is not the surviving entity, a corporation organized and existing under the laws of the United States of America or any State or the District of Columbia, and, if such Seller is not the surviving entity, such corporation 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 such Seller hereunder, including its obligations under Section 7.04; and (y) such Seller has delivered to the Trustee an Officer's Certificate and an Opinion of Counsel each stating that such consolidation, merger, conveyance or transfer and such supplemental agreement comply with this Section 7.02, that such supplemental agreement is a valid and binding obligation of such surviving entity enforceable against such surviving entity in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, receivership, conservatorship or other similar laws affecting creditors' rights generally from time to time in effect and except as such enforceability may be limited by general principles of equity (whether considered in a suit at law or in equity), and that all conditions precedent herein provided for relating to such transaction have been complied with; (ii) if the surviving entity is a Non-Code Entity, the applicable Seller shall have delivered notice of such consolidation, merger, conveyance or transfer to each Rating Agency or, if the surviving entity is not a Non-Code Entity, such Seller shall have received written notice from each Rating Agency that such consolidation, merger, conveyance or transfer will not have a Ratings Effect and shall have delivered copies of each such written notice to the Servicer and the Trustee; and (iii) the applicable Seller shall have delivered to the Trustee, each Rating Agency and any Series Enhancer entitled thereto pursuant to the relevant Supplement a Tax Opinion, dated the date of such consolidation, merger, conveyance or transfer, with respect thereto. (b) The obligations of each Seller hereunder shall not be assignable nor shall any Person succeed to the obligations of the Sellers hereunder except in each case in accordance with the provisions of the foregoing paragraph or Section 7.05. Section 7.03. Limitations on Liability of Each Seller. Subject to --------------------------------------- Sections 7.01 and 7.04, neither any Seller nor any of the directors, officers, employees or agents of any Seller acting in such capacity shall be under any liability to the Trust, the Trustee, the 66 Certificateholders, any Series Enhancer or any other Person for any action taken or for refraining from the taking of any action in good faith in such capacity pursuant to this Agreement; provided, however, that this provision --------- ------- shall not protect any Seller or any such Person 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. Each Seller and any director, officer, employee or agent of such Seller may rely in good faith on any document of any kind prima facie properly executed and submitted by any Person (other than such Seller) respecting any matters arising hereunder. Section 7.04. Liabilities. Notwithstanding Section 7.03 (and ----------- notwithstanding Sections 8.03 and 8.04), by entering into this Agreement, each Seller agrees to be liable, directly to the injured party, for the entire amount of any losses, claims, damages or liabilities (other than those incurred by an Investor Certificateholder in the capacity of an investor in the Investor Certificates or those which arise from any action by any Investor Certificateholder) arising out of or based on the arrangement created by this Agreement (to the extent Trust Assets remaining after the Investor Certificateholders and Series Enhancers have been paid in full are insufficient to pay such losses, claims, damages or liabilities) and the actions of the Servicer taken pursuant hereto as though this Agreement created a partnership under the New York Uniform Partnership Act in which each Seller was a general partner. In the event of the appointment of a Successor Servicer, the Successor Servicer will (from its own assets and not from the assets of the Trust) indemnify and hold harmless each Seller against and from any losses, claims, damages and liabilities of the Seller as described in this Section 7.04 arising from the actions or omissions of such Successor Servicer. Section 7.05. Assumption of a Seller's Obligations. Notwithstanding ------------------------------------ the provisions of Section 7.02, each Seller may assign, convey and transfer all of its consumer revolving credit card accounts and other revolving credit accounts and the receivables arising thereunder, which may include all, but not less than all of the Accounts and such Seller's remaining interest in the Receivables arising thereunder, its interest in the Participation interests and its Sellers' Interest (collectively, the "Assigned Assets"), together with all --------------- servicing functions and other obligations under this Agreement or relating to the transactions contemplated hereby (collectively, the "Assumed Obligations"), ------------------- to another entity (the "Assuming Entity") which may be an entity that is not --------------- affiliated with such Seller, and such Seller may assign, convey and transfer the Assigned Assets and the Assumed Obligations to the Assuming Entity, without the consent or approval of the holders of any Certificates, upon satisfaction of the following conditions: (a) the Assuming Entity, such Seller and the Trustee shall have entered into an assumption agreement (the "Assumption Agreement") providing -------------------- for the Assuming Entity to assume the Assumed Obligations, including the obligation under this Agreement to transfer the Receivables arising under the Accounts and the Receivables arising under any Additional Accounts to the Trust, and such Seller shall have delivered to the Trustee an Officer's Certificate and an opinion of Counsel each stating that such transfer and assumption comply with this Section 7.05, that such Assumption Agreement is a valid and binding obligation of such Assuming Entity enforceable against such Assuming Entity in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, receivership, conservatorship or other similar laws affecting creditors' rights 67 generally from to time in effect and except as such enforceability may be limited by general principles of equity (whether considered in a suit at law or in equity), and that all conditions precedent herein provided for relating to such transaction have been complied with; (b) each provider of Series Enhancement, if any, shall have consented to such transfer and assumption; (c) such Seller or the Assuming Entity shall have delivered to the Trustee copies of UCC-1 financing statements covering such Accounts to perfect the Trust's interest in the Receivables arising herein; (d) if the Assuming Entity is a Non-Code Entity, such Seller shall have delivered notice of such transfer and assumption to each Rating Agency or, if the Assuming Entity is not a Non-Code Entity, such Seller shall have received written notice from each Rating Agency that such transfer and assumption will not have a Ratings Effect and shall have delivered copies of each such written notice to the Servicer and the Trustee; (e) the Trustee shall have received an Opinion of Counsel with respect to clause (c) above and as to certain other matters specified in Exhibit H-2; and - ----------- (f) the Trustee shall have received a Tax Opinion. Upon such transfer to and assumption by the Assuming Entity, such Seller shall surrender the Bank Certificate, if any, evidencing its interest in the Trust to the Transfer Agent and Registrar for registration of transfer and the Transfer Agent and Registrar shall issue a new Bank Certificate, if applicable, in the name of the Assuming Entity. Notwithstanding such assumption, such Seller shall continue to be liable for all representations and warranties and covenants made by it and all obligations performed or to be performed by it in its capacity as a Seller prior to such transfer. ARTICLE VIII Other Matters Relating to the Servicer -------------------------------------- Section 8.01. Liability of the Servicer. The Servicer shall be liable ------------------------- under this Article 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: (a) (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, if the Servicer is not the surviving entity, a corporation organized and existing under the laws of the United States of America or any State or the District of Columbia, and, if the Servicer is not the surviving entity, such corporation shall expressly assume, by an agreement supplemental hereto, executed and 68 delivered to the Trustee, in form satisfactory to the Trustee, the performance of every covenant and obligation of the Servicer hereunder; (ii) the Servicer has delivered to the Trustee an Officer's Certificate and an opinion of Counsel each stating that such consolidation, merger, conveyance or transfer and such supplemental agreement comply with this Section 8.02, that such supplemental agreement is a valid and binding obligation of such surviving entity enforceable against such surviving entity in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, receivership or conservatorship or other similar laws affecting creditors' rights generally from time to time in effect and except as such enforceability may be limited by general principles of equity (whether considered in a suit at law or in equity), and that all conditions precedent herein provided for relating to such transaction have been complied with; (b) if the surviving entity is a Non-Code Entity, the Servicer shall have delivered notice of such consolidation, merger, conveyance or transfer to each Rating Agency or, if the surviving entity is not a Non-Code Entity, the Servicer shall have received written notice from each Rating Agency that such assignment and succession will not have a Ratings Effect and shall have delivered copies of each such notice to the Sellers and the Trustee; and (c) 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 an Eligible Servicer. Section 8.03. Limitation on Liability of the Servicer and Others. -------------------------------------------------- Except as provided in Section 8.04, neither the Servicer nor any of the directors, officers, employees or agents of the Servicer in its capacity as Servicer shall be under any liability to the Trust, the Trustee, the Certificateholders, any Series Enhancer or any other person for any action taken or for refraining from the taking of any action in good faith in its capacity as Servicer pursuant to this Agreement; provided, however, that this provision -------- ------- shall not protect the Servicer or any such Person 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, officer, 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 (other than the Servicer) 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 as Servicer in accordance with this Agreement and which in its reasonable judgment may involve it in any expense or liability. The Servicer may, in its sole discretion, undertake any such legal action which it may deem necessary or desirable for the benefit of the Certificateholders with respect to this Agreement and the rights and duties of the parties hereto and the interests of the Certificateholders hereunder. Section 8.04. Servicer Indemnification of the Trust and the --------------------------------------------- Trustee. The Servicer shall indemnify and hold harmless the Trust and the Trustee from and against any loss, liability, expense, damage or injury suffered or sustained by reason of any acts or omissions of the Servicer with respect to the Trust pursuant to this Agreement, including any judgment, award, settlement, reasonable attorneys' fees and other costs or expenses incurred in connection 69 with the defense of any action, proceeding or claim. Indemnification pursuant to this Section 8.04 shall not be payable from the Trust Assets. Section 8.05. The Servicer Not To Resign. Except as provided in -------------------------- Section 7.05 with respect to the transfer of servicing to an Assuming Entity, the Servicer shall not resign from the obligations and duties hereby imposed on it except upon determination that (i) the performance of its duties hereunder is no longer permissible under Requirements of Law (other than the charter and by- laws of the Servicer) and (ii) there is no reasonable action which the Servicer could take to make the performance of its duties hereunder permissible under such Requirements of Law. Any determination permitting the resignation of the Servicer shall be evidenced by an Officer's Certificate and an Opinion of Counsel to such effect delivered to the Trustee. No 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. If within 120 days of the date of the determination that the Servicer may no longer act as Servicer the Trustee is unable to appoint a Successor Servicer, the Trustee shall serve as Successor Servicer. Notwithstanding the foregoing, the Trustee shall, if it is legally unable so to act, petition a court of competent jurisdiction to appoint any established institution having a net worth of not less than $50,000,000 and whose regular business includes the servicing of credit card accounts and who has the ability to service the Receivables as the Successor Servicer hereunder. The Trustee shall give prompt notice to each Rating Agency and each Series Enhancer entitled thereto under the terms of the applicable Supplement upon the appointment of a Successor Servicer. Section 8.06. Access to Certain Documentation and Information ----------------------------------------------- Regarding the Regarding the Receivables. The Servicer shall provide to the - --------------------------------------- Trustee access to the documentation regarding the Accounts and the Receivables in such cases where the Trustee is required in connection with the enforcement of the rights of Certificateholders or by applicable statutes or regulations to review such documentation, such access being afforded without charge but only (a) upon reasonable request, (b) during normal business hours, (c) subject to the Servicer's normal security and confidentiality procedures and (d) at the Servicer's principal office or at the Servicer's office in the continental United States where the documentation regarding the Accounts and the Receivables normally is kept. Nothing in this Section 8.06 shall derogate from the obligation of the Sellers, the Trustee and 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 Lending Guidelines; provided, however, in the case of significant delegation to a Person -------- ------- other than any Affiliate of a Seller or Electronic Data Services, (i) at least thirty (30) days prior written notice shall be given to the Trustee, each Rating Agency and each Series Enhancer entitled thereto pursuant to the relevant Supplement, of such delegation and (ii) at or prior to the end of such 30-day period the Servicer shall not have received a notice in writing from a Rating Agency that such delegation will have a Ratings Effect. Any such delegation shall not relieve the Servicer of its liability and responsibility with 70 respect to such duties, and shall not constitute a resignation within the meaning of Section 8.05 hereof. Section 8.08. Examination of Records. Each Seller and the ---------------------- Servicer shall clearly and unambiguously indicate in their computer files or other records that the Receivables arising in the Accounts have been conveyed to the Trustee, on behalf of the Trust, pursuant to this Agreement for the benefit of the Certificateholders. Each Seller 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. ARTICLE IX Pay Out Events -------------- Section 9.01. Pay Out Events. If any one of the following events shall -------------- occur with respect to any Series: (a) any Seller (including any Additional Seller) shall consent to the appointment of a conservator or receiver or liquidator in any insolvency, readjustment of debt, marshalling of assets and liabilities or similar proceedings of or relating to such Seller or of or relating to all or substantially all of its property, or a decree or order of a court or agency or supervisory authority having jurisdiction in the premises for the appointment of a conservator or receiver or liquidator in any insolvency, readjustment of debt, marshalling of assets and liabilities or similar proceedings, or for the winding-up or liquidation of its affairs, shall have been entered against such Seller; or such Seller shall admit in writing its inability to pay its debts generally as they become due, file a petition to take advantage of any applicable insolvency or reorganization statute, make any assignment for the benefit of its creditors or voluntarily suspend payment of its obligations (any such event, an "Insolvency Event"); provided that an Insolvency Event shall be a ---------- ----- Pay Out Event with respect to any Seller only if, at the time such Insolvency Event occurs, Receivables transferred by such Seller are then included in the Trust; or (b) the Trust shall become an "investment company" within the meaning of the Investment Company Act; then, in the case of any such event, a Pay Out Event shall occur with respect to such Series without any notice or other action on the part of the Trustee or the Investor Certificateholders, immediately upon the occurrence of such event. Section 9.02. Additional Rights upon the Occurrence of Certain Events. ------------------------------------------------------- (a) If an Insolvency Event occurs with respect to Capital One Bank or Capital One Bank violates Section 2.07(c) for any reason, Capital One Bank shall on the day any such Insolvency Event or violation occurs (the "Appointment ----------- Date"), immediately cease to transfer Principal Receivables to the Trust - ---- and shall promptly give notice to the Trustee thereof. Notwithstanding any cessation of the transfer to the Trust of additional Principal Receivables, Principal Receivables transferred to the Trust prior to the occurrence of such Insolvency Event and Collections in respect of such Principal Receivables and Finance Charge Receivables whenever created, accrued in respect of such Principal Receivables, shall continue to be a part of the Trust. So long as any Series issued prior to April 1, 2001 remains outstanding, within fifteen (15) days after receipt of such notice by the Trustee of the occurrence 71 of such Insolvency Event or violation of Section 2.07(c), the Trustee shall (i) publish a notice in an Authorized Newspaper that an Insolvency Event or violation has occurred and that the Trustee intends to sell, dispose of or otherwise liquidate the Receivables and (ii) give notice to Investor Certificateholders and each Series Enhancer entitled thereto pursuant to the relevant Supplement describing the provisions of this Section 9.02 and requesting instructions from such Holders. Unless the Trustee shall have received instructions within ninety (90) days from the date notice pursuant to clause (i) above is first published from (x) Holders of Investor Certificates evidencing more than 50% of the aggregate unpaid principal amount of each Series or, with respect to any Series with two (2) or more Classes, of each Class, to the effect that such Investor Certificateholders disapprove of the liquidation of the Receivables and wish to continue having Principal Receivables transferred to the Trust as before such Insolvency Event or violation, (y) to the extent provided in the relevant Supplement, the Series Enhancer with respect to such Series, to such effect, and (z) each holder (other than the Banks) of a Seller Certificate to such effect, the Trustee shall promptly use its best efforts to sell, dispose of or otherwise liquidate the Receivables by the solicitation of competitive bids and on terms equivalent to the best purchase offer as determined by the Trustee. The Trustee may obtain a prior determination from any such conservator, receiver or liquidator that the terms and manner of any proposed sale, disposition or liquidation are commercially reasonable. The provisions of Sections 9.01 and 9.02 shall not be deemed to be mutually exclusive. (b) If an Insolvency Event occurs with respect to Capital One, F.S.B. or any Additional Seller or Capital One, F.S.B. or any such Additional Seller violates Section 2.07(c) for any reason, Capital One, F.S.B. or such Additional Seller, as the case may be, shall on the day any such Insolvency Event or violation occurs (the "Appointment Date"), immediately cease to transfer Principal Receivables to the Trust and shall promptly give notice to the Trustee thereof. Notwithstanding any cessation of the transfer to the Trust of additional Principal Receivables, Principal Receivables transferred to the Trust prior to the occurrence of such Insolvency Event and Collections in respect of such Principal Receivables and Finance Charge Receivables whenever created, accrued in respect of such Principal Receivables, shall continue to be a part of the Trust. (c) The proceeds from the sale, disposition or liquidation of the Receivables pursuant to paragraph (a) ("Insolvency Proceeds") shall be ------------------- immediately deposited in the Collection Account. The Trustee shall determine conclusively the amount of the Insolvency Proceeds which are deemed to be Finance Charge Receivables and Principal Receivables. The Insolvency Proceeds shall be allocated and distributed to Investor Certificateholders in accordance with Article IV and the terms of each Supplement and the Trust shall terminate immediately thereafter. 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) any failure by the Servicer to make any payment, transfer or deposit or to give instructions or notice to the Trustee pursuant to the terms of this Agreement or any Supplement on or before the date occurring ten (10) 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 in any material respect any other covenants or agreements of the Servicer set forth in this Agreement or any Supplement which has a material adverse effect on the interests hereunder of the Investor Certificateholders of any Series or Class (which determination shall be made without regard to whether funds are then available pursuant to any Series Enhancement) and which continues unremedied for a period of sixty (60) days after the date on which written notice of such failure, 72 requiring the same to be remedied, shall have been given to the Servicer by the Trustee, or to the Servicer and the Trustee by Holders of Investor Certificates evidencing not less than 10% of the aggregate unpaid principal amount of all Investor Certificates (or, with respect to any such failure that does not relate to all Series, 10% of the aggregate unpaid principal amount of all Series to which such failure relates); or the Servicer shall delegate its duties under this Agreement, except as permitted by Sections 8.02 and 8.07, a Responsible Officer of the Trustee has actual knowledge of such delegation and such delegation continues unremedied for 15 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 Holders of Investor Certificates evidencing not less than 10% of the aggregate unpaid principal amount of all Investor Certificates; (c) any representation, warranty or certification made by the Servicer in this Agreement or any Supplement or in any certificate delivered pursuant to Agreement or any Supplement shall prove to have been incorrect when made, which has a material adverse effect on the rights of the Investor Certificateholders of any Series or Class (which determination shall be made without regard to whether funds are then available pursuant to any Series Enhancement) and which continues to be incorrect in any material respect for a period of sixty (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 by the Trustee, or to the Servicer and the Trustee by the Holders of Investor Certificates evidencing not less than 10% of the aggregate unpaid principal amount of all Investor Certificates (or, with respect to any such representation, warranty or certification that does not relate to all Series, 10% of the aggregate unpaid principal amount of all Series to which such representation, warranty or certification relates); or (d) the Servicer shall consent to the appointment of a conservator or receiver or liquidator in any insolvency, readjustment of debt, marshalling of assets and liabilities or similar proceedings of or relating to the Servicer or of or relating to all or substantially all of its property, or a decree or order of a court or agency or supervisory authority having jurisdiction in the premises for the appointment of a conservator or receiver or liquidator in any insolvency, readjustment of debt, marshalling of assets and liabilities or similar proceedings, or for the winding-up or liquidation of its affairs, shall have been entered against the Servicer, and such decree or order shall have remained in force undischarged or unstayed for a period of sixty (60) days; or the Servicer shall admit in writing its inability to pay its debts generally as they become due, file a petition to take advantage of any applicable insolvency or reorganization statute, make any assignment for the benefit of its creditors or voluntarily suspend payment of its obligations; 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 more than 50% of the aggregate unpaid principal amount of all outstanding Series, by written notice then given to the Servicer (and to the Trustee and any Series Enhancer entitled thereto pursuant to the relevant Supplement if given by the Investor Certificateholders) (a "Termination Notice"), may terminate all but not ------------------ less than all the rights and obligations of the Servicer as Servicer under this Agreement and in and to the Receivables and the proceeds thereof; provided, -------- however, if within sixty (60) days of receipt of a Termination Notice the - ------- Trustee does not receive any bids from Eligible Servicers in accordance with Section 10.02(c) to act as a Successor Servicer and receives an Officer's Certificate of the Sellers to the effect that the Servicer cannot in good faith 73 cure the Servicer Default which gave rise to the Termination Notice, the Trustee shall grant a right of first refusal to the Sellers which would permit the Sellers at their option to purchase the Certificateholders' Interest on the Distribution Date in the next calendar month; provided further, however, the -------- ------- ------- foregoing right of first refusal shall not apply in the case of a Servicer Default set forth in subsection 10.01(d). The purchase price for the Certificateholders' Interest shall be equal to the sum of the amounts specified therefor with respect to each outstanding Series in the related Supplement. The Sellers shall notify the Trustee prior to the Record Date for the Distribution Date of the purchase if they are exercising such option. If it exercises such option, the Sellers shall (x) deliver to the Trustee an Opinion of Counsel (which must be an independent outside counsel) to the effect that, in reliance on certain certificates to the effect that the Receivables constitute fair value for consideration paid therefor and as to the solvency of the Sellers, the purchase would not be considered a fraudulent conveyance and (y) deposit the purchase price into the Collection Account not later than 12:00 noon, Richmond, Virginia time, on such Distribution Date in immediately available funds. The purchase price shall be allocated and distributed to Investor Certificateholders in accordance with Article IV and the terms of each Supplement. After receipt by the Servicer of such Termination Notice, and on the date that a Successor Servicer shall have been appointed by the Trustee pursuant to Section 10.02, all authority and power of the Servicer under this Agreement shall pass to and be vested in a Successor Servicer; 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 transfer of servicing rights. 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 the transfer to such Successor Servicer of all authority of the Servicer to service the Receivables provided for under this Agreement, including 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 and in enforcing all rights to Insurance Proceeds. 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 agreements as the Servicer shall deem necessary to protect its interests. Notwithstanding the foregoing, any delay in or failure of performance under Section 10.01(a) for a period of five (5) Business Days or under Section 10.01(b) or (c) for a period of sixty (60) days (in addition to any period provided in Section 10.01(a), (b) or (c)) shall not constitute a Servicer Default until the expiration of such additional five (5) Business Days or sixty (60) days, respectively, if such delay or failure could not be prevented by the exercise of 74 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 any Supplement and the Servicer shall provide the Trustee, each Rating Agency, any Series Enhancer entitled thereto pursuant to the relevant Supplement, each Holder of a Seller Certificate and the Investor Certificateholders with an Officer's Certificate giving prompt notice of such failure or delay by it, together with a description of its efforts to so perform its obligations. 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 or 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 appoint an Eligible Servicer as 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 of the Trustee or agent in accordance with Sections 3.01(b) and 8.07. Notwithstanding the foregoing, the Trustee shall, if it is legally unable so to act, petition a court of competent jurisdiction to appoint any established institution having a net worth of not less than $50,000,000 and whose regular business includes the servicing of credit card receivables and who has the ability to service the Receivables as the Successor Servicer hereunder. The Trustee shall give prompt notice to each Rating Agency and each Series Enhancer entitled thereto pursuant to the applicable Supplement 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. (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 aggregate Servicing Fees for all Series; provided, however, that the Sellers shall be responsible for payment -------- ------- of the Sellers' portion of such aggregate Servicing Fees and that no such monthly compensation paid out of Collections shall be in excess of such aggregate Servicing Fees. Each holder of a Seller Certificate agrees that, if Capital One Bank (or any Successor Servicer) is terminated as Servicer hereunder, the portion of the Collections in respect of Finance Charge Receivables that the Sellers are entitled to receive pursuant to this Agreement or any Supplement shall be reduced by an amount sufficient to pay the Sellers' share (determined by 75 reference to the Supplements with respect to any outstanding Series) of the compensation of the Successor Servicer. (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 Sellers and, without limitation, the Sellers are 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 Sellers 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 Sellers in such electronic form as the Sellers may reasonably request and shall transfer all other records, correspondence and documents to the Sellers in the manner and at such times as the Sellers shall reasonably request. To the extent that compliance with this Section 10.02 shall require the Successor Servicer to disclose to the Sellers information of any kind which the Successor Servicer deems to be confidential, the Sellers 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. Within two (2) ---------------------------------- Business Days after the Servicer becomes aware of any Servicer Default, the Servicer shall give notice thereof to the Trustee, each Rating Agency and any Series Enhancer entitled thereto pursuant to the relevant Supplement and the Trustee shall give notice to the Investor Certificateholders. Upon any termination or appointment of a Successor Servicer pursuant to this Article X, the Trustee shall give prompt notice thereof to the Investor Certificateholders. ARTICLE XI The Trustee ----------- Section 11.01. Duties of Trustee. (a) The Trustee, prior to the ----------------- occurrence of a Servicer Default and after the curing of all Servicer Defaults which may have occurred, undertakes to perform such duties and only such duties as are specifically set forth in this Agreement. If a Servicer Default 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, and use the same degree of care and skill in its exercise, as a prudent person would exercise or use under the circumstances in the conduct of such person's 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, shall examine them to determine whether they conform to the requirements of this Agreement. The Trustee shall give prompt written notice to the Certificateholders of any material lack of conformity of any such instrument to the applicable requirements of this Agreement discovered by the Trustee which would entitle a specified percentage of the Certificateholders to take any action pursuant to this Agreement. 76 (c) Subject to Section 11.01(a), no provision of this Agreement shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act or its own misconduct; provided, -------- however, that: - ------- (i) the Trustee shall not be personally 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 personally 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 more than 50% of the aggregate unpaid principal amount of all Investor Certificates (or, with respect to any such action that does not relate to all Series, 50% of the aggregate unpaid principal amount of the Investor Certificates of all Series to which such action relates) relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Agreement; and (iii) the Trustee shall not be charged with knowledge of any failure by the Servicer referred to in clauses (a) and (b) of Section 10.01 unless a Responsible Officer of the Trustee obtains actual knowledge of such failure or the Trustee receives written notice of such failure from the Servicer, any Holders of Investor Certificates evidencing not less than 10% of the aggregate unpaid principal amount of all Investor Certificates (or, with respect to any such failure that does not relate to all Series, 10% of the aggregate unpaid principal amount of all Investor Certificates of all Series to which such failure relates, or the Series Enhancers for all Series to which such failure relates). (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 hereunder or thereunder, 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 shall in any event require the Trustee to perform, or be responsible for the manner of performance of, any of the obligations of the Servicer under this Agreement 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. (e) Except for actions expressly authorized by this Agreement, the Trustee shall take no action reasonably likely to (i) impair the interests of the Trust in any Receivable now existing or hereafter created or (ii) impair the value of any Receivable now existing or hereafter created. (f) The Trustee shall have no power to vary the corpus of the Trust, except as expressly provided in this Agreement. (g) Subject to Section 11.01(d), 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 77 Registrar, as the case may be, under this Agreement, the Trustee shall be obligated as soon as possible upon 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) If a Seller has agreed to transfer any of its receivables (other than the Receivables) to another Person, upon the written request of such Seller, the Trustee will enter into such intercreditor agreements with the transferee of such receivables as are customary and necessary to separately identify the rights of the Trust and such other Person in such Seller's receivables; provided that the Trustee shall not be required to enter into -------- any intercreditor agreement which could adversely affect the interests of the Certificateholders and, upon the request of the Trustee, such Seller will deliver an Opinion of Counsel on any matters relating to such intercreditor agreement, reasonably requested by the Trustee. Section 11.02. Certain Matters Affecting 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, Officer's Certificate, 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 by the proper party or parties; (b) the Trustee may consult with counsel, and any advice of such counsel, or 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 advice or Opinion of Counsel; (c) the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Agreement or any Enhancement Agreement, or to institute, conduct or defend any litigation hereunder or thereunder or in relation to this Agreement or any Enhancement Agreement, at the request, order or direction of any of the Certificateholders, pursuant to the provisions of this Agreement or any Enhancement Agreement, 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; nothing contained herein shall, however, relieve the Trustee of the obligations, upon the occurrence of any Servicer Default (which has not been cured) to exercise such of the rights and powers vested in it by this Agreement, and to use the same degree of care and skill in its exercise, as a prudent person would exercise or use under the circumstances in the conduct of such person's own affairs; (d) the Trustee shall not be personally 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; (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 more than 25% of the aggregate unpaid 78 principal amount of all Investor Certificates (or, with respect to any such matters that do not relate to all Series, 25% of the aggregate unpaid principal amount of the Investor Certificates of all Series to which such matters relate); (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 a custodian, 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; and (g) except as may be required by Section 11.01(a) hereof, 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 each Seller with its representations and warranties or for any other purpose. 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, 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 Sellers of any of the Certificates or of the proceeds of such Certificates, or for the use or application of any funds paid to the Seller or the Holders of the Seller Certificates in respect of the Receivables or deposited in or withdrawn from the Collection Account, any Series Accounts or any other accounts hereafter established to effectuate the transactions contemplated by this Agreement and in accordance with the terms of this Agreement. Section 11.04. Trustee May Own Certificates. Subject to Section 6.06, ---------------------------- 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 the Servicer will pay or reimburse the Trustee (without reimbursement from the Collection Account or otherwise) 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 Enhancement Agreement (including the reasonable fees and expenses of its agents, any co-trustee and counsel) except any such expense, disbursement or advance as may arise from its own 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 provisions 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. 79 The obligations of the Servicer under Section 8.04 and this Section 11.05 shall survive the termination of the Trust and the resignation or removal of the Trustee. Section 11.06. Eligibility Requirements for Trustee. The Trustee ------------------------------------- hereunder shall at all times be a bank or 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 and maintain any credit or deposit rating required by any Rating Agency (as of the date hereof Baa3 for Moody's). If such bank or 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 bank or 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 Servicer. Upon receiving such notice of resignation, the Seller 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 within thirty (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 and shall fail to resign after written request therefor by the Servicer or any Seller, or if at any time the Trustee shall be legally unable to act, or shall be adjudged a bankrupt or insolvent, or 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, the Servicer shall 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 and any liability of the Trustee arising hereunder shall survive such appointment of a successor trustee. Section 11.08. Successor Trustees. ------------------ (a) Any successor trustee appointed as provided in Section 11.07 shall execute, acknowledge and deliver to the Sellers, to the Servicer 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 80 obligations of its predecessor hereunder, with the like effect as if originally named as Trustee herein. The predecessor Trustee shall deliver to the successor trustee all documents and statements held by it hereunder, and the Seller 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, powers, duties and obligations. (b) No successor trustee shall accept appointment as provided in this Section 11.08 unless at the time of such acceptance such success or 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 provide notice of such succession hereunder to all Investor Certificateholders and the Servicer shall provide such notice to each Rating Agency and any Series Enhancer entitled thereto pursuant to the relevant Supplement. 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. Section 11.10. Appointment of Co-Trustee or Separate Trustee. --------------------------------------------- (a) Notwithstanding any other provisions of this Agreement, 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; provided, however, that the Trustee -------- -------- shall exercise due care in the appointment of any co-trustee. 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 laws of any jurisdiction in which any particular act or acts are to be performed 81 (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 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 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, specifically including every provision of this Agreement 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 law, to do any lawful act under or in respect to this Agreement 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 the event the Trust shall be required ----------- to file 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 (5) 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 terms of each Supplement 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. In no event shall the Trustee or the Servicer (except as provided in Section 8.04) be liable for any liabilities, costs or expenses of the Trust or the Investor Certificateholders arising under any tax law, including federal, state, local or foreign 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 action and claims under this Agreement or the - ------------ Certificates may be prosecuted and 82 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. --------------------- (a) If a Servicer Default shall occur and be continuing, the Trustee, in its discretion may, subject to the provisions of Sections 10.01 and 11.14, proceed to protect and enforce its rights and the rights of the Certificateholders under this Agreement by a 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 in aid of the execution of any power granted in this Agreement 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. (b) If the FDIC or any equivalent governmental agency or instrumentality or any designee of any of them shall have been appointed as receiver, conservator, assignee, trustee in bankruptcy or reorganization, liquidator, sequestrator or custodian with respect to any Seller (the "receiver"), the Trustee shall, irrespective of whether the principal of any - --------- Series or Class of Investor Certificates shall then be due and payable: (i) unless prohibited by applicable law or regulation or unless under FIRREA the receiver is required to participate in the process as a defendant or otherwise, promptly take or cause to be taken any and all necessary or advisable commercially reasonable action as a secured creditor on behalf of the Certificateholders to recover, repossess, collect or liquidate the Receivables or any other Trust Assets on a "self-help" basis or otherwise and exercise any rights or remedies of a secured party under the applicable UCC and take any other appropriate action to protect and enforce the rights and remedies of the Trustee and the Certificateholders; (ii) promptly, and in any case within any applicable claims bar period specified under FIRREA or otherwise, file and prove a claim or claims under FIRREA or otherwise, by filing proofs of claim, protective proofs of claim or otherwise, for the whole amount of unpaid principal and interest in respect of the Investor Certificates and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Trustee and the Certificateholders allowed in any judicial, administrative, corporate or other proceedings relating to any Seller, its creditors or its property, including any actions relating to the preservation of deficiency claims or for the protection against loss of any claim in the event the Trustee's or the Certificateholders' status as secured creditors are successfully challenged; and (iii) collect and receive any moneys or other property payable or deliverable on any such claims and distribute all amounts with respect to the claims of the Certificateholders to the Certificateholders. 83 (c) 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 Investor Certificates or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Certificateholder in any such proceeding; provided, however, that the -------- ------- Trustee may, on behalf of the Investor Certificateholders, vote for the election of a trustee in bankruptcy or similar official and be a member of a creditor's or other similar committee. Section 11.14. Rights of Certificateholders To Direct Trustee. Holders ---------------------------------------------- of Investor Certificates evidencing more than 50% of the aggregate unpaid principal amount of all Investor Certificates (or, with respect to any remedy, trust or power that does not relate to all Series, 50% of the aggregate unpaid principal amount of the Investor Certificates of all Series to which such remedy, trust or power relates) shall have the right to direct the time, method, and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee relating to such proceeding; 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 shall impair the right of the Trustee to - ------- take any action deemed proper by the Trustee and which is not inconsistent with such direction. Section 11.15. Representations and Warranties of Trustee. The Trustee ----------------------------------------- represents and warrants as of each Closing Date that: (a) the Trustee is a banking corporation organized, existing and in good standing under the laws of the State of New York; (b) the Trustee has full power, authority and right to execute, deliver and perform this Agreement and each Supplement, and has taken all necessary action to authorize the execution, delivery and performance by it of this Agreement and each Supplement; and (c) this Agreement and each Supplement has been duly executed and delivered by the Trustee. Section 11.16. Maintenance of Office or Agency. The Trustee will ------------------------------- maintain at its expense an office or agency (the "Corporate Trust Office") where ---------------------- notices and demands to or upon the Trustee in respect of the Certificates and this Agreement may be served (a) in the Borough of Manhattan, The City of New York, in the case of Registered Certificates and Holders thereof, and (b) in London or Luxembourg, in the case of Bearer Certificates and Holders thereof, if and for so long as any Bearer Certificates are outstanding. The Corporate Trust Office shall initially be located at 101 Barclay Street, New York, New York 10286. The Trustee will give prompt notice to the Servicer and to Investor Certificateholders of any change in the location of the Certificate Register or any such office or agency. 84 Section 11.17. Confidentiality. Information provided by the Banks to --------------- the Trustee related to the transaction effected hereunder, including all information related to the Obligors with respect to the Receivables, and any computer software provided to the Trustee in connection with the transaction effected hereunder or under any Supplement, in each case whether in the form of documents, reports, lists, tapes, discs or any other form, shall be "Confidential Information." The Trustee and its agents, representatives or employees shall at all times maintain the confidentiality of all Confidential Information and shall not, without the prior written consent of the applicable Bank, disclose to third parties (including Certificateholders) or use such information, in any manner whatsoever, in whole or in part, except as expressly permitted under this Agreement or under any Supplement or as required to fulfill an obligation of the Trustee under this Agreement or under any Supplement, in which case such Confidential Information shall be revealed only to the extent expressly permitted or only to the Trustee's agents, representatives and employees who need to know such Confidential Information to the extent required for the purpose of fulfilling an obligation of the Trustee under this Agreement or under any Supplement. Notwithstanding the above, Confidential Information may be disclosed to the extent required by law or legal process, provided that the Trustee gives prompt written notice to the applicable Bank of the nature and scope of such disclosure. ARTICLE XII Termination ----------- Section 12.01. Termination of Trust. The Trust and the respective -------------------- obligations and responsibilities of the Sellers, the Servicer and the Trustee created hereby (other than the obligation of the Trustee to make payments to Investor Certificateholders as hereinafter set forth) shall terminate, except with respect to the duties described in Sections 7.04, 8.04 and 12.02(b), upon the earlier of (i) September 1, 2014, (ii) the day following the Distribution Date on which the Invested Amount and Enhancement Invested Amount for each Series is zero and (iii) the time provided in Section 9.02(c). Section 12.02. Final Distribution. ------------------ (a) The Servicer shall give the Trustee at least thirty (30) days prior notice of the Distribution Date on which the Investor Certificateholders of any Series or Class may surrender their Investor Certificates for payment of the final distribution on and cancellation of such Investor Certificates (or, in the event of a final distribution resulting from the application of Section 2.06, 9.02 or 10.01, notice of such Distribution Date promptly after the Servicer has determined that a final distribution will occur, if such determination is made less than thirty (30) days prior to such Distribution Date). Such notice shall be accompanied by an Officer's Certificate setting forth the information specified in Section 3.05 covering the period during the then-current calendar year through the date of such notice. Not later than the fifth day of the month in which the final distribution in respect of such Series or Class is payable to Investor Certificateholders, the Trustee shall provide notice to Investor Certificateholders of such Series or Class specifying (i) the date upon which final payment of such Series or Class will be made upon presentation and surrender of Investor Certificates of such Series or Class at the office or offices therein designated, (ii) the amount of any such final payment and (iii) that the Record Date otherwise applicable to such payment date is not applicable, payments being made only 85 upon presentation and surrender of such Investor Certificates at the office or offices therein specified (which, in the case of Bearer Certificates, shall be outside the United States). The Trustee shall give such notice to the Transfer Agent and Registrar and the Paying Agent at the time such notice is given to Investor Certificateholders. (b) Notwithstanding a final distribution to the Investor Certificateholders of any Series or Class (or the termination of the Trust), except as otherwise provided in this paragraph, all funds then on deposit in the Collection Account and any Series Account allocated to such Investor Certificateholders shall continue to be held in trust for the benefit of such Investor Certificateholders and the Paying Agent or the Trustee shall pay such funds to such Investor Certificateholders upon surrender of their Investor Certificates (and any excess shall be paid in accordance with the terms of any relevant Enhancement Agreement). In the event that all such Investor Certificateholders shall not surrender their Investor Certificates for cancellation within six (6) months after the date specified in the notice from the Trustee described in paragraph (a), the Trustee shall give a second notice to the remaining such Investor Certificateholders to surrender their Investor Certificates for cancellation and receive the final distribution with respect thereto (which surrender and payment, in the case of Bearer Certificates, shall be outside the United States). If within one year after the second notice all such Investor Certificates 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 such Investor Certificateholders concerning surrender of their Investor Certificates, and the cost thereof shall be paid out of the funds in the Collection Account or any Series Account held for the benefit of such Investor Certificateholders. The Trustee and the Paying Agent shall pay to the Seller any moneys held by them for the payment of principal or interest that remains unclaimed for two (2) years. After payment to the Sellers, Investor Certificateholders entitled to the money must look to the Sellers for payment as general creditors unless an applicable abandoned property law designates another Person. (c) In the event that the Invested Amount (or Enhancement Invested Amount) with respect to any Series is greater than zero on the related Series Termination Date or such earlier date as is specified in the related Supplement (after giving effect to deposits and distributions otherwise to be made on such date), the Trustee will sell or cause to be sold on such Series Termination Date, in accordance with the procedures and subject to the conditions described in such Supplement, Principal Receivables and the related Finance Charge Receivables (or interests therein) in an amount equal to the Invested Amount and the Enhancement Invested Amount, if any, with respect to such Series on such date (after giving effect to such deposits and distributions; provided, however, ----------------- that in no event shall such amount exceed such Series' allocable share of Receivables on such Series Termination Date). The proceeds from any such sale shall be allocated and distributed in accordance with the terms of the applicable Supplement. Section 12.03. Seller's Termination Rights. Upon the termination of --------------------------- the Trust pursuant to Section 12.01 and, if any part of the Sellers' Interest is then evidenced by a certificate, the surrender of such part of the Seller Certificates, the Trustee shall sell, assign and convey to the applicable Seller or its designee, without recourse, representation or warranty, all right, title and interest of the Trust in the Receivables, whether then existing or thereafter created, all monies due or to become due and all amounts received with respect thereto and all proceeds thereof, except for amounts held by the Trustee pursuant to Section 12.02(b). The Trustee shall 86 execute and deliver such instruments of transfer and assignment, in each case without recourse, as shall be reasonably requested by the Sellers to vest in the Sellers or their designee all right, title and interest which the Trust had in the Receivables and such other related assets. Section 12.04. Defeasance. If the deposit referred to in subsection ---------- 12.04(c)(i) below is funded solely from Collections of Receivables or, if funded from any other sources, if so provided in the applicable Supplement: (a) The Sellers may at their option be discharged from their obligations hereunder with respect to any Series or all outstanding Series (the "Defeased Series") on the date the applicable conditions set forth in Section - ---------------- 12.04(c) are satisfied ("Defeasance"); provided, however, that the following ---------- -------- ------- rights, obligations, powers, duties and immunities shall survive with respect to the Defeased Series until otherwise terminated or discharged hereunder: (i) the rights of Holders of Investor Certificates of the Defeased Series to receive, solely from the trust fund provided for in Section 12.04(c), payments in respect of principal of and interest on such Investor Certificates when such payments. are due; (ii) the Sellers' obligations with respect to such Certificates under Sections 6.04 and 6.05; (iii) the rights, powers, trusts, duties and immunities of the Trustee, the Paying Agent and the Transfer Agent and Registrar hereunder; and (iv) this Section 12.04. (b) Subject to Section 12.04(c), the Sellers at their option may cause Collections allocated to the Defeased Series and available to purchase additional Receivables to be applied to purchase Eligible Investments rather than additional Receivables. (c) The following shall be the conditions to Defeasance under Section 12.04(a): (i) the Sellers irrevocably shall have deposited or caused to be deposited with the Trustee, under the terms of an irrevocable trust agreement in form and substance satisfactory to the Trustee, as trust funds in trust for making the payments described below, (A) Dollars in an amount, or (B) Eligible Investments which through the scheduled payment of principal and interest in respect thereof will provide, not later than the due date of payment thereon, money in an amount, or (C) a combination thereof, in each case sufficient to pay and discharge, and, which shall be applied by the Trustee to pay and discharge, all remaining scheduled interest and principal payments on all outstanding Investor Certificates of the Defeased Series on the dates scheduled for such payments in this Agreement and the applicable Supplements and all amounts owing to the Series Enhancers with respect to the Defeased Series; (ii) prior to its first exercise of its right pursuant to this Section 12.04 with respect to a Defeased Series to substitute money or Eligible Investments for Receivables, the Sellers shall have delivered to the Trustee a Tax Opinion with respect to such deposit and termination of obligations and an Opinion of Counsel to the effect that such deposit and termination of obligations will not result in the Trust being required to register as an "investment company" within the meaning of the Investment Company Act; (iii) each Seller shall have delivered to the Trustee and each Series Enhancer entitled thereto pursuant to the relevant Supplement an Officer's Certificate of such Seller stating that such Seller reasonably believes that such deposit and termination of obligations will not, based on the facts known to such officer at the time of such certification, then cause a Pay Out Event or any event that, with the giving of notice or the lapse of time, would constitute a Pay Out Event to occur with respect to any Series; and (iv) the Sellers shall have received written notice from each 87 Rating Agency that such deposit and termination of obligations will not have a Ratings Effect and shall have delivered copies of each such written notice to the Servicer and the Trustee. ARTICLE XIII Miscellaneous Provisions ------------------------ Section 13.01 Amendment; Waiver of Past Defaults. ---------------------------------- (a) This Agreement or any Supplement may be amended from time to time (including in connection with (v) the issuance of a Supplemental Certificate, (w) the addition of Participation Interests to the Trust, (x) the designation of an Additional Seller, (y) the assumption by an Assuming Entity of a Seller's obligations hereunder, or (z) the provision of additional Series Enhancement for the benefit of Certificateholders of any Series) by the Servicer, the Sellers and the Trustee without the consent of any of the Certificateholders; provided that (i) the Sellers shall have received written -------- notice from each Rating Agency that such amendment will not have a Ratings Effect and shall have delivered copies of each such written notice to the Servicer and the Trustee, (ii) if such amendment relates to the provision of additional Series Enhancement for any Series, each Seller shall have delivered to the Trustee and each provider of Series Enhancement an Officer's Certificate of such Seller stating that such Seller reasonably believes that such amendment will not based on the facts known to such officer at the time of such certification, have a material adverse effect on the interests of the Certificateholders, (iii) in the case of an amendment relating to the assumption by the Assuming Entity of a Seller's obligation or all other conditions to such assumption specified herein shall have been satisfied and (iv) the conditions set forth in Section 13.02(d) shall have been satisfied; provided further that ---------------- an amendment pursuant to this Section 13.01(a) shall not effect a significant change in the Permitted Activities of the Trust. (b) This Agreement or any Supplement may also be amended from time to time by the Servicer, the Sellers and the Trustee, (A) in the case of a significant change in the Permitted Activities of the Trust, with the consent of Holders of Investor Certificates evidencing Undivided Interests aggregating not less than 50% of the Invested Amount of each outstanding Series affected by such change, and (B) in all other cases with the consent of the Holders of Investor Certificates evidencing not less than 66-2/3% of the aggregate unpaid principal amount of the Investor Certificates of all adversely affected Series, for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Agreement or any Supplement or of modifying in any manner the rights of the Certificateholders; provided, however, that no such --------- -------- amendment shall (i) reduce in any manner the amount of or delay the timing of any distributions to be made to Investor Certificateholders or deposits of amounts to be so distributed or the amount available under any Series Enhancement without the consent of each affected Certificateholder, (ii) change the definition of or the manner of calculating the interest of any Investor Certificateholder without the consent of each affected Investor Certificateholder, (iii) reduce the aforesaid percentage required to consent to any such amendment without the consent of each Investor Certificateholder or (iv) adversely affect the rating of any Series or Class by any Rating Agency without the consent of the Holders of Investor Certificates of such Series or Class evidencing not less than 66-2/3% of the aggregate unpaid principal amount of the Investor Certificates of such Series or Class. Any amendment to be effected pursuant to this 88 paragraph shall be deemed to adversely affect all outstanding Series, other than any Series with respect to which such action shall not, as evidenced by an Opinion of Counsel for the Sellers, addressed and delivered to the Trustee, adversely affect in any material respect the interests of any Investor Certificateholder of such Series. The Trustee may, but shall not be obligated to, enter into any such amendment which affect the Trustee's rights, duties or immunities under this Agreement or otherwise. (c) Promptly after the execution of any such amendment or consent (other than an amendment pursuant to paragraph (a)), the Trustee shall furnish notification of the substance of such amendment to each Investor Certificateholder, and the Servicer shall furnish notification of the substance of such amendment to each Rating Agency and each Series Enhancer entitled thereto pursuant to the relevant Supplement. (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 Supplement executed in accordance with the provisions of Section 6.03 shall not be considered an amendment to this Agreement for the purposes of this Section 13.01. (f) The Holders of Investor Certificates evidencing more than 66-2/3% of the aggregate unpaid principal amount of the Investor Certificates of each Series, or, with respect to any Series with two (2) or more Classes, of each Class (or, with respect to any default that does not relate to all Series, 66-2/3% of the aggregate unpaid principal amount of the Investor Certificates of each Series to which such default relates or, with respect to any such Series with two (2) or more classes, of each Class) may, on behalf of all Certificateholders, waive any default by the Sellers or the Servicer in the performance of their obligations hereunder and its consequences, except the failure to make any distributions required to be made to Investor Certificateholders or to make any required deposits of any amounts to be so distributed. 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. Section 13.02 Protection of Right, Title and Interest to Trust. ------------------------------------------------ (a) The Servicer shall cause this Agreement, all amendments and supplements 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 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 Certificateholders and the Trustee hereunder to all property comprising the Trust. 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 89 available following such recording, registration or filing. The Sellers 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 paragraph. (b) Within thirty (30) days after any Seller 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) seriously misleading within the meaning of Section 9-402(7) (or any comparable provision) of the UCC, such Seller shall give the Trustee 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) Each Seller and the Servicer will give the Trustee prompt notice of any relocation of any office from which it services Receivables or keeps records concerning the Receivables or of its principal executive office 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. Each Seller and the Servicer will at all times maintain each office from which it services Receivables and its principal executive offices within the United States. (d) The Servicer will deliver to the Trustee and any Series Enhancer entitled thereto pursuant to the relevant Supplement: (i) upon the execution and delivery of each amendment of this Agreement or any Supplement, an Opinion of Counsel to the effect specified in Exhibit H-1; (ii) on each Addition ----------- Date on which any Additional Accounts (other than Automatic Additional Accounts) are to be designated as Accounts pursuant to Section 2.08(a) or (b) and on each date specified in Section 2.08(c)(iii) with respect to the inclusion of Automatic Additional Accounts as Accounts, an Opinion of Counsel substantially in the form of Exhibit H-2, and on each Addition Date ----------- on which any Participation Interests are to be included in the Trust pursuant to Section 2.08(a) or (b), an Opinion of Counsel covering the same substantive legal issues addressed by Exhibit H-2 but conformed to the ----------- extent appropriate to relate to Participation Interests; and (iii) on or before April 30 of each year, beginning with April 30, 1994, an Opinion of Counsel substantially in the form of Exhibit H-2. ----------- Section 13.03 Limitation on Rights of Certificateholders. ------------------------------------------ (a) The death or incapacity of any Certificateholder shall not operate to terminate this Agreement or the Trust, nor shall such death or incapacity entitle such 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 expressly 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 anything herein set forth, or contained in the terms of the Certificates, be construed so as to constitute the Investor 90 Certificateholders from time to time as partners or members of an association, 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. (c) No Investor 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 Investor Certificateholder previously shall have made, and unless the Holders of Investor Certificates evidencing more than 50% of the aggregate unpaid principal amount of all Investor Certificates (or, with respect to any such action, suit or proceeding that does not relate to all Series, 50% of the aggregate unpaid principal amount of the Investor Certificates of all Series to which such action, suit or proceeding relates) shall have made, a request to 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 sixty (60) days after such 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 Investor Certificateholder with every other Investor Certificateholder and the Trustee, that no one or more Investor Certificateholders shall have any right in any manner whatever by virtue or by availing itself or themselves of any provisions of this Agreement to affect, disturb or prejudice the rights of the holders of any other of the Investor Certificates, or to obtain or seek to obtain priority over or preference to any other such Investor 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 Investor Certificateholders except as otherwise expressly provided in this Agreement. For the protection and enforcement of the provisions of this Section 13.03, each and every Investor 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 CONSTRUED IN ------------- ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. Section 13.05. Notices; Payments. ----------------- (a) All demands, notices, instructions, directions and communications (collectively, "Notices") under this Agreement shall be in ------- writing and shall be deemed to have been duly given if personally delivered at, mailed by registered mail, return receipt requested, or sent by facsimile transmission or by such other means acceptable to the recipient (i) in the case of Capital One Bank, as a Seller or as the Servicer, to Capital One Bank, 8000 Jones Branch Drive, McLean, Virginia 22102, Attention: General Counsel, with a copy to Director of Securitization (facsimile nos. 703-875-1589 and 703-875- 1389), (ii) in the case of Capital One, F.S.B., as a Seller, to Capital One, F.S.B., 2980 Fairview Park Drive, Falls Church, Virginia 22042, Attention: General Counsel, with a copy to Director of Securitization (facsimile nos. 703- 875-1589 and 703-875-1389), (iii) in the case of the Trustee, to The Bank of New York, 101 Barclay Street, Floor 12 East, New York, New York 10286, Attention: Corporate Trust Department (facsimile no. 212-815-5544), (iv) in the case of Moody's, to 99 Church Street, New 91 York, New York 10007, Attention: ABS Monitoring (facsimile no. 212-298-7139), (v) in the case of Standard & Poor's, to 55 Water Street, New York, New York 10041, Attention: Asset Backed Group (facsimile nos. 212-438-2648 and 617-557- 5197), (vi) in the case of Fitch, to One State Street Plaza, New York, New York 10004, Attention: Asset Backed Surveillance (facsimile no. 212-635-0476), (vii) in the case of the Paying Agent or the Transfer Agent and Registrar, to The Bank of New York, 101 Barclay Street, Floor 12 East, New York, New York 10286, Attention: Corporate Trust Department (facsimile no. 212-815-5544), and (viii) to any other Person as specified in any Supplement; or, as to each party, at such other address or facsimile number as shall be designated by such party in a written notice to each other party. (b) Any Notice required or permitted to be given to a Holder of Registered Certificates shall be given by first-class mail, postage prepaid, at the address of such Holder as shown in the Certificate Register. No Notice shall be required to be mailed to a Holder of Bearer Certificates or Coupons but shall be given as provided below. Any Notice so mailed within the time prescribed in this Agreement shall be conclusively presumed to have been duly given, whether or not the Investor Certificateholder receives such Notice. In addition, (a) if and so long as any Series or Class is listed on the Luxembourg Stock Exchange and such exchange shall so require, any Notice to Investor Certificateholders shall be published in an Authorized Newspaper of general circulation in Luxembourg within the time period prescribed in this Agreement and (b) in the case of any Series or Class with respect to which any Bearer Certificates are outstanding, any Notice required or permitted to be given to Investor Certificateholders of such Series or Class shall be published in an Authorized Newspaper within the time period prescribed in this Agreement. (c) All Notices to be given to Capital One Bank, as a Seller or as the Servicer, shall be deemed given if one Notice is provided to the address of Capital One Bank. All payments hereunder to Capital One Bank, whether as a Seller or as the Servicer, or the Capital One, F.S.B., as a Seller, shall be made to such account as such party may specify in writing. All payments hereunder to the Sellers shall be deemed made if made to the account of Capital One Bank or Capital One, F.S.B., as the case may be, as provided above. Section 13.06. Rule 144A Information. For so long as any of the --------------------- Investor Certificates of any Series or Class are "restricted securities" within the meaning of Rule 144(a)(3) under the Act, the Sellers, the Trustee, the Servicer and any Series Enhancer agree to cooperate with each other to provide to any Investor Certificateholders of such Series or Class and to any prospective purchaser of Certificates designated by such an Investor Certificateholder, upon the request of such Investor Certificateholder or prospective purchaser, any information required to be provided to such holder or prospective purchaser to satisfy the condition set forth in Rule 144A(d)(4) under the Act. Section 13.07. 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 provisions shall be deemed severable from the remaining provisions of this Agreement and shall in no way affect the validity or enforceability of the remaining provisions or of the Certificates or the rights of the Certificateholders. Section 13.08. Assignment. Notwithstanding anything to the contrary ---------- contained 92 herein, except as provided in Section 7.05 or Section 8.02, this Agreement may not be assigned by the Servicer without the prior consent of Holders of Investor Certificates evidencing not less than 66-2/3% of the aggregate unpaid principal amount of all outstanding Investor Certificates. Section 13.09. Certificates Nonassessable and Fully Paid. It is the ----------------------------------------- intention of the parties to this Agreement that the Certificateholders shall not be personally liable for obligations of the Trust, that the interests in the Trust represented by the 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 Section 6.02 are and shall be deemed fully paid. Section 13.10. Further Assurances. The Sellers 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 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 13.11. Nonpetition Covenant. Notwithstanding any prior -------------------- termination of this Agreement, the Servicer, the Trustee, any Seller, each Series Enhancer and each holder of a Supplemental Certificate shall not, prior to the date which is one year and one day after the termination of this Agreement with respect to the Trust, acquiesce, petition or otherwise invoke or cause the Trust to invoke the process of any Governmental Authority for the purpose of commencing or sustaining a case against the Trust under any federal or state bankruptcy, insolvency or similar law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Trust or any substantial part of its property or ordering the winding-up or liquidation of the affairs of the Trust. Section 13.12. No Waiver; Cumulative Remedies. No failure to ------------------------------ exercise and no delay in exercising, on the part of the Trustee or the Certificateholders, any right, remedy, power or privilege under this Agreement shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege under this Agreement preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges provided under this Agreement are cumulative and not exhaustive of any rights, remedies, powers and privileges provided by law. Section 13.13. Counterparts. This Agreement may be executed in two ------------ (2) 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 13.14. Third-Party Beneficiaries. This Agreement will inure ------------------------- to the benefit of and be binding upon the parties hereto, the Certificateholders, any Series Enhancer (to the extent provided in this Agreement and the related Supplement) and their respective successors and permitted assigns. Except as otherwise expressly provided in this Agreement, no other Person will have any right or obligation hereunder. Section 13.15. Actions by Certificateholders. ----------------------------- 93 (a) Wherever in this Agreement a provision is made that an action may be taken or a Notice given by Certificateholders, such action or Notice may be taken or given by any Certificateholder, unless such provision requires a specific percentage of Certificateholders. (b) Any Notice, request, authorization, direction, consent, waiver or other act by the Holder of a Certificate shall bind such Holder and every subsequent Holder of such Certificate and of any 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 13.16. 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 13.17. Headings. The headings herein are for purposes of -------- reference only and shall not otherwise affect the meaning or interpretation of any provision hereof. Section 13.18. Construction of Agreement. Each Seller hereby grants ------------------------- to the Trustee a security interest for the benefit of (i) the Certificateholders and (ii) any Series Enhancer to the extent of the Enhancement Invested Amount, if any, provided for in the relevant Supplement (which interest, in the case of any Series Enhancer, will be subordinated to the interest of the Certificateholders of such Series in accordance with the relevant Supplement), in all of the Seller's right, title and interest in, to and under the Receivables now existing and hereafter created, all moneys due or to become due and all amounts received with respect thereto and all "proceeds" thereof and any other Trust Assets, to secure all the Sellers' and Servicer's obligations hereunder, including each Seller's obligation to sell or transfer Receivables hereafter created to the Trust. This Agreement shall constitute a security agreement under applicable law. 94 IN WITNESS WHEREOF, the Sellers, 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. CAPITAL ONE BANK, as a Seller and the Servicer By /s/ Thomas Feil --------------- Title: Director of Securitization CAPITAL ONE, F.S.B. as a Seller By /s/ Thomas Feil --------------- Title: Director of Securitization THE BANK OF NEW YORK, as the Trustee By /s/ Scott J. Tepper ------------------- Title: Assistant Treasurer EXHIBIT A FORM OF BANK CERTIFICATE THIS BANK CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. NEITHER THIS BANK CERTIFICATE NOR ANY PORTION HEREOF MAY BE OFFERED OR SOLD EXCEPT IN COMPLIANCE WITH THE REGISTRATION PROVISIONS OF SUCH ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM SUCH REGISTRATION PROVISIONS. THIS BANK CERTIFICATE IS NOT PERMITTED TO BE TRANSFERRED, ASSIGNED, EXCHANGED OR OTHERWISE PLEDGED OR CONVEYED EXCEPT IN COMPLIANCE WITH THE TERMS OF THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN. No. R- One Unit CAPITAL ONE MASTER TRUST BANK CERTIFICATE THIS CERTIFICATE REPRESENTS AN INTEREST IN CERTAIN ASSETS OF THE CAPITAL ONE MASTER TRUST Evidencing an interest in a trust, the corpus of which consists primarily of receivables generated from time to time in the ordinary course of business in a portfolio of revolving credit card accounts and other revolving credit accounts owned by Capital One Bank (the "Bank"), as a seller, Capital One, F.S.B. (the ---- "Savings Bank"), as a seller (the Bank and the Savings Bank are collectively - ------------- referred to herein as the "Sellers"), and, in certain circumstances, certain ------- Additional Sellers (as defined in the Pooling and Servicing Agreement referred to below). (Not an interest in or obligation of the Seller or any affiliate thereof) This certifies that CAPITAL ONE BANK and CAPITAL ONE, F.S.B. are the registered owners of a fractional interest in the assets of a trust (the "Trust") not allocated to the Certificateholders' Interest or the interest of ----- any holder of a Supplemental Certificate pursuant to the Pooling and Servicing Agreement, dated as of September 30, 1993, as amended and restated as of April 9, 2001 (as amended and supplemented, the "Agreement"), among the Bank, a --------- Virginia banking corporation, as a Seller and the Servicer, the Savings Bank, a federal savings bank, as a Seller, and The Bank of New York, a New York banking corporation, as Trustee (the "Trustee"). The corpus of the Trust consists of ------- (i) a portfolio of all receivables (the "Receivables") existing in the consumer ----------- revolving credit card accounts and other consumer revolving credit accounts identified under the Agreement from time to time (the "Accounts"), (ii) all -------- Receivables generated under the Accounts from time to time thereafter, (iii) funds collected or to be collected from accountholders in respect of the Receivables, (iv) all funds which are from time to time on deposit in the Collection Account and in the Series Accounts, (v) an interest in any Funds Collateral relating to secured accounts, (vi) the benefits of any Series A-1 Enhancements issued and to be issued by Series Enhancers with respect to one or more Series of Investor Certificates and (vii) all other assets and interests constituting the Trust. 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 Corporate Trust Office. 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 and supplemented from time to time, the Sellers by virtue of the acceptance hereof assent and are bound. The Receivables consist of Principal Receivables which arise generally from the purchase of goods and services and amounts advanced to cardholders as cash advances and Finance Charge Receivables which arise generally from Periodic Finance Charges, Late Charges and other fees and charges with respect to the Accounts. This Certificate is the Bank Certificate, which represents the Sellers' Interest in certain assets of the Trust, including the right to receive a portion of the Collections and other amounts at the times and in the amounts specified in the Agreement. The aggregate interest represented by the Bank Certificate at any time in the Receivables in the Trust shall not exceed the Sellers' Interest at such time. In addition to the Bank Certificate, (i) Investor Certificates will be issued to investors pursuant to the Agreement, which will represent the Certificateholders' Interest, and (ii) Supplemental Certificates may be issued pursuant to the Agreement, which will represent that portion of the Sellers' Interest not allocated to the Sellers. This Bank Certificate shall not represent any interest in the Collection Account or the Series Accounts, except as expressly provided in the Agreement, or any Series Enhancements. The Sellers have entered into the Agreement, and this Certificate is issued, with the intention that, for federal, state and local income and franchise tax purposes only, the Investor Certificates will qualify as indebtedness of the Sellers secured by the Receivables. Each Seller, by entering into the Agreement and by the acceptance of this Certificate, agrees to treat the Investor Certificates for federal, state and local income and franchise tax purposes as indebtedness of such Seller. Subject to certain conditions and exceptions specified in the Agreement, the obligations created by the Agreement and the Trust created thereby shall terminate upon the earlier of (i) September 1, 2014, (ii) the day following the Distribution Date on which the Invested Amount and Enhancement Invested Amount, if any, for each Series is zero and (iii) the time provided in Section 9.02(c) of the Agreement. Unless the certificate of authentication hereon 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. A-2 IN WITNESS WHEREOF, each Seller has caused this Certificate to be duly executed. CAPITAL ONE BANK, as a Seller By ________________________________________ Name: Title: CAPITAL ONE, F.S.B., as a Seller By ________________________________________ Name: Title: Dated: _______ __, 20__ A-3 TRUSTEE'S CERTIFICATE OF AUTHENTICATION This is the Bank Certificate described in the within-mentioned Agreement. THE BANK OF NEW YORK, as Trustee, By _____________________________________ Authorized Officer Or By ________________________, as Authenticating Agent for the Trustee By _____________________________________ Authorized Officer A-4 EXHIBIT B FORM OF ASSIGNMENT OF RECEIVABLES IN ADDITIONAL ACCOUNTS (As required by Section 2.08 of the Pooling and Servicing Agreement) ASSIGNMENT No. ___ OF RECEIVABLES IN ADDITIONAL ACCOUNTS, dated as of _______ __, 20__/1/ (the "Assignment"), by and among CAPITAL ONE BANK, a Virginia banking corporation, as a Seller and the Servicer (a "Bank" and the "Servicer," respectively), CAPITAL ONE, F.S.B., a federal savings bank, as a Seller (a "Bank" and, together with Capital One Bank acting in such capacity, the "Banks"), and THE BANK OF NEW YORK, a New York banking corporation, as Trustee (the "Trustee"), pursuant to the Pooling and Servicing Agreement referred to below. WITNESSETH WHEREAS, the Banks, the Servicer and the Trustee are parties to the Pooling and Servicing Agreement, dated as of September 30, 1993, as amended and restated as of April 9, 2001 (as amended and supplemented from time to time, the "Agreement"); WHEREAS, pursuant to the Agreement, [Capital One Bank] [Capital One, F.S.B.] (the "Seller") wishes to designate Additional Accounts (which may include Secured Accounts) owned by the Seller to be included as Accounts and to convey the (i) Receivables of such Additional Accounts, whether existing on the Additional Cut-Off Date or thereafter created, and (ii), with respect to Additional Accounts that are Secured Accounts, the Funds Collateral relating to such Additional Accounts, to the Trust as part of the corpus of the Trust; and WHEREAS, the Trustee is willing to accept such designation and conveyance subject to the terms and conditions hereof; NOW, THEREFORE, the Banks, the Servicer and the Trustee hereby agree as follows: 1. Defined Terms. All capitalized terms used herein shall have the ------------- meanings ascribed to them in the Agreement unless otherwise defined herein. "Additional Account" shall have the meaning specified in Section 2 of this Assignment. "Addition Date" shall mean, with respect to the Additional Accounts designated hereby, _______ __, 20__. "Additional Cut-Off Date" shall mean, with respect to the Additional Accounts designated hereby, _______ __, 20__. - ---------- /1/ To be dated as of the applicable Document Delivery Date B-1 2. Designation of Additional Accounts. The Seller does hereby ---------------------------------- deliver to the Trustee a computer file or a microfiche list containing a true and complete list of the Additional Accounts (including any Secured Accounts) designated hereby (the "Additional Accounts") specifying for each Additional Account, as of the Additional Cut-Off Date, its account number, the collection status, the aggregate amount outstanding in such Additional Account, the aggregate amount of Principal Receivables outstanding in such Additional Account and, for any Funds Collateral with respect to Additional Accounts that are Secured Accounts, if any, the account number for, and the amount of funds on deposit in, the Deposit Account with respect to such Additional Account, which computer file or microfiche list shall supplement Schedule 1 to the Agreement. Such computer file or microfiche list is marked as Schedule 1 to this Assignment. 3. Conveyance. (a) The Seller does hereby sell, transfer, assign, ---------- set over and otherwise convey to the Trustee, on behalf of the Trust, for the benefit of the Certificateholders, all of its right, title and interest in, to and under the Receivables of the Additional Accounts existing at the close of business on the Additional Cut-Off Date and thereafter created from time to time until the termination of the Trust, the Funds Collateral, if any, relating to such Additional Accounts, all moneys due or to become due and all amounts received or receivable with respect thereto and all proceeds (including "proceeds" as defined in the UCC and including Insurance Proceeds and Recoveries) thereof, and the related Interchange payable pursuant to Section 2.07(i) of the Agreement. This paragraph 3(a) does not constitute and is not intended to result in the creation or assumption by the Trust, the Trustee, any Investor Certificateholder or any Series Enhancer of any obligation of the Servicer, the Seller or any other Person in connection with the Accounts, the Receivables, the Funds Collateral or under any agreement or instrument relating thereto, including any obligation to Obligors, merchant banks, merchants clearance systems, VISA, MasterCard or insurers. (b) The Seller agrees to record and file, at its own expense, financing statements (and continuation statements when applicable) with respect to the Receivables and the Funds Collateral, if any, now existing or hereafter created in such Additional Accounts, meeting the requirements of applicable state law in such manner and in such jurisdictions as are necessary or appropriate to perfect, and maintain the perfection of, the sale and assignment of such Receivables and Funds Collateral to the Trust, and to deliver a file stamped copy of each such financing statement or other evidence of such filing to the Trustee on or prior to the Addition Date. The Trustee shall be under no obligation whatsoever to file such financing or continuation statements or to make any other filing under the UCC in connection with such sale and assignment. (c) In connection with such sale, the Seller further agrees, at its own expense, on or prior to the date of this Assignment, to indicate clearly and unambiguously in its computer files, and to cause the Depository to indicate in its files, that Receivables created in connection with, and all Funds Collateral, if any, relating to, the Additional Accounts have been conveyed to the Trust pursuant to the Agreement and this Assignment for the benefit of the Certificateholders. (d) In connection with such sale, each Seller further agrees, at its own expense, on or prior to the date of this Assignment, to deliver to the Trustee a fully executed B-2 consent and agreement, substantially in the form of Exhibit B hereto (the "Acknowledgment and Consent"), from each Depository. (e) The parties hereto intend that the transfer of Receivables, any Funds Collateral, and other property pursuant to this Assignment constitute a sale, and not a secured borrowing, for accounting purposes. If the transfer pursuant to this Assignment is not deemed to be a sale, the Seller shall be deemed hereunder to have granted and does hereby grant to the Trustee a security interest in all of its right, title and interest, whether now owned or hereafter acquired, in, to and under the Receivables of the Additional Accounts existing at the close of business on the Additional Cut-Off Date and thereafter created from time to time until the termination of the Trust, the Funds Collateral, if any, relating to the Additional Accounts, all moneys due or to become due and all amounts received or receivable with respect thereto and all proceeds (including "proceeds" as defined in the UCC and including Insurance Proceeds and Recoveries) thereof and the related Interchange payable pursuant to Section 2.07(i) of the Agreement. This Assignment constitutes a security agreement under the UCC. (f) The Seller hereby appoints the Trustee as its attorney-in-fact with full authority in the place and stead of the Seller and in the name of the Seller or otherwise from time to time in the Trustee's discretion to take any action and to execute any instrument that the Trustee may deem necessary or advisable to accomplish the purposes of this Assignment, including, without limitation, to ask, demand, collect, sue for, recover, compromise, receive and give acquittances and receipts for moneys due or to become due under or in connection with the Funds Collateral, receive, endorse and collect all drafts or other instruments and documents made payable to the Seller in connection therewith or representing any payment, dividend or other distribution in respect of the Funds Collateral or any part thereof and to give full discharge for the same and the Trustee may as such attorney-in-fact, file any claims or take any action or institute any proceedings which the Trustee may deem to be necessary or desirable for the collection thereon or to enforce compliance with the terms and conditions of this Assignment and the Agreement. 4. Acceptance by Trustee. The Trustee hereby acknowledges its --------------------- acceptance on behalf of the Trust of all right, title and interest to the property, now existing and hereafter created, conveyed to the Trust pursuant to Section 3 of this Assignment, and declares that it shall maintain such right, title and interest, upon the trust set forth in the Agreement for the benefit of all Certificateholders. The Trustee further acknowledges that, prior to or simultaneously with the execution and delivery of this Assignment, the Seller delivered to the Trustee the computer file or microfiche list described in Section 2 of this Assignment. 5. Withdrawal of Funds from the Deposit Account. (a) Acting in -------------------------------------------- accordance with its customary and usual servicing procedures for servicing Secured Accounts and in accordance with the Lending Guidelines, the Servicer shall, upon withdrawing funds from a Deposit Account, apply an amount up to the aggregate amount of Principal Receivables outstanding in the Additional Account for which such amounts are being withdrawn, plus any Finance Charge Receivables related to such Additional Account, and deposit such amount into the Collection Account for treatment as Collections of Principal Receivables and Finance Charge Receivables, respectively. Any proceeds of the Funds Collateral received by the Seller shall be B-3 held in trust by the Seller for and as the Trustee's property and shall not be commingled with the Seller's other funds or properties. (b) The Seller shall, at its own cost and expense, maintain satisfactory and complete records of the Funds Collateral, including, without limitation, a record of all deposits made by or on behalf of each Obligor into the Deposit Account, all credits granted and debits made with respect to such Obligor's interest in the Deposit Account, and all other dealings with the Deposit Account. The Seller will deliver and turn over to the Trustee or to its representatives at any time on demand of the Trustee the Deposit Documents. 6. Representations and Warranties of the Seller. The Seller 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 Seller enforceable against the Seller in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, receivership, conservatorship or other similar laws now or hereafter in effect affecting the enforcement of creditors' rights in general or the rights of creditors of [a Virginia banking corporation] [a federal savings bank] 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. Each Additional Account designated ----------------------- hereby is an Eligible Account. (c) No Lien. Each Receivable created in connection with, and all ------- Funds Collateral relating to, the Additional Accounts have been transferred to the Trust free and clear of any Lien other than (i) Liens permitted under subsection 2.07(b) of the Agreement, (ii) any tax or governmental lien or other nonconsensual lien and (iii) with respect to Funds Collateral, Liens granted in favor of the Seller by an Obligor. (d) Classification. The Receivables created in connection with the -------------- Additional Accounts (together with the Seller's interest in the related Funds Collateral) constitute "accounts" or "general intangibles" under and as defined in Article 9 of the UCC; (e) Federal Deposit Insurance. Each Obligor of a Secured Account ------------------------- holds a beneficial ownership interest in the Funds sufficient to afford such Obligor separate federal deposit insurance with respect to the portion of the Deposit Account attributable to such Obligor. (f) Insolvency. As of each of the Additional Cut-Off Date and the ---------- Addition Date, no Insolvency Event with respect to the Seller has occurred and the transfer by the Seller of Receivables arising in the Additional Accounts to the Trust has not been made in contemplation of the occurrence thereof. (g) Pay Out Event. The Seller reasonably believes that the addition ------------- of the Receivables arising in the Additional Accounts will not, based on the facts known to the B-4 Seller, cause a Pay Out Event or any event that, after giving of notice or the lapse of time, would constitute a Pay Out Event to occur with respect to any Series. (h) Security Interest. This Assignment constitutes a valid sale, ----------------- transfer and assignment to the Trustee of all right, title and interest of the Seller in the Receivables now existing or hereafter created in the Additional Accounts and the Funds Collateral, if any, relating to the Additional Accounts, all moneys due or to become due and all amounts received with respect thereto and the proceeds (including "proceeds" as defined in the UCC as in effect in the Commonwealth of Virginia and including Insurance Proceeds and Recoveries) thereof, and the Interchange payable pursuant to Section 2.07(i) of the Agreement or, if this Assignment does not constitute a sale of such property, it constitutes a grant of a security interest in such property to the Trustee, which, in the case of existing Receivables, Funds Collateral and the proceeds thereof is enforceable upon execution and delivery of this Assignment, and which will be enforceable with respect to such Receivables and Funds Collateral hereafter created and the proceeds thereof upon such creation. Upon the filing of the financing statements described in Section 3 of this Assignment and, in the case of the Receivables and Funds Collateral hereafter created and the proceeds thereof, upon the creation thereof, the Trustee shall have a first priority perfected security or ownership interest in the Seller's rights in such property and proceeds. (i) No Conflict. The execution and delivery by the Seller of this ----------- Assignment, the performance of the transactions contemplated by this Assignment and the fulfillment of the terms hereof applicable to the Seller, will not conflict with or violate the articles of incorporation or bylaws of the Seller or conflict with, result in any breach of any of the terms and provisions of, or constitute (with or without notice or lapse of time or both) a material default under, any indenture, contract, agreement, mortgage, deed of trust or other instrument to which the Seller is a party or by which it or its properties are bound. (j) No Proceedings. There are no Proceedings or investigations -------------- pending or, to the best knowledge of the Seller, threatened against the Seller, before any court, regulatory body, administrative agency or other tribunal or governmental instrumentality (i) asserting the invalidity of this Assignment, (ii) seeking to prevent the consummation of any of the transactions contemplated by this Assignment, (iii) seeking any determination or ruling that, in the reasonable judgment of the Seller, would materially and adversely affect the performance by the Seller of its obligations under this Assignment or (iv) seeking any determination or ruling that would materially and adversely affect the validity or enforceability of this Assignment. (k) All Consents. All authorizations, consents, orders or other ------------ actions of any Person or of any Governmental Authority required to be obtained by the Seller in connection with the execution and delivery of this Assignment by the Seller and the performance of the transactions contemplated by this Assignment by the Seller, have been obtained. (l) No Material Adverse Effect. None of the terms of this Assignment, -------------------------- including the addition to the Trust of the Receivables created in connection with, and the B-5 Funds Collateral relating to, the Additional Accounts, will have a material adverse effect on the interests of the Certificateholders. 7. Covenants of the Seller. The Seller hereby covenants and agrees ----------------------- with the Trustee, on behalf of the Trust, as follows: (a) Transfers, Liens, Etc. Except for the conveyances hereunder, and ---------------------- except as otherwise provided under the Agreement, the Seller shall not sell, pledge, assign or transfer to any other Person, or grant, create, incur, assume or suffer to exist any Lien upon or with respect to any Receivable created in connection with, or the Funds Collateral relating to, the Additional Accounts, whether now existing or hereafter created. (b) Notice of Liens. The Seller shall notify the Trustee and each --------------- Series Enhancer entitled to such notice pursuant to the relevant Supplement promptly after becoming aware of any Lien on any Receivable created in connection with, or on the Funds Collateral relating to, the Additional Accounts, other than (i) the conveyances hereunder, (ii) Liens permitted under Section 2.07(b) of the Agreement, (iii) any tax or governmental lien or other nonconsensual lien or (iv) with respect to Funds Collateral, Liens granted in favor of the Seller by an Obligor. (c) Federal Deposit Insurance. The Seller will maintain or cause to ------------------------- be maintained records regarding each Obligor's beneficial ownership interest in the Funds sufficient to afford such Obligor separate federal deposit insurance with respect to the portion of the Deposit Account attributable to such Obligor. (d) Location of Deposit Account. The Seller shall not move the --------------------------- location of any Deposit Account without the prior written consent of Moody's, Standard & Poor's and Fitch. (e) Servicer Default. If the Servicer is the Depository, the Seller ---------------- shall, upon the occurrence of a Servicer Default, immediately move the location of the Deposit Account to an Eligible Institution. 8. Covenant of Servicer. The Servicer hereby covenants and agrees -------------------- with the Trustee, on behalf of the Trust, that it will take no action which, nor omit to take any action the omission of which, would substantially impair the rights of the Certificateholders in the Receivables created in connection with, or the Funds Collateral relating to, the Additional Accounts. 9. Reassignment of Receivables and Funds Collateral. ------------------------------------------------ (a) The parties hereto hereby agree that any reassignment or assignment of Receivables to the Seller or the Servicer required pursuant to Section 2.05, 2.06 or 3.03 of the Agreement shall include the Receivables of the Additional Accounts and the Funds Collateral, if any, related to such Receivables. (b) In the event any representation or warranty of the Seller contained in Section 6(c), (d) or (e) hereof is not true and correct in any material respect as of the date B-6 hereof or the date specified therein, as applicable, and such breach (individually or together with any other breach or breaches then existing) has a material adverse effect on the Certificateholders' Interests of all Series in the Receivables of the Additional Accounts or related Funds Collateral, if any, transferred to the Trust (which determination shall be made without regard to the availability of funds under any Series Enhancement) and remains uncured for 60 days (or such longer period, not in excess of 150 days, as may be agreed to by the Trustee) after the earlier to occur of the discovery thereof by the Seller or receipt by the Seller of notice thereof given by the Trustee, then the remedy provided under Section 2.05 of the Agreement (including the proviso thereto) shall apply with respect to each of the Receivables and the related Funds Collateral, if any, transferred to the Trust pursuant to this Assignment as if set forth herein. (c) In the event any representation or warranty of the Seller contained in Section 6(h) hereof is not true and correct in any material respect and such breach has a material adverse effect on the Certificateholders' Interests of all Series in the Receivables of the Additional Accounts or the related Funds Collateral, if any, then the remedy provided under Section 2.06 of the Agreement (including the proviso thereto) shall apply with respect to each of the Receivables and the related Funds Collateral, if any, transferred to the Trust pursuant to this Assignment as if set forth herein. 10. Ratification of Agreement. As amended and supplemented by this ------------------------- Assignment, the Agreement is in all respects ratified and confirmed and the Agreement as so supplemented by this Assignment shall be read, taken and construed as one and the same instrument. 11. Counterparts. This Assignment may be executed in two or more ------------ counterparts (and by different parties on separate counterparts), each of which shall be an original, but all of which shall constitute one and the same instrument. 12. GOVERNING LAW. THIS ASSIGNMENT SHALL BE CONSTRUED IN ACCORDANCE ------------- WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. B-7 IN WITNESS WHEREOF, the Banks, the Servicer and the Trustee have caused this Assignment to be duly executed by their respective officers as of the day and year first above written. CAPITAL ONE BANK, as a Bank and the Servicer By ------------------------------------ Name: Title: CAPITAL ONE, F.S.B., as a Bank By ------------------------------------ Name: Title: THE BANK OF NEW YORK, as Trustee By ------------------------------------ Name: Title: B-8 EXHIBIT C FORM OF REASSIGNMENT OF RECEIVABLES IN REMOVED ACCOUNTS (As required by Section 2.09 of the Pooling and Servicing Agreement) REASSIGNMENT OF RECEIVABLES, dated as of _______ __, 20__, by and among CAPITAL ONE BANK, a Virginia banking corporation, as a Seller and the Servicer (a "Bank" and the "Servicer," respectively), CAPITAL ONE, F.S.B., a ---- -------- federal savings bank, as a Seller (a "Bank" and, together with Capital One Bank ---- acting in such capacity, the "Banks"), and THE BANK OF NEW YORK, a New York ----- banking corporation, as Trustee (the "Trustee"), pursuant to the Pooling and ------- Servicing Agreement referred to below. WITNESSETH: WHEREAS, the Banks, the Servicer and the Trustee are parties to the Pooling and Servicing Agreement, dated as of September 30, 1993, as amended and restated as of April 9, 2001 (as amended and supplemented, the "Agreement"); --------- WHEREAS, pursuant to the Agreement, [Capital One Bank] [Capital One, F.S.B.] (the "Seller") wishes to remove from the Trust all Receivables in ------ certain designated 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 Seller; 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 Banks and the Trustee hereby agree as follows: 1. Defined Terms. All terms defined in the 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, _______ __, 20__. 2. Designation of Removed Accounts. On or before the date that is 10 ------------------------------- Business Days after the Removal Date, the Seller will deliver to the Trustee a computer file or microfiche list containing a true and complete list of the Accounts designated for removal hereby (the "Removed Accounts") specifying for ---------------- each such Account, as of the Removal Date, its account number, the aggregate amount outstanding in such Account, the aggregate amount of Principal Receivables in such Account and, for any Funds Collateral relating to such Account, the account number for, and the amount of funds on deposit in, the applicable Deposity Account, which computer file or microfiche list shall be marked as Schedule 1 to this Reassignment and shall supplement Schedule 1 to the Agreement. 3. Conveyance of Receivables. (a) The Trustee does hereby release ------------------------- its lien on and security interest in, and does hereby sell, transfer, assign, set over and otherwise convey C-1 to the Seller, without recourse, all of its right, title and interest of the Trust in, to and under the Receivables existing at the close of business on the Removal Date and thereafter created from time to time in the Removed Accounts, the Funds Collateral, if any, relating to such Additional Accounts, all moneys due or to become due and all amounts received or receivable with respect thereto and all proceeds (including "proceeds" as defined in the UCC and including Insurance Proceeds and Recoveries) thereof, and the related Interchange otherwise payable pursuant to Section 2.07(i) of the Agreement. (b) In connection with such transfer, the Trustee agrees to execute and deliver to the Seller on or prior to the date this Reassignment is delivered, applicable termination statements with respect to the Receivables existing at the close of business on the Removal Date and thereafter created from time to time in the Removed Accounts and the proceeds thereof evidencing the release by the Trust of its interest in such Receivables and proceeds, and meeting the requirements of applicable state law, in such manner and such jurisdictions as are necessary to terminate such interest. 4. Representations and Warranties of the Seller. The Seller hereby -------------------------------------------- represents and warrants to the Trustee, on behalf of the Trust, as of the Removal Date: (a) Legal, Valid and Binding Obligation. This Reassignment ----------------------------------- constitutes a legal, valid and binding obligation of the Seller enforceable against the Seller, in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, receivership, conservatorship or other similar laws now or hereafter in effect affecting the enforcement of creditors' rights in general or the rights of creditors of a [Virginia banking corporation] [a federally chartered savings bank], 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) Pay Out Event. The Seller reasonably believes that (A) the ------------- removal of the Receivables existing in the Removed Accounts will not, based on the facts known to the Seller, cause a Pay Out Event or any event that, after giving of notice or the lapse of time, would constitute a Pay Out Event to occur with respect to any Series and (B) no selection procedure reasonably believed by the Seller to be materially adverse to the interests of the Investor Certificateholders was used in selecting the Removed Accounts. (c) List of Removed Accounts. The list of Removed Accounts delivered ------------------------ pursuant to Section 2.09(a) of the Agreement, as of the Removal Date, is true and complete in all material respects. 5. Ratification of Agreement. As amended and supplemented by this ------------------------- Reassignment, the Agreement is in all respects ratified and confirmed and the Agreement as so supplemented by this Reassignment shall be read, taken and construed as one and the same instrument. 6. 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 shall constitute one and the same instrument. C-2 7. GOVERNING LAW. THIS REASSIGNMENT SHALL BE CONSTRUED IN ACCORDANCE ------------- WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. IN WITNESS WHEREOF, the Banks and the Trustee have caused this Reassignment to be duly executed by their respective officers as of the day and year first above written. CAPITAL ONE BANK, as a Bank By ________________________________________ Name: Title: CAPITAL ONE, F.S.B., as a Bank By ________________________________________ Name: Title: THE BANK OF NEW YORK, as Trustee By ________________________________________ Name: Title: C-3 EXHIBIT D FORM OF ANNUAL SERVICER'S CERTIFICATE (To be delivered on or before May 31 of each calendar year beginning with May 31, 1994, pursuant to Section 3.05 of the Pooling and Servicing Agreement referred to below) CAPITAL ONE BANK ------------------------ CAPITAL ONE MASTER TRUST ------------------------ The undersigned, a duly authorized representative of Capital One Bank, as Servicer (the "Bank"), pursuant to the Pooling and Servicing Agreement, dated ---- as of September 30, 1993, as amended and restated as of April 9, 2001 (as amended and supplemented, the "Agreement"), among the Bank, as a Seller and the --------- Servicer, Capital One, F.S.B., as a Seller, and The Bank of New York, as Trustee, does hereby certify that: 1. The Bank is, as of the date hereof, the Servicer under the Agreement. Capitalized terms used in this Certificate have their respective meanings as set forth in the Agreement. 2. The undersigned is a Servicing Officer who is duly authorized pursuant to the 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, 20__, and of its performance under the Agreement was conducted under my supervision. 4. Based on such review, the Servicer has, to the best of my knowledge, performed in all material respects its obligations under the Agreement throughout such year 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 Agreement known to me to have been made by the Servicer during the year ended December 31, 20__, which sets forth in detail (i) the 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 such default: [If applicable, insert "None."] D-1 IN WITNESS WHEREOF, the undersigned has duly executed this Certificate this ____ day of _______, 20__. CAPITAL ONE BANK, as Servicer By ________________________________________ Name: Title: D-2 EXHIBIT E-1 THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"). NEITHER THIS CERTIFICATE NOR ANY PORTION HEREOF MAY BE OFFERED OR SOLD EXCEPT IN COMPLIANCE WITH THE REGISTRATION PROVISIONS OF THE 1933 ACT AND ANY APPLICABLE PROVISIONS OF ANY STATE BLUE SKY OR SECURITIES LAWS OR PURSUANT TO AN AVAILABLE EXEMPTION FROM SUCH REGISTRATION PROVISIONS. THE TRANSFER OF THIS CERTIFICATE IS SUBJECT TO CERTAIN CONDITIONS SET FORTH IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN. THIS CERTIFICATE MAY NOT BE ACQUIRED BY OR FOR THE ACCOUNT OF A BENEFIT PLAN (AS DEFINED BELOW). E-1-1 EXHIBIT E-2 [FORM OF REPRESENTATION LETTER] [Date] The Bank of New York 101 Barclay Street, Floor 12 East New York, New York 10286 Attention: Corporate Trust Department Capital One Bank 8000 Jones Branch Drive McLean, Virginia 22102 Capital One, F.S.B. 2980 Fairview Park Drive Falls Church, Virginia 22042 Re: Purchase of $ /1/ principal amount of Capital One Master Trust Series [ ] [ %] [Floating Rate] Asset Backed Certificates Dear Ladies and Gentlemen: In connection with our purchase of the above Asset Backed Certificates (the "Certificates") we confirm that: ------------ (i) we understand that the Certificates are not being registered under the Securities Act of 1933, as amended (the "1933 Act"), and are -------- being sold to us in a transaction that is exempt from the registration requirements of the 1933 Act; (ii) any information we desire concerning the Certificates or any other matter relevant to our decision to purchase the Certificates is or has been made available to us; (iii) we have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the Certificates, and we (and any account for which we are purchasing under paragraph (iv) below) are able to bear the economic risk of an investment in the Certificates; we (and any account for which we are purchasing under paragraph (iv) below) are an "accredited investor" (as such term is defined in Rule 501(a)(1), (2) or (3) of Regulation D under the 1933 Act); and we are not, and none of such accounts is, a Benefit Plan; (iv) we are acquiring the Certificates for our own account or for accounts as to which we exercise sole investment discretion and not with a view to any distribution of - ---------- /1/ Not less than $250,000 minimum principal amount. E-2-1 the Certificates, subject, nevertheless, to the understanding that the disposition, of our property shall at all times be and remain within our control; (v) we agree that the Certificates must be held indefinitely by us unless subsequently registered under the 1933 Act or an exemption from any registration requirements of that Act and any applicable state securities law is available; (vi) we agree that in the event that at some future time we wish to dispose of or exchange any of the Certificates (such disposition or exchange not being currently foreseen or contemplated), we will not transfer or exchange any of the Certificates unless: (A)(1) the sale is of at least U.S. $250,000 principal amount of Certificates to an Eligible Purchaser (as defined below), (2) a letter to substantially the same effect as paragraphs (i), (ii), (iii), (iv), (v) and (vi) of this letter is executed promptly by the purchaser and (3) all offers or solicitations in connection with the sale, whether directly or through any agent acting on our behalf, are limited only to Eligible Purchasers and are not made by means of any form of general solicitation or general advertising whatsoever; or (B) the Certificates are transferred pursuant to Rule 144 under the 1933 Act by us after we have held them for more than three (3) years; or (C) the Certificates are sold in any other transaction that does not require registration under the 1933 Act and, if the Sellers, the Servicer, the Trustee or the Transfer Agent and Registrar so requests, we theretofore have furnished to such party an opinion of counsel satisfactory to such party, in form and substance satisfactory to such party, to such effect; or (D) the Certificates are transferred pursuant to an exception from the registration requirements of the 1933 Act under Rule 144A under the 1933 Act; and (vii) we understand that the Certificates will bear a legend to substantially the following effect: "THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"). NEITHER THIS CERTIFICATE NOR ANY PORTION HEREOF MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE REGISTRATION PROVISIONS OF THE 1933 ACT AND ANY APPLICABLE PROVISIONS OF ANY STATE BLUE SKY OR SECURITIES LAWS OR PURSUANT TO AN AVAILABLE EXEMPTION FROM SUCH PROVISIONS. THE TRANSFER OF THIS CERTIFICATE IS SUBJECT TO CERTAIN CONDITIONS SET FORTH IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN." ["THE HOLDER OF THIS CERTIFICATE BY ITS ACCEPTANCE HEREOF REPRESENTS AND WARRANTS, FOR THE BENEFIT OF CAPITAL ONE BANK E-2-2 AND CAPITAL ONE, F.S.B., THAT SUCH HOLDER IS NOT (1) AN EMPLOYEE BENEFIT PLAN THAT IS SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, (2) A PLAN OR OTHER ARRANGEMENT (INCLUDING AN INDIVIDUAL RETIREMENT ACCOUNT OR KEOGH PLAN) THAT IS SUBJECT TO SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, OR (3) AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" UNDER THE PLAN ASSET REGULATION BY REASON OF ANY SUCH PLAN'S INVESTMENT IN THE ENTITY."] The first paragraph of this legend may be removed if the Sellers, the Servicer, the Trustee and the Transfer Agent and Registrar have received an opinion of counsel satisfactory to them, in form and substance satisfactory to them, to the effect that such paragraph may be removed. "Eligible Purchaser" means either an Eligible Dealer or a corporation, ------------------ partnership or other entity which we have reasonable grounds to believe and do believe can make representations with respect to itself to substantially the same effect as the representations set forth herein. "Eligible Dealer" means --------------- any corporation or other entity the principal business of which is acting as a broker and/or dealer in securities. "Benefit Plan" means any employee benefit ------------ plan, trust or account, including an individual retirement account, that is subject to the Employee Retirement Income Security Act of 1974 or that is described in Section 4975(e)(1) of the Internal Revenue Code of 1986 or an entity whose underlying assets include plan assets by reason of a plan's investment in such entity. Capitalized terms used but not defined herein shall have the meanings given to such terms in the Pooling and Servicing Agreement, dated as of September 30, 1993, as amended and restated as of April 9, 2001, among Capital One Bank, as a seller and the servicer, Capital One, F.S.B., as a seller, and The Bank of New York, as trustee. Very truly yours, ----------------------- (Name of Purchaser) by ------------------------ (Authorized Officer) E-2-3 EXHIBIT E-3 THE HOLDER OF THIS CERTIFICATE BY ITS ACCEPTANCE HEREOF REPRESENTS AND WARRANTS, FOR THE BENEFIT OF CAPITAL ONE BANK AND CAPITAL ONE, F.S.B., THAT SUCH HOLDER IS NOT (1) AN EMPLOYEE BENEFIT PLAN THAT IS SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, (2) A PLAN OR OTHER ARRANGEMENT (INCLUDING AN INDIVIDUAL RETIREMENT ACCOUNT OR KEOGH PLAN) THAT IS SUBJECT TO SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, OR (3) AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" UNDER THE PLAN ASSET REGULATION BY REASON OF ANY SUCH PLAN'S INVESTMENT IN THE ENTITY. E-3-1 EXHIBIT G-1 (FORM OF CLEARANCE SYSTEM CERTIFICATE TO BE GIVEN TO THE TRUSTEE BY EUROCLEAR OR CLEARSTREAM FOR DELIVERY OF DEFINITIVE CERTIFICATES IN EXCHANGE FOR A PORTION OF A TEMPORARY GLOBAL SECURITY] CAPITAL ONE MASTER TRUST, Series [ ] [ %] [Floating Rate] --------------------------------- Asset Backed Certificates ------------------------- [Insert title or sufficient description of Certificates to be delivered] We refer to that portion of the temporary Global Certificate in respect of the above-captioned issue which is herewith submitted to be exchanged for definitive Certificates (the "Submitted Portion") as provided in the Pooling ----------------- and Servicing Agreement, dated as of September 30, 1993, as amended and restated as of April 9, 2001 (as amended and supplemented, the "Agreement") in respect of --------- such issue. This is to certify that (i) we have received a certificate or certificates, in writing or by tested telex, with respect to each of the-persons appearing in our records as being entitled to a beneficial interest in the Submitted Portion and with respect to such persons beneficial interest either (a) from such person, substantially in the form of Exhibit G-2 to the Agreement, or (b) from _________, substantially in the form of Exhibit G-3 to the Agreement, and (ii) the Submitted Portion includes no part of the temporary Global Certificate excepted in such certificates. We further certify that as of the date hereof we have not received any notification from any of the persons giving such certificates to the effect that the statements made by them with respect to any part of the Submitted Portion are no longer true and cannot be relied on as of the date hereof. G-1-1 We understand that this certificate is required in connection with certain securities and tax laws in the United States of America. If administrative or legal proceedings are commenced or threatened in connection with which this certificate is or would be relevant, we irrevocably authorize you to produce this certificate or a copy thereof to any interested party in such proceedings. Dated: , /1/ [Euroclear Bank, S.A./N.V., as operator of the Euroclear System]/2/ [Clearstream Banking, societe anonyme]/2/ by --------------------------------- - ---------- /1/ To be dated on the Exchange Date. /2/ Delete the inappropriate reference. G-1-2 EXHIBIT G-2 FORM OF CERTIFICATE TO BE DELIVERED TO EUROCLEAR OR CLEARSTREAM BY [INSERT NAME OF MANAGER] WITH RESPECT TO REGISTERED CERTIFICATES SOLD TO QUALIFIED INSTITUTIONAL BUYERS] CAPITAL ONE MASTER TRUST, Series [ ] [ %] [Floating Rate] ---------------------------------- Asset Backed Certificates ------------------------- In connection with the initial issuance and placement of the above referenced Asset Backed Certificates (the "Certificates"), an institutional ------------ investor in the United States ("institutional investor") is purchasing U.S. ---------------------- $___________ aggregate principal amount of the Certificates held in our account at [Euroclear Bank, S.A./N.V., as operator of the Euroclear System] [Clearstream Banking, societe anonyme] on behalf of such investor. We reasonably believe that such institutional investor is a qualified institutional buyer as such term is defined under Rule 144A of the Securities Act of 1933. [We understand that this certificate is required in connection with United States laws. We irrevocably authorize you to produce this certificate or a copy hereof to any interested party in any administrative or legal proceedings or official inquiry with respect to the matters covered by this certificate.] The Definitive Certificates in respect of this certificate are to be issued in registered form in the minimum denomination of U.S. $500,000 and such Definitive Certificates (and, unless the Pooling and Servicing Agreement or Supplement relating to the Certificates otherwise provides, any Certificates issued in exchange or substitution for or on registration of transfer of Certificates) shall bear the following legend: "THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED. NEITHER THIS CERTIFICATE NOR ANY PORTION HEREOF MAY BE OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OR TO U.S. PERSONS (EACH AS DEFINED HEREIN), EXCEPT IN COMPLIANCE WITH THE REGISTRATION PROVISIONS OF SUCH ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM SUCH REGISTRATION PROVISIONS. THE TRANSFER OF THIS CERTIFICATE IS SUBJECT TO CERTAIN CONDITIONS SET FORTH IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN. THIS CERTIFICATE CANNOT BE EXCHANGED FOR A BEARER CERTIFICATE." Dated: _______ __, 20__ [ ], by -------------------------------- Authorized Officer G-2-1 EXHIBIT G-3 [FORM OF CERTIFICATE TO BE DELIVERED TO EUROCLEAR OR CLEARSTREAM BY A BENEFICIAL OWNER OF CERTIFICATES, OTHER THAN A QUALIFIED INSTITUTIONAL BUYER] CAPITAL ONE MASTER TRUST, Series [ ] [ %] [Floating Rate] Asset Backed Certificates ------------------------- This is to certify that as of the date hereof and except as provided in the third paragraph hereof, the above-captioned Certificates held by you for our account (i) are owned by a person that is a United States person, or (ii) are owned by a United States person that is (A) the foreign branch of a United States financial institution (as defined in U.S. Treasury Regulations Section 1.165-12(c)(1)(v)) (a "financial institution") purchasing for its own --------------------- account or for resale, or (B) a United States person who acquired the Certificates through the foreign branch of a financial institution and who holds the Certificates through the financial institution oh the date hereof (and in either case (A) or (B), the financial institution hereby agrees to comply with the requirements of Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code of 1986, as amended, and the regulations thereunder), or (iii) are owned by a financial institution for purposes of resale during the Restricted Period (as defined in U.S. Treasury Regulations Section 1.163-5(6)(2)(i)(D)(7)). In addition, financial institutions described in clause (iii) of the preceding sentence (whether or not also described in clause (i) or (ii)) certify that they have not acquired the Certificates for purposes of resale directly or indirectly to a United States person or to a person within the United States or its possessions. We undertake to advise you by tested telex if the above statement as to beneficial ownership is not correct on the date of delivery of the above- captioned Certificates in bearer form with respect to such of said Certificates as then appear in your books as being held for our account. This certificate excepts and does not relate to U.S. $_______ principal amount of Certificates held by you for our account, as to which we are not yet able to certify beneficial ownership. We understand that delivery of Definitive Certificates in such principal amount cannot be made until we are able to so certify. We understand that this certificate is required in connection with certain securities and tax laws in the United States of America. If administrative or legal proceedings are commenced or threatened in connection with which this certificate is or would be relevant, we irrevocably authorize you to produce this certificate or a copy thereof to any interested party in such proceedings. As used herein, "United States" means the United States of America (including the states and the District of Columbia), its territories, its possessions and other areas subject to its jurisdiction; and "United States person" means a citizen or resident of the United States, a corporation, partnership or other entity created or organized in or under the laws of the United States, or any political subdivision thereof, or an estate or trust the income of which is subject to United States federal income taxation regardless of its source. G-3-1 Dated: /1/ by ------------------------------- As, or as agent for, the beneficial owner(s) of the interest in the Certificates to which this certificate relates. - ---------- /1/ This Certificate must be dated on the earliest of the date of the first actual payment of interest in respect of the Certificates and the date of the delivery of the Certificates in definitive form. G-3-2 EXHIBIT H-1 FORM OF OPINION OF COUNSEL WITH RESPECT TO AMENDMENTS Provisions to be included in Opinion of Counsel to be delivered pursuant to Section 13.02(d)(i) The opinions to the effect of the matters set forth below may be subject to all the qualifications, assumptions, limitations and exceptions taken or made in the Opinions of Counsel delivered on any applicable Closing Date and may reflect the form and substance of such previously delivered Opinions of Counsel. (i) The amendment to the [Pooling and Servicing Agreement], [Supplement], attached hereto as Schedule 1 (the "Amendment"), has been duly --------- authorized, executed and delivered by the Seller and constitutes the legal, valid and binding agreement of the Seller, enforceable in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws from time to time in effect affecting creditors' rights generally or the rights of creditors of Virginia banking corporations or federal savings banks, as the case may be. The enforceability of the Sellers' obligations is also subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). (ii) The Amendment has been entered into in accordance with the terms and provisions of Section 13.01 of the Pooling and Servicing Agreement. H-1-1 EXHIBIT H-2 FORM OF OPINION OF COUNSEL WITH RESPECT TO ACCOUNTS Provisions to be included in opinion of Counsel to be delivered pursuant to Section 13.02(d)(ii) or (iii) ----------------------------- The opinions to the effect of the matters set forth below may be subject to all the qualifications, assumptions, limitations and exceptions taken or made in the Opinions of Counsel delivered on any applicable Closing Date and may reflect the form and substance of such previously delivered Opinions of Counsel. 1. The Receivables will constitute either "general intangibles" or "accounts," in each case as defined under Section 9-106 of the UCC. 2. If the transfer of the Receivables to the Trust pursuant to the Pooling and Servicing Agreement constitutes a true sale of the Receivables to the Trust: (i) with respect to Receivables in existence on the date hereof, such sale transfers all of the right, title and interest of the applicable Seller in and to such Receivables to the Trust, free and clear of any Liens now existing or hereafter created, but subject to the rights of such Seller as holder of a Seller Certificate; (ii) with respect to Receivables which come into existence after the date hereof, upon the creation of such Receivables and the subsequent transfer of such Receivables to the Trust in accordance with the Pooling and Servicing Agreement and receipt by the Sellers of the consideration therefor required pursuant to the Pooling and Servicing Agreement, such sale will transfer all of the right, title and interest of the applicable Seller in and to such Receivables to the Trust, free and clear of any Liens, but subject to the rights of such Seller as holder of the Seller Certificate; and, in either case, no further action will thereafter be required to protect the Trust's ownership interest in the Receivables against creditors of, or subsequent purchasers from, such Seller. We note, however, that if the Receivables constitute "general intangibles" rather than "accounts", in equity principles, but subject to the matters discussed in paragraph 4 below. Such perfection, priority and enforceability of the security interest of the Trustee, for the benefit of the Certificateholders, would not be affected by an increase or decrease in the relative interests in the Receivables of the Investor Certificateholders and the Sellers as holders of the Seller Certificates. [3]4. Should the FDIC be appointed as a receiver or conservator for a Seller and should a court characterize the transfers of the Receivables and the proceeds thereof pursuant to the Pooling and Servicing Agreement as a transfer of collateral as security for the obligations of such Seller under the Pooling and Servicing Agreement rather than a sale, no statute, case or regulation would, of its own force, cause the security interest of the Trustee for the benefit of the H-2-1 Certificateholders in the Receivables and the proceeds thereof to be subject to avoidance by the FDIC as receiver or conservator for such Seller. H-2-2 EXHIBIT I FORM OF ASSUMPTION AGREEMENT ASSUMPTION AGREEMENT (the "Agreement"), dated as of _______ __, 20__ --------- (the "Assumption Date"), by and among CAPITAL ONE BANK, a Virginia banking --------------- corporation (the "Bank"),CAPITAL ONE, F.S.B., a federally chartered savings bank ---- (the "Savings Bank" and, together with the Bank, the "Banks"), [____________] ------------ ----- (the "Assuming Entity"), a [_________], and THE BANK OF NEW YORK, a New York banking corporation (the "Trustee"), pursuant to the Pooling and Servicing Agreement referred to below. WHEREAS, the Bank and the Trustee are parties to the Pooling and Servicing Agreement, dated as of September 30, 1993, as amended and restated as of April 9, 2001 (hereinafter as such agreement may have been, or from time to time be, amended, supplemented or otherwise modified, the "Pooling and Servicing Agreement"); WHEREAS, the [Bank] [Savings Bank] wishes to assign; transfer and convey all of its consumer revolving credit card accounts and other revolving credit accounts and the receivables arising thereunder, which may include all, but not loss than all, of the Accounts and the [Bank's] [Savings Bank's] remaining interest in the receivables arising thereunder, its interest in the Participation Interests and its Sellers' Interest (collectively, the "Assigned -------- Assets"), together with all servicing functions and other obligations under the - ------ Pooling and Servicing Agreement or relating to the transactions contemplated thereby (collectively, the "Assumed Obligations") pursuant to Section 7.05 of ------------------- the Pooling and Servicing Agreement; WHEREAS, pursuant to the Pooling and Servicing Agreement, the Assuming Entity and the Banks must comply with the provisions of Section 7.05 thereof in order for the bank to transfer such Assigned Assets and Assumed obligations to the Assuming Entity; and WHEREAS, the Trustee is willing to accept an assumption by the Assuming Entity subject to the terms and conditions hereof and of the Pooling and Servicing Agreement. NOW, THEREFORE, the Banks, the Assuming Entity 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. 2. Designation of Accounts. In connection with such conveyance, the ----------------------- Assuming Entity agrees, at its own expense, on or prior to the Assumption Date, to deliver to the Trustee, a computer file or microfiche list containing a true and complete list of all such Accounts or Participation Interests transferred by the [Bank] [Savings Bank] to the Assuming Entity pursuant to this Agreement, specifying (x) for each such Account, as of the Assumption I-1 Date, (i) its account number, (ii) the collection status, (iii) the aggregate amount of Receivables outstanding in such Account and (iv) the aggregate amount of Principal Receivables outstanding in such Account and (y) for each such Participation Interests, as of the Assumption Date, information comparable to the information delivered under (x) above. Such file shall be marked as Schedule I to this Agreement and, as of the Assumption Date, shall be incorporated into and made a part of this Agreement. 3. Assumption of Assigned Assets and Assumed Obligations. (a) The ----------------------------------------------------- Assuming Entity hereby agrees that on and after the Assumption Date it shall be bound by all the provisions and requirements of and assume all of the responsibilities and duties under the Pooling and Servicing Agreement applicable to the Servicer. (b) In connection with such assumption, the Assuming Entity 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 (i) the Receivables now existing and created on or after the Assumption Date in the Accounts designated hereby (which may be a single financing statement with respect to all such Receivables) for the transfer of or the grant of a security interest in "accounts" or "general intangibles" as defined in Section 9-106 of the UCC as in effect in the State of [ ] and (ii) all other Trust Assets as defined In Section 2.01 of the Pooling and Servicing Agreement now existing and created an or after the Assumption Date, meeting the requirements of applicable state law in such manner and In such jurisdiction as are necessary to perfect the transfer and assignment of such Receivables and other Trust Assets to the Trust, and to deliver a file-stamped copy of such financing statement or financing statements or other evidence of such filing (which may, for purposes of this Section 3, consist of telephone confirmation of such filing, confirmed within 24 hours in writing) to the Trustee on or prior to the Assumption Date. (c) In connection with such transfer, the Assuming Entity further agrees, at its own expense, on or prior to the date of this Agreement to clearly indicate in its computer files that Receivables created In connection with the Accounts or Participation Interests designated hereby have been conveyed to the Trust pursuant to the Pooling and Servicing Agreement and this Agreement for the benefit of the Investor Certificateholders. 4. Accepted by Trustee. The Trustee hereby acknowledges its ------------------- acceptance on behalf of the Trust of such assumption. The Trustee further acknowledges that, prior to or simultaneously with the execution and delivery of this Agreement, the Assuming Entity delivered to the Trustee the computer, file, or microfiche list described in Section 2 of this Agreement. The foregoing assumption 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 Banks, the Assuming Entity or any other Person in connection with the Account, the Receivables or any agreement or instrument relating thereto, including, without limitation, any obligation to any obligors, merchant banks, merchants clearance system, VISA, MasterCard or insurers, except as expressly provided herein. 5. Representations and Warranties of the Assuming Entity and the ------------------------------------------------------------- Banks. In addition to the representations and warranties deemed to have been - ----- made by the Assuming Entity in respect of the Accounts and Receivables thereunder pursuant to Section 7.05 of the Pooling I-2 and Servicing Agreement, the Assuming Entity and the Banks hereby also represent and warrant to the Trust as of the Assumption Date: (a) Legal, Valid and Binding Obligation. This Agreement constitutes a ----------------------------------- legal, valid, and binding Obligation of the Assuming Entity and the Banks, enforceable against the Assuming Entity and the Banks in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium, receivership, conservatorship or other similar laws now or hereafter in affect affecting creditors' rights in general and the rights of creditors of a Virginia banking corporation or a federal savings bank, as the case may be, and except as such enforceability may be limited by general principles of equity (whether considered in a suit at law or in equity). (b) Insolvency. None of the Assuming Entity or the Bank is insolvent; ---------- and, after giving effect to the conveyance of the Assigned Assets and the Assumed Obligations to the Assuming Entity by the [Bank] [Savings Bank], neither the Assuming Entity nor the [Bank] [Savings Bank] will be insolvent; (c) Security Interest. The security interest of the Trustee in the ----------------- Receivables and other Trust Assets continues to remain in full force and effect and has not been interrupted or impaired by the signing of this Agreement and such security interest remains prior to all others except as set forth in the Pooling and Servicing Agreement; and (d) Qualification. The Assuming Entity (i) is legally qualified to ------------- service the Accounts, (ii) is eligible to maintain the Collection Account as set forth in Section 4.02 of the Pooling and Servicing Agreement and (iii) is qualified to use the software that the Servicer is currently using to service the Account or has obtained the right to use or has its own software that is adequate to perform its duties as Servicer under the Pooling and Servicing Agreement. 6. Conditions Precedent. The acceptance of the Trustee set forth in -------------------- Section 4 and the amendment of the Pooling and Servicing Agreement set forth in Section 7 are subject to the satisfaction, on or prior to the Assumption Date, of the conditions precedent referred to in Section 7.05 of the Pooling and Servicing Agreement and of the following additional conditions precedent: (a) The Bank shall have transferred the Bank Certificate to the Assuming Entity as set forth in Section 7.05 of the Pooling and Servicing Agreement and references to the Bank as it relates to the Bank Certificate shall refer to only the Assuming Entity. (b) The payment of any other consideration has been completed as certified by the Assuming Entity to the Trustee. (c) The Assuming Entity shall have delivered to the Trustee an Officer's Certificate, dated the Assumption Date, stating that the Assuming Entity is eligible to maintain the Collection Account pursuant to section 4.02 of the Pooling and Servicing Agreement. (d) The Assuming Entity shall have delivered to the Trustee an Officer's Certificate, dated the Assumption Date, in which an officer of the Assuming Entity shall state that the representations and warranties of the Assuming Entity in its capacities as Seller under I-3 Section 2.03 and Section 7.04 of the Pooling and Servicing Agreement and Servicer under Section 3.03 of the Pooling and Servicing Agreement are true and correct. 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 Assumption Date to be a dual reference to the Pooling and Servicing Agreement as supplemented by this Agreement and all other Supplements thereto. The Assuming Entity and the Banks hereby agree that from and after the Assumption Date the terms "Seller" and "Servicer" in the Pooling and Servicing Agreement shall refer to the Assuming Entity. 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, the execution and delivery of this Agreement by the Trustee 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. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE ------------- WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. 9. Counterparts. This Agreement may be executed in two (2) or more ------------ counterparts (and by different parties on separate counterparts), each of which shall be an original, but all of which together shall constitute but one and the same instrument. I-4 IN WITNESS WHEREOF, the undersigned have caused this Agreement to be duly executed and delivered by their respective duly authorized officers on the day and year first above written. CAPITAL ONE BANK By ------------------------------- Name: Title: CAPITAL ONE, F.S.B. By ------------------------------- Name: Title: [ASSUMING ENTITY], By ------------------------------- Name: Title: THE BANK OF NEW YORK, as Trustee, By ------------------------------- Title: I-5 SCHEDULE I List of Accounts ---------------- [Original list delivered to Trustee] S-1 -----END PRIVACY-ENHANCED MESSAGE-----